Understanding a Co-operative Society

What is a co-operative society?

A co-operative society is an association of persons who have come together with a common purpose of pooling their resources together for mutual economic and social benefit.

Types of co-operatives societies in Kenya

a) Savings and credit co-operative societies

These are formed to provide financial support to members. They accept deposits from members and grant them loans at reasonable interest rates in times of need.

b) Housing co-operatives societies

These are co-operative societies formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rates of interest to members to construct their own houses.

c) Consumer co-operative societies

These societies are formed to protect the interest of general consumers by making consumer goods available at reasonable price. They buy good directly from producers or manufacturers thereby eliminate middlemen in the process of distribution.

d) Agricultural/marketing/farmers co-operatives

These are formed by small farmers to work jointly in marketing their produce and thereby enjoy the benefits of large-scale farming.

e) Producer co-operative societies

These societies are formed to protect the interest of small producer by making available items of their need for production like raw materials, tools and equipment, machinery, etc..

f) Multipurpose co-operative societies

These are co-operatives that deal with more than one activity. The Ministry of Co-operative Development and Marketing discourages the formation of such co-operatives as their overall performance has been found wanting.

What are the objects of a co-operative society?

The main object of a co-operative society is to organize and promote the economic interest of its members in accordance with the Co-operative Principles and Values. The specific objects include:-

• promotion of thrift among members-opportunity for accumulation of savings/deposits; loans at fair and reasonable rates of interest
• to provide opportunities for members to improve their economic and social conditions
• perform those functions and exercise powers designated for Co-operatives Societies under applicable by-laws.

The Co-operative Values:

• Self-help
• Mutual responsibility
• Equality
• Equity
• Honesty
• Openness
• Social responsibility

The seven universal co-operatives principles:

• Voluntary and open membership
• Democratic member control
• Economic and participation of members
• Autonomy and independence
• Education, training and information
• Co-operation among co-operatives
• Concern for community

Structure of co-operative movement in Kenya

The co-operative movement in Kenya is divided into four distinct divisions namely:-

a) The National Apex:

Kenya National Federation of Co-operatives Ltd (KNFC)- defunct, was formed on 28th April 1964 as the Apex Co-operative organization of the Kenya Co-operative Movement with the mandate to lobby, advocate for, network, collaborate and unite all co-operatives in Kenya. It has been replaced by Co-operative Alliance of Kenya that was inaugurated in 2010.

b) National Co-operative Organizations:

• The Co-operative Bank of Kenya
• The Co-operative Insurance Company of Kenya CIC
• Kenya Union of Savings and Credit Co-operative KUSCCO
• Kenya Rural Sacco Societies Union Limited KERUSSU
• National Co-operative Housing Union Ltd NACHU
• Co-operative Collage of Kenya
• Kenya Planters Co-operative Union KPCU-registered both as a company and a co-operative society
• New Kenya Co-operative Creameries Ltd KCC

Secondary Co-operative Societies:

Comprises of all co-operatives unions countrywide.

Primary Co-operative Societies:

Comprise over 12,000 primary co-operative societies registered countrywide.

Registration of Co-operative Societies

Pre-requisites

The co-operative Societies Act, Chapter 490 of the Laws of Kenya, states that for a society to be registered with or without limited liability, it:

• has to have its object as the promotion of the welfare and economic interest of its members and
• has incorporated in its by laws the co-operative principles

Essentials for registration of a co-operative societies

For a society to be registered under the Act, it must:

• in the case of the primary society, consist of at least ten persons all of whom shall be qualified for membership of the co-operative society
• in the case of a co-operative union, it consists of two or more registered primary societies
• in the case of an apex society, consist of two or more secondary societies

Procedure for registration

• an application is made to the commissioner for co-operatives development in the prescribed form and signed by at least ten would be members
• the application is accompanied by four copies of the proposed by-laws of the society in English and the person or persons by whom or on whose behalf such application is made, shall furnish such information with regard to the society as the commissioner may require
• if the commissioner for co-operatives development is satisfied that a society has complied with the Act and any rules made there under and if the proposed by-laws are not contrary to the Act, he may register the society and its by-laws.

Registration Documents 

• The proposed by-laws in four copies
• Filled application for registration form in four copies
• Supplementary information form in four copies (if any)
• Economic appraisal in four copies
• In case of salaried workers with check-off agreement with employer, a letter from the employer is needed.

CORPORATE GOVERNANCE IN CO-OPERATIVES

What is Governance?

GOOD CORPORATE GOVERNANCE

The manner in which power is exercised in the management of resources for sustainable development. It is vital in efficient production and deliver of goods and services, accountability in the use of power, protection of members rights and freedoms and maintenance of an organized corporate framework within which each member can contribute fully toward finding innovative solutions to common problems.

What is the aim of good corporate governance in the co-operative? 

Good corporate governance seeks to promote:-

1. Efficient, effective and sustainable co-operatives that contribute to the welfare of the members and society in general by creating wealth, employment and solutions to emerging challenges.
2. Responsive and accountable co-operative.
3. Co-operative that are managed with integrity and transparency.
4. Recognition and protection of members and stakeholders rights.
5. An approach based on corporate ideas, legitimate representation and participation.

In the co-operative sector, good governance should concern itself with the systems, practices, procedures and processes and the manner in which the rules and regulations are applied and followed. In short, governance addresses the leadership role in the institutional framework.

Governance can also be seen as the manner in which power in an organization is exercised in the stewardship of the organizations total portfolio of assets and resources with the objective of maintaining and increasing shareholder value and satisfaction. It is also concerned with creating a balance between economic and social goals between individual and communal goals.

Principles of good corporate governance

1. Authority and duties of members (shareholders)-members of the co-operative society must severally and jointly protect, preserve and actively exercise the supreme authority of the society in general meetings i.e. they must ensure among other things:-only competent and reliable persons, who can add value, are elected into the office, the management committee is constantly held accountable and responsible for the efficient and effective governance of the society so as to achieve its objectives and change the composition of the board that does not perform to their expectation and in accordance with their mandate.
2. Leadership-the board should exercise leadership, enterprise, integrity and judgement in directing the society and act in the best interest of the society in manner based on accountability, transparency and responsibility.
3. Strategy and values-the board should determine the purpose and values and the strategies to achieve them.
4. Structure and organization-the management structure, organization, systems and people must ensure that the structure functions in order to achieve the society objectives.
5. Viability and financial stability-at least on annual basis, the board must monitor and evaluate the implementation of strategies, policies and management performance.
6. Corporate compliance-the society must comply with all relevant laws, regulations, governance practices, accounting and auditing standards.
7. Communication-the board must communicate with all stakeholders effectively. Members should receive any information that would materially affect their membership or any resolutions of interest to them as members.
8. Internal controls and procedures-systems, processes and procedures must be reviewed regularly. This will ensure accuracy in decision making.
9. Development and strengthening of skills-the board and employees must be trained continuously in line with technological and management development, Equally, members must be enlightened regularly to ensure that they effectively exercise their rights.
10. Adoption of technology-in order to survive and thrive, the technology, skills and systems must be adequate to run the society and compete in the competitive market environment.
11. Recognition of risk-it is crucial to identify the key risk areas and the the key performance indicators and constantly monitor these factors.
12. Social and environment responsibility-the society should operate within the mandate entrusted to it by society and shoulder its social responsibility e.g. conserve resources, shouldn't exploit its labour, shouldn't neglecting the needs of the local community, shouldn't evade taxation or engaging in other antisocial practices.

Society Governance Problems

1. The principal-agent problem
2. The co-operative governance structure
3. Borrower domination problem
4. Lack of clear proper rules of decision making
5. Unqualified personnel
6. The co-operative democracy of one member one vote regardless of amount invested
7. Inadequate supervision

The role of members in corporate governance

Why should the shareholder be interested in good governance? The shareholders are concerned about corporate governance to ensure:-

1. A sustainable responsible enterprise
2. Growth of the society
3. Corporate leadership that ensures efficiency, responsiveness, accountability, transparency, profitability and increased shareholder value.

Duties of members/shareholders

1. Ensure that only competent and reliable persons are elected
2. Ensure that the board of directors is held accountable and responsible for the efficient and effective governance

Role and function of the board of directors

1. Exercise leadership, sound judgement and prudence in directing the society
2. Determine the purpose and values of the society
3. Put in place a proper management structure (organization, systems and people)
4. Monitor and evaluate implementation of strategies, policies and plans
5. Regularly review systems, processes and procedures to ensure effectiveness of its internal systems of control
6. Appointment of senior management including the CEO
7. Set out a code of ethics

Important aspects of the Code of Ethics

1. Personal conduct
2. Corporate behavior
3. Obligations of:-

• Directors and managers
• Employees and professionals
• Shareholders
• Financiers, suppliers
• The state

Special care should be made in the Code of Ethics to the duty of care and responsibility and liability of professionals who are called upon to perform any professional tasks for the society.

WILL SACCOs DIE IN THE DEVOLVED GOVERNMENTS ERA?

We are still in a situation where the National Government has halted a crisis from occurring by stating that they will continue with the function of paying civil servants salaries. This is until such a time when County Governments have put up the necessary infrastructure and systems that will handle salary payments. The National Government has just saved Saccos!!!!

Backwards?

Saccos under the various Ministries otherwise referred to as countrywide Saccos, functioned effectively under the National Government. These Saccos received employees deductions from the main line ministries not from numerous fragmented sources...read County Governments, as it is going to be. These Ministries remitted the same to Saccos within seven days as required by the Co-operative Societies Act Cap 490 Section 35. This particular section give us clue when sums deducted should be remitted and the consequences of not doing so within the stipulated time. In the 90's, many Saccos under the Local Authorities i.e. the county councils and municipal councils, collapsed or were rendered almost incapable of providing services to their members. The various councils and municipalities, used to deduct from salaries of their employees and never remitted to their respective Saccos. Instead these municipalities and county councils used the monies (which are salaries) to carry out other activities of those municipalities and county councils!! Some of the membership of these Saccos have not been refunded their Sacco contributions to date!!

Tick Tock Tick Tock!!

Will it work with Saccos?

All Saccos that are under Ministries of Health, Co-operatives Development and Marketing, Agriculture, Environment etc or any devolved "Ministry" may be affected. The main line Ministries all made sure that Saccos received members contributions together with loan repayments and the interests due within stipulated period. Will County Governments deduct and remit the same within the period required? Will instances like one viewed in some Counties e.g. Kiambu (missing a deadline!!) affect and ultimately kill these Saccos? What would be the situation like where County Governments will be required to deduct from employees salaries and remit monies to hundreds of Saccos within stipulated time given some counties are far removed from some services e.g. certain banks? Should the membership of these Saccos start withdrawing membership and seek refunds before things go haywire?

Tick Tock Tick Tock!!

Let us paint a picture here. In a County Government, their would be members of various countrywide Saccos (Wakulima Sacco, Shirika Sacco, Afya Sacco, Jamii Sacco, etc.). These County Governments would have of course budgeted for recurrent expenditure though probably despite the politics and greed like we just witnessed. The salaries would be paid through the County Governments to civil servants who work in the devolved systems. Also deductions will have to be effected by the County Governments from these workers to be remitted to their respective Saccos within seven days. There would be hundreds of Saccos waiting for their members deductions. Cheques will be written and deposited to these Saccos accounts or send all the way from Mandera, Lodwar, West Pokot, etc. The magnitude of these activities are overwhelming to say the least. Some County Governments probably will view this activity (deducting and remitting) as not a "priority". It will be a disaster too if salaries will delay, if County priorities will be as we just witnessed, if certain activities in a county have been underfunded and employees deductions seem easy way out, if corruption will intensify,etc.

Tick Tock Tick Tock!!

More information is needed!!

Then again are these Saccos placed to collect their members deductions from the 47 Counties? Do these Saccos know where their members are and how many are to be affected? Do these Saccos have a way of monitoring remitted deductions and notifying its membership of any failure by County Governments to do so? Will the Ministry or department at County Government responsible for co-operative societies have the muscles to effectively enforce Section 35 or shoot itself? Under which County will be these countrywide Saccos be? Nairobi? Will Nairobi County (if it is) have the manpower and even the mandate to enforce Section 35 to a County or Counties that failed to remit sums deducted?

We all know most people that have been employed by the County Governments are political or were employed for political reasons or tribal, nepotism, etc reasons. What will prevent them from doing shoddy jobs? What will motivate them to ensure Saccos don’t die? What will prevent them from punishing members of a certain Ministry within the County by holding their deductions and even salaries?

Tick Tock Tick Tock!!

Transcend your reality.

I say that co-operatives should have never been devolved. Devolve health, agriculture etc. but not co-operatives. Co-operatives have political bearing as they have elections and sometimes these elections are highly contested and attract politicians who influence it their way. What motivation will a co-operative officer have to stop such interference? What motivation will a co-operative officer have to enforce Co-operative Societies Act despite it being unpopular and being against County Government officials?

Tick Tock Tick Tock!!

WHAT IS A CO-OPERATIVE?

"The people's welfare can best be secured by institutions organized by the people themselves, because these institutions are most likely to possess the characteristics that appeal to the people and therefore the stability to perpetuate their services"- Alphonse Desjardins.

What is a Co-operative?

A co-operative is define as an autonomous association of persons united voluntary to meet their economic, social, cultural needs and aspirations through a jointly-owned and democratically controlled enterprise. A co-operative may also be defines as a business owned and controlled equally by the people who use its services or who at it, who are referred to as members (International Co-operative Alliance).

Like companies co-operatives are economic organizations whose income generating activities are devoted to the economic and social welfare of their members by providing services which enable individuals to improve their personal skills and economic means for self advancement.

Co-operative is an idea, a thought, a certainty that yes we can, that anything the human mind can believe, the human mind can achieve. It is also important to note that "every individual forms his own estimate of himself and that basic estimate goes far towards determining what he or she becomes. You can do more than you believe you can. You can do more than you believe you are. Belief stimulates power within yourself. Have faith in faith. Don't be afraid to trust faith."

Co-operative approach implies:-

• Treating people as origin of action, not as objects to be manipulated or serviced
• Encouraging people to work together and help one another solve mutual problems
• Designing useful structures, processes, products and services so as to meet people's needs rather than profit making purposes alone.

OBEJECTIVES OF SACCO SOCIETIES

The objects for which the society is established are to organize and promote the welfare and economic interests of its members.

In particular, the society undertake:

a) To promote thrift among its members by affording them an opportunity for accumulating their savings and deposits and create thereby a source of funds from which loans can be given to them exclusively for provident and productive purposes, at fair and reasonable rates of interest; thereby enabling them to use and control their money for their mutual benefit.

b) To ensure personal growth through the introduction of new products and services that will promote the economic base of the members.

c) To ensure progress of members and society through continuous education programs on proper use of credit, reduction of poverty, human dignity and co-operation.

d) To apply the co-operative principle of co-operation among co-operatives in order to promote members’ interests. In furtherance to the objects the society shall affiliate to the relevant National Co-operative Union and the Apex society.

For the attainment of the above objects, the society may do acts and things that are permissible under the Act, rules and these By- laws including but not limited to acquire property and chattels and doing all such other things as are incidental or consequential to the economic enhancement of its members interests provided such act is approved by the members in a general meeting.

SUSPENSION AND EXPULSION OF MEMBERS OF A SACCO

The committee may suspend a member subject to the decision of the general meeting to expel who:

a) fails to fulfill his/her obligations to the society whether stated in these by-laws, general internal regulations, a resolution of the general meeting or in contravention of any other legal document, provided such a member has been called upon to do so but has failed,

b) Is convicted in a court of law for a criminal offence involving dishonesty or fraud or is, imprisoned for a period of three months or more,

c) Is a member of another society having similar objects,

d) Acts in any manner prejudicial to the interests of the society.

Provided that, no member shall remain in suspension for a period of more than 12 months.

PROCEDURE OF SUSPENSION AND EXPULSION

a) Upon formal and written proof that a member has committed a violation punishable by expulsion, the committee shall serve a thirty (30) days written notice to the member stating the reason(s) for the proposed expulsion and requiring him/her to file a defense.

b) Upon the expiry of the 30 days and taking into consideration the member’s defense if any, the committee shall initiate administrative inquiry and make a decision on its findings within 15 days. The Committee may;-

i. Suspend the member pending expulsion by the General Meeting or

ii. Impose any other punishment as provided for in the applicable law.

c) The suspended member may appeal to the supervisory committee if not satisfied with the decision of the committee.

d) The committee and supervisory committee shall present their findings to the next General meeting which may either lift the suspension or expel the member.

e) A member who is expelled from the Sacco society shall have the right to appeal to the tribunal.

ACCORDING TO INTERNATIONAL CO-OPERATIVE ALLIANCE....

• Worldwide more than 1 billion people are members of cooperatives.
• Cooperatives provide 100 million jobs worldwide, 20% more than multinational enterprises.
• The economic activity of the largest 300 cooperatives in the world equals the 10th largest national economy.

• 

  Money can't buy happiness, however it can rent it :-)

  In India and China combined, more than 400 million people are part of cooperatives.
• In Germany and the United States, one in four people are cooperative members while in Canada that number is four in 10!
• In Japan, 1 out of every 3 families is a member of a cooperatives.
• In Indonesia, cooperatives provide jobs to 288,589 individuals.
• In Kenya, 250,000 people are employed by cooperatives.
• Canadian maple sugar cooperatives produce 35% of the world's maple sugar production.
• In Colombia, the 8,124 cooperatives were responsible for 4.96% of the GDP in 2009. They employ over 137,888 people - 46% of which are men and 54% women.
• In Kenya, cooperatives are responsible for 45% of the GDP and 31% of national savings and deposits. They have 70% of the coffee market, 76% dairy, 90% pyrethrum, and 95% of cotton.
• In Poland, dairy cooperatives are responsible for 75% of dairy production.
• In the UK, the largest independent travel agency is a cooperative.
• In Vietnam, cooperatives contribute 8.6% of the Gross Domestic Product (GDP).
• Costa Rica counts over 10% of its population as members of cooperatives.
• In Germany, 20 million people are members of cooperatives, 1 out of 4 people.
• In Singapore, 50% of the population (1.6 million people) are members of a cooperative.

1)    To observe and operate within provisions of the Co-operative Societies Act, Rules, Society By-law and the various policy documents.

2)    Operate within the budget, and avail the Trial Balances and Economic reports to the respective Government offices.

3)    To provide efficient, timely and quality services to their members.

4)    The members have obligation to elect leaders who are transparent and accountable.

5)    Committee have obligation of providing minutes of Management, Special and Annual General Meetings to the Sub-County Co-operative Officer at all times.

6)    The committees have an obligation to invite the Co-operative Officers to all their meetings.

7)    The society has an obligation to provide accurate, timely and up to date information to the Sub-County Co-operative Officer.

8)    The society has an obligation to pay audit and supervision fee to the Ministry of Industrialization and Enterprise Development Department of Co-operative Development and Marketing.

Related articles

• Meetings in Co-operative Societies (funnyardstick.wordpress.com)
• Suspension and Expulsion of a Member of a Sacco/co-operative (funnyardstick.wordpress.com)
• Duties and Powers of the Management Committee/board of Directors (funnyardstick.wordpress.com)

MERGERS OR AMALGAMATION OF CO-OPERATIVES

The Sacco Societies Regulatory Authority (Sasra) has asked 65 co-operatives to merge so as to raise their capital levels to 10 million as required by law so as to continue offering Front Office Savings Activities (FOSA). Amalgamation is a complicated process and more so as the said Saccos some were mismanaged and probably some are still refunding past members their deposits or have other debts. Saccos should not rush to have FOSAs and should concentrate on back office services until such a time they have the membership and financial capabilities to do so.

The following is an excerpt from the Co-operative Societies Act Cap 490 on amalgamation/mergers of co-operative societies:-

Section 29 Amalgamation of co-operative societies

(1) Any two or more co-operative societies (hereinafter referred to as amalgamating societies) may, by special resolution (in this section referred to as the preliminary resolution), resolve to amalgamate as a single society
(hereinafter referred to as the amalgamated society).

(2) A copy of the preliminary resolution shall be sent to all the members and creditors of each of the amalgamating societies, and to all other persons whose interests in any of the amalgamating societies will be affected by the amalgamation.

(3) Any member of any of the amalgamating societies may, notwithstanding any by-law to the contrary, by notice in writing given to his society at least one month before the date specified as the date of amalgamation, intimate his intention not to become a member of the amalgamated society.

(4) Any creditor of any of the amalgamating societies may, notwithstanding any agreement to the contrary, by notice in writing given to such society at least one month before the date specified as the date of amalgamation, intimate his intention to demand the payment of any money due to him.

(5) Any other person whose interest will be affected by the amalgamation may, by notice in writing given to the concerned amalgamating society, not less than one month before the date specified as the date of amalgamation, object to the amalgamation unless his claim is satisfied.

(6) Not less than three months after the date of the meeting at which the preliminary resolution is passed, a further special general meeting of each of the amalgamating societies shall be held to consider the preliminary resolution and any notices received under this section.

(7) At the special general meeting held under subsection (6) provision shall be made by a further resolution of the society (in this section referred to as the secondary resolution) for—
(a) the repayment of the share capital of any member who has given notice under subsection (3);
(b) the satisfaction of any claims by creditors who have given notice under subsection (4); and
(c) the satisfaction of the claims of such other persons who have given notice under subsection (5) securing of their claims in such manner as determined or directed by the Commissioner. Provided that no member or creditor or other person shall be entitled to such repayment or satisfaction until the preliminary resolution is confirmed as provided in subsection (8).

(8) Each amalgamating society may, by further resolution passed by a two thirds majority of the members present and voting, confirm the preliminary resolution.

(9) (1) If, within such time as the Commissioner considers reasonable, the Commissioner is satisfied that the secondary resolutions of each of the societies amalgamating comply with the provision of this section, he may register the amalgamated society and its by-laws and thereupon—
(a) each of the amalgamating societies shall stand dissolved and its registration cancelled;
(b) the registration of the amalgamated society shall be a sufficient conveyance to vest the assets and liabilities of the amalgamating societies in the amalgamated society;
(c) the remaining members of the amalgamating societies shall become members of the amalgamated society and will be subjected to its bylaws;
(d) any share holders of the amalgamating societies or any other persons who have claims against the amalgamating societies and whose claims were not satisfied in accordance with the secondary resolution, may pursue such claims against the amalgamated society.

(10) Where the Commissioner refuses the amalgamation of the amalgamating societies under subsection (9) such societies may appeal against such refusal to the Minister.

DIVISION OF CO-OPERATIVE SOCIETIES

Division of Co-operative Societies is also permitted under the Co-operative Societies Act Cap 490 of the Laws of Kenya Section 30. With Co-operatives, the bigger the better; economies of scale is easily realized and taken advantage of. Division is also not an easy process as it can be seen from the process below from the excerpt of the Act. Its advisable not to recommend division but look at other ways of improving the society capacity or find lasting solutions to the problems that are leading to division.

Section 30 Division of co-operative societies

(1) (a) A co-operative society (hereinafter referred to as the existing society) may, by special resolution (in this section referred to as the preliminary resolution), resolve to divide itself into two or more co-operative societies
(hereinafter referred to as the new societies).
(b) The preliminary resolution shall contain proposals for the division of assets and liabilities of the existing society among the new societies in which it is proposed to be divided and may prescribe the area of operation of, and specify the members who will constitute, each of the new societies.

Money can't buy happiness, however it can rent it :-)

(2) A copy of the preliminary resolution shall be sent to all the members and creditors of the existing society, and to all other persons whose interests will be affected by the division of the existing society.

(3) Any member of the existing society may, notwithstanding any by-law to the contrary, by notice in writing given to the society within two months of the receipt of the copy of the preliminary resolution, intimate his intention not to become a member of any of the new societies.

(4) Any creditor of the existing society may, notwithstanding any agreement to the contrary, by notice in writing given to the existing society within two months after his receipt of the copy of the preliminary resolution, intimate his intention to demand the payment of any money due to him.

(5) Any other person whose interest will be affected by the division may, by notice in writing given to the existing society within two months of the receipt of the preliminary resolution, object to the division.

(6) After the expiry of three months after the date of the preliminary resolution, a further special general meeting of the existing society shall be held to consider the preliminary resolution and any notices received under this
section.

(7) At the special general meeting held under subsection (6), provision shall be made by a further resolution of the society for—
(a) the repayment of the share capital of any member who has given notice under subsection (3);
(b) the satisfaction of any claims by creditors who have given notice under subsection (4);
(c) the satisfaction of the claims of such other persons who have given notice under subsection (5) or the securing of their claims as the Commissioner may determine, or direct: Provided that no member or creditor or other person shall be entitled to such repayment or satisfaction until the preliminary resolution is confirmed as
provided in subsection (8).

(8) The society may, by further resolution passed by a two-thirds majority of the members present and voting, confirm the preliminary resolution, with or without changes as in the opinion of the Commissioner are not substantial, and the decision of the Commissioner as to whether any changes are or are not substantial shall be final.

(9) If, the Commissioner is satisfied within such time as he considers reasonable that the provisions of the secondary resolution and the provisions of this section have been complied with, he may, register the societies into which the existing society has been divided and the by-laws of such societies and thereupon—
(a) the registration of the existing society shall stand dissolved;
(b) the registration of the new societies shall be sufficient to vest the assets and liabilities of the existing society in the new societies in the manner specified in the preliminary resolution, as confirmed;
(c) the remaining members of the existing society shall become members of one or other of the new societies, as is provided by the preliminary resolution, as confirmed; and
(d) any share holders or creditors of the existing society and any other persons who have claims against the existing society and whose claims were not satisfied in accordance with the secondary resolution, may pursue such claims against one or other of the new societies, as is provided by the preliminary resolution, as confirmed.

(10) Where the Commissioner refuses to approve the division of an existing society under subsection (9), the society may appeal to the Minister within thirty days of the communication to it of the refusal.