THE COOPERATIVE SOCIETIES LEGAL FRAMEWORK IN TANZANIA MAINLAND

A cooperative society is an association or organisation that is formed by people of common interest who voluntarily come together and pool resources to promote their welfare. These can be in a form of a primary society, secondary society, an apex, and/or a federation.

The legal framework regulating cooperative societies in Tanzania dates back to 1932 when the first legislation was coined. The Co-operative Societies Act of 1932 was introduced in the then Tanganyika by the colonial government with a view of controlling cooperative societies in Tanganyika.

Thereafter, there have been several other legislations and amendments culminating to the new Cooperative Societies Act Number 6 of 2013 of the laws of Tanzania (the “Act”).  

The Act, primarily among other pertinent matters, provides for the establishment of the Tanzania Co-operative Development Commission (hereinafter referred to as “TCDC’). The TCDC is assigned with the registration and operation of cooperative societies; promotion of co-operative development and other matters incidental to or connected thereto. In the course of implementing the Act, the Government of Tanzania is required to provide and create a conducive social, economic and legal environment for the development and prosperity of cooperative societies in Tanzania.

In view of eradicating poverty in Tanzania, the TCDC is also mandated to oversee the management and operations of cooperatives societies and to ensure compliance to the fundamental principles and best practices of cooperatives. It is also responsible for coordinating the promotion and supervision of cooperative development activities, with the Registrar of cooperatives being its Chief Executive Officer.

The fundamental principles regulating cooperative societies include, but not limited to: -

•          voluntary and open membership;
•          democratic member control;
•          member economic participation;
•          autonomy and independence;
•          education training and information;
•          co-operation among cooperatives society; and
•          concerns for community.

The appropriateness or otherwise of a cooperative society’s rules and by-laws is determined by adherence to the above principles.

Types of Registration of cooperative societies

The TCDC is empowered to issue the following types of registrations, namely: -

• agricultural cooperatives which are designed to deal with crop production, collecting, processing, marketing, distribution, and any such activities as may be provided for in the Regulations and by-laws;
• cooperative financial institutions;
• consumer cooperatives designed to deal with wholesale and retail business amongst members;
• industrial cooperatives for production, manufacturing, and sale of goods;
• housing cooperatives designed to deal with building, construction, and housing programs for members;
• livestock cooperative societies designed to deal with the needs of members in animal husbandry, livestock keeping, and dairy farming;
• fisheries cooperative societies designed to deal with fishing, processing, and marketing of fish and other sea products;
• producers' cooperatives for agricultural, forestry, or other natural products;
• mining cooperatives designed to deal with mining operations and mineral marketing; and
• such other cooperatives as may be established.

Process of Registration

An application for registration is made in the prescribed form (reflected in the second schedule under Cooperative Societies Regulations issued under Government Notice No. 272 of 2015) to the Registrar as stated under section 30 of the Act, and is accompanied by the following documents: -

• four (4) copies of the proposed by-laws of the society, signed by all the applicants;
• a report of a feasibility study or project writeup indicating the viability of the society; and
• such other information concerning the society as the Registrar may require.

Upon registration, a society becomes a separate legal entity as one of its characteristics, with the limited liability of its members and with the capacity to enter into any agreement and to purchase or sell properties in its name, among others. Death, insolvency, or mental illness of a member does not affect the existence of a cooperative society.

Thus, a cooperative society is a unique form of business organization that is partly private and partly public, but essentially different from both private enterprise and public enterprise used by people and businesses for their mutual benefit.

It should also be noted that the provisions of the Companies Act, Chapter 212 of the laws of Tanzania and the Business Names (Registration) Act, Chapter 213 of the laws of Tanzania, do not apply to societies registered under the Act as stated under section 143of the Act.

By Nuruh Mwandambo - Legal Intern

Note: This is not a legal opinion and the contents hereof are not meant to be relied upon by any recipient unless our written consent is sought and explicitly obtained in writing.