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FEDERAL NEGARIT GAZETA


OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA
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Council of Ministers Regulation No. 106/2004


Coucils of Ministers Regulation No. 106/2004 to
Provide for the implementation of Cooperative
Societies Proclamation No.147/1998. ... Page 2641
COUNCIL OF MINISTERS

REGULATION

No.1 06/2004

COUNCIL OF MINISTERS REGULA TION TO


PROVIDE FOR THE I!v!PLEMENTATION
OF
COOPERA TIVE SOCIETIES PROCLAMA TION

This Regulation is issued by the council of Ministers pursuant


to article 5 of the definition of powers and Duties of the
Executive organs of the Federal Democratic Republic of
Ethiopia Proclamation NO.4/1995 and article 59 of
Cooperative Societies Proclamation No.147/1998.
SECTION ONE
General

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lOtllYear No. 47
ADDISABABA- 2Sd.June 2004

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1. Short Title
This Regulation may be cited as "Coucils of Ministers
Regulation No. 106/2004 to Provide for the implementation of Cooperative Societies Proclamation No.147/
1998."
2. Definition
In this Regulation, unless the context requires otherwise.
1/ "Proclamation" means cooperative societies
Proclamation No. 147/1998.
2/ "Regular meeting" means a general assembly
convened pursuant to sub article 1 of article 22 of
proclamation No 147/1998
3/ "Cooperative society" Means an entity that has got a
definition referred to (indicated) under article 2(2) of
the proclamation.
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"Appropriate Authority" means Cooperatives Commission established pursuant to article 2( I) of


proclamation 274/2002 and includes cooperative
promotion Bureaus and offices established in I".,ach
region.
"Union" means a union composed of more than one
pnmary cooperative socieities that have similar
objecties.
"Federaton" means a group consists of unions and
cooperative socieities with similar objectives
"League" means cooperative society league of
Ethiopia established by cooperative societies at the
national level.

SECTION TWO
Establishment of Cooperative Societies
Establishment of Primary Cooperative Societies

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Establishment of Cooperative Federation


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Primary cooperative society shall be established by


voluntary individuals who live or work in the same
area or engaged in the same profession. Number of
members establishing the society shall not be less
than ten. The appropriate authotiry shall, taking into
account the economic efficiency, determine the least
number of establishing members through directives
issued by itself.
2/ The operational area of primary cooperative society
established pursuant to article I of this article may be
confined to one region or cover more than one
regions.
3/ Different kinds of primary cooperative societies may
be established in the operational area indicated in sub
article 2 this article,
4. Establishment of a union
1/ Subject to the provision of this Regulation and that of
other relevant laws on coperative society, primary
cooperative societies having similar objective may
establish a union.
2/ Subject to the Provision of this Regulation and that of
other laws an individual who carries out similar
activities to that of a union and who is willing to
observe the principles of the society may become a
member of the union.
5.

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No. 47-

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Subject to the provison of this Regulaton and that of


other relevant laws, unions having similar objectives
at Federal level may establish a Federation.
Subject to the provision of this Regulation and that of
other relevant law, cooperative societies and an
individual that carries out similar activities with that
of the Federation may become a member of the
Federation.

6. Establishment of Cooperative League


I) Subject to the provision of this Regulation and that of
"'lcn- OIJLPt.;J-~ ').nt."" P't. 0'/')nt--1': ').nt.-":Y' "hCJ
other relevant laws, primary cooperative societies.
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unions. and federations may establish a league that
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represents all cooperative societies in Ethiopia.

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SECTION THREE

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Types and Functions of


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8. Functions of Cooperative society

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A cooperative society may engage in production or


service rendering activities or in both production and
service rendering activities.

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9.

Cooperative Society Engaged in Production Activities


Cooperative Societies Engaged in Production Activities
shall be one which takes part in production process or
which converts raw materials or semi-finished products
to finishedd products.

10. Cooperative Societies engaged in serVIce rendering


activities
A cooperative society engaged in service rendering
activities shall deliver various services to members or
cause them to obtain the same.
11. Cooperatives Societies Engaged in Production and
Service rendering activities
A cooperative society engaged in production and service
rendering shall carry out both activities indicated under
article 9 and 10 of this regulation.
12. Types of Cooperative Societies
1/ Cooperative Societies of different type may be
organized in any economic or social sector of the
country.
2) Cooperative societies differ from others based on
their unique nature such as their working place,
establishment, function and legal personality they
nave.
3) The unique nature of cooperative societies shall be
determined by a directive issued by the appropriate
Authority.

ODODt.r .rmnIA::
SECTION FOUR
Registration of Cooperative societies

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13. Registration.
1)

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2643

Operational Area
1) The operational area of a union or a Federation
Established pursuant to Article 4 or 5 of this
regulation shall be determined by the by-laws of the
union or the Federation.
2) The league shall have an operational area through
out the territory of Ethiopia.

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f'HIt..).

28'hJune. 2004-Page

2) The number of the league establsihed pursuant to sub


article 1 of this article may not exceed one.

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2)

The Federal Cooperative commission shall register


the league and the federations as well as unions at the
national level.
Any society established pursuant to this regulation
shall have legal personality as of the date of its
registration.

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2X'"JuneMareh. 2004-Page

2644

14. Particulars ot'by-laws ot'a Codperative society


Suhject to the provision of article 11 of the Proclamation,
any hy-law of a cooperative society shall contain the
following particulars:
(a) Ohjecties, values and principles of cooperative
societies;
(h) Administrative structure of the society;
(c) Budget year of the soeiety'
(d) Manner of keeping the fuM of the socieity and ways
of its utilization;
(e) Procedures on loans;
(t) procedure to be applied in the instance of withdrawal, dismissal or death of members;
(g) Rules of procedures for the meeting of the society
and notifications to be given to members;
(h) Procedures for the appointment or employment of
managers and other officers of the society, their
powers and duties and term of office;
(i) Administration of employee of the society;
(j) Matters requiring special or quorum resolutions
(decision);
(k) Procedure to be applied in cases where the by-law of
the society is amended or in cases where the society
is dissolved, divided or amalgamated with other
societies;
(I)

Other appropriate particulars;

15. Share certificate of members of a cooperative society


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m1'} t\..,.t\/\~ hf.':j'A?,,::

Any member shall be granted certificate for the


amount of full shares he has paid for.
2) The share certificate shall be printed in confidence
(secretly) and shall contain the following particulars:
(a) Name, address and emblem of the society;
(b) Date of registration and registration number of
the society;
(c) Identification number of share certificate;
(d) par value of each share;
(e) Name and identification number of the member;
(f) The amount of shares he has paid for (bought)
and the price of the share he has bought;
(g) Signature of a person entrusted with a power of
leading the society;
(h) Seal of the society;
(i) Date, month and year of issuance of certificate;
3)

The share of the society may not be transferred from


one member to the other or from a member to a third

party.

16. Dismissal of members


1) A member who failed to meet his obligation shall be
Ir.' rc'h.nt..). Fl,. O'/..,nc ;\11t\.), h/\"tolj{1-f:n.). o-).:J'
dismissed from the society. The member shall be
/i) "lYu;J'm.'} fA'l-cnn) h'}JJ.: hl1A hO'/"'O~ f.OIj
deemed
not to meet his obligation where he:
O;J'A:: h'1/\. "lYu;J'm.'} h'},v,A,,'mnJ fO'/A"ml.co';
(a) has failed to pay fully for the shares within a
(u) O,"mo"m. f1.11. 1Y.'0 f6nJ h~f1 ft\mlj<l'<l'
period specified,
h'}Y,U''' :
(b) has failed to meet his oblitation emanated from
(/\) 00'/..,0-:. O"tomm'
fP'I,. IIC~ ho-/\'} 1.11.
the occupational sector granted by the society
Ot\f. "lYu:J'CO,'},tJA,,'mnJ :
for more than two times;
(ch) 0'/..,0-:. OO'/.onJ:':co, h1A"l/\,..f':j.
CDf.?"
(c) has not participated for a year in any transacdon
:
Hlf,.y.':j. /\h'}Y.' quo.} fA."It.,.t.
or services rendered by the society;

1R' j(it}X~?;

(uP)

Federal Negarit Gazeta -

(\). rti'i ""J XUX:t?;'HI".


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2)

No. 47

28thJune, 2004-Page 2645

Has not participated in two consecutive regular


meetings of the society without sufficient
reason.

Any member who has committed a fault shall be


dismissed from membership. The member shall be
deemed to have committed a fault where he has:
(a) Committed a fault which is contrary to the
objective of the society;
(b) Deliberately caused harm or caused to be
harmed the properties of the society
(c) Misappropriate the properties of the society that
he has received for various reason;
(d) Deliberately misappropriate the fund of the
society or facilitate conditions for the same
action to be committed;
(e) Bribed somebody or been bribed by somebody
in the name of the society;
(f) Sold or caused to be sold under price or bought
or caused to be bought over price the properties
of the society with view to derive unlawful
advantage;
(g) Reduced the amount or the quality of product or
service that the society supplies.

17. Charges
Any cooperative society shall pay charges indicated in
the schedule attached thereto to government upon
receiving a share certificate or its substitute.

::

18. Grant of substitute certificate


itm""
If;- 9"..,.h f9" ith C CDl.,.""
1) A cooperate society that has lost its certificate may
apply to appropriate authority for the grant of
ji) f"'(}mw,
f9"ithC
CDl.,."" f m1-n-}
OI/'};;:CD"9"
substitute certificate;
~.nl')'
P'1r OI/~nc 9"-)'h f9"ithC
CDl""} h'}Jt
2)
The
appropri~te authority shall grant the substitute
(}mw' h..,ll-n fl\lD-') IlI\P'AClJ'} l\.m.f,:" .f,:Y'I\A ::
certificate within 10 days as of the submission of the
~) h..,t1.n fl\lD-'} t11\P'AClJ'} 'l'f4:CD' n.,.lnl\')' nI"',}
request.
1.n CD'it 9"')'h f9"ithC Wl.,.-t:'} .f,(}ClJA::
3/ The appropriate authority shall issue directives on
r) h..,ll-n fl\lD- IlI\P'AClJ'} itl\ 9"""h f9ithc CDl.,.'}
the manner of granting substituted certificate;
it 1\uP

h(}ClJ'I' 11C11C uPuPtf

fCDClJA::

19. Conditions for the Prohibition of Registration


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v.);;J'
0I/'}~lD-9" ~.nl"" P' Ir OI/~nCI
Ii)

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r)

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itl\ ~.nl""

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SECTION FIVE

h9"it""

Meetings of a Cooperative society

P'1r OI/~n.;. it.n(}Il9':Y'

r;' uPY.n~ m:"l\" ?-lll}.


0I/'}~lD-9"

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,"uP11"'(1 f9"ithc

Ii)

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1.,L uPY.n~ m:"1\1\ 1.111}.fY.C;JA::

hm:"1\1\

?-t1I}.lD- hlll\""

?-lll}. .f,lfe; A::

Any cooperative society shall not get registered and be


granted certificate where:
1) It has got similar name and emblem with the society
that has already registered;
2) It lacks its own project proposal;
3) It doesn't observe registration requirements
specified in this regulaton and the proclamation;
4) Its objective is found contrary to this regulation, the
proclamation and directive issued by the appropriate
authority.

h..,OI/7i

nl\.f,

(}.11- 9"'}I}.,.

20. Regular Meeting of the general Assambly


1) Any cooperative society shall convene its regular
general assembly at least once in a year.
2) There shall be a quorum where more than half
members of the general assembly are present.

1K' jlitno:n

i:)

4..1.".&\

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Federal Negarit Gazeta -

(});
~% ?if! ""J XiitiJ; '}.9".

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'(}fi' hilTI).f,

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O+C OooY-O~ (l)f,9" OhilTI).f, 1-1I~m- f7.:f-"I\4(I)""'~9'-:;' Ohll"-f: fh-O"6liJ. 1:9"1\ f,lfljA II
f1:9"1\ h(}tfJ'I' hh.A Oh.A fTht.1\ ft.1f1 f1-lI~m(}-Oito. (l)it~ 1:9"1\ f,'i I."A II
h~A il1:il.1.
il" ,"h-Ol."'-r~ IP/10C 1-o1."'-lj 11"-0

~,

2646

3. Where there is no quorum of the general assembly


called, the second general assembly shall be called
within 15 days as of the date of the first general
assembly. Where there is no quorum for general
assembly called for the second time, the meeting
shall be convenced by members present.
4. The decision passed by the general assembly, which
is convenced in a situation where there is no quorum
as is indicated in sub article 3 of this article, shall be
deemed to have been made in the presence of all
members.
21. Emergemcy meeting of the General Assembly
1. Where there is no quorum in an emergency meeting
called as per article 22 of the proclamation, the
managment commi~~eesshall call the second emergency meeting within 15 days as of the date of the
first meeting. Where there is no quorum in emergency meeting called for the second time, the
appropriate authority may call another meeting.
2. There shall be quorum where two third of members
of the general assembly are present.
22. Call for the meeting
The managment committee shall make a call, as per the
provisions of the proclamation to all members 15 days
before the emergency meeting is convened through a
.
News Paper having nation wide circulation or using any
means found convenient.
23. Voting Procedure of a Cooperative society
1) Unless and otherwise provided in the by-law of the
society, decision of regular or emergency meeting
shall be passed by a majority vote.
2) In cases of a tie, the chairperson of the general
assembly, shall have a casting vote.
SECTION SIX
Assets and funds of the Cooperative society

"'-C~ hY.I\~A

f)-~' ill\,"h-Ol."" r~ IP/10C fIP/f,h4.t.A 1-01."'IP/1~m-9" fIP/10';' 1.01.-}-t


(0) OoomllO-tf ,.,.,-0 m-il'l' f-t-00"10 hlf'1t
(1\)

28thJune, 2004-Page

24. Allocation of Net profit


1. 30% of the net profit of the society shall be deducted
hIP/10';'
fTtfJ~
.1-c~ "f, en 000'" hf.f-+Hl
and allocated for the reserve fund. The amount
OoomllO-tf """-0 f,+ootfJA II foomllO-tf ".,.,0'
allocated for the reserve shall be deposited only IIntil
it shall not exeed 30% of the capital of the society.
fIP/.+oomm- hIP/10';' tt1:;J-A t!) 000.,. hilhIP/.Y,Cil
2.
The
amount of fund deducted from the net profit and
(I)'
II
-O;r- '1
allocated
for the reserve shall be deposited in a
Ofl}oo-f: hIP/10';' f-f-mt"'-C~ (I)'il1' hf-f-+Hl
saving account opened in the name of the society.
OoomllO-tf
f"7..oo~Om11"-0
0IP/10';'
il9"
The
utilizationlaplication of this fund shall be
II ill\hm:J>+oo'
fckmll """-0 -t-h~"'I\"'- f,+ootfJA
determined by directive issued by appropriate
h..,lI-o fl\m- 1II\rAtfJ1
oooo~f f(l)tfJA II
authority.

f)'' fTtfJ~

fi)

No. 47

Oil{l\;J- (l)f,9" Om-Cil f.f-1'f


f,IfCjA

hlf'1 fmA 1-nl.')

II

25. Indivisibility of Assets of the society


Where the asset of the society is:
(a) Registered as a reserve fund account.
(b) Obtained through donation or inheritance it shall
remain indivisible and common asset of the society.

26. Distribution of Assets of Dissolved Cooperative society.


The assets of a dissolved cooperative society left after the
h h4-t.A
creditors are paid as is indicated under Article 44 sub
IP/1~:m-9" 1-nl."'- rt- IP/1nC O,"h.., 00 lP1."'- (}.t.Cil
article 4 of the proclamation shall be distributed to a
Oh":( h1+1\ -:i 10-il h1"'1\ OOlPl."'-,"h-nl.') rt.
member who is active at the time when dissolution
"-h~l\" f"7..+I.(I). 1-nl.'}1\' 11n.;. 11"-0 mf-t9'ipronounced, to a member who is dismissed for the reason
,"h.nl.'}- r~ IP/1n.;. (}.t.Cill\'1n.;. hll"') t ,"h-nl..1-rl..
other than committing a fault. and to a substitute of a
0I/1n.;. hoo~I."" Ot."'- fl\'I'4-.1- I\.'-(}ljn'f: hI)".}'.'
deceased member. Manner of distribution of the asset
shall be determined by a directive issued by the ap1\":1_-:;-hll""'- -t-"-h.9".J- h1Y-f~-c7i:t:(I). .eh~t.l\AII
propriate authority.
lll\hh~t_l\' h..,lI-O fl\m- 1I1\P'AtfJ1 oooo~f fOJtfJA II

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f,"h-Ol.'r
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t..Y..t.l\

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Federal Negarit Gazeta -

'Ha.

'6":;.. f.f'7i.;. :lt1:1.


f..tJ'} '.'}.n

fn<J.:J>l.,}n<J'}~'':m'9,.'}.n m~9 uuuut,f

7.'-:'t..
uuuut, .f fn<Jm-"l'}
.."

The appropriate authority shall issue a directive ne~essary for the implementation of this regulation.

f.tJ,} ,.'}.n t\"7ilt.R9 uuuut,f

::

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f.tJ '.'}.n n~;Jt,.} ;JII."I ;J"1'qu hm"ln.}

29. Effective Date


This regulation shall come in to force on the date of its
publication in the Negarit Gazeta.

.,.'} ~e.9~(-:fOCi

f. If c.'A ::

Done at Addis Ababa, this 28"1day of June 2004

".&til "nl} (a~ r;"fi .,.') Hn:~:4 l}.lJD.

MELES ZEN AWI

uut\il II.c.'~
fh..1'f'A'f

to~t."~

.&tquht.(a.f~

t,T.nt\.h

PRIME MINISTER OF THE FEDERAL

{fl:"" f. n<J.~ il.1'c

nh..}f'A'f

'f"'''~

flJDilhc

DEMOCRATIC REPUBLIC OF ETillOPIA


The Federal Democratic Republic of Ethiopia

to~t."~
.&tquht.(a.f~ t,'r:.nt\.h
f..,.n l. .1' P't. 1'1n<J:li'}

flJDilhc ml.""}

ml."''':

Cooperative Commission
Schedule of fees for certificate service

"1A..,t\.1. htt:.f lP'}{fll.~'f

l}f.~'}

with this

regulation shall be inapplicable.

.-"

"o,'Hl .ft\m-I}t\P'A"I'}

inconsistent

2647

28. Power to issue a Directive

P'A"I'}

28"' June, 2004-Page

27. Repealed laws


Regulations or a directives

'h'-Rn<J.',.1, ft\m-9::

No. 47

fhtt:.f
UU{fl'}/.nc

9cuut.

DESCRIPTION

No

FEE/BIRR REMARK

".&tillJD1'11}

60

NEW REGISTRATION

60

lJD""h

30

SUBSTITUTION

30

'l.lI.f~

30

TEMPORAR Y CERTIFICATE

30

l1C'I1'1

"t\SJO CTlJ1'DIl.f Y:C~T

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