Friendly Society Rules

Table of Contents

Meetings

The rules of registered societies and branches must provide for holding a general meeting. There is provision for the requisition of a meeting for the purpose of amending the rules.

The chief registrar may, with certain consents and subject to certain requisition by members can read a special meeting. The requisite number of members is generally one fifth, but varies with the size of the society.

The application must be accompanied by evidence of the applicant’s good faith and legitimate reason for calling the meeting. The expenses may be payable by the applicant or the society as the registrar directs. The registrar may determine the time and place of the meeting.

A special resolution is a resolution that deals with fundamental matter such as change of name, amalgamation and transfer of engagements. Special resolutions require three quarters of members present and voting to approve. Copies of special resolutions must be maintained.

Disputes

Societies must provide for resolution of disputes in the rule. The dispute resolution mechanism may be binding on the parties In certain circumstances it may be referred to the chief registrar or court. Parties with disputes may by consent refer certain disputes to the chief registrar.

Where there is no mechanism for resolution of disputes, or no decision is made within 40 days after the reference the person may apply to the Circuit Court or the District Court to determine the matter depending on its nature.

disputes of a type, which may be determined in the manner directed by the rules are as follows.
disputes between members under the rules
disputes as to entitlements.
disputes as to interpretation of the rules.
disputes in respect with entitlements of the members
disputes between branches and the principal society.
disputes between officers and branches of the society.

The procedure is limited to matters arising in the context of the person’s membership as such and not otherwise. It does not apply for the dispute concerns a matter outside of the powers of the branch.

The rules may make provision for reference of disputes to arbitration. The Circuit Court may hear disputes or rules rule out where a dispute is not made on to the dispute resolution mechanism within 40 days. Certain disputes may be referred to the District Court.

Assets & Trustees

The assets and property of a society are vested in trustees of the society for the use and benefit of the members and persons attending through them. Branch property may be vested in branch trustees. Upon the death or resignation of trustees, the assets vest in their successors.

The rules of the Friendly Society or branch must provide for investments of funds. The trustees may with the with consent of the committee or majority of member entitled to vote invest the funds in certain way prescribed including documented savings, purchase of land, purchase of government securities, investment in statutory trustee permitted investments, and certain other investments.

Trustees may invest in securities authorised by the rules. In this context, security may include debts guaranteed with certain guarantees including mortgages to local authorities or mortgages on freehold property.

Borrowing

The powers of borrowing conferred for the Friendly Societies Acts are limited and must authorised by the rules. Formerly, there might be power to accept deposits made by members to a separate loan fund if the rule allowed. This is now prohibited by banking legislation.

The society may borrow in accordance with its rules for its business to the extent necessary for carrying out its objective.

Loans

Apart from statutory powers, the trustees do not have power to lend the society’s money. A registered society may be authorised to create a separate loan fund by receiving contributions or deposits from members for the purpose of making loans. Lending in itself is not an objective for which the society can be formed. It may be undertaken within restricted limits with relatively low amounts which have been greatly eroded by inflation.

A society’s subject, to its rules may be make a loan to a member of at least a year standing on security of himself until satisfactory surety. There are limits on the amounts. The society may have power to lend on mortgage.

Nomination

A member may nominate sums which are to be paid directly on death to a nominated party. The payment may be made on proof of death without grant to representation. The member must be over 16 years of age and the nomination must be in writing. It is subject to a relatively small cap.

In other circumstances payment may be made to a person, who appear to be entitled. They are valid as against third parties. If they are wrongly made the person entitled may recover from the person to whom payment is made.

Valuations & Accounts

Societies must keep accounts and have them audited annually. Separate funds must be separately accounted for. Accounts must be sent with manual return to the registrar.

Societies must value their assets every number of years, unless exempted. Exemptions apply to certain categories of society. The valuation is to be undertaken by a valuer appointed. It is to be returned together with details of benefits assured, contributions, receivables, and protections of all firms’ liabilities etc.

Inspectors

The registrar may appoint inspectors to examine the affairs of the society. This may be done on the requisition of a certain number of members (varying with the size of the society).

The inspector may require production of all documents. He may examine officers, members, agents and employees on oath. He makes his report to the chief registrar. The cost may be directed to be borne by the applicants, the society or members.

Legislation provides procedures for amalgamation and transfer of the engagements of a Friendly Society. A special resolution with the assent of five sixths in value of members is required. The consent of certain persons entitled to benefits is also required in certain circumstances.

Dissatisfied members may apply to court. The court has similar powers to those arising in the categories of dispute of which it may hear.

Dissolution

Friendly Societies may be dissolved. Societies and branches may be dissolved in a number of way. It may be provided by the rule. There may be an instrument of dissolution. There may be an award by the chief registrar. Registered societies with more than 7 members may be dissolved as an unregistered company under the Companies Act.

A society may dissolve itself by instrument of dissolution with the consent of five or six of its members, and certain persons entitled to benefits, unless their claims are first satisfied. The members are required to sign the instrument.

The instrument of dissolution is to deal with assets and liabilities, members and nature of interest, numbers of creditors intended appropriation and division of firms. The proposed dissolution must be advertised.

Certain third parties have the rights to ensure protection of their interests. Dissatisfied members may apply to court. Proceedings to set aside a dissolution may be taken within a certain time.

Dissolution by award of the registrar may be made on application to him that the societies’ firms are insufficient to meet its claims. The registrar may investigate the affairs of the society He may appoint an actuary or an auditor. The application must be signed by one fifth of the members or certain other percentages.

If it appears that the society is unable to meet its claims, the registrar may award that the society be dissolved and direct the cashes be divided and appropriated. The award is published and procedures apply to the dissolution.

The registrar may cancel the registration if he thinks it. This may apply where the registration has been obtained by fraud or mistake; the society is for an illegal purpose or has ceased to exist. Certain procedures apply.

Offences

The friendly societies legislation creates a range of offenses. It is an offense to fail to give the records of terms required. There are offenses for failures to comply with certain requirements in dispute resolution and related context.

It is an offence for the society itself to fail to comply with certain categories of obligations. There are a range of further offences dealing with failures of compliance. There are special procedures in relation to procuring return of money withheld or misapplied.

Proceedings

The trustees of the society may bring or defend legal action in relation to its property or assets. They may sue in the names with or without description of their title.

Proceedings against the society by a member or a person deriving from him against a society may be sued in or defended the name of certain officers for and behalf of society. An officer sued on behalf of the society is not personally liable.