Ind Provident Societies
Industrial and Provident Societies
The principal legislation for industrial and provident societies is the Industrial and Provident Societies Act 1893. The entities are body corporates with separate legal identities. They have a separate legal liability from their members, which is accordingly limited.
Industrial and provident societies are registered by the Registrar of Friendly Societies. Certain returns and documents must be lodged with the registrar. These include applications to register and form societies, amendments, annual returns, special resolutions, change of name, transfer of engagements, appointment of receivers, dissolutions instruments, winding up resolutions and other documents.
The forms of return are prescribed by the registrar. The registry is open to inspection. Copies may be obtained.
Formation
The principal legislation for industrial and provident societies is the Industrial and Provident Societies Act 1893. The entities are corporate bodies with a separate legal identity. They have a separate legal liability from their members, which is accordingly limited.
Industrial and provident societies are registered by the registrar of friendly societies. The society can be registered for the carrying out of any business or industrial trade specified by its rules. It may be for trade or services. There are special provisions applicable to societies which carry on banking.
A society may not be registered with a name that the registrar considers undesirable. The word limited must be in the name of every society unless the registrar is satisfied that it is established for purposes which are wholly charitable or benevolent.
The application to register must be sent by seven members and the secretary. A printed copy of the rules must be sent to the registrar.
Upon being satisfied that the society has complied with the statutory provisions of the registration the registrar issues an acknowledgment. This is conclusive evidence of the existence of the society. The registration may be suspended or cancelled.
Upon registration the society becomes a body corporate with its own legal identity. If the registrar refuses to register on certain grounds there is an appeal to the High Court.
Registration
Certain returns and documents must be lodged at the register with the register. These include
- application to register and form society
- amendments,
- annual returns,
- special resolutions,
- change of name,
- Â transfer of engagements,
- appointment of receivers,
- dissolutions instruments
- winding up resolutions and other documents.
The forms of return are prescribed by the registrar. The registry is open to inspection. Copies may be obtained also to returns.
Cooperative Society
A society may not be registered unless it is shown to the satisfaction of the registrar that it is a bona fide cooperative society. It must be shown that it is intended to be conducted mainly for the benefit or the purpose of improving living conditions and promoting the well-being of members of particular groups or communities. It must be shown that there are good reasons to register under this legislation as opposed to as a company.
A cooperative society does not include a society which carries on business with an objective making profits mainly for the purpose of dividends, bonus and interest on monies invested or deposited with the society. The society must have at least seven members. It may comprise of other registered societies. There must be at least two.
Rules Requirements
Certain provisions are required in the rules. Other provisions may be adopted to avoid the statutory default applying.
Rules for the protection of the society may be invalid if they impose an unnecessary restraint of trade that is not reasonably necessary for the purpose. The registration of the society does not prove that the rules do not offend the restraint of trade doctrine or competition law.
There are certain mandatory rules which must be provided. They include
- applicant’s name and registered office.
- Terms of admission of members including conditions for investing funds.
- Holding in meetings and voting rights.
- Manners of changing rules
- Appointment on removal of committee of management
- Appointment and removal of managers and officers and the respective.
- Powers and remuneration of officers and managers
- Determination of interest on shares
- Determination whether shares are transferrable and form of transfer and registration.
- Provisions regarding withdrawal from membership provision for appropriation of profits
- Determination of an investment of capital
- Inspection of societies’ books
- Use of the society seal.
- Investment of capital
- Inspection of societies’ books by registrar
- Appointment of inspector
- Voluntary dissolution
- Delivery of demand of corporate rules
- Annual audit of accounts
- Appointment and removal of auditor
- Making of annual returns
- Inspection of books and accounts by members
- Some other sets of rules have been published.
Rules & Registration
The rules of a registered society are binding as between all members. They are deemed of the same effects as if each person had subscribed to an agreement executed as a deed.
There is no statutory mechanism for amending the rules. The rules themselves usually provide for a provision for their amendment. It appears that the amendments must be broadly in the scope of the original rules such as it would had been in the contemplation of the original incorporators as amendments.
It is not enough to pass the meeting resolution at a general meeting. The amendments must be made in good faith for the benefit of the members as a whole. It must not be aimed at or penalise existing members. It must not be contrary in existing rights, not be inconsistent with the nature of the society itself.
The amendment must be registered with the registry.  An application to register as amendment must be made by the secretary and supported by a statutory declaration showing the amendment. The copies of the new rules must be filed.
Name
A register society can change its name by resolution at general meeting. This does not affect the underlying entity. The same principle that apply to the original name, apply to change of name.
The registered society must display the name at set of every office or place where it carries on business. Its name must also appear in official business, bill of exchange promissory notes advertisements, cheques and orders for money or goods purporting to be signed on behalf of the society.
It must be used on business letters, , invoices and receipts and letters of credit in respect of the society. Failure to do the above is an offence subject to summary prosecution.
Registered Office & Seal
Every registered society must have a registered office. Any changes must be registered with the registrar.
Communications and notices are sent to the registered office. Copies of the balance sheet and auditors report must be retained there together with certain statements. The register of members and officers must be retained there. Court summons against the society may be served at the registered office.
Registered societies must have a seal and provide for its use.
Purposes
The society can be registered for the carrying out of any business, industry or trade specified by its rules. It may be wholesale trade or services. There are special provisions applicable to societies which carry on banking.
A Society may not be registered unless it is shown to the satisfaction of the registrar that it is a bona fide incorporated society. It must be shown that the activity is intended to be conducted mainly for the benefit or the purpose of improving the living conditions and promoting the well-being of members of particular groups or communities. It must be shown that there are good reasons to register under this legislation as opposed to as a company.
A cooperate society does not include a society which carries on business with the objective of making profits, mainly for the purpose of dividends, bonus on interest on monies invested or deposited with the society.
The society must have at least seven members. It may comprise of other registered societies or it is that there must be at least two.
A society may not be registered with a name which the registrar considers to be undesirable. The word limited must be in name of every society unless the registrar is satisfied that it is established for purposes which are wholly charitable or benevolent.
The application to register must be signed by seven members and the secretary. Printed copy of the rules must be sent to the registrar.
Upon registration the society becomes a body corporate with its own legal identity. Upon being satisfied that the society has complied with the statutory provisions for registration the registrar issues an acknowledgment. This is conclusive evidence of the existence of the society. The registration may be suspended or cancelled. If the registrar refuses to register other than on certain grounds there is an appeal to the High Court.
Inspector
The registrar may appoint inspectors to investigate the affairs of a Society. The application must be supported by evidence showing a good reason requiring the inspection. It must be undertaken in good faith.
The application for appointment of an inspector  may be made on the application of one-tenth of members or 100 person members if the membership exceeds 1000. The registrar may require security for cost.
An inspector may require production of documents, accounts and books. He may examine officers, members, agents and employees on oath. The inspector makes a report to the chief registrar.
The expenses of the report must be defrayed by the members applying for it or out of the funds of the Society or by the members or officers in such proportions as the chief registrar directs.
Disputes
A registered society does not need to make provisions for the settlement of disputes in its rules. It may make such provision for determination of dispute and commonly does. A decision made in accordance with the rules is binding and conclusive on parties without an appeal. An application can be made to the Circuit Court to enforce the determination.
Rules may provide that disputes are referred to arbitration. They may be appointed in the manner selected or by court. The courts have jurisdiction if the dispute is not determined by the rules.
Parties to a dispute may by consent refer the matter to the registrar. The registrar or a person nominated by him may hear the dispute.
Monies payable by members to the Society are recoverable as a debt due in ordinary debt collection proceedings. A Society has a lien its shares for amounts due to it. They may be set-off against sums due by it to the members.
A Industrial and Provident Society may sue and be sued in its name. Proceedings are governed by the ordinary rules of court.
Offences
There are a number of statutory offences created by the legislation. Failure to give any notice or return required by a Society officer or member under the Acts is an offence. It is an offence to wilfully neglect or refuse to do an act or furnish information required by the acts by the registrar. It is an offence to make a return or wilfully furnish information that is false or insufficient.
Any person who by false representation obtains possession of any assets of the Society or withholds or misapplies them or wilfully applies any part other than for the purpose is guilty of an offence subject to summary conviction. He may be ordered to deliver up the property or asset.
Deposits
The 1978 Industrial and Provident Societies legislation introduced significant amendments. It provided that new societies could not accept deposits. The prohibition also applied to societies that should not have more than £25,000 in deposits after the legislation’s commencement.
The prohibition was to apply for 12 years, extendable by the minister by five years. A society may not raise funds other than by way of subscriptions for shares, where the aggregate amount does not exceed £10,000 within any six months, except under written permission from the Registrar.
The Registrar may only give permission if it is in the public interest, the interest of the society’s creditors, or for the orderly or proper regulation of the society. Permission may relate to specific classes of society and may be subject to conditions specified by the Registrar. This provision does not apply to a loan made by a bank to a society or to the acceptance of deposits by a society in certain circumstances.
Societies with less than £25,000 on the commencement of legislation on 4 October 1978 were obliged to submit a repayment scheme for deposits within three months. The 1978 Act was amended in 2014 to increase the amount a society may raise by way of shares to €30,000 from £10,000.
Societies may not advertise for the purpose of raising funds or accepting deposits without the written permission of the Registrar. Where the Registrar, after consulting the Central Bank, believes that the interests of the public or creditors require it, they may regulate a society’s deposit-taking or lending activities.
When exercising this regulatory power, the director may issue directions in writing to the society concerning deposit-taking, loan-making, maintenance of asset-to-liability ratios, and other matters as deemed appropriate, including maintaining adequate paid-up capital.
Amalgamation
The 1971 Industrial and Provident Societies Amendments Act introduced a lower threshold, requiring three-quarters of members to approve an amalgamation for registered societies engaged in manufacturing butter, cream, or other dairy products.
A Society may pass a special resolution for an amalgamation with another registered Society or company or for  the transfer of its engagements to same. There is provision for transfer of engagements or amalgamation under the legislation by operation of law.
Assets may vest in the amalgamated Society automatically. There are similar provisions in respect of the transfer of engagements.
Dissolution
If a receiver or manager is appointed over the assets of the Society, he must notify the same to the registrar within one month. Periodic returns are required from every receiver or manager.
A registered Society may be dissolved under the Companies Acts.  The consent of three quarters of the members testified by instrument of dissolution is required. There is provision for solvent and insolvent winding up depending on the financial position of the Society. In the case of an insolvent winding up the winding up may be initiated by the order of court or may proceed as a creditor’s voluntary liquidation.
That is provision for winding up through an instrument of dissolution. This is an alternative to a winding up under the Companies Act. The instrument of dissolution must set out assets and liabilities. It must set out the nature of parties’ interest and claims of creditors. It must  contain a list of members who have not signed it. It must be filed with the registrar.
The registrar may register the instrument of dissolution once he has received the annual return covering the relevant period. The registration of the instrument is binding on all members. A member who has not voted in favour of it,  within three months of the date of advertisement of the dissolution, may take court proceedings to set aside the dissolution.
In the absence of proceedings, the dissolution takes place from the date of advertising of dissolution. The secretary or the assistant must certify that all assets have been duly conveyed and transferred to the person entitled.
Examinership
There are detailed provisions applying the laws on examinership to industrial and provident societies. Provisions of the Companies Act relating to examinership and examiners are to apply. References to the Companies Act are to be interpreted as applying to the nearest equivalent definition or entity in an industrial and provident society.
The number of members required to present a petition is specified. Specific provisions of the Companies Act deemed inapplicable are disapplied.
Inspection & Report
An authorised person, upon the Registrar’s request and presentation of authorisation, may inspect a society’s accounts, documents, deeds, and records at any time and may enter its premises for such purposes. Persons responsible for such books and records must produce them and provide reasonably required information.
The society shall return such information and reports on its business as the Registrar may, from time to time, specify as necessary for their function.
The Registrar was given powers to investigate a society’s affairs where it is deemed in the public interest or the interest of society’s creditors or proper business regulation. They may appoint inspectors to investigate and report on the society’s affairs. Inspectors have the right to examine documents, records, deeds, and related materials.
Officers, members, agents, employees, etc., are required to cooperate; failure to do so is an offence. Inspectors may apply to the court, which may order individuals to attend and be examined under oath. Inspectors may participate, and the court may ask questions as it sees fit.
The inspector is to produce a report, which the Registrar is to forward to the minister. If deemed necessary, the Registrar may have the report printed and published.
Actions on Report
If, after considering the report, the Registrar finds it in the public interest to seek damages for fraud, misfeasance, or other misconduct connected with a society’s formation, promotion, or business operations or for recovery of misapplied or wrongly retained funds, they may initiate proceedings in the society’s name.
The minister may indemnify a society against costs incurred in such proceedings. A copy of the inspector’s report is admissible in these proceedings.
The Registrar may appoint a person to the society’s management committee if an investigation finds this necessary for the orderly regulation of the society’s business.
In making this decision, the Registrar must consider whether the society’s financial transactions have been conducted in a way that is detrimental to the interests of the public or society’s creditors. The appointed person must report to the Registrar as directed.
The Registrar may direct the suspension of deposits or payments if a society has contravened a previous directive, is unable or likely to become unable to meet its creditor obligations, or if it is in the public interest to do so, irrespective of an investigation. The Registrar may apply to the court for an order confirming the direction and specifying the duration, with the proceedings held in chambers.
Where a society makes a loan in violation of a Registrar’s directive, the officers and employees who authorised the loan are jointly and severally liable for any resulting loss. Where funds are raised or deposits accepted in violation of a Registrar’s directive, the responsible employees and officers are jointly and severally liable for any loss incurred by the depositor or investor. A society may only be wound up in accordance with the Companies Act, which applies with modifications.