357Distribution of surplus or reserves to members

357 Distribution of surplus or reserves to members

357 Distribution of surplus or reserves to members

(1) A distributing co-operative may apply a part of the surplus arising in a year from the business of the co-operative or a part of the reserves of the co-operative by—

(a) distribution to members as a rebate in proportion to—

(i) the value of business done by each member with the co-operative; or

(ii) profits earned by the co-operative on business done by each member with the co-operative; or

(b) the issue to members of bonus shares in proportion to—

(i) the value of business done by each member with the co-operative; or

(ii) profits earned by the co-operative on business done by each member with the co-operative; or

(iii) shares held by each member; or

(c) the issue to members of a limited dividend for shares held by each member.

(2) The amount of a rebate payable to a member under subsection (1) (a) may be applied—

(a) in payment for the issue to the member of bonus shares, with the consent of the member; or

(b) as a loan to the co-operative—

(i) with the consent of the member; or

(ii) if the rules of the co-operative authorise the amount of a rebate payable to a member under subsection (1) (a) to be applied as a loan to the co-operative.

(3) The amount of a dividend payable to a member under subsection (1) (c) may be applied—

(a) in payment for the issue to the member of bonus shares, with the consent of the member; or

(b) as a loan to the co-operative—

(i) with the consent of the member; or

(ii) if the rules of the co-operative authorise the amount of a dividend payable to a member under subsection (1) (c) to be applied as a loan to the co-operative.

(4) A loan to the co-operative authorised by the rules (as referred to in subsection (2) (b) (ii) or (3) (b) (ii)) is repayable at call and must bear interest at a rate not lower than the rate prescribed by the National Regulations.