Cooperative Societies Law (2020 Revision)

Summary

This document is the consolidated 2020 Revision of the Cayman Islands' Cooperative Societies Law, which sets out the legal framework for registering, operating, regulating and dissolving cooperative societies, with special additional provisions for credit unions (a category of cooperative society engaged in savings and lending activities for members). It establishes the office of the Registrar of Cooperative Societies and gives the Cayman Islands Monetary Authority (CIMA) specific supervisory powers over credit unions, including approving changes in directors and senior officers and assessing whether proposed directors/senior officers are 'fit and proper' persons before a credit union can be registered.

• Cooperative societies generally: Entities formed to promote the economic interests of members on cooperative principles, requiring at least ten qualifying members.
• Credit unions specifically: Within the cooperative society category, credit unions are subject to enhanced oversight by the Authority (CIMA) in addition to the Registrar.

• Registration: Registration requirements and naming conventions.
• Members' rights and restrictions: Includes share capital caps, voting, and transfers.
• Property and funds rules: Covers loans, deposits, reserves, and dividends.
• Audit and inspection powers: Provisions for auditing and inspecting cooperative societies.
• Dissolution and liquidation procedures: Rules governing the winding up of cooperative societies.
• Dispute resolution: Mechanisms for resolving disputes.
• Offences and penalties: For non-compliance, such as false returns, misuse of the term 'cooperative', fraud or misappropriation.

Because large portions of the substantive middle sections (e.g. detailed accounts, audit and Authority powers provisions in Parts IV-VII) were not fully visible in the extracted text, this summary is based primarily on the visible introductory, registration and closing sections, plus the table of contents outlining the Law's structure.

Key obligations

• A person wishing to register a cooperative society to engage in credit union business must apply to the Authority (CIMA) in the prescribed form for a determination that the proposed directors and senior officers are fit and proper persons.
• An applicant for such a determination must provide the Authority with such information, and within such time, as the Authority requires to assess fitness and propriety of proposed directors and senior officers.
• The Registrar must not approve registration of a credit union unless the Authority has determined that its proposed directors and senior officers are fit and proper persons.
• Every registered society must include the word 'cooperative' in its name, and every registered society with limited liability must end its name with 'limited'.
• No society may register under a name identical to, or likely to be confused with, an existing registered society.
• Registered societies and their officers/members must furnish information and returns lawfully required by the Authority or Registrar and must not make wilfully false returns or furnish false information.
• Instruments executed by or on behalf of a registered society relating to its business are exempt from stamp duty (an entitlement rather than an obligation).

Applies to

cooperative societies, credit unions, directors and senior officers of credit unions, members of registered societies