By Kamundia Muriithi
Embu County has developed a new law to govern operations of cooperative societies.
The County Cooperative Societies Bill 2019, spearheaded by the agriculture committee chaired by Rev Elizabeth Kivai, seeks to establish a legal framework relating to the formation, registration, promotion, development and regulation of cooperative societies.
The Bill was drafted by the County Assembly of Embu and intends to: “promote growth and development of cooperative societies by fostering cooperation between the National and County Government in matters relating to the societies”.
It will also be geared towards enhancing good governance in cooperative societies and managing conflicts and disputes amongst members.
When enacted, the new legislation is expected to promote local economic growth and development within the county by encouraging good corporate governance of cooperative societies. All cooperative societies operating within Embu County will be expected to fully comply with the provisions of this Act when it comes into effect.
The law requires cooperative societies to keep proper books of accounts which will be open for audit by an auditor approved by the County Director of Cooperatives in consultation with the Institute of Certified Public Accountants of Kenya (ICPAK).
Failure to present books of accounts for auditing within the stipulated period will lead to the automatic disbandment of the society’s governing committee.
The Act will also empower the Director of Cooperatives to conduct an inquiry into the operations of any cooperative society if the County Executive Committee member so orders, if one-third of the member’s demand so during a general meeting, or in the event of an application of a society liquidator or any creditor.
The Director of Cooperatives will also have the mandate of dissolving a cooperative society and subsequently cancelling its registration after the results of an inquiry into its operations reveals that the society cannot be salvaged.
The new law prohibits persons convicted of an offence under sections of the Companies Act of 2015, specified in section 77 from taking part in the management of any cooperative society either directly or indirectly for a period of five years from the date of his conviction. The proposed legislation will be subjected to public participation to gather views of key stakeholders before being deliberated upon at the County Assembly with the aim of enactment
