THE PROCEDURE TO BE FOLLOWED TO INCORPORATE A PRIMARY 
CO-OPERATIVE UNDER THE CO-OPERATIVES ACT (NO.91 OF 1981)



In this memorandum any reference to the "Act" is a reference to the 
Co-operatives Act, 1981 (no.91 of 1981) and the Co-operatives Amendment 
Act of 1993) and any reference to a section is a reference to a section 
of the afore-named Acts.

The Act provides for the formation and incorporation of three kinds of 
primary co-operative. viz. an agricultural co-operative, a special farmers' 
co-operative and a trading co-operative (section 17).  Although the 
procedure to be followed in respect of the formation of each kind of primary 
co-operative is the same, the Act sets out various requirements which serve 
to identify each kind of co-operative.  This memorandum will explain the 
various requirements for each kind of co-operative.

The first step which must be taken by the promoters for the formation of 
the proposed co-operative I to communicate with the office of the 
Registrar of Co-operative, Private Bag X237, Pretoria 0001 in order;

(a)	to obtain clarity regarding the requirements for, an the policy 
laid down in respect of the formation of co-operatives;
(b)	to have  statute for the proposed co-operative drawn up; and
(c)	to obtain the necessary documents complying with the requirement 
in respect of the kind and form of co-operative.

Such documents for the formation and incorporation of co-operative will 
be drawn up and provide by this office free of charge.

The next step will be to convene a meeting of interested parties.

At least such number of natural or juristic persons a is set our in 
sub-paragraphs (a),(b) and (c) who are qualified to form the kind of 
co-operative the promoters have in mind must be present at this meeting 
(section 19).

(a)	Agricultural co-operatives

Two or more persons carrying on farming operations on their own account, 
whether alone or together with ay other person or in addition to any other 
business occupations or trade.  Persons carrying on farming operations 
outside the Republic qualify for the formation o such co-operatives only 
after they have been approved by the Registrar o Co-operatives.  An 
application for the approval of such persons will therefore have to be 
made to the Registrar or Co-operatives well in advance 
(Section 57(I)a (i) or (ii)).

(b)	Special farmers' co-operatives

Two or more persons carrying on farming operations on their own account 
(the observation made in sub-paragraph (a) applies in this case also) or 
who in the course of their activities handle, treat or dispose of 
agricultural products.

(c)	Trading co-operative

(i)	Eleven or more persons (natural or juristic persons);or
(ii)	In the case of a primary trading co-operative formed for the purpose 
of manufacturing an disposing of any article, two to eleven persons.
N.B: A home industry co-operative does not fall uner this category and the 
provisions of sub-paragraph (c)(i) apply to the formation o uch a co-operative.

A chairman and a secretary must be chosen to conduct the business of the 
meeting.

After a short explanation by the chairman of the purposes of the meeting, 
there shall be submitted (and read) in accordance with section 25(2)(a) of 
the Act;

(a)	a written exposition of the objects of the co-operative (as included 
in the proposed statute), its business prospects and the facts and statistics 
calculated to show that the co-operative will be ale to carry out its objects 
after incorporation.  This exposition should be drawn up by the promoters 
before the meeting is held.

The exposition should, in addition to the objects of the proposed co-operative, 
indicate the mot important reasons which motivated the promoters to for the 
co-operative and must set out full particulars I respect of anticipated turnover, 
capital requirements, the manner in which the capital required will be collected 
or otherwise obtained, anticipated income and expenditure, whether the anticipated 
income will e sufficient to cover all expenses and what advantages are expected 
to accrue to members by the incorporation of the co-operative.

The incorporation of every co-operative is subject to the approval of the Registrar 
of Co-operative.  Bearing in min the prejudicial effect that the failure of a single 
co-operative can have on the movement as a whole, the incorporation o the 
co-operative will not be approved unless the promoters can present particulars 
showing that arrangements in respect of capital requirements ad business prospects 
in general are such a to enable the co-operative, after its incorporation, to 
attain its objective.

(b)	Both copies of the statute must be submitted for registration

In this connection see sub-paragraph 3(b) supra.  Notice must be taken in connection 
with the completion of the statute, that in accordance with Section 40 of the Act 
the name of the co-operative must include the word "co-operative" and include as its 
last word, the word "limited" but shall not include the word "company" or an 
abbreviated form thereof.  As in accordance with Section 36 of the Act, a co-operative 
may not be incorporate under the same name as that under which another co-operative 
has already been incorporated, or under a name which resembles that of an already 
incorporated co-operative to such an extent that, in the opinion of the Registrar 
it would be misleading, it is advisable that the Registrar be consulted in 
connection with the proposed name for the co-operative before the meeting for 
the formation of the co-operative is held.  Furthermore, provision is made in 
Section 37 of the Act for literal translation and one abbreviated form of the 
name of the co-operative.  If such are desired, the relevant particulars must 
be included in the statute and the requirements as set out above must be 
complied with.  Notice must be taken that in accordance with Section 106(1) of 
the Act, the co-operative may not establish any branches or depots except at 
places authorised in its statute.  Therefore, in the event of the co-operative 
wanting branches or depots, the places where they will be situated must also be 
stipulated in the statute.

After consideration of the exposition and statute referred to in paragraph 7, 
each of the persons in favour of the formation of the co-operative and who 
wish to become members of the proposed co-operative must fill in and sign an 
application form for membership of the proposed co-operative.

N.B	At least the number of persons mentioned in paragraph 6 must complete 
application forms.  It is advisable to obtain as many applicants for membership 
as possible to confirm the essential support.

The persons who have completed and signed application forms for membership must 
then proceed to elect the first directors of the co-operative.  Only these 
persons who completed and signed application forms for membership at the formation 
meeting are eligible as the first directors of the co-operative.  The number of 
directors shall be as stipulated in the statute but in accordance with section 
107(2) of the Act.

The co-operative at this stage is lawfully formed and the meeting can be concluded.

Within 60 days after the holding of the meeting application must be made to the 
Registrar of Co-operatives, Private Bag X237, Pretoria for the registration of 
the statute and incorporation o the co-operative.  Application must be made on 
Form K1 and must be accompanied by the following;

(a)	a sworn or solemn statement by the person who acted as chairman at the 
formation meeting stating that the meeting at which the co-operative was formed 
was held on a date specified in the statement and tht all the requirements et 
out in the Act concerning those matters preceding the formation of the 
co-operative and in connection therewith have been complied with (a per 
Form A - Sections 25 and 26);
(b)	a copy of the written exposition referred to in sub-paragraph 7(a) supra;
(c)	two copies of the proposed statute of the co-operative as approved by the 
formation meeting signed by at least two applicants for membership in the case of 
an agricultural or special farmers' co-operative or trading co-operative formed to 
manufacture an article and by at least two but not more than eleven applicants for 
membership in the case of a trading co-operative.  The signature of each of the 
persons who signed the statute must be attested by one witness.  The same 
applicants for membership and their witnesses must sign both copies of the 
statute in the same order.
The statute which is recommended for registration must be clearly typed or 
printed an any alterations made thereto must be duly initialled by the persons 
whose signatures appears at the end of the statute.  At least one of the copies 
must be original. Ie. Not a Photostat copy;

(d)	A list containing;

(i)	the full names and address of the applicants for membership also, including 
those who applied for membership after the holing of the meeting;
(ii)	The date on which each application for membership was made;
(iii)	The number of shares applied for by each applicant (N.B. At least one tenth 
of the nominal value of shares must be paid on application therefore) and;
(iv)	The number of shares (if any) to which a contingent liability is attached 
and the amount of such contingent liability.

(e)	a schedule showing the full names and addresses of the persons elected as 
the first directors or the co-operative.
(f)	a detailed statement containing particulars of expenses and liabilities 
incurred on behalf of the proposed co-operative up to the date of transmission to 
the Registrar of the application for incorporation.
(g)	A copy of any written contract, if any, entered into before the incorporation 
of the co-operative - see section 26(2)(g)an 29 of the Act.


(h)	Uncancelled revenue stamps in payment of the application fee;
Commercial Co-operatives:	R550.00
Developing Co-operatives:	R137.50 and
(i)	the prescribed form (K.5) containing the address of the registered office 
and the postal address of the co-operative.  This form will be supplied by the 
Registrar's office.
Commercial Co-operatives:	R21.00
Developing Co-operatives:	R00.00

As soon as the statute of the co-operative is registered, the Registrar will forward 
to the secretary of the co-operative a certificate in which is certified that the 
co-operative is incorporated and a copy of the statute on which particulars of 
registration are recorded.  On receipt of the afore-named document the co-operative 
may begin its activities.

As the statute of the co-operative must be kept in safe-keeping at the registered 
office of the co-operative and be held available for inspection by its members at 
all reasonable tie, this office must satisfy itself that the co-operative has 
received the statute.  For this reason, it is expected that the co-operative will 
acknowledge receipt thereof in writing.