Record keeping by a co-operative
This information should be noted BEFORE an application is lodged for registration of a new co-operative.
1. A registered co-operative must keep (in terms of the Co-operatives Act, 2005) the following at its offices:
• Its Constitution, including any amendments thereto.
• The minutes of General Meetings in a Minute Book.
• The minutes of meetings of the Board of Directors in a Minute book.
• A LIST OF MEMBERS / REGISTER OF MEMBERS setting out-
i. the name and address of each member.
ii. the date on which each member became a member.
iii. if applicable, the date on which a person’s membership was terminated.
iv. the amount of any membership fees paid, the number of membership shares owned and the number and amount of member loans.
• A REGISTER OF DIRECTORS setting out-
i. the name, address and identity number of each director, including former directors.
the date on which such directors became or ceased to be directors.
ii. the name and address of any other co-operative, company or close corporation where both present and former directors are, or were, directors or members.
• A REGISTER OF DIRECTOR’S INTEREST in contracts or undertakings.
• Adequate ACCOUNTING RECORDS, including records reflecting the transactions between each member and the co-operative for the purpose of calculating the patronage proportion.
2. The co-operative must keep its accounting records
- for a period of five years after the end of the financial year to which they relate, in the case its main object involves its members conducting transactions with it.
- for a period of three years after the end of the financial year to which they relate, in the case its main object does not involve its members conducting transactions with it.
Access to information of Co-operative
- Subject to the paragraph below, members of the co-operative may examine the records referred to in paragraphs above during normal business hours of the co-operative and may make copies thereof after payment of a fee.
- Subject to the Promotion of Access to Information Act, 2000, the Board of Directors may, for a reasonable period of time, refuse information relating to any commercial transaction of the co-operative if there are reasonable grounds to believe that the disclosure may be to the disadvantage of the co-operative.
- Where the constitution of a co-operative provides for the establishment of a supervisory committee, the supervisory committee must determine whether the Board of Directors is entitled to withhold information in terms of the paragraph above.
TIP: Before considering registering a Co-operative, visit your local Small Enterprise Development Agency (SEDA) Office for the following services:
• Pre-incorporation & Co-operative Management Training
• Assistance with business planning
The auditor’s report and the Annual Financial Statements(AFS) must be approved at the Annual General Meeting (AGM) and signed by the chairperson of that meeting.
The Board of Directors must send a copy of the Annual Financial Statement to the Registrar of Co-operatives within 15 days after it has been approved and signed.
Steps to file your annual financial statements
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. Your customer code should be completed on the CR form (The reference number).
Step 2: Submit the Annual Financial Statements
Scan and email or post application form and the Annual Financial Statements
All Co-operatives must appoint an auditor and complete the CR4 form (Appointment of an Auditor).
The services of a registered auditor can be too expensive for a small Co-operative. A Co-operative that cannot afford the services of a registered auditor may apply for exemption from this requirement. To do so, complete and send in form CR8 - Application for exemption from compliance with audit requirements. The CR8 form is in the format of an affidavit, which must be provided by the Chairperson of the Co-operative and must be signed by a Commissioner of Oaths.
A Co-operative may apply to the Registrar of Co-operatives for exemption from the requirement to submit audited financial statements every year (option 2(a) of form CR8).
The Registrar of Co-operatives may then give the Co-operative permission to be audited at a period of longer than one year, but not exceeding three years, or the Co-operative may be given permission to be audited every year by a bookkeeper (option 2(b) or (c) of form CR8) (who is not registered as an auditor) and whose services are not as expensive.
An audit is a financial evaluation that is done by a qualified and registered accountant to check that the financial affairs of the Co-operative are being correctly and honestly managed. The person or company that carries out the audit is called an auditor.
The duties of an auditor include the following:
- Make sure that the Co-operative keeps accurate Annual Financial Statements (AFS).
- Make sure that the financial records of the Co-operative follow the requirements of the Constitution and the Co-operative Act.
- Make sure that the assets and property of the Co-operative are properly managed.
- Attend meetings of the Co-operative where financial matters are discussed.
- Collect any information needed for the audit.
- Report on whether the Co-operative is following the seven Co-operative principles.
- Report on any other financial matters.
- Submit an annual auditor’s report and Annual Financial Statements (AFS) to the Co-operative.
To view the steps on how to update the auditors of the co-operative, click here.
After registration, a co-operative has to convene an annual general meeting (AGM) within 18 months of registration.
- At the first AGM of your Co-operative you must:
- Appoint an auditor
- Elect the Directors
- Elect the supervisory committee, if required by the constitution
- Decide on the future business of the Co-operative
- Take minutes
After that, all further Annual General Meetings must be held within 6 months after the end of a Co-operative’s financial year as stated in the Constitution.
- At all the other Annual General Meetings the Co-operative must do the following:
- The Board of Directors must present a financial report on the past financial year together with the Annual Financial Statements (AFS)
- Approve the report and the Annual Financial Statements (AFS)
- Elect Directors, if required by the constitution
- Elect the supervisory committee, if necessary
- Decide on matters relating to the business and activities of the co-operative