chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 38: Functions, Duties and Powers of Annual General Meeting
Functions, duties and powers of the General Meeting shall be as follows:-
(a) To approve the annual program and budget,
(b) To approve the annual audit report,
(c) To elect and dissolve the Board of Directors and Accounts Supervision Committee,
(d) To remove from the office of a director, convener or member of the Accounts Supervision Committee,
(e) To adopt the annual report of the Board of Directors or of the Accounts Supervision Committee,
(f) To adopt Byelaws and internal procedures,
(g) To appoint an Auditor and determine his or her remuneration,
(h) To make a decision as to the unification or dissolution of the Organization,
(i) To determine incentives, including remuneration,
(j) To accept external liabilities,
(k) To write off the liability of a member,
(l) To issue necessary directives to the Board of Directors,
(m) To carry out such other functions as referred to in the bylaws.

Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 39: Meeting General Meeting
1) The Board shall call a preliminary General Meeting within three months of the Cooperative Organization’s registration.
2) The Board shall call an Annual General Meeting within six months from the completion of each fiscal year.
3) The Board shall call an Extraordinary General Meeting in any of the following circumstances:-
(a) On the recommendation of the Accounts Supervision Committee pursuant to clause (g) of sub-Section (1) of Section 49,
(b) In case the Board approves the resolution moved by any Director to call an Extraordinary General Meeting,
(c) In case the Board decides to call an Extraordinary General Meeting for any particular business,
(d) In case fifteen percent of the members submit an application to the Board to call an Extraordinary General Meeting showing reasons thereof,
(e) In case the Registrar or authority authorised by the Registrar directs pursuant to sub-Section (1) of Section 40,
(f) In case the Registrar or authority authorised by the Registrar orders pursuant to sub-Section (2) of Section 42.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 40: Directives may be given to call an Extraordinary General Meeting
1) Registrar or authority authorised by the Registrar may direct the Cooperative Organization to call an Extraordinary General Meeting in case any of the following circumstances are found while carrying out inspection or supervision of any Cooperative Organization or while inquiring into a complaint:-
(a) In case of commission of any act against values, norms and principles of cooperatives,
(b) In case of commission of any act against this Act, the Rules, Byelaws and internal procedures framed under this Act,
(c) In case serious flaws are identified in the course of inspection or supervision of a Cooperative Bank by the Nepal Rastra Bank,
(d) In case of frequent violation of the directives issued by the Registrar or authority authorised by the Registrar,
(e) In case the Registrar or authority authorised by the Registrar issues an order pursuant to sub-Section (2) of Section 42.
2) In case of receipt of the directive to call the General Meeting pursuant to sub-Section (1), the Board shall call the General Meeting within Thirty-five days from the date of receipt of the directive, and discussions shall be held on the complaint, or the matter identified in the course of inspection and report thereof shall be submitted to the Registrar or authority authorised by the Registrar.
3) In case the Board fails to call the General Meeting within the period referred to in sub-Section (1) and (2), the authority authorised by the Registrar in case of the organisation, District Sectoral Cooperative Association and District Cooperative Association; and the Registrar in case of Provincial Sectoral Cooperative Association, provincial cooperative Association, Specialized Cooperative Association, Central Sectoral Cooperative Association, National Cooperatives Federation and Cooperative Bank, may call such a General Meeting.
4) The quorum for the General Meeting of a Cooperative Organization shall be at least fifty-one percent of the number of the then-existing members.
Provided that in case the quorum could not be constituted in the General Meeting called for the first time, it shall be called again within seven days. If one-third of the members, along with the majority of the members of the Board of Directors, are present in the General Meeting called again, the quorum for the General Meeting shall be deemed to be constituted.
5) While convening the General Meeting by a Cooperative Organization having two thousand or more members, the General Meeting may be convened on the same agenda in a local body or a ward thereof on the basis of a prescribed number by sending the members of the Board of Directors, representatives may be selected to certify the decisions of the General Meeting and the General Meeting may take final decisions in the presence of such representatives.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 41: Board of Directors
1) There shall be a Board of Directors in a Cooperative Organization elected by the General Meeting.
2) The Board referred to in sub-Section (1) shall, to the extent possible, ensure the presence of at least thirty-three percent women members.
3) No more than one person of the same family may become a candidate and be elected at the same tenure as a director and a member of the Accounts Committee.
4) No director of any Cooperative Organization can become an employee or a director of any other Cooperative Organization except the Cooperative Organization in which he/she is a director.
Provided that it shall not hinder a Director of a Cooperative Organization from having an annual turnover of less than twenty million rupees from working as an employee in the same cooperative Organization. In case any Director of a Cooperative Organization having an annual turnover of more than twenty million rupees is also working as an employee, such a Director shall give up the position of an employee within four years from the date of commencement of this Act and manage for another employee. The committee referred to in Section 51 shall specify the maximum ceiling of the amount with regard to the existing conditions of the market and the rate of inflation.
5) A person may become a director of only one Cooperative Organization at a time.
6) Notwithstanding anything contained in sub-Section (4) and (5), in case any person has become a director in more than one Cooperative Organization or an employee in the same or another Cooperative Organization, he/she shall have to be a director of only one Cooperative Organization or an employee, as the case may be within one year from the commencement of this Act.
7) The term of the office of the Board shall be as follows:-
(a) Four years in the case of an organisation or Association or Federation,
(b) Four years in the case of Cooperative Bank.
8) Other provisions relating to meetings of the Board shall be as prescribed.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 42: Election of Board
1) The Board shall have to conduct the election of another Board before the expiry of its term of office.
2) In case information is received that the election of the Board is not held pursuant to sub-Section (1), the Registrar or authority authorised by the Registrar may order the concerned Board to complete the election within six months from the date of receipt of such information.
3) In case the Registrar or authority authorised by the Registrar issues the order pursuant to sub-Section (2), the concerned Board shall hold the election within the time stipulated in such an order and inform the Registrar or authority authorised by the Registrar about the same.
4) In case the election is not held as referred to in sub-Section (3), the Registrar or authority authorised by the Registrar shall carry out entire actions relating to the election of the Board having involved representative of the higher association if any of such Organization in which it is a member.
5) It shall be the duty of the concerned Organization and the Board to render assistance in the election referred to in sub-Section (4).
6) Entire costs to be incurred in the case of conducting the election referred to in sub-Section (4) shall be borne by the concerned Cooperative Organization.
7) The Board shall carry out its functions as provided for in the Bylaws until the next election of the Board is held under this Section.

Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 43: Functions, duties and powers of Board
In addition to the functions, duties, and powers referred to elsewhere in this Act, the functions, duties and powers of the Board shall be as follows:-
(a) To operate the Cooperative Organization according to norms, values and principles of Cooperatives,
(b) To carry out or cause to be carried out financial and administrative functions,
(c) To call preliminary General Meetings, Annual General Meetings, Extraordinary General Meetings,
(d) To implement or cause to be implemented the resolutions of the General Meeting,
(e) To prepare policies, plans, budget and annual programs of the Cooperative Organization and to submit them to the General Meeting,
(f) To grant membership of the Cooperative Organization and to remove from membership,
(g) To carry out functions relating to share transfer and withdrawal,
(h) To acquire membership of the concerned Association,
(i) To frame Byelaws and internal procedures and to submit them in the General Meeting,
(j) To carry out or cause to be carried out necessary functions for the promotion of transactions and commercial interests subject to the working areas of the Cooperative Organization,
(k) To carry out such hold other functions as prescribed.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 44: Directors not to continue to hold the office
A Director shall not continue to hold the office in any of the following circumstances:-
(a) In case the resignation tendered by him or her is accepted by the Board,
(b) In case a decision is taken to remove him or her from the office of Director pursuant to sub-Section (1) of Section 45,
(c) In case he/she is the director of another Cooperative Organisation as well,
(d) In case he/she is an incumbent employee in the same Organisation or another organisation,
Provided that in case of the circumstance referred to in the proviso to sub-Section (4) of Section 41 shall be as stated there.
(e) In case he/she is a member of the Accounts Supervision Committee in the same Organisation or another organisation,
(f) In case he/she dies.

Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 45: Directors may be removed from Office
1) The General Meeting may, by a resolution adopted by its majority, remove a director from the office of a director in any of the following circumstances:-
(a) In case he/she incurs loss or damage to the concerned Cooperative organisation by committing fiscal embezzlement,
(b) In case he/she discloses confidentiality of transaction of the concerned Cooperative Organization in an unauthorised manner,
(c) In case he/she is involved in the same nature of business or transaction with the concerned Cooperative Organization in a competitive manner,
(d) In case he/she commits any act against the interests of the concerned Cooperative Organization,
(e) In case he/she is physically or mentally incapable of working,
(f) In case any director does not have qualifications referred to in this Act, Rules or Byelaws framed under this Act.
2) Before adopting a resolution to remove any director from the office, such a director shall be provided with a reasonable opportunity to defend himself or herself at the General Meeting.
3) In case any director fails to submit his or her defence within the period referred to in sub-Section (2), or in case his or her defence is not satisfactory, the General Meeting may remove him or her from the office thereafter.
4) The member removed from the director pursuant to sub-Section (3) is not eligible to become a candidate for two terms of office.
5) In case any director is removed from the office pursuant to sub-Section (3), the General Meeting may elect another person as the director for the remaining term of the office.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 46: Not to be involved in the decision-making process having conflict of personal interest
1) The director shall be engaged in the decision-making process that involves his or her personal interests.
2) No Director shall carry out or cause to be carried out any act of Cooperative Organization that renders benefits only to him or her.
3) In case any director carries out or causes to carry out any act in contravention of sub-Section (1) or beyond his or her working areas, such a director shall be personally liable for such act and in case such an act renders loss or damage to Cooperative Organization, to a member or any other person, such loss or damage shall be recovered from him or her.

Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 47: Dissolution of Board
1) The General Meeting may dissolve the Board in any of the following circumstances:-
(a) In case transactions of the Cooperative Organization are at risk due to
malafide
acts of the Board,
(b) In case of failure to pay the liabilities to be paid by the Cooperative Organization within the specified time,
(c) In case of the commission of an act against the objective and business specified in the bylaws,
(d) In case the Board does not fulfil its responsibilities,
(e) In case of frequent violation of this Act or conditions referred to in Rules or the directives issued by the Registrar or the authority authorised by the Registrar.
2) In case the Board is dissolved pursuant to sub-Section (1), the General Meeting shall elect a new Board.
3) In case the Board does not comply with the directive issued by the Registrar or the authority authorised by the Registrar under this Act or Rules framed under this Act or on the basis of gravity of the subject matter found in the complaint filed or found in the course of inspection according to the report submitted to pursuant to sub-Section (2) of Section 40, the Registrar or office in-charge may give a time of six months for reform and if no reform is taken place even within that period, such a Board shall be dissolved.
4) In case the Board is dissolved pursuant to sub-Section (3), the Registrar or the authority authorised by the Registrar shall have to form an ad hoc Board as prescribed for holding an election of another Board within three months from the date of dissolution so made and to operate the daily transactions of the Cooperative Organization until the election is held.
5) Entire expenses incurred in the case of holding the next election under this Section shall be borne by the concerned Cooperative Organization.
6) Notwithstanding anything contained elsewhere in this Section, the Registrar shall obtain consultation from the Nepal Rastra Bank before dissolving the Board of a Cooperative Bank, and it shall be done according to the advice of the Nepal Rastra Bank in this regard.
Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 48: Formation of Accounts Supervision Committee
1) In order to strengthen the internal control system in a Cooperative Organization, the General Meeting shall form through election an Accounts Supervision Committee comprising one convener and two members having met the prescribed qualifications.
2) More than one member of the same family shall not stand as a candidate or get elected at the same tenure as a director convener or member of the Accounts Supervision Committee of the same Cooperative Organization.

Cooperatives Act 2074

Chapter 6 General Meeting, Board of Directors and Account Supervision Committee

Section 49: Functions, duties and powers of Accounts Supervision Committee
1) The Functions, duties and powers of the Accounts Supervision Committee shall be as follows:-
(a) To conduct or cause to be conducted internal auditing of the Cooperative Organization in every quarter,
(b) To comply with or cause to be complied with the basic principles of auditing while conducting internal auditing,
(c) To inspect and evaluate and cause to be inspected or evaluated financial transactions,
(d) To have regular supervision of the actions and activities of the Board and to provide necessary suggestions to the Board,
(e) To monitor whether or not directives issued or decisions made by the General Meeting and decision of the Board have been implemented,
(f) To submit to the General Meeting accounts, report and annual report on supervision of the functions of the Board,
(g) To recommend the Board to call a meeting of the extraordinary General Meeting showing the reasons thereof that adverse impact is caused in the interests of any Cooperative Organization due to non-compliance of the recommendations made by it frequently; that there have been embezzlement or massive misuse of cash or kind assets of such organisation or in case the organisation is likely to undergo serious financial crises.
(h) To make recommendations of names of three persons to be appointed as internal auditors, if required.
2) The convener and members of the Accounts Supervision Committee shall not be involved in daily and administrative functions of the Cooperative Organization.
Cooperatives Act 2074

Chapter 7 Mobilisation of Saving and Credits

Section 50: Transaction of Savings and Credits to be made concentrating on Member
1) A Cooperative Organization may accept savings only from its members, to mobilise such savings and disperse credits only to the members.
2) Notwithstanding anything contained in sub-Section (1), no sectoral or multi-purpose Organization other than the Organization Registered with the main objective of making savings and credit transactions shall be allowed to make savings and credit transactions as the main transaction.
Provided that in case any sectoral or multi-purpose Organization has been carrying out the main objective of making transactions of savings and credit at the commencement of this Act, such an organisation shall, within a period of three years, make provisions of not carrying out the transaction of savings and credits as the main transaction and to have the main transaction of the matter which was stated at the time of registration of the Organization.
3) Except otherwise specified by the Registrar, service charges and renewal fees on credits disbursed by Cooperative Organization to members shall be as stated in the procedures of the concerned Organization.
4) The difference in the rate of interest on savings and on credits (spread) shall not be more than six percent.
5) The interest to be charged on credit disbursed by a Cooperative Organization shall not be charged having capitalised the interest in the main credit amount.
1
6) Cooperatives shall not use the savings of their members for any purpose other than for loan investment among themselves, purchase of bonds issued by the Government of Nepal or shares of cooperative banks or small farmers’ microfinance institutions, purchase of real estate, construction of infrastructure, investment in transactions, purchase of shares of firms, companies or any other banks or for any other purpose.
7) A Cooperative Organization may collect deposits as much as fifteen times the primary capital.
8) An Organisation or Association may not make credit investments to members other than the members who are listed at the time of registration until a period of three months is completed after acquiring the membership.
1 Amended by the Act to Amend Certain Nepal Acts, 2075.
Cooperatives Act 2074

Chapter 7 Mobilisation of Saving and Credits

Section 51: Reference interest rate may be determined
1) The Registrar may, on the recommendation of the following committee, determine the reference interest rate and the upper ceiling of a transaction referred to in sub-Section (4) of Section 41 for the purpose of Cooperative Organization in the context of savings and credit:
(a)
Registrar
Convener
(b)
Representative, Ministry
Member
(c)
Representative, Ministry of Finance
Member
(d)
Representative, Nepal Rastra Bank
Member
(e)
Representative, National Cooperative Development Board
Member
(f)
Chairperson, National Federation of Cooperatives or Director Representative designated by him or her
Member
(g)
Representative, National Cooperatives Bank
Member
(h)
Chairperson of Federation or a director designated by him or her and two persons from central Sectoral associations
Member
(i)
Deputy-Registrar, Department of Cooperative
Member-Secretary
2) The reference interest rate determined pursuant to sub-Section (1) shall be the directive interest rate for Cooperative Organization.
3) The bases and procedures for determining the reference interest rate shall be as specified in the bylaws of the concerned Organization.

Cooperatives Act 2074

Chapter 7 Mobilisation of Saving and Credits

Section 52: Limit of Personal Saving
The limit of personal deposits of members in an Organisation shall be as specified in the bylaws of the concerned Organisation.