Amalgamations of Co-operatives (Section 57&64)

If members of a co-operative would like to amalgamate two or more co-operatives, a special resolution is needed. Pass a special resolution at a general meeting convened for approval of agreement to amalgamate two or more co-operatives.

Steps to follow:

Step 1:  Register as a Customer

 If you are already registered as a customer, and know your customer code and password, proceed to step 2.  The customer code must be used as reference number on all co-operative forms. 

Step 2:  Deposit funds 

Deposit R245 into the CIPC bank account.  For the bank account details, click here

Step 3: Amalgamate the co-operative  

Print and complete the following:

    • CR1 – Application to register a co-operative
    • CR4 - Notice of appointment of auditor OR
    • CR8 - Application for exemption from full compliance with auditing requirements.
    • CR5 - Application for name reservation
  • Scan and e-mail or post the completed and signed documents, together with supporting information to cooperativesonline@cipc.co.za
  • Include the supporting documents:
    • Confirmation notice of name reservation - CoR9.4
    • Certified identity copy of members
    • Power of attorney (if applicable)
    • Proof of payment of R245
    • Copy/Summary of the proposed amalgamation agreement must accompany the notice of meeting
    • Notice of registered office, directors of the amalgamated co-operative
    • Declaration by the directors of each amalgamating co-operative stating that the amalgamated co-operative is liquid, solvent and interests of creditors will be protected.
    • The board of directors of each amalgamating co-operative must submit the proposed agreement to amalgamate to a general meeting of each amalgamating co-operative
    • A copy or summary of the proposed amalgamation agreement must accompany the notice of such meeting
    • An amalgamation agreement must be approved by special resolutions of each amalgamating co-operative
    • After approval of an amalgamation agreement, the constitution of the amalgamated co-operative must be submitted to the registrar for approval, together with a notice of its registered office, a notice of the directors of the amalgamated co-operative
    • A declaration by the directors of each amalgamating co-operative must be attached to the constitution submitted as mentioned above, establishing that the relevant provisions of their constitutions have been complied with in approving the amalgamation, and that there are reasonable grounds to believe that-
      • the amalgamated co-operative will be able to pay its liabilities as they become due;
      • the realisable value of the amalgamated co-operative's assets will not be less than the total of its liabilities, share capital and reserves; and
      • the interests of creditors will be protected in compliance with section 64.

 

Division of a co-operative (Section 60 & 64)

If members of a co-operative would like to divide a co-operative into two or more co-operatives, a special resolution is needed. Pass a special resolution at a general meeting convened for approval of the division.  Each of the new co-operatives will have to comply with the requirements of a co-operative.  The agreement must set out the terms of the division and how the division will be done, including the following:

  • The provisions of the constitution of each co-operative
  • Which members will become members of each of the co-operatives
  • The manner in which the assets, rights, liabilities and obligations of the cooperative are to be divided between the co-operatives to be constituted by the division
  • The business of each of the co-operatives constituted by the division and the area or sector in which they are to operate; and
  • The name and address of the proposed directors of the co-operatives have to be constituted.

Steps to follow:

Step 1:  Register as a Customer

 If you are already registered as a customer, and know your customer code and password, proceed to step 2.  The customer code must be used as reference number on all co-operative forms. 

Step 2:  Deposit funds 

Deposit R215 for each co-operative into the CIPC bank account.  For the bank account details, click here

Step 3: Divide the co-operative  

Print and complete the following:

    • CR1 – Application to register a co-operative
    • CR4 - Notice of appointment of auditor OR
    • CR8 - Application for exemption from full compliance with auditing requirements.
  • Scan and e-mail or post the completed and signed documents, together with supporting information to cooperativesonline@cipc.co.za
  • Include the supporting documents:
    • Confirmation notice of name reservation - CoR9.4
    • Certified identity copy of members
    • Power of attorney (if applicable)
    • Proof of payment of R215 per co-operative
    • Copy/Summary of the proposed division agreement must accompany the notice of meeting
    • The constitutions of the co-operatives to be constituted by the division must be submitted to the CIPC for approval together with a notice of their registered offices and a notice of the directors of the co-operatives in question.
    • A declaration by the directors of the co-operative being divided, establishing that the relevant provisions of its constitution have been complied with in approving the division;
    • A declaration by the directors of each co-operative constituted by the division, establishing that there are reasonable grounds to believe that-
      • the co-operatives to be constituted will be able to pay their liabilities as they become due;
      • the realisable value of the assets of the co-operatives to be constituted will not be less than the total liabilities, share capital and reserves; and
      • the interests of creditors will be protected in compliance with section 64.
Liquidation (Winding up or deregistering a co-operative)

If members decide to close down their Co-operative and bring the business of the Co-operative to an end, this is referred to as “winding up” or deregistering the Co-operative.

  • There are three reasons why you might have to wind up your Co-operative.
    1. The members may decide to do this at a general meeting.  In that case, you need to pass a special resolution and 75% of the members will have to vote in favour of the resolution.  If you do this, then you will need to complete form CR9 to inform the Registrar of Co-operatives that the members have voluntarily decided to deregister their Co-operative.
    2. A Co-operative may be ordered by a Court to wind up its business if it is unable to pay its debts, it appears just and equitable to do so and there is no reasonable probability that it will be able to pay its debts or become a viable co-operative.
    3. The Minister of Trade and Industry may order a Co-operative to deregister if the Registrar of Co-operatives finds that the Co-operative has committed fraud to get registered, or has not fulfilled its obligations (such as not doing the business for which it was formed) or has not followed the rules of its constitution or the Co-operatives Act.  The Minister must listen to the Co-operative’s side of the story before deciding. 

If the assets of a co-operative exceed R1000,00, the co-operative must follow a liquidation process.  When a Co-operative is liquidated, its remaining assets and property will be distributed by a liquidator.  The liquidator will sort out claims against the Co-operative, payments of its debts, collection of money still owed to it, payment of share capital to shareholders, and the payment of any remaining surplus to the members according to the proportion of transactions each of them did with the Co-operative.  If the assets of a co-operative are less than a R 1000, then the co-operative can follow a normal deregistration process.

Voluntary Winding up (deregistration) of a co-operative

The members may decide to voluntarily deregister the co-operative at a general meeting.  In that case, you need to pass a special resolution and 75% of the members will have to vote in favour of the special resolution tovoluntarily  wind up the co-operative. 

To voluntarily deregister your co-operative, follow these steps:

Step 1:  Register as a Customer

  • If you are already registered as a customer, and know your customer code and password, proceed to step 2.  Use your customer code as reference on the co-operative forms

 Step 2: Apply for voluntary winding up (deregistration) of your co-operative

  • Print and complete form CR9.
  • The following supporting documents must be included:
    • A copy of the notice convening the meeting and setting out the proposed resolution and the reasons therefore
    • Power of attorney – if representative

The service delivery standard is 15 working days of receipt of an application.

Please note that full finalisation of de-registrations is dependent on statutory advertisement process which is in excess of 3 months.

If you do not receive confirmation of deregistration application within the service delivery standard, please send a query to us by going to “Enquiries” and select the correct option.

Liquidation or Winding up by Court Order

To wind up a co-operative by court order, follow these steps:

Step 1:  Register as a Customer

  • If you are already registered as a customer, and know your customer code and password, proceed to step 2.

Step 2: Wind up the co-operative by court order

E-mail the following to cooperativesonline@cipc.co.za

  •  Court order to commence winding up proceedings

The service delivery standard is 15 working day of receipt of an application.

Please note that full finalisation of deregistrations is dependent on statutory advertisement process which is in excess of 3 months.

If you do not receive acknowledgement within the service delivery standard, please send a query to us by going to “Enquiries” and select the correct option.

 

Deregistration by order of the Minister of Trade and Industry

To wind up a co-operative by order of the Minister of Trade and Industry, follow these steps:

Step 1: Deregistering the co-operative by order of the Minister of Trade and Industry

  • The Registrar will notify the co-operative of liquidation or winding up proceedings.

The service delivery standard is 15 working day of receipt of an application.

Please note that full finalisation of deregistrations is dependent on statutory advertisement process which is in excess of 3 months.

If you do not receive your certificate within the service delivery standard, please send a query to us by going to “Enquiries” and select the correct option.

Conversion to a company or cancellation of registration as a co-operative
  1. A co-operative may apply to:
    • convert into any other form of corporate of unincorporated body in accordance with the applicable legislation; and
    • cancel its registration as a co-operative.
  2. An application to convert may only be made if the board of directors has submitted a proposal to a general meeting, detailing the reasons for and the terms of the proposed conversion.
  3. A copy of the proposal must be attached to the notice of the general meeting, and must be adopted by special resolution.
  4. A declaration by the board of directors of the co-operative must be attached to an application establishing:
    • compliance witht he relevant provisions of the Co-operative Act and the constitution of the co-operative; and
    • that the interests of creditors will be protected inaccordance with section 64.
  5. The registrar may require the board of directors to submit such proof as the registrar may require in any matter containted  in the declaration by the board of directors.
  6. If the registrar is satisfied that there has been compliance with the provisions of this Act, the registrar must:
    • cancel the registration of the co-operative; and
    • remove its name from the register of co-operatives
  7. As from the date on which the registration of a co-operative is cancelled:
    • the co-operation cease to exist
    • all assets, rights, liabilites and obligations of the co-operative vest in the corporate body or unincorporated association of persons into which the co-operative has been converted it if it is by virtue of its constitution capable of owning property separate from its members; and

if the co-operative is converted into a company, all members of the co-operative become shareholders of that compan

A co-operative can be converted to a company.  The conversion can be done manually.

A co-operative can be converted to a company.  The conversion can be done manually.

To convert a co-operative to a company, follow these steps:

Step 1:  Register as a Customer

  • If you are already registered as a customer, and know your customer code and password, proceed to step 2.

 Step 2:  Deposit funds

  • To convert a close corporation to a short standard private company (CoR15.1A), deposit R50 for the name reservation and R125 for company registration  the CIPC bank account.  For the bank account details, click here.
  • To convert a close corporation to a company with a customised Memeorandum of Incorporation, or using CoR15.1B, deposit R50 for the name reservation and R425 for company registration into the CIPC bank account.  For the bank account details,click here.

Step 3: Convert the co-operative to a company

 Important: Use the name that the company will be using after conversion on all the forms

To convert a close corporation to a company, complete the following:

  • A Memorandum of Incorporation for the company to be formed (CoR15.1.A or CoR15.1 B or customized MOI)
  • Form CoR39 to identify the initial directors of the company
  • Form CoR21.1 if a change in registered office is to be made
  • Form CoR25 if a change in financial year end is to be made
  • Form CoR44 if an auditor for the company has been appointed
  • Form CoR44 if an audit committee has been appointed
  • Form CoR 9.4 (reserve a name) if a change of name must take place upon conversion
  • Other supporting documents required are: 
    • The original written resolution or statement of consent
    • Certified identity copy of the applicant
    • Certified copied of the identity documents of all the incorporators and the directors

 

 

Protection of creditors ito amalgamations, divisions, conversion or transfer of co-operatives

The registrar may not register any amalgamation, division, conversion or transfer of a co-operative unles the registrar is satisfied that:

  • written notice of at least three months of the proposal has been given to each known creditor who has a claim exceeding one thousand rand or such amount as the Minister may from time to time prescribe;
  • any creditor who demanded payment of any amount due to them have been paid in full or will be paid before the amalgamation, division, conversion or transfer is effected; and
  • no creditor will be prejudiced by the amalgamation, division, conversion or transfer.