128Repayment of shares on expulsion or resignation

128 Repayment of shares on expulsion or resignation

128 Repayment of shares on expulsion or resignation

(1) When a member is expelled or resigns from a co-operative under its rules, the co-operative must, within one year after the day of expulsion or resignation—

(a) repay to the former member an amount (the repayable amount) made up of the amount paid up on the shares held by the member at the day of expulsion or resignation, less any amount owed by the member to the co-operative at the day of expulsion or resignation under the rules of the co-operative or any contract or otherwise; or

(b) apply the repayable amount under subsection (2) if—

(i) the board considers repayment would adversely affect the financial position of the co-operative; or

(ii) the board and the former member agree.

(2) The repayable amount may be applied in one or more of the following ways—

(a) the co-operative may appropriate the amount as a donation to the co-operative, but only if the former member consents in writing to the donation;

(b) if the co-operative is a deposit-taking co-operative—the co-operative may apply the amount as a deposit by the former member with the co-operative;

(c) the co-operative may allot or issue debentures or CCUs of the co-operative to the former member in satisfaction of the amount.

(3) If the balance sheet of the co-operative last issued before the expulsion or resignation of a member of the co-operative disclosed a loss or deficiency, there must be a proportionate reduction in the capital to be repaid to the member.

(4) That reduction must be by an amount that bears to the amount of the loss or deficiency so disclosed the same proportion as the number of shares held by the member bore to the total number of shares held by all members of the co-operative as at the date of expulsion or resignation of the member.

(5) Shares for which capital has been repaid must be cancelled.

Note—

Section 163 deals with repayment of amounts owing because of cancelled membership. Sections 164 and 165 deal with interest on, and repayment of, deposits, debentures and CCUs referred to in this section.