2024/03/11
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A Simple Guide to the Formation and Registration of Co-operative Societies and Credit Unions

What is a co-operative society ?

  • A co-operative society is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

  • A co-operative society is another means for forming a legal entity other than a company. It pools together human resources in the spirit of self and mutual help with the object of providing services and support to members.

  • The Co-operative Principles under which a co-operative society operates and carries out its business are :-
    1. Voluntary and open membership.
    2. Democratic control, one member one vote.
    3. Autonomy and independence.
    4. Promoting economic activities.
    5. Promoting education and information technology.
    6. Co-operation among co-operatives.
    7. Concern for the social and ecological environment.

How is a co-operative society regulated ?

  • The operation of co-operative societies is subject to control so as to prevent fraud and to ensure that every member enjoys equal rights and benefits (equity and equality) in respect of the business of the society. There are restrictions on profit disposal and rules to sustain corporate governance.

  • When a co-operative society is dissolved, the remaining surpluses shall be disposed by the Registrar at his discretion for any co-operative purpose.

  • The Co-operative Societies Ordinance, Cap 33 enshrines the Co-operative Principles and the Director of Agriculture, Fisheries and Conservation is appointed as the Registrar to register and regulate co-operative societies.

  • Other than a registered co-operative society, or unless approved by the Chief Executive, no one shall trade or carry on business under any name or title of which the word 'co-operative' is part.


How to form a co-operative society?

  • To set up a preparatory committee, preferably with 5 members, to pool human and other resources together.

  • To convene meetings to discuss the organizational structure of the proposed co-operative society (e.g. name, object, common bond of its members, share and business scope).

  • To draft co-operative by-laws by referring to the model by-laws obtainable from the Registrar and find suitable premises for the society.

  • To recruit members (at least 10 persons, each over 18 in age).

 
A Guide to the Registration of Co-operative Societies
  
I.      Introduction
 
Any 10 or more persons who wish to associate themselves together as a co-operative society for the objects of the promotion of the economic interests of its members in accordance with co-operative principles, or facilitating the operations of such a society, may be registered under the Co-operative Societies Ordinance, Cap. 33 (the “Ordinance”), the Laws of Hong Kong SAR. The Registrar of Co-operative Societies (a post concurrently held by the Director of Agriculture, Fisheries and Conservation) is responsible for the registration of societies and their by-laws, the inspection or audit of accounts and general supervision.
 
 
II.    Membership
 
In order to be qualified for membership of a Co-operative Society, a person must:-
(a)        have attained the age of 18 years;
(b)        be resident within or in occupation of land within the society’s area of operation as described by the by-laws of the society.
 
 
III.   Preparation on Application for Registration
 
A.    Inquire by phone on 2150 6762, email to mailbox@afcd.gov.hk or in person to the Co-operative and Credit Union Section, Agriculture, Fisheries and Conservation Department, 6th Floor, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon.
 
B.     Talks introducing the principles and operations of co-operative will be provided by the Section.
 
C.     Assistance will be given in the drawing up of the proposed by-laws and the filling in of the Application for Registration in the prescribed form.
 
 
IV.    Application for Registration
 
A.     The Application for Registration form shall be submitted to the Registrar together with 3 copies of the by-laws which the society proposes to adopt.
 
B.     If the Registrar is satisfied that the application has complied with the provisions of the Ordinance, and that its proposed by-laws are not contrary to the Ordinance, he may, if he thinks fit, register the society and its by-laws within 3 working days.
 
C.     Upon the registration of a society, the Registrar shall forward to the society free of charge the following documents:-
(a)    a certificate of registration;
(b)    a copy of the by-laws of the society as approved by him and certified under his hand; and
(c)    a copy of the Co-operative Societies Ordinance and Rules.
 
 
V.    Liability to profits tax
 
According to section 14 of the Inland Revenue Ordinance (IRO), any person (including a co-operative society) carrying on a trade, profession or business in Hong Kong is chargeable to tax in respect of the assessable profits arising in or derived from Hong Kong from such trade, profession or business (excluding profits arising from the sale of capital assets).  A co-operative society is not a “club or similar institution” for the purpose of section 24(1) of the IRO. Therefore, the provision providing for the circumstances under which a person who carries on a “club or similar institution” is deemed not to carry on a business under section 24(1) does not apply to a co-operative society. A co-operative society shall keep sufficient records in the English or Chinese language of its income and expenditure to enable the assessable profits of such trade, profession or business to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions, acts or operations to which they relate.
 

How to apply for registration ?

  • To complete and submit an application to the Registrar of Co-operative Societies.

  • To submit 3 copies of the proposed by-laws.

  • Registration is free of charge.


How to run a co-operative society ?

  • The following meetings are convened for the formulation of business policies and implementation of strategic plans :
    1. General meeting
    2. Special general meeting
    3. Committee meeting

  • A 5-member committee is entrusted with the duties and responsibilities in the management of the society's affairs.

  • The committee is elected by members annually at the general meeting in a one-member-one-vote manner.

  • Members of the committee are unpaid.

  • Supreme authority is vested in the general meeting with the committee as its executive arm.

  • Accounts, books and records should be properly kept and are subject to audit by persons authorized by the Registrar.


Copies of the Co-operative Societies Ordinance and Rules, Cap. 33 are available for sale at the Government Publications Centre. For electronic copies, please go to the BLIS of the Department of Justice.

Website : https://www.elegislation.gov.hk/?_lang=en

 

How to form a credit union?

 
A Guide to the Registration of Credit Unions
 
I.      Introduction
 
Any 15 or more persons who wish to associate themselves together as a credit union for the objects to promote thrift, to receive the savings of its members either as payment on shares or as deposits and to make loans to its members for provident or productive purposes, may be registered under the Credit Unions Ordinance, Cap. 119 (the “Ordinance”), the Laws of Hong Kong SAR. The Registrar of Credit Unions (a post concurrently held by the Director of Agriculture, Fisheries and Conservation) is responsible for the registration of credit unions and their by-laws, the examination and inquiry, and general supervision.
 
 
II.    Condition of Registration
 
In order to be qualified for tendering application for registration, the applicants must:-
(a)        not less than the age of 16 years;
(b)        have at least three of them not less than the age of 21 years;
(c)        within the common bond of occupation, employment, association, or residence as defines in the proposed by-laws of the credit union.
 
 
III.   Preparation on Application for Registration
 
A.    Inquire Credit Union League of Hong Kong (the “League”) by phone on 2388 0177 which is incorporated for the objects to provide educational and advisory services and to assist in the organization of credit union.
 
B.     Seminars introducing the principles and operations of credit union will be provided by the League.
 
C.     Assistance will be given in the drawing up of the proposed by-laws and the filling in of the Memorandum of Association in the prescribed form.
 
D.    Inquiries may also be made by phone on 2150 6762, email to mailbox@afcd.gov.hk or in person to the Co-operative and Credit Union Section, Agriculture, Fisheries and Conservation Department, 6th Floor, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon.
 
 
IV.    Application for Registration
 
A.     The applicants shall sign in duplicate before two witnesses a Memorandum of Association and cause both copies thereof to be submitted to the Registrar together with 2 copies of the by-laws which the credit union proposes to adopt.
 
B.      The persons signing the Memorandum of Association shall appoint a provisional secretary.
 
C.      The Registrar may make such inquiries as he deems necessary upon receiving the Application.
 
D.    The Registrar may, register the credit union within 3 working days, if he is satisfied :
(a)    that the proposed by-laws do not conflict with any provision of the Ordinance;
(b)    that the proposed by-laws are sufficient to enable the credit union to carry out its objects;
(c)    that the body to which membership is limited is such as to ensure reasonable personal association amongst the members;
(d)    that the applicants have reasonable prospects of carrying out the objects of a credit union;
(e)    that the applicants and the application comply with the requirements of the Ordinance.
 
E.     Upon the registration of a credit union, the Registrar shall forward to the credit union free of charge the following documents :
(a)    one copy of the Memorandum of Association;
(b)    one copy of the by-laws, with his approval endorsed thereon; and
(c)    a certificate of registration.
 
 
V.    Liability to profits tax
 
According to section 14 of the Inland Revenue Ordinance (IRO), any person (including a credit union) carrying on a trade, profession or business in Hong Kong is chargeable to tax in respect of the assessable profits arising in or derived from Hong Kong from such trade, profession or business (excluding profits arising from the sale of capital assets). A credit union is not a “club or similar institution” for the purpose of section 24(1) of the IRO. Therefore, the provision providing for the circumstances under which a person who carries on a “club or similar institution” is deemed not to carry on a business under section 24(1) does not apply to a credit union. A credit union shall keep sufficient records in the English or Chinese language of its income and expenditure to enable the assessable profits of such trade, profession or business to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions, acts or operations to which they relate.
 

Do you need more information or assistance?

If you wish to obtain more information or assistance, please contact this department by phone on 2150 6764 / 2150 6765 or email to mailbox@afcd.gov.hk.

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