THE ROLE OF THE COMMISSIONER FOR COOPERATIVE DEVELOPMENT IN

REGULATION OF COOPERATIVE SOCIETIES IN KENYA.

Section 2 of the Cooperative Societies Act interprets a “Commissioner” as the commissioner

for Co-operative development appointed under Section 3 and whom any of the powers of the
commissioner have been conferred in accordance with the Act. Section 3 establishes the office
of the Commissioner which is an office in the public service. There shall also be established
other offices including the deputy commissioner who shall assist the commissioner in carrying
out administration duties.

The Commissioner shall be responsible for the growth and development of co-operative societies
by providing services such as registration, organization, operation, advancement, dissolution to
the co-operative societies.1

1. Registration

Section 4 of the Co-operative Societies Act provides that the commissioner registers a society
as a co-operative society under the Act on condition that its objects is to promote the welfare of
its members and its by-laws contain co-operative principles in line with the Act. This is done by
lodging an application to the commissioner in the prescribed form in accordance with the Co-
operative Societies Act.2 Upon satisfaction of the requirements, the commissioner issues a
certificate which serves as evidence of registration.

In the case of Felix Otande v Commissioner for Co-operative Development and Another, the
court stated that by the 2nd respondent filing the certificate of registration in their annexure of
documents, and therefore in line with Section 11 of the Co-operative Societies Act, this was
sufficient and conclusive evidence that the 2nd respondent was a registered co-operative society.3

In the event that the commissioner is not satisfied that the society has complied with these
requirements, and is of the opinion that the persons applying for the registration will exercise due
diligence to ensure the society complies, the commissioner may register the society for a period
not exceeding one year and the commissioner may specify in writing to the persons or to those

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Section 3(3) of Co-operative Societies Act Cap 490 Laws of Kenya
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Section 6 of the Co-operative Societies Act Cap 490 Laws of Kenya
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who the application is made on their behalf. This is provisional registration.4 At any point during
the provisional registration, where the commissioner is satisfied the requirements have been
complied with, may register the society under Section 5 and the same will be deemed to have
been registered on the date of its provisional registration.

With regards to registration of amendments of the by-laws, the commissioner will register the
same upon satisfaction that the by-laws of the co-operative society are not contrary to the Act.
The commissioner will cancel the amendment, for example, where the amendment was effected
by virtue of misrepresentation or concealing of a material fact.5 Section 9 of the Act provides
however, that a co-operative society may lodge an appeal to the Minister where the
commissioner has refused to register the society and its by-laws or amendments within 30 days
of the refusal. If a party is not satisfied by the decision of the Minister, they may appeal to the
High Court.

Under Section 52 if the Act, under the registration of charges, the commissioner;

(1) Shall register all charges requiring registration

(2) Shall issue a certificate of the registration of any charge registered under the act stating
the amount required, the certificates shall be conclusive evidence that the requirements of
this Act as to registration of charges have been complied with
(4) Shall keep a chronological index in the prescribed form and contain particulars of the
charges entered in the region

Once satisfied with the registration protocol or procedure a certificate of satisfaction of charged
ought to be issued provided for under Section 53 of the Act whereby, once the commissioner
gives his satisfaction to the payment of a debt to which a registered charge had been given is
paid;

1. The commissioner orders a memorandum of satisfaction be entered on the register

2. The commissioner furnishes the co-operative society with a copy thereof

Moreso, two or more co-operative societies may choose to come together by a special resolution
known as the preliminary resolution and amalgamate as a single society. A commissioner’s

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Section 7 of the Co-operative Societies Act Cap 490 Laws of Kenya
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Section 8 of the Co-operative Societies Act Cap 490 Laws of Kenya
consent or rather satisfaction is key to having an amalgamated society registered as such. Section
29(5) of the Act calls for those person’s whose interest is affected by the amalgamation of
societies, give a notice one month prior to the amalgamation date, and object unless their claim
gets satisfied. A general meeting is held, not less than three months from when the special
resolution is passed to consider any resolution and/or notices that have been received under this
section. Among the issues raised in the general meeting are the satisfaction of the claims made
under subsection 5 which are to be in a manner determined or directed by the Commissioner

Once satisfied that the seconds resolutions of each society amalgamating comply with the
provisions of this section, the commissioner may register the amalgamated society and it’s by
laws according to the provisions under Section 29(9) of the Act. If the society fails to meet the
provisions the commissioner may refuse it’s amalgamation and an appeal against such refusal
may be appealed against to the minister under Section 29(10) of the Act.

2. Organization

Section 25 of the Co-operative Societies Act provides on accounting and auditing where it
states that an auditor shall be appointed at the annual general meeting from a list of auditors
approved by the commissioner in consultation with the Institute of Certified Public Accountants
of Kenya. At an annual general meeting where the auditor has not been appointed the
commissioner may appoint a person to fill the vacancy.

Every co-operative society has the duty to file with the commissioner an annual return
accompanied with a certified copy of the audited accounts and balance sheet of the society for
each period of 12months.

Section 27(8) of the Act provides that the commissioner may hold a special general meeting of a
society at which he may direct the matters to be discussed at the meeting.
The commissioner has the power to suspend any committee member charged in court with an
offence involving fraud or dishonesty pending the determination of that suit.6

Section 28 of the Act provides for the membership and powers of the committee with subsection
(4) stipulating instances where one may fail to become a member if;

(h) he has not furnished the commissioner, within 30 days of his appointment, a declaration of
his wealth in a manner prescribed by the Act.

(k) if he has been named by the commissioner in a inquiry report adopted by the general meeting
for mismanagement or corrupt practices while being a member of the Committee.

3. Inquiry and Inspection

Section 58 of the Act directs that the commissioner on the direction of the Minister, shall
conduct an inquiry towards the by-laws, working and financial conditions of the co-operative
society or authorize another person in writing to do so, as the case may be or on the application
of not less than one-third of the members present and voting at a meeting duly advertised.

The findings of this inquiry will be reported by the commissioner at a general meeting of the
society and shall give recommendations and directions of their implementation.

Under Section 58 (4) it is provided that where the commissioner is satisfied that the society is
not performing its duties accordingly, he may dissolve the committee or cause an interim
committee to be appointed comprising of not more than 5 members from among the members of
the society for a period not more than 90 days.

Section 59 outlines the role of the commissioner on inspection of books of the society on
application of a creditor and thereafter report back to the creditor of the results of the inspection.
Notwithstanding this sections, the commissioner may from time to time conduct an impromptu
inspection into the affairs of the co-operative society.

In Richard Olendo and 2 Others v Commissioner for Co-operative Development, Ministry

of Industry, Trade and Co-operatives and Another, the court noted the functions of a

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Section 28(7) of the Co-operative Societies Act Cap 490 Laws of Kenya
commissioner in conducting an inquiry and reporting the findings during the general meeting and
giving directions towards the recommendations made by the commissioner.7

4. Dissolution

Section 61 outlines that the dissolution of the co-operative society may occur where after the
commissioner has conducted an inquiry, or receiving an application of at least three fourths of
the members of the society, and is of the opinion that the society should be dissolved, the
commissioner shall order in writing, the dissolution of the society and subsequently cancel its
registration.

Any member not satisfied with the order may within two months after the order, appeal to the
Minister and finally at the High Court. The order will take effect where there no appeal has been
lodged within the prescribed time period.

A co-operative society may be de-registered and subsequently dissolved through an order in

writing from the commissioner. The consequence of cancellation is that the co-operative society
ceases to exist as a corporate body from the date the order takes effect. The instances include:

i. members are less than the prescribed number

ii. it has failed to achieve its objectives
iii. the society has failed to file returns with the commissioner for three years.8

With regards to the property of such a society, Section 65 of the Act prescribes that the
commissioner shall appoint a liquidator or liquidators with whom property of the society shall
vest in the liquidator from the date which the cancellation order takes effect. This may follow up
after the cancellation of the registration of a co-operative society under Section 61 and 62 of the
Act possibly where;

1. The society has less than the prescribed members

2. The society fails to file returns for a period of 3 years
3. The society fails to achieve it’s objectives

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Section 62 of Co-operative Societies Act Cap 490 Laws of Kenya
Powers of Commissioner during liquidation

Section 68 establishes the powers of the commissioner with regards to the powers of the
liquidator and the commissioner may:

i. rescind or vary any order made by the liquidator and make a new order he deems proper
ii. remove the liquidator and appoint a new liquidator
iii. make an order regarding the liquidator’s remuneration
iv. discharge the liquidator upon application after the liquidation proceedings ends
v. limit the powers of the liquidator by an order in writing
vi. call for all books, documents and assets of the society

Any person not satisfied with an order made by the commissioner or the liquidator in such an
instance, may appeal against the decision to the tribunal within 30 days after the order has been
made.

5. Other powers of the commissioner

Under Section 93A of the Act the commissioner may:

i. call for elections in any co-operative society

ii. attend meetings of a co-operative society and require every society to send at a proper
time, the agenda, notice, minutes and communications of every meeting.
iii. require societies to update their by-laws
iv. exercise any other powers consistent with the Act