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SECTION 10, CLAUSE (1).—What the Rules must contain.

The rules must contain provisions for all matters mentioned in Schedule II. of the Act, as follows::-

MATTERS TO BE PROVIDED FOR BY THE RULES OF SOCIETIES REGISTERED UNDER THIS ACT.

1. Object, name, and registered office of the society. 2. Terms of admission of the members, including any society or company, investing funds in the society under the provisions of this Act.

3. Mode of holding meetings, scale and right of voting, and of making, altering, or rescinding rules. 4. The appointment and removal of a committee of management, by whatever name, of managers or other officers, and their respective powers and remuneration.

5. Determination of the amount of interest, not exceeding two hundred pounds sterling, in the shares of the society which any member other than a registered society may hold.

6. Determination whether the society may contract loans or receive money on deposit, subject to the provisions of this Act, from members or others; and, if so, under what conditions, on what security, and to what limits of amount.

7. Determination whether the shares or any of them shall be transferable, and provision for the form of transfer and registration of the shares, and for the consent of the committee thereto; determination whether the shares, or any of them, shall be withdrawable, and provision for the mode of withdrawal and for payment of the balance due thereon on withdrawing from the society.

8. Provision for the audit of accounts and for the
appointment of auditors or a public auditor.

9. Determination whether and how members may
withdraw from the society, and provision for the
claims of the representatives of deceased members,
or the trustees of the property of bankrupt members,
and for the payment of nominees.
10. Mode of application of profits.

11. Provisions for the custody and use of the seal of the society.

12. Determination whether, and by what authority, and in what manner, any part of the capital may be invested.

The statutory duties of the society should also be set forth in the rules for the information of the members.

In regard to the matters above-mentioned it should be observed that

I. Any society registered under the Industrial and Provident Societies Act may hold shares in another society if the rules of the society in which the investment is proposed to be made permit, and to any extent specified in such rules; but a joint-stock company or other body corporate cannot hold more than £200, which is also the limit fixed for individual members.

manner

II. A society may contract loans in any specified in its rules, and up to any limit stated therein. It should be understood, however, that there is a great distinction between loans and deposits. Loans can only be received where the conditions of repayment are secured either by agreement, bond, mortgage, or other legal form. Deposits at call can be dealt with only within such limits as are fixed by Section 19 (3), and provision must be made in the rules for dealing with such deposits.

Societies should make their rule regarding loans as wide as possible. An agreement is the simplest and easiest form of security; but this can only be used where the rules of a society permit it. For the guidance of societies the following model regulations for a loan department, together with a form of loan agreement, are inserted here:

MODEL REGULATIONS FOR THE CONDUCT OF A LOAN DEPARTMENT.

Co-operative Society Limited.

REGULATIONS OF LOAN DEPARTMENT.

1. Loans may be received either from members or nonmembers.

2. Each lender shall pay sixpence for a pass book, containing a printed loan agreement, signed by two members of the committee in the name of the society, and by the lender, and having a 6d. agreement stamp, also containing a printed copy of these regulations, in which shall be entered all loans and repayments.

3. Not more than £

shall be received from any lender
day of each
exclusive of interest.

in any year, commencing the and no account shall exceed £

4. A receipt stamp shall be affixed to all receipts or payments of £2 and upwards, in the case of receipts at the cost of the society, and in that of payments of the lender. 5. Interest at the rate of £ per annum shall be paid (half-yearly or quarterly) on such days as the general meetings of the society fix from time to time, on each sum of £1 each calendar month in each (half year or quarter) during which it has continued in account.

6. Notice shall be given of all withdrawals, according to the scale hereto annexed. All sums so withdrawn shall be payable in the week succeeding the termination of the notice; but the committee, at their discretion, may pay any sum of which notice of withdrawal has been given at any time after the receipt of such notice.

7. All notices shall be in the form hereto annexed, and shall be made or entered in a book kept by the secretary, as the committee direct.

8. No payment shall be received or made without the production of the loan book. Lenders must attend personally, if possible, when any money is to be withdrawn.

9. If a loan book is filled with entries it shall be delivered to the secretary of the society, that the balance may be transferred to another book, for which the lender shall pay sixpence.

10. The society shall be in no way affected by any writing or mark made in any loan book, except it is made by the secretary of the society or some person acting under his authority.

11. The loan book must be preserved intact, and if lost, torn, or cut, shall be replaced at the cost of the lender; and when an account is closed shall be given up to the society.

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Any sum up to £5, two weeks; exceeding £5 and not over £10, four weeks; and four weeks' additional notice for every further sum of £10, or fraction thereof.

N.B.-Loans will be received and paid every

between

the contrary.

and

unless notice is given to

The secretary has charge of the accounts, and will see that proper attendance is given at the times appointed for receipts and payments.

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herein called

of the lender, which name shall include the executors, administrators, or assigns of such lender, witnesses as follows:

1. In consideration of the moneys to be paid to the society by the lender from time to time, the society agrees with the lender

(1). On any demand of the lender made in accordance with the regulations, forms, and scale of notice contained in this loan book, to pay the lender the sum

so demanded, not exceeding the balance appearing to be due upon the account contained in such book, or in any like book similarly numbered and signed issued in replacement thereof;

(2). To pay interest upon the balance of principal money appearing to be due to the lender on such account, after the rate and in the manner mentioned in such regulations;

(3). In the event of any default being made in any such payment, to pay the lender on demand the balance then due upon the said account for principal and interest, with all costs or expenses whatsoever which the lender may be put to by reason of such default.

2. In consideration of the above agreements, the lender agrees with the society to be bound by all the regulations contained in the loan book now issued:

In witness whereof the undersigned members of the committee of management of the society, in its name and by its authority, and the lender, have set their hands the year and day first aforesaid.

Members

of the

Committee.

Witness to the above signatures,

Lender.

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