Cooperative Societies Act

Section Interpretation Section In this Act, unless the context otherwise requires— “ agricultural produce ” means the produce of farms, gardens, orchards and forests, including all dairy produce and all products of animal husbandry, and shall be deemed to include all the products of fishes and fishing and peasant handicrafts; “ apex society ” means a registered society under this Act, the membership of which is restricted to secondary and tertiary cooperatives societies and cooperative bank and includes a society established to serve the cooperative movement by providing facilities for banking, insurance and the supply of goods or services; “ beneficial owner ” means a natural person who ultimately owns or controls a cooperative society or the natural person on whose behalf a transaction is conducted in the cooperative society, and includes a natural person who exercises ultimate control over a cooperative society; “ Board ” means the Board of Directors of the Uganda Cooperative Alliance Ltd.; “ bonus ” means a share of the surplus of a registered society divided among its members in proportion to the volume of business done with the society by them from which the surplus of the so...

Section Amendment of byelaws of registered society Section A registered society may, subject to this Act, amend its byelaws , including a byelaw which declares the name of the society. An amendment of the byelaws of a registered society shall not be valid until the amendment has been registered under this Act, for which purpose a copy of the amendment shall be forwarded to the Registrar . Where the Registrar is satisfied that an amendment of the byelaws is not contrary to the provisions of this Act, he or she shall register the amendment. An amendment which changes the name of a registered society shall not affect any right or obligation of the society or any of its members or past members, and any legal proceedings pending may be continued by or against the society under its new name. When the Registrar registers an amendment of the byelaws of a registered society , he or she shall issue to the society a copy of the amendment certified by him or her which shall be conclusive evidence of the fact that the amendment has been duly registered. Where it appears to the Registrar that an amendment of the byelaws of a society is necessary or desirable in the interest of the society, he or...

Section Appeal to Board Section From every refusal of the Registrar to register a society or its byelaws or any amendment of its byelaws , an appeal shall lie, in accordance with any regulations made under this Act, to the Board whose decision, subject to section 144 , shall be final.

Section Provisions regarding name of registered society Section A society shall not be registered under a name identical with that under which any other existing society is registered, or under any name likely in the opinion of the Registrar to mislead the members of the public as to its identity. The word “Cooperative” shall form part of the name of every society registered under this Act, and the word “Limited” shall be the last word in the name of every society with limited liability registered under this Act.

Section Evidence of registration Section A certificate of registration signed by the Registrar shall be conclusive evidence that the society mentioned in it is duly registered unless it is proved that the registration of the society has been cancelled. Where the Registrar is satisfied that a society’s original certificate of registration has been lost or destroyed, he or she may issue a duplicate certificate.

Section Register of beneficial owners Section A cooperative society with beneficial owners shall keep a register of its beneficial owners and shall enter in register the following particulars— The register of beneficial owners shall be kept at the registered office of the cooperative society except that— the names, contact and postal addresses of each beneficial owner ; the national identification number (NIN) of each beneficial owner ; the nature of the beneficial ownership; the date on which each beneficial owner was entered in the register as a beneficial owner ; the date on which any person ceased to be a beneficial owner ; and any other information as the Minister may prescribe by regulations. if the work of making it up is done at another office of the cooperative society, it may be kept at that other office; and if the cooperative society arranges with some other person for the making up of a register on behalf of the cooperative society by that other person, it may be kept at the office of that person at which the work is done but it shall not be kept at a place outside Uganda. A cooperative society shall, within fourteen days after creating the register or changing the pla...

Section Registrar, deputy registrars and assistant registrars Section There shall be a Registrar for Cooperative Societies who shall also be the commissioner for cooperative development for the purposes of this Act. The Registrar shall be a public officer responsible for providing and administering the services required by societies for their formation, organisation, registration, deregistration, operation and advancement and for carrying out the provisions of this Act. There shall be three deputy registrars who shall be deputy commissioners, one of whom shall be responsible for the administration of cooperative societies, while the other shall be responsible for the implementation of the legal provisions of this Act. All officers of the rank of assistant cooperative officer and above shall be assistant registrars of cooperative societies for the purpose of this Act. Every district shall have a district cooperative officer and staff who shall report to the Commissioner , or a person designated by him or her. The Minister may, by statutory order, confer or impose on any assistant registrar for cooperative societies all or any of the powers and duties conferred or imposed on the Regi...

Section Registration of societies Section Subject to this Act, a society which has for its object the promotion of the economic and social interests of its members in accordance with cooperative principles and which, in the opinion of the Registrar , is capable of promoting those interests may be registered under this Act with or without limited liability; except that a cooperative union or any apex society shall be registered with limited liability.

Section Conditions of registration Section A society shall not be registered under this Act unless— it consists of at least thirty persons all of whom are qualified for membership of the society under section 15 ; in the case of a secondary society , it consists of at least two registered primary societies among its registered members; in the case of a tertiary society , it consists of at least two registered secondary societies among its registered members; or in the case of an apex society , it consists of two or more secondary or tertiary societies. Notwithstanding subsection (1)(a) , the Registrar may register a society of a unique nature, consisting of less than thirty persons all of whom qualify for membership under section 15 . The Uganda Cooperative Alliance Limited shall be administered in accordance with the provisions of this Act and other laws governing cooperative societies. A cooperative society shall incorporate in its proposed byelaws , a statement on cooperative identity as specified in Schedule 2 to this Act. For the avoidance of doubt, a society shall not be registered with unlimited liability.

Section Application for registration Section The application shall be signed— For the purpose of registration, an application to register a society shall be made to the Registrar . in the case of a primary society , by at least thirty persons qualified for membership of the society under section 15 ; and in the case of a secondary, tertiary or apex society , by person duly authorised for that purpose by each registered society , who is a member of that society. The application shall be accompanied by four copies of the proposed byelaws of the society in English, and the persons by whom or on whose behalf the application is made shall furnish such information in regard to the society as the Registrar may require.

Section Registration on probation Section Where the Registrar is satisfied that a society has complied with this Act and regulations made under it and that its proposed byelaws are not contrary to the provisions of this Act, he or she shall register the society and its byelaws on probation for a period not exceeding twenty-four months. If at the expiration of twenty-four months, the Registrar is satisfied with the performance of the society, he or she shall register the society permanently, if the society complies with the conditions prescribed by regulations. Where at the expiration of twenty-four months, the Registrar is not satisfied with the performance of the society, he or she may either cancel the registration or extend the probationary period by a period not exceeding twelve months; and if after the extension he or she is still not satisfied with the performance of the society, he or she shall cancel the registration of the society. Where the Registrar cancels the registration of a society under subsection (3) , then the provisions of sections 130 and 131 concerning the appointment of a liquidator and his or her powers shall apply. A society registered under subsection (1)...

Section Pre-registration contracts Section A contract which purports to be made on behalf of a cooperative society before the cooperative society is formed, has effect, as one made with the person purporting to act for the cooperative society. A cooperative society may adopt a pre-incorporation contract with its formation and registration made on its behalf without a need for novation. In all cases where the cooperative society adopts a pre-incorporation contract, the liability of the promoter of that cooperative society shall cease.

Section Indication of registration on probation Section A society which is registered under section 6(1) shall state in legible letters in all its receipt heads, letter papers, notices, advertisements or other official publications that it is registered probationary and shall indicate the same on a signboard in a conspicuous position outside any premises or office in which it carries on its business.

Section Cancellation of registration on probation Section At any time during the period of registration of a society under section 6(1) , the Registrar may, by notice in writing to the person responsible for the running of the society, cancel the registration on probation of the society stating the reasons for the cancellation; and the society shall, from the date of service of the notice, cease to be a registered society . The cancellation referred to in subsection (1) shall be gazetted and published in at least one of the English newspapers in Uganda. Where a society registered under section 6(1) contravenes or fails to comply with section 8 , that society and any officer or person who purports to act on its behalf commits an offence and is liable, on conviction, to a fine not exceeding 0.5 of a currency point and in the case of a continuing offence to a further fine not exceeding 0.05 of a currency point for each day on which the offence is continued after conviction of the offence. A cooperative society shall be deregistered if its membership falls below the prescribed number in section 4 .

Section Qualifications for membership Section In order to be qualified for membership of a registered society , any person, other than a registered society or a company incorporated under the Companies Act or an unincorporated body of persons permitted to become a member under section 17 , shall— have attained the age of eighteen years; and be a resident within or in occupation of land within the society’s area of operation as prescribed by the relevant byelaw. A person above the age of twelve years may become a member of a society, but that person shall not be eligible to act as a committee member of the society until he or she has reached the age of eighteen years. When, for the purpose of this section, any question arises as to the age of any person, that question shall be decided by the Registrar , whose decision shall be final.

Section Restriction on shareholding Section A member , other than a registered society , shall not hold more than one-third of the paid-up share capital of any cooperative society.

Section Restriction on membership Section A company incorporated or registered under the Companies Act and an unincorporated body of persons shall not be entitled to become a member of a registered society, except with the written permission of the Registrar.

Section Rights and obligations of members Section A member of a cooperative society shall have a right to— A member shall— A member of a registered society shall not exercise any of the rights of a member until he or she has made such payment to the society in respect of membership or has acquired such interest in the society as may be prescribed by regulations made under this Act or by the byelaws of the society. attend, participate and vote for decisions taken at all general meetings of the society; be elected to organs of the society subject to its byelaws , policies and resolutions of the general meeting; enjoy the use of all facilities and services of the society subject to the society byelaws , policies and resolutions of the general meeting; and access all legitimate information relating to the society. observe and comply with all the byelaws of the society and decisions taken by the relevant organs of the cooperative society in accordance with the byelaws of the society; pay up for shares or make any other payments provided for in the byelaws of the society; meet the debts of the society in case of bankruptcy in accordance with the provisions of this Act and the byelaws of...

Section Votes of members Section Each member of a registered society shall have one vote only as a member in the affairs of the registered society . A registered society , a cooperative union or an apex society which is a member of any other registered society shall have as many votes as may be prescribed by the byelaws of the other society, and may, subject to those byelaws , appoint any number of its committee members, not exceeding the number of those votes, to exercise its voting power.

Section Leadership and management of society Section The Board shall be the governing body of the society and shall, subject to any direction from the general meeting or the byelaws of the society, direct the affairs of the society with powers to— A person appointed under subsection (4) to the management of a cooperative society shall— Other than the qualifications that may be set with the approval of the Registrar , a person shall be a member of a Board if he or she— Every society shall have a Board consisting of an odd number of members not less than five and not exceeding nine. enter into contracts; institute and defend suits and other legal proceedings brought in the name of or against the society; and do all other things necessary to achieve the society’s object in accordance with its byelaws . In the conduct of affairs of a cooperative society, the members of the Board shall exercise the prudence and diligence of an ordinary person of business and shall be held, jointly and severally, liable for any losses sustained through any of their acts which are contrary to the Act, regulations, byelaws or directions of any general meeting of the cooperative society. The Board shall hav...

Section Supervisory board Section Save for the Board of a cooperative society provided for in section 20 , the annual general meeting shall be responsible for electing a supervisory board of three persons, which shall make, or cause to be made, regular examination of the accounts, records, and affairs of the society and review the action of the officers, Board, and credit committee for conformity with the law, regulations, byelaws, and policies of the society and is answerable to the annual general assembly. The supervisory board may, in consultation with the Registrar , call a special general meeting of the members to consider any violation of the Act, regulations or byelaws , or any practice of the cooperative society considered by the Board to be unsafe or unsound. The supervisory board shall be required to make a record of all its activities available for inspection by the Registrar and the society’s auditors and shall present a report of its activities to the general meeting. Members of the supervisory board shall be subjected to the same provisions under section 20(10) . The supervisory board shall inform the Registrar in writing within five working days of any recommendation...

Section Restrictions on transfer of share or interest Section In the case of a society registered with unlimited liability, a member shall not transfer or charge any share held by him or her or his or her interest in the capital of the society or any part of it, unless— he or she has held the share or interest for not less than one year; and the transfer or charge is made to the society or to a member of the society.

Section Address of society Section Every registered society shall have a registered address to which notices and communications may be sent and shall send to the Registrar notice of every change of address within one month of the change. Every registered society shall display its name and address on a signboard in a conspicuous position outside its place of business.

Section Copy of Act, regulations, byelaws, etc. to be open for inspection Section Every registered society shall keep a copy of this Act and of the regulations made under it and of its byelaws and a list of its members open to inspection by any person, free of charge at all reasonable times during business hours at the office of the society.

Section Records management of registered society Section Records management in a society shall be done in accordance with the National Records and Archives Act. There shall be a cooperative archive in the Ministry responsible for cooperatives.

Section Audit, annual returns and accounts Section Every registered society shall cause its accounts to be audited at least once in every year by an auditor appointed by the annual general meeting and approved by the Registrar , and the cost of the audit shall be borne by the society; except that— In addition to regular audits, social audits shall be conducted annually to examine the following components— The auditor shall have power when necessary— Every auditor appointed under subsection (1) shall submit a detailed audit report of the accounts and balance sheet to the committee and a true copy of the accounts and balance sheet to the Registrar, three months after its financial year prepared in compliance with generally accepted professional audit standards and, in addition, include the auditor’s opinion on whether or not the business administration of the society has been conducted— no auditor chosen by a registered society to audit its books shall perform that function for more than three annual audits in succession unless authorised by the Registrar ; where the registered society is unable to appoint its own auditors, the Registrar may appoint the auditors. Notwithstanding subs...

Section Qualifications of auditors Section No person shall be appointed or approved as an auditor of the accounts of a registered society unless that person or in case of a firm is a member of the Institute of Certified Public Accountants of Uganda as per the Accountants Act. The Registrar may in certain circumstances appoint an auditor for a limited period, a person who has previously served as an assistant registrar of a cooperative society. The Registrar may, in consultation with the Institute of Certified Public Accountants of Uganda, appoint a person who previously served as an assistant registrar and above to audit primary societies. The Minister may, by statutory instrument, in consultation with the Board and amend the qualifications of auditors specified in this section.

Section Estimates and expenditure Section Every committee of a registered society shall cause estimates of the society’s income and expenditure of both revenue and capital to be prepared for the coming twelve months at least three months before the end of its financial year. A copy of those estimates shall be sent to the Registrar for an opinion before they are submitted to the general meeting. Supplementary estimates may be prepared by a society during the financial year and submitted to the Registrar for an opinion before they are submitted to the annual general meeting. No development capital expenditure shall be made by a registered society before the committee ’s estimates have been approved by a general meeting. Where a society contravenes or fails to comply with any provision of this section, that society and any officer or person who purports to act on its behalf commits an offence, and the Registrar shall impose upon the society or officer or person a fine not exceeding 0.25 of a currency point and in the case of a continuing offence a further fine not exceeding 0.025 of a currency point for each day on which the offence is continued.

Section Voluntary amalgamation of societies Section An amalgamation referred to in subsection (1) shall not take place unless— Any two or more registered societies may, with the prior approval of the Registrar , amalgamate into a single society. a general meeting of each of the societies has been called; each member of the society has had a clear notice of fifteen days of the meeting; and a preliminary resolution has been passed by a two-thirds majority of the members present at the meeting for the amalgamation. Upon amalgamation of registered societies into a society, the societies shall cease to exist but there shall be division of assets and liabilities in accordance with the agreement governing the amalgamation.

Section Transfer of assets and liabilities to another society Section A registered society may by a resolution passed under section 29(2)(c) transfer its assets and liabilities to any other society which agrees to accept them. The transfer of liabilities referred to in subsection (1) shall not be made to any society without giving a notice in writing of ninety days to the creditors of both or more societies concerned in the transfer of these liabilities. Where a creditor objects to an amalgamation decided upon under section 28 or a transfer of liabilities under this section and gives a notice in writing of one month before the date fixed for the amalgamation or transfer of liabilities to the society concerned, the amalgamation or transfer shall not take place until the dues of the creditor have been satisfied or until an agreement for payment of the dues has been made by the society and the creditor. A creditor who is not satisfied with the dues paid to him or her or who does not accept to enter an agreement with the society concerned as provided under subsection (3) may appeal to the Registrar within ninety days from the date of his or her disagreement with the society, and the de...

Section Voluntary division of society Section A division of a society referred to under subsection (1) shall not take place unless— At the special meeting of the society held under subsection (7) , provision shall be made by another resolution for— A registered society may, with the prior approval of the Registrar , divide itself into two or more societies in accordance with the procedure laid down by regulations made under this Act. a general meeting of the members of the society has been called; each member of the society has had a clear notice of at least fifteen days of the meeting; and a resolution has been passed by a two-thirds majority of the members present at the meeting providing for the division. A resolution passed under subsection (2) (hereafter referred to as a preliminary resolution) shall contain proposals for the distribution of the assets and liabilities of the divided society among the societies in which it is proposed to be divided and shall prescribe the area of operation of, and specify the members who may constitute, each of the new societies. A copy of the preliminary resolution shall be sent to all the members of the society and its creditors, and any othe...

Section Cancellation of registration after inquiry or inspection Section Where the Registrar , after holding an inquiry under section 59 or after making an inspection under section 60 , or on receipt of an application made by two-thirds of the members of a registered society, is of the opinion that the society ought to be dissolved, the Registrar may make an order for the cancellation of registration of the society. A member of a registered society may, within two months from the date of an order made under subsection (1) , appeal from the order to the Board. Where no appeal is presented within two months from the making of an order under subsection (1) cancelling the registration of a society, the order shall take effect on the expiry of that period; where an appeal is presented within two months, the order shall not take effect until it is confirmed by the Board. A registered society shall not be wound up, except by an order of the Registrar .

Section Cancellation for other reasons Section The Registrar may, on his or her motion, by order in writing, cancel the registration of any society, if satisfied that— the registration was obtained by fraud or mistake; the society exists for an illegal purpose; the society has wilfully, after notice by the Registrar , contravened any of the provisions of this Act, the regulations or the byelaws ; the society is no longer operating in accordance with cooperative principles; the number of members of the society has fallen below the minimum required by this Act; or the society has not commenced operations or has ceased to operate for two consecutive years. A society shall liquidate when two-thirds of its share capital has been lost, unless it can convince the Registrar that the loss will be made good within six months from the date of discovery of the insolvency. An appeal against an order made under subsection (1) or (2) shall be lodged with the Board within two months from the date of receipt of the order.

Section Winding up Section Where the Registrar , after an inquiry has been held under section 59 , is of the opinion that the society ought to be wound up, the Registrar may make an order directing it to be wound up and may appoint a liquidator for the purpose and fix the remuneration of the liquidator which shall be paid out of the funds of the society. Where no liquidator is appointed, the assets and liabilities of the society shall vest in the Registrar .

Section Effect of winding up Section Upon the winding up of a registered society , Schedule 5 to this Act shall apply in relation to the society.

Section Effective date of cancellation Section Where the registration of a society is cancelled, the society shall cease to exist as a corporate body as from the date of dissolution .

Section Copy of order to be filed by Registrar Section On the making of an order to cancel the registration of a society, a copy of the order shall be placed in the file maintained by the Registrar in respect of the society and gazetted and published in at least one of the newspapers in Uganda.

Section Appointment of liquidator Section Where the registration of a society is cancelled under section 125 or 126 , the Registrar may appoint one or more persons to be a liquidator or liquidators of the society, and all the property of the society shall vest in the liquidator or liquidators with effect from the date of dissolution.

Section Powers of liquidator Section A liquidator appointed under section 131 shall, subject to the guidance and control of the Registrar and to any limitation imposed by the Registrar or by an order made under section 133 , have the following powers— to appoint a day, in the manner prescribed by regulations made under this Act, before which the creditors whose claims are not already recorded in the books of the society shall state their claims for admission or be excluded from any distribution made before they have proved them; to institute and defend suits and other legal proceedings by and on behalf of the society by his or her name of office and appear in court as a litigant in person on behalf of the society; to refer disputes to arbitration in the manner prescribed by regulations made under this Act; to determine the contributions to be made by the members and past members, and by the estate of deceased members of the society, respectively, to the assets of the society; to investigate all claims against the society and, subject to this Act, decide questions of priority arising between claimants; to call such meetings of members as may be necessary for the proper conduct of th...

Section Powers of Registrar in liquidation Section A liquidator shall exercise his or her powers subject to powers of control and revision by the Registrar who may— rescind or vary any order made by a liquidator and make whatever new order is required; remove a liquidator from office and appoint a new liquidator; call for all books, documents and assets of the society; by order in writing, limit the powers of a liquidator under section 132 ; require accounts to be rendered to the Registrar by the liquidator at the Registrar ’s discretion; procure the auditing of the liquidator’s accounts and authorise the distribution of the assets of the society; make an order for the remuneration of the liquidator; grant a discharge to the liquidator on application by him or her after completion of the liquidation proceedings; require any member of a society and any trustee, banker, receiver, agent or officer of the society to pay, deliver, convey, surrender or transfer immediately, or within such time as he or she shall direct, to the liquidator any money, property or books and papers in his or her hands to which the society is prima facie entitled; appoint a special manager of the business of a...

Section Appeal against order of liquidator or Registrar Section A person aggrieved by an order of a liquidator or the Registrar given under section 132 or 133(1)(a) may appeal against the order to the Board whose decision shall, subject to section 144 , be final.

Section Commission of offences by officers of society Section If the liquidator of a society whose registration has been cancelled alleges that any of the offences mentioned in paragraphs 17, 18, 19, 20, 21 and 22 of Schedule 5 to this Act has been committed, the liquidator shall report to the Director of Public Prosecutions for the institution of proceedings as may be necessary.

Section Closure of liquidation Section Any surplus remaining after the application of the funds to the purposes specified in subsection (1) and any sums unclaimed under subsection (2) shall— In the liquidation of a society whose registration has been cancelled, the funds, including the reserve fund, shall be applied first to the costs of liquidation, including the remuneration of the liquidator, then to the discharge of the liabilities of the society, then to the payment of the share capital and then, if the byelaws of the society so permit, to the payment of a dividend at a rate not exceeding ten percent per year for any period for which no disposal of the net surplus was made. When the liquidation of a society has been closed, the claim of any creditor of that society who has not received what is due to him or her under the approved scheme of distribution shall be barred by prescription on the expiry of one year from the date of the order cancelling the registration of the society. be distributed among the members at the time of dissolution (or their legal personal representatives) in proportion to the value of the business of each such member with the society during the three ye...

Section Convicted officers not to be officers of society Section A person convicted of an offence under this part of this Act shall not be an officer of a registered society or in any way, whether directly or indirectly, be concerned in or take part in the management of a society for five years from the date he or she is released from prison, or he or she pays a fine. Any person acting in contravention of this section commits an offence and is liable, on conviction, to imprisonment for a term not exceeding two years.

Section Offences Section Offences under this Part shall be cognisable by a court presided over by a chief magistrate or a magistrate grade 1 having jurisdiction over the place in which the alleged offence was committed.

Section Societies to be bodies corporate Section A society on registration shall become a body corporate by the name under which it is registered, with perpetual succession and a common seal, and with power to hold movable and immovable property of every description, to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary for the purpose of its constitution.

Section Board of directors of apex society Section The Board of the apex society shall, subject to the byelaws and any directions issued by the general meeting of the alliance— consider and make recommendations to the Government on matters of policy relating to the cooperative movement; make representations to the Government as it may think fit in relation to any matter affecting registered cooperative societies in general or any particular registered society which those societies generally or any such society may request the Board to bring to the notice of the Government; and carry out any other duty assigned to it under this Act.

Section Byelaws to bind members Section The byelaws of a registered society shall, when registered, bind the society and its members to the same extent as if they were signed by each member , and contain obligations on the part of each member , his or her heirs, executors, administrators and assignees, to observe all the provisions of the byelaws . It shall not be competent for a member of a registered society to contest any suit, claim, action or proceedings between that member and the society or any other member of the society on the ground that any byelaw of the society constitutes a contract in restraint of trade.

Section Contract with members to dispose of produce Section A registered society , having as one of its objects the disposal of any agricultural produce , may contract with its members either in its byelaws or by a separate document that they shall dispose of all their produce or of such amounts or descriptions as may be stated in those byelaws or that document, to or through the society, and may in the contract provide for payment of a specific sum per unit of weight or other measure as liquidated damages for infringement of the contract, and that sum shall be a debt due to the society. Any such contract as is mentioned in subsection (1) shall create in favour of the society a first charge upon all produce mentioned in the contract, whether existing or future. The covenants or obligations imposed by any such contract as is mentioned in subsection (1) shall run with any lands, trees, buildings or other structures mentioned in it and shall be binding on all assignees and transferees; and any transfer or conveyance of property subject to the contract shall be deemed to operate also as a like transfer or assignment of the contract. A contract entered into under this section shall not...

Section Imposition of fines upon members Section The byelaws of a registered society may, subject to any regulations made under this Act, provide for the imposition of fines on its members for any infringement of its byelaws ; but no such fine shall be imposed upon any member until written notice of intention to impose the fine and the reason for it has been transmitted to him or her and he or she has had an opportunity of showing cause against the imposition of the fine and, if he or she so desires, of being heard with or without witnesses. Any such fine may be recovered by suit in any competent court . The whole or any part of such fine may be set off against any money due to such member in respect of produce delivered by him or her to the society. A member shall not be deemed to have infringed the byelaws of a registered society by reason of his or her having failed to deliver produce to the society if that failure was due to the fact that before becoming a member of the society the member had contracted to deliver the produce to some other person. Every person applying for membership of a registered society shall disclose to the society particulars of all such contracts as are...