Ind Prov Governance
Rules of Society
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’s not reasonably necessary for the purpose. The registration of the society does not prove that the rules did 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 sales.
- 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 model sets of rules have been published.
The rules of the registered society are binding as between all members. They are deemed to have the same effects as if each person had subscribed to an agreement executed as a deed.
Amending Rules
There is no statutory mechanism for amending the rules. The rules themselves usually provide for their amendment. It appears that the amendments must be broadly withing the scope of the original rules such as were in the contemplation of the original rules on incorporation.
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 to existing rights and not be inconsistent with the nature of the society itself.
The amendment must be registered with the registry.  An application to register an 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 principles that apply to the original name, apply to a change of name.
The Friendly Society must display same at every office or place where it carries on business. Its name must also appear on business letters, bills 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 invoices, receipts, letters of credit in respect of the society. Failure to do the above is an offence subject to summary prosecution.
Registered Office
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 in order to report must be retained there together with certain statements. The register of members and officers must be retained there. Certain summons against the society may be served at the registered office.
Management
The rules must provide for the appointment of a committee of management or equivalent officers. Their powers and remuneration must be provided for. There must be a secretary. Provision may be made for officers or equivalent as may be desired.
It is not necessary to notify the registrar of appointments. Particulars must be kept on registers kept at the registered office. The annual return must contain details of members of the committee, and persons in charge of money.
The committee of management has functions laid down by statutes and byelaws. In certain cases, an offence is committed by the society and may be deemed to be committed by members of the management committee.
Where, as will commonly would be the case, the control of the business and affairs of the society is vested in the committee of management. The members in general meeting cannot exercise that authority. It is likely that same broad principles applicable to boards of directors in the context of companies will apply.
Officers
Officers of societies who have received or are in charge of money may be required by the rules to give security for the due execution of their office. This may be required by way of bonds from an insurer.
An officer of the society who has received or in charge of money may be required to render account of monies paid and received. If he fails to do so the society may take action or enforce the bond or security he may have given.
The mechanism for resignation and removal of an officer must be provided by the rules. Officers may resign.
The rules of the society will provide for rights of members. A registered society must keep a register of members with their names and addresses, statements of shares held, amounts paid or agreed to be paid in consideration, statements relating to loans, deposits held by each, date of entry as a member and date of cessation.
A register of officers must be kept with the name and address of officers and the dates on which they assumed and ceased office. The register may be kept in the form of a bound book or other written forms.
The registrar or persons authorised by him may inspect any details in the register at all reasonable hour. The registers are presumptive evidence of certain of the information contained in it.
Appointment of Officers
The rules must provide for the appointment of a committee of management or equivalent officer. Their powers and remuneration must be provided for. There must be a secretary.
Provision may be made for any kind of officers or equivalent as may be desired.
It is not necessary to notify the registrar of appointments. Particulars must be kept on registers kept at the registered office. The annual return must contain details of members of the committee, and certain persons in charge of money.
Committee of Management
The committee of management has functions laid down by statute and rules / byelaws. In certain cases, as offence is committed by the society may be deemed to be committed by members of the management committee.
Where, as will commonly be the case, the control of the business and affairs of the society is vested in the committee of management the members in general meeting cannot exercise that authority. It is likely that same broad principles applicable to boards of directors in the context of companies will apply.
Officers
Officers of societies who have received or are in charge of money may be required by the rules to give security for the due execution of their office. This may be required by way of bonds from an insurer.
Every officer of the society having received  charge of money may be required to render account of monies paid and received. If he fails to do so, the society may take action or enforce out of bond or security he may have given.
The mechanism for resignation and removal of an officer must be provided by the rule. An officer may resign.
A register of officers must be kept with the name and address of officers and the  dates in which they assumed and ceased office.
The register may be kept in the form of a bound book or other written forms. The registrar or persons authorised by him may inspect any details in the register at all reasonable hours. The register are presented evidence of certain of the information contained in it.
Contacts & Land
Contracts made or entered on behalf of the Society in accordance with law are binding. The Society will act through agents in the same way as a company. Where a contract is required by law to be under seal, it must be entered under the common seal of the Society.
In the absence of the rules providing otherwise, a Society may purchase, hold and lease land or buildings. A buyer, mortgagee, tenant etc. is not bound to examine the authority of the Society in this regard.
There is special provision under the Industrial and Provident Societies legislation for the releases of mortgage by short form endorsement.
Capital
A registered Society must provide rules in relation to the manner in which its capital may be invested. If the rules do not provide otherwise, investments may be made in securities in which trustees are authorised to invest such as certain bonds, securities, debentures and other stock authorised by the Act of parliament or local authority, shares in other societies, building societies or companies.
Rules may provide for advances to members if the company carries on a banking business. This is now severely restricted by the 1978 legislation.
The profits of the Society may be appropriated in accordance with the rules. Where the purposes are  improve the well-being and conditions of the members, the appropriation must be consistent with those purposes. The Registrar requires the rate of interest to be limited by the rules to a rate which approximates to the minimum necessary to obtain the capital required to carry out the objects of the Society.
Where Society is registered – as a co-op, the rules are similarly required to limit the interest payable on capital. Provision may be made for the  further distribution of profits amongst members.
Accounts
A registered Society must provide in its rules for accounts and for the annual audit. The auditor has rights of access to all books and accounts. He must examine the books and report on them to the Society. It is an offence to fail to submit accounts.
Every registered Society must publish its balance sheet together with auditor’s report. This must be displayed in a  conspicuous place at its registered office. This must be required by the rules and failure to do so is an offence.
The rules of a registered Society must make provision for an annual return of income and expenditure, funds and assets together with copies of a balance sheet and auditor’s report. The form of annual return is prescribed. The reporting date is with reference to the balance sheet date and audit.
A registered Society must supply a copy of the return to members copies  or to other persons interested in that Society’s funds, free of charge. Failure to do so is an offence.
Annual returns to the Registrar may be submitted on one of two dates during the year, depending on the financial year. This gives societies flexibility in choosing their year-end.
Inspection of Accounts
Any person having an interest in the funds of the Society must be allowed to inspect his own account or books containing names of members. The member  or person acting on his behalf may inspect the register of members, officers and other books.
He is entitled to inspect the register of members and officers. Failure to facilitate the same is an offence. The inspection must be made at reasonable hours at the registered office or in places where the books containing the names of members are kept.
The registrar may acting  as he thinks fits on the application of 10 members who must be members not less than 12 months appoint an accountant or actuary to inspect the books and report on them. The applicants must deposit an amount with the registrar as security in such sum as is determined.