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Cooperative Organizational Directive No. 896/2022

Ethiopian Cooperative CommissionNo. 896/2022

Summary

This directive outlines the organizational framework, operational procedures, and regulatory requirements for cooperatives in Ethiopia. It covers aspects such as the establishment of cooperatives, membership criteria, rights and obligations of members, organizational structure, financial management, auditing, dispute resolution, and dissolution.

Who's affected

Cooperatives, cooperative unions, cooperative federations, cooperative members, and individuals involved in the establishment and management of cooperatives.

Action required

Review and adhere to the organizational, operational, and regulatory requirements outlined in the directive for all cooperative activities.

Key points

The directive outlines organizational, operational, and regulatory frameworks for cooperatives.
It covers establishment, membership, rights, obligations, financial management, auditing, dispute resolution, and dissolution.
Specific requirements for primary cooperatives, unions, federations, and community basin user cooperatives are detailed.

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Emphasis is placed on cooperative principles, values, and ethical conduct.
Procedures for registration, renewal, and replacement of certificates are defined.
Guidelines for mergers, divisions, and dissolution of cooperatives are provided.
Dispute settlement mechanisms include conciliation and arbitration.
Government support and the role of the Ethiopian Cooperative Commission are highlighted.
The directive repeals Farmers' Organization Directive No. 001.

Requirements

228

Submit requests for organization with applicant details.
Establish a founding committee to conduct feasibility studies, prepare business plans, and bylaws.
Convene founding conferences and approve prepared documents.

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Elect Executive Committee, Regulatory Committee, and sub-committees.
Submit all documents and assets to the newly elected executive committee.
Apply for registration after organizing activities are met.
Individuals must submit applications with full name, gender, age, education level, address, type of work, and purpose.
Cooperatives applying to form a Union or Federation must provide certified minutes, application forms, and audit reports.
Cooperatives must be three years old to form a Union or Federation.
Community Basin User Cooperatives must be organized and certified according to specific proclamations.
Members under 18 may be organized through guardians, with details included in bylaws.
Honorary members provide technical, financial, or other support without voting rights.
Founding committee of 5-7 members to be established, including women and youth representation.
Founding committee duties include confirming member information, registering interested parties, conducting feasibility studies, preparing business plans and bylaws, convening meetings, and fundraising.
Founding members' meetings require at least two-thirds attendance.
Primary cooperatives cannot be established in the same operational area if performing similar functions; merger may be required.
Full-time government or non-governmental employees may not be organized into cooperatives where members are directly involved in production.
Members directly involved in joint production cannot hire another person on their behalf.
Cooperatives cannot be established with only one family member.
Employees of primary cooperatives can become members but cannot be elected to committee positions unless they resign.
More than two primary cooperatives with the same function and purpose may establish a cooperative union, ensuring economic viability.
Primary cooperatives must be three years old to join a union.
Cooperative federations organized by two or more affiliated cooperative unions with similar functions and objectives.
Cooperative unions must be three years old to join a federation.
Cooperatives must submit quarterly and annual work reports and work plans to the appropriate authority.
Cooperatives must notify the appropriate authority of emergency general meetings, dismissal/termination of governing board members, and changes in permanent address.
Cooperatives require approval from the appropriate authority to be audited by an external auditor.
Cooperatives must mobilize member products to create better markets and prices, add value, eliminate additional costs, promote modern technology, and support domestic/foreign markets.
Cooperatives must develop a saving culture and provide savings services.
Cooperatives must conduct research and training, increase access to extension services, and participate in natural resource protection.
Cooperatives must pay taxes on time.
Cooperatives must be organized based on feasibility studies.
Business plans must contain vision, mission, situation analysis, product/service plan, market analysis, human resource plan, and financial plan.
Bylaws must include operational area, member records, acceptance/registration/suspension, organizational structure, resolutions, fees, capital formation, accounting, loan administration, payment/incentive systems, relationships with other parties, fiscal year, inspection, division/merger/dissolution, dispute resolution, fund management, advisory council, education/training, internal regulations, and effective date.
Bylaws must be amended when the cooperative changes its name, with approval from the General Assembly and registrar.
Cooperatives must have their own name, logo, and seal, registered and confirmed by law.
Operational areas must be determined according to bylaws and registered fields of work.
Cooperatives cannot open main offices or branches outside their operational area without permission.
Cooperatives must record income and expenses daily, close monthly and annually, and be ready for audit.
Donations must be recorded, and cash donations deposited in savings accounts.
Cooperative accounts must be closed monthly and annually and prepared for audit.
Financial reports must be submitted monthly, quarterly, and annually.
Cooperatives must open accounts at legal financial institutions or banks.
Registration requires specific forms and adherence to principles and values.
Primary cooperatives must submit bylaws signed by General Assembly members and names/addresses of members.
Cooperatives above primary level must submit meeting minutes, balance sheets, plans, and professional testimonials.
A registration fee is required for registration.
Cooperatives must be monitored and supported by promoters before registration.
Registrar must verify registration forms, transfer information to registers, assign numbers, and certify registration.
Legal existence of a cooperative is effective from the date of registration.
Cooperatives must be registered at appropriate levels (woreda, zonal, regional, federal).
Cooperative League registered at national level.
Registration certificates must be kept in transparent places.
Temporary registration certificates issued for one year if criteria are not met, with possibility of extension.
Replacement registration certificates issued upon loss, damage, or name change.
Standard-based registration certificates (green, yellow, red) issued based on performance.
Registration certificates must be renewed every three years.
Membership requirements include legal capacity, residence/work in the operational area, willingness to implement bylaws, not being a member of a similar cooperative, and no conflicting activities.
Members have rights to participate in the General Assembly, obtain information, submit questions/comments, participate in training, receive share reimbursement, and appoint representatives.
Members have obligations to attend General Assembly meetings, provide quality products/services, repay loans, support projects, fulfill assigned duties, share losses, maintain internal peace, respect bylaws, avoid detrimental conduct, cooperate with leadership, and honor contracts.
Members may be dismissed for death, dissolution, lack of discipline, non-repayment of loans, absence from meetings, acts contrary to cooperative objectives, misuse of property, bribery, misappropriation, or product/service quality reduction.
Former members may reapply for membership after settling debts and explaining dismissal reasons.
Minimum number of members required for different types of cooperatives (e.g., 80 for livestock, 100 for crop, 250 for consumer).
Membership registers must include marital status, family size, work, share bought, and details of member cooperatives.
Members can vote by proxy in General Assemblies, with specific representation limits.
General Assembly is the supreme body; decisions are final.
Members must pay required fees to participate in elections.
General Assembly powers include approving reports, electing/dismissing committees, deciding on investments, approving audit reports, penalizing/dismissing members, insuring education/training, approving managers, and accepting/suspending members.
Management committee members must be cooperative members, possess relevant skills, be free from unethical conduct charges, meet minimum education levels, volunteer for training, have good character, understand accountability, and have been members for at least one operational year.
Management committee members are elected without discrimination; a term limit of two consecutive three-year terms applies.
Management committee duties include representing the cooperative, making agreements within General Assembly limits, approving/controlling income, approving accounts, facilitating audits, submitting audit reports, taking measures based on recommendations, examining membership applications, accepting resignations, ensuring member rights/obligations, preparing bylaw amendments, submitting documents for registration, studying new procedures, ensuring share sales, hiring managers, managing loans, supervising staff, providing training, transferring shares/benefits of deceased members, seeking conciliation in disputes, and being jointly/severally liable for losses.
Chairman's duties include leading assemblies/committees, co-signing documents, representing the cooperative in legal matters, entering contracts, and performing other duties assigned by bylaws or General Assembly.
Vice-Chairman replaces Chairman in absence and chairs sub-committees.
Secretary prepares meeting agendas, distributes calls, convenes minutes, maintains seals/records, and chairs sub-committees.
Treasurer collects revenues, pays costs, monitors employee operations, protects money/documents, ensures supporting documents exist, performs accounting procedures, and co-signs financial statements/checks.
Accountant prepares/follows up on accounts, documents assets/liabilities, maintains records, ensures authorized expenses, submits financial reports, works with Treasurer, and signs financial documents.
Other management committee members share in functions and decisions and chair sub-committees.
Control committee members must be cooperative members, fulfill obligations, collaborate, have good manners, and be free from dishonesty charges.
Control committee is accountable to the General Assembly and has 3 or 5 members.
Control committee duties include examining issues, supervising managers, ensuring management committee decisions align with General Assembly and bylaws, and keeping accurate accounts.
Control committee chairman attends management committee meetings, raises issues, records minutes, submits management committee agendas/decisions to the control committee, schedules/monitors activities, and notifies management committee of gaps.
Sub-committee members must be cooperative members, fulfill obligations, collaborate, have knowledge/experience, and be literate.
Sub-committees are formed according to bylaws and have distinct functions.
Management committee members chair sub-committees.
Sub-committee duties include performing assigned functions, preparing work plans, scheduling meetings, implementing recommendations, reporting challenges, and recording ideas.
Committee members resigning must submit applications; committees must respond in writing.
Members acting contrary to rules are suspended and presented to the General Assembly.
Replacement committee members elected by the General Assembly.
Manager prepares strategic plans/budgets, implements approved plans, hires qualified professionals, develops a code of conduct, attends management committee meetings, supports conflict resolution, provides information to authorities, reviews audit reports, maintains records of non-member activities, recommends incentives, provides performance reports, assists control committee, permits hiring as authorized, and reviews employee performance.
Recruitment and management of employees follow specific guidelines; employers perform technical/administrative duties, utilize employee skills, increase member participation, increase internal capital, organize market information, document cooperative information, use modern accounting systems, close accounts monthly, increase member benefits, provide equal treatment, respect laws/procedures, understand cooperative purpose, foster team spirit, make reports accessible, protect assets, increase member participation/benefit, provide job descriptions, and avoid hiring board members' relatives without special decision.
Cooperatives develop organizational structures based on research, approved by the General Assembly.
Organizational structures aim to achieve stated purposes, include committees, and vertical/horizontal accountabilities.
Organizational structures can be improved based on field of work, development level, and member needs.
Organizational structures should encourage creativity, knowledge transfer, and clear delegation of authority.
Organizational structures require competent manpower and may combine job descriptions with performance capacity, work processes, and education level.
Organizational reforms focus on communication, coordination, efficiency, and staff skills.
Working systems should be examined for problems and modernized.
Systems should be developed based on research for healthy cooperatives.
Human resource management requires professionals with business knowledge, cooperative characteristics, and competitive education/experience.
Cooperatives adopt clear pay and incentive systems.
Cooperatives classified according to criteria set by the appropriate authority.
Cooperative performance evaluated by expert teams.
Standards vary by cooperative type and level and are revised every three years.
Cooperative evaluation occurs after the fiscal year and audit.
Standards identification criteria include marketing participation, member numbers, scope of work, value addition, technology supply, financial access, educated workforce, social participation, profit distribution, accounting systems, capital growth, and other related activities.
Cooperative ranking aims to provide support, standardized capacity building, capacity control, and stakeholder assistance.
Cooperative grades (A, B, C) based on rating criteria.
Grade C cooperatives are evaluated for improvement to B and then A.
Grade B cooperatives are supported to reach Grade A.
Grade A cooperatives focus on excellence.
Steering committees established at regional, zonal, and woreda levels to classify cooperatives.
Steering committee members have relevant experience and knowledge of cooperatives.
Steering committees are accountable to the appropriate authority.
Steering committees implement classification plans, identify cooperatives by term, create joint plans, raise awareness, submit reports, organize information, provide orientation, grade cooperatives, and attend selected cooperatives.
General assemblies conduct regular meetings, elect committees, decide on bylaws, approve budgets and plans, and accept/suspend members.
Net profit distribution based on members' shares and participation.
Savings and Credit Cooperatives distribute profits based on their own capital.
Profit distribution information must be recorded and verified by auditors.
Income tax must be deducted from member profits and remitted to tax collectors.
Undistributed property and cash become assets of the cooperative.
In case of dissolution, unallocated common property is deposited in the Cooperative Fund.
Cooperative funds are established from annual net profit, deductions from cooperative unions, non-existent cooperatives' assets, donations, and government/development partner contributions.
Cooperatives can provide loan services with short, medium, and long terms, with or without interest.
Loans require member requests, known interest rates, and repayment schedules.
Loan sources include cooperative capital, member savings, loans from associates, government support, financial institutions, and capacity builders.
Financial cooperatives can lend up to 70-80% of member savings; other cooperatives cannot exceed 70% of their capital for investment.
Cooperatives can borrow from members, other cooperatives, or lending institutions.
Loans must not exceed capital, and Savings and Credit Cooperatives must be insured.
Borrowing cooperatives must meet conditions like good credit history, absence of continuous loss, clear loan purpose, experience, business plan, credit management history, financial statements, and reasonable guarantees.
Borrowing members must have a loan repayment history, no previous loan guarantee, a written request, experience in proper loan use, a business plan, and provide adequate guarantee.
Cooperatives can use various loan warranty options; fixed assets and financial documents must be verified.
Cooperatives can repay debts by selling warranted property or using compensation.
Interest-free services implemented according to bylaws.
Cooperatives must establish a loan life insurance system for borrowers.
Cooperatives are entitled to fair payment upon membership, with members sharing in losses if the cooperative incurs them.
Resigning/deceased/dismissed members receive remaining shares/benefits after cooperative debts are paid.
Member shares/benefits cannot be seized or sold for external debts.
Cooperative debts to members are compensated by reducing shares or other benefits.
Members can transfer shares/benefits to other members or volunteers, with heirs potentially becoming members by paying a registration fee.
Government support includes modernization with technology, practical experiences, financial options, project design, education institutions, advisory councils, job creation support, quality-based systems, technical support, and market linkages.
Cooperative relationships with members include planning, reporting, education, extension services, marketing, bookkeeping, and experience exchange.
Cooperative plans must be based on member needs and approved by members.
Quarterly performance reports submitted to the executive committee/board and appropriate authority.
Cooperative unions submit quarterly performance reports to member cooperatives.
Cooperative unions provide extension services, infrastructure, support to primary cooperatives, collect/analyze information, hire accounting staff, develop new technologies, conduct asset inventories, and provide mechanization supply/service.
Cooperative federations and unions relate based on unity of purpose, principle, and value.
Federations may support unions in resource search, training, implementing foreign experiences, technology generation, bulk purchasing, maintenance services, product processing/export, research, international communication, bookkeeping services, budget allocation for audits, asset/machine utilization, and providing agricultural equipment/spare parts.
Cooperative relationships with the appropriate authority include planning, accounting, auditing, legal services, certification support, monitoring, evaluation, and information exchange.
Appropriate authorities provide technical support and monitoring.
Cooperative relationships among themselves are based on unity of purpose, principle, and value, including technical support, experience exchange, financial/marketing linkages, and information exchange.
Producer and consumer cooperatives exchange information and establish marketing agreements.
Savings and credit cooperatives support other cooperatives financially and with education/training.
Cooperative relationships with financial institutions are through loan agreements.
Cooperative relationships with stakeholders and capacity builders include education, training, infrastructure, human resource/technology transfer, and financial/logistical support.
Cooperative audit services ensure financial health through modern accounting systems, audited by appropriate authorities or external bodies.
Auditing bodies must be free from interference.
Experts preparing accounts focus on documents, bylaws, guidelines, audit feedback, contracts, and meeting minutes.
Accountants identify cooperatives closing accounts daily, prepare them for audit, maintain lists of audited cooperatives, support accountants, monitor financial report submission, evaluate financial reports, and develop accounting systems.
Inspection feedback is used to ensure cooperatives act in accordance with rules and regulations.
Corrective actions are taken based on inspection findings.
Amalgamation (merger) of cooperatives requires a two-thirds majority vote, similar purpose and function, and approval by the appropriate authority.
Mergers should not be contrary to member or public interest and must be publicized.
Mergers can occur due to insufficient members, increased efficiency, better management, lower capital, capacity building, merging weak performers, equitable benefits, expanded services, government/stakeholder support, or avoiding conflict/competition.
Creditors must be notified three months in advance of mergers.
Cooperatives may divide due to large membership, inability to provide adequate services, large operational areas, low member participation, geographical/administrative demarcation, researched importance, different member needs, member requests, weakened capital capacity, or conducive management/administration.
Mergers or divisions are based on studies, requiring verification of member status, assets, debts, and reserve funds.
Merger/division processes include auditing accounts, gathering member information, verifying information, developing new bylaws/business plans, and submitting for registration.
Merger/division decisions require proof of member benefit, member consent, two-thirds majority vote, appropriate authority approval, consideration of economic/social impact, audited accounts, secure storage of records, debt payment guarantees for dismissed members/debtors, and transfer of rights/obligations.
Former employees are treated according to labor law and contracts.
Disputes over mergers/divisions are handled by the appropriate authority, with rights of members/creditors/employees protected.
Reorganized cooperatives are registered following formal processes, with professional support provided.
Dissolution of cooperatives requires appointment and duties of liquidators.
Auditing of cooperative accounts occurs upon dissolution, debt identification, asset/liability determination, reorganization, inactivity, non-permanent registration, bankruptcy, business change, insufficient members, or operating outside bylaws/principles.
Liquidators verify accounts, manage assets and documents, distinguish divisible/non-divisible assets, identify members/debts, sell property, manage bank accounts, decide verification costs, negotiate debts, settle disputes, present reports, and transfer records.
Appropriate authority orders account verification, assigns liquidators, ensures General Assembly approval, submits reports, and handles opposition to dissolution.
Undivided property of cooperatives includes reserve accounts, gifts, inheritances, government-acquired assets, and entrusted property.
Undivided property is used to expand future cooperatives or deposited in a Special Cooperative Fund.
Creditors are called and paid according to a prioritized order (government debt, salaries, external borrowers, member debts, share fees, dividends).
Final balance sheet results presented to the General Assembly for distribution decisions.
Cooperatives are cancelled from the registry upon completion of liquidation, with notification to the public.
Settlement of disputes through conciliation is considered a final judgment.
Arbitrators require good morals and community recognition.
Parties to conciliation must submit written agreements and necessary budgets.
Conciliation agreements include party details, case substance, and signatures.
Arbitrators may receive reimbursement for expenses, not wages, unless agreed.
Appropriate authority facilitates conciliation, provides professional support, ensures legality, and ensures impartial arbitrator selection.
Arbitration is used for disputes not solved through conciliation, with binding decisions.
Arbitration procedures follow civil procedure code.
Appeals on arbitration decisions can be made to High Courts.
Disputed parties must provide information/evidence and avoid impeding arbitrators.
Disputed parties must be legally competent and directly involved or legally delegated.
Disputed parties must agree to arbitral tribunal terms and follow due process.
Arbitrators' expenses are reimbursable; wages require agreement.
Appropriate authority facilitates arbitration, provides support, ensures legality, and assists in arbitrator selection.
Strengthening and modernization of cooperatives focus on organization, management, operations, extension services, governance, member participation, financial capacity, property administration, saving culture, market share, inter-cooperative relationships, infrastructure, and information systems.
Cooperatives use cost-effective and time-saving technology.
Cooperative organizers identify and address gaps, establish cooperative funds/councils/federations/leagues, conduct research, develop model documents, develop policies/strategies, develop training curricula, expand international/local practices, conduct research, develop strategic alternatives, implement projects, establish registration systems, and develop merger/division/dissolution systems.
Community basin users have rights to use resources jointly/privately, form user groups, and participate in awareness forums.
Community basin users have obligations to participate in natural resource development, protect resources, pay membership fees, participate in planning, and maintain infrastructure.
Cooperative bylaws incorporate rights and obligations; members failing to fulfill duties may be dismissed.
Non-member basin users have rights to use resources, become members if requirements are met, and participate in awareness forums.
Non-member basin users have obligations to participate in development/protection, refrain from harmful activities, avoid resource depletion, and cooperate during disasters.
Community basin cooperatives receive benefits, support, and supervision.
Stakeholders coordinate to organize, register, build capacity, monitor, and support cooperatives.
Individuals owning land in two basin areas may only be members of one cooperative unless land is transferred.
Couples can be members; internal rules may clarify engagement.
Forestry cooperatives organized under basins may receive benefits from relevant proclamations.
Members leasing land receive benefits after contract expiry or if they don't continue membership.
Resigning members must repay loans/debts.
Similar community beneficiaries may form cooperatives based on feasibility studies.
Two or more similar cooperatives can be established in one kebele based on feasibility.
Bylaws determine revolving fund distribution requirements and interest rates.
Revolving funds/assets remain with the cooperative, distributed upon dissolution.
Ownership of community basin user cooperatives requires proof of land ownership, registration certificate, and management plan.
Land administration bodies verify ownership.
Existing cooperatives on public land should accept others as members.
New basin user cooperatives may be established based on study if conditions are unsuitable for existing ones.
Linkages between forest development and community basin user cooperatives should be strengthened.
Community basin user cooperatives must register separately and receive separate certificates.
Temporary registration certificates issued if requirements are not fully met.
Cooperative organizers exhibit consistency, readability, freedom from influence, knowledge-based practice, wariness, prudence, honesty, sociability, ethical conduct, integrated support, understanding of law, reliable service, neutrality, confidentiality, and professional qualification.
Cooperative registration and data management professionals conduct research, develop guidelines, monitor naming, register cooperatives, issue legal entity certifications, verify bylaw amendments, process dissolutions, support temporary registrations, register mergers/divisions, receive/disseminate information, and manage dissolution documents.
Registration and data management professionals exhibit consistency, neutrality, knowledge-based practice, caution, honesty, ethical conduct, understanding of law, reliable service, impartiality, and confidentiality.
Farmers' Organization Directive No. 001 is repealed.
Any directive or customary practice contradicting this directive is non-applicable.
Concerned organs have an obligation to cooperate for the implementation of this directive.
This directive can be amended by the Federal Cooperative Agency as needed.
This Cooperative Organization Directive is effective from the date of its issuance.

Rights and permissions

Members have the right to voluntarily and democratically promote the position of the General Assembly.
Members have the right to obtain necessary information from their cooperatives.
Members have the right to submit and receive any questions, complaints, and comments on matters pertaining to the cooperative.

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Members have the right to participate in trainings provided by the cooperative without discrimination.
Members have the right to reimbursement of the nominal value of paid-up shares upon termination of membership.
Members have the right to appoint a representative where necessary.
Members shall exercise their rights granted by law through themselves or their representatives.
Community Basin Development Community members have the right to use community resources in the basin jointly or privately.
Community Basin Development Community members have the right to create user groups based on profession and interests and engage in activities that do not harm the basin.
Community Basin Development Community members have the right to participate in awareness-raising forums on the protection and use of community watershed development.
Non-member Basin users have the right to utilize natural resources in the community basin that are privately owned by the community or by a legal entity.
Non-member Basin users have the right to become a member of a Community Users Cooperative at any time if they meet the requirements for membership.
Non-member Basin users have the right to participate in awareness-raising forums on the protection and use of community watershed development.
Non-member Basin users have the right to protect property from damage caused by the association due to its activities related to the development of the basin.
Liquidators have the right to start new activities for the purpose of enforcing contracts or verifying accounts.
Liquidators have the right to decide on the costs of account verification.
Liquidators can decide with creditors about debt and payment mechanisms.
Liquidators have the right to settle disputes through mediation or conciliation.
Disputed parties have the right to explain their disputes and present their cases.
Disputed parties have the right to appeal arbitration decisions.
Arbitrators have the right to demand reimbursement for expenses incurred.
Members have the right to receive deposits immediately in Savings and Credit Cooperatives and are entitled to an audit.
Members have the right to share in losses if the cooperative incurs them.
Resigning/deceased/dismissed members receive remaining shares and benefits after cooperative debts are paid.
Member shares/benefits cannot be responsible, seized, or sold for debt or liability outside the cooperative.
If the cooperative owes a member debt, it is compensated by reducing the member's share or other benefits.
Members can transfer shares and benefits upon application.
Heirs may become members by paying a new registration fee for inherited shares and benefits.
The government provides various supports to cooperatives, including modernization with technology, practical experiences, financial options, project design, education institutions, advisory councils, job creation support, quality-based systems, technical support, and market linkages.
Cooperatives are entitled to fair and equitable payment upon membership.
Members have the right to receive the deposits immediately in Savings and Credit Cooperatives and are entitled to an audit of the Cooperative.
If the cooperative incurs a loss, the member shall also share the loss in accordance with the law.
If a member resigns by will or by law or by death or dismissed, only the remaining shares and benefits shall be respected after the Cooperative has paid the required debts.
The benefits or shares of a member may not be responsible, seized or sold for debt or liability outside the Cooperative.
If there is a debt owed by the Cooperative to the member, he/she shall be compensated for the debt by reducing his/her share in the Cooperative or other benefits.
The member may transfer his share and benefit from the Cooperative only on the application submitted by the member.
Any Cooperative member may transfer his or her share of benefits and benefits to a member or other person who volunteers for a member of the Cooperative or any other person.
If the heir wants to become a member of the Cooperative, he may become a member of the cooperative by paying a new registration fee for the share and benefits allowed to be inherited from the Cooperative.
Cooperatives can use different options for loans warranty depending on the growth, type, and characteristics of the Cooperatives.
The warrantee of fixed assets and financial documents must be verified by the relevant authorities.
Any cooperative has the right to repay the debt by selling the warranteed property legally or using the money as compensation if the debt or property is not repaid on time.
Interest-free services shall be implemented in accordance with the bylaws of cooperatives.
Every Cooperative must establish a system of loan life insurance for borrowers to ensure its loans.

Restrictions

280

Persons living outside of Ethiopia cannot be organized by representative on their behalf.
Primary cooperatives performing similar functions cannot be established in the same operational area; merger may be required.
Full-time government or non-governmental employees may not be organized into cooperatives where members are directly involved in production.

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Any member of a cooperative who is directly involved in the joint production of products or service provision may not hire another person on his behalf.
It is not possible to establish a cooperative with only one family member.
An employee of a primary cooperative may become a member but cannot be elected to any committee member position unless they resign.
No employee may be a member of a cooperative in which they cannot actively participate in person.
More than one cooperative union with the same purpose and function cannot be established in the same area.
More than one federation engaged in similar activities cannot be organized at the state or federal level.
A cooperative cannot open its main office or branches out of its operational area, except for the head office with permission for efficiency.
Cooperatives engaged in marketing may open offices or shops out of their operational area for efficiency.
Cooperative branches or offices out of the operational area must be accepted by the General Assembly, included in bylaws, and notified to the appropriate authority.
A cooperative cannot open its main office or branches out of its operational area.
Cooperatives engaged in marketing may open offices or shops out of their operational area for efficiency.
When opening a service delivery branch within the operational area or a case management/service delivery office/shop out of the operational area, the cooperative shall: be accepted by the General Assembly, be included in the bylaws, and be notified and accredited to the appropriate authority.
When deciding to close a case management/service delivery office/shop/branch, the cooperative shall: be accepted by the General Assembly, have no third-party claim, and notify the appropriate authority within fifteen days.
No one may use the name "Cooperative" on names, logos, and seals without permission from the appropriate authority.
Operational areas of cooperatives with the same field of work, purpose, and function cannot be established in the same operational area.
A cooperative cannot open its main office or branches out of its operational area, except for the head office with permission for efficiency.
Cooperatives engaged on marketing may open offices or shops out of their operational area for efficiency.
When opening a service delivery branch within operational area or case management/service delivery office/shop out of operational area, any cooperative shall: be accepted by the General Assembly, be included in the bylaw, and be notified and accredited to the appropriate authority.
Without prejudice to Article 27, sub-article 5, cooperatives engaged on marketing may open to facilitate marketing linkage case management or service delivery office or shop out of operational area in different corridors for the sake of efficiency.
Without prejudice to Article 27, sub-article 7, the case management or service delivery office or shop or branch of the cooperative when deciding to close or stop with different reasons: shall be accepted by the General Assembly, shall not have third-party claim and ensured by law, shall be notified with letter to appropriate authority within fifteen days.
Cooperatives cannot use the name "Cooperative" on names, logos, and seals without the permission of the appropriate authority.
Cooperative names cannot be the same as any other cooperative name within the registration area.
Names given before within the operational area cannot be used for other cooperatives organized within the same operational area.
No one may use the name "Cooperative" on names, logos, and seals without the permission of the appropriate authority.
The name, logo, and seal of any cooperative shall be used only if it is confirmed by law that it has not been complained about by a third party.
The logo and seal of any cooperative shall not be the same and misleading.
The seal of any cooperative shall bear the name and logo of the cooperative and may be round at the bottom and rectangular at the top in shape.
Operational areas of any newly organized or dividing or merging cooperative shall be determined in accordance with the provisions of the By-Laws in the registered field of work, objective and bylaws.
Cooperatives with the same field of work, purpose, and function may not be established in the same operational area.
Any cooperative cannot open main office or branches out of operation area.
Without prejudice to the provision Article 27 sub-article 5 cooperatives engaged on marketing may open to facilitate marketing linkage case management or service delivery office or shop out of operational area in different corridors for the sake of efficiency.
Without prejudice to the provision Article 27 sub-article 7 in this directive the case management or service delivery office or shop or branch of the cooperative when deciding close or stop with different reasons: Shall be accepted by the General Assembly, Shall not have third party claim and ensured by law, Shall be notified with letter to appropriate authority within fifteen days.
No one can be a member of a cooperative organized in different fields of work, purpose and function in the same operational area.
The operational area of cooperative organized by this directive shall be based on economic benefit of the cooperative. The details will be determined by the cooperative's bylaws.
Any cooperative shall declare and register its legal description of working area to the appropriate authority.
A cooperative shall declare address change of workplace to the appropriate authority within 15 days with official letter through confirmation of no third party claim.
The management body of a cooperative that authorizes finance does not collect any finance, does not perform accounting records.
Individual shall not engage on cash collecting activities on behalf of the cooperative unless he or she has been officially delegated by the cooperative.
A cooperative shall perform its income and expenses only in accordance with the budget approved by the General Assembly.
Donation and support from governmental or non-governmental organization shall record and kept properly by the cooperative.
Cash collection vouchers and other accounting documents shall be kept carefully. If lost for various reasons, shall immediately report it to the appropriate legal entity and notify to the communication media in addition.
Members of the Cooperatives' Special Committee shall not be charged for the services they provide to their cooperatives and their members. However, in the case of a cooperative, if they travel more than five kilometers from the cooperative, they will be paid a living allowance as determined in their by-laws. Transportation costs will also be covered by your legal receipt.
Cash shall not be kept on safe or on hand more than the amount stated on the bylaw.
Payments collected for registration and share by members of the founding committee shall be kept in a block saving account opened by a financial institution or bank until the cooperative is registered with the appropriate authority.
Without prejudice to the provision Article 30 sub-article 1 in this directive the money collected from registration and share may save in interest free account for those cooperative engaged on interest free practices.
No Cooperative shall be engaged in any business unless it is registered in accordance with Cooperative law.
The registrar may specifically allow a child under the age of 18 to remain a member of a cooperative via his/her guardian until he or she reaches the age of majority. However, any Cooperative may decide in its bylaws on the performance of a guardianship.
Any Cooperative pays a registration fee.
Cooperatives shall be properly monitored and supported by Cooperative promoters before they can be registered.
The Cooperative Promoter shall provide a written statement of professional testimony and comments regarding the proper support and follow-up to the Cooperative following the request of Cooperative and the benefits of establishing the Cooperative.
Based on the information provided by the Cooperative, which was reviewed by the Organizing Expert to register in accordance with the Cooperatives Organization Guidelines, the Registrar will clear the following issues: Cooperatives applying for registration must provide a complete and verified registration form; The cooperative shall transfer the information to the legal entity registration register; Identification of register number by region or city administration or zone or sub-city must be given in order; The type of Cooperative, identification number, or code must be given; Registration pay information must be attached; The registrar must certify by signing in the date on which the information is given; Prepare the certificate and along with bylaws shall be submit with covering letter to the Cooperative; The stamp must be attached or affixed to the proposed bylaws when applying for registration.
The legal existence of any Cooperative shall be effective from the date of registration.
Primary Cooperatives; Cooperative unions and Cooperatives Federations shall be registered and registered with the Cooperative Promotion bodies at woreda or Zonal or Sub-city or Region or Federal level depending on their characteristics.
Primary Cooperatives or Cooperative unions to be established between two woredas shall be registered with the Cooperatives Promotion body at the zonal or sub-city level.
Any Cooperative to be established between two zones or sub-cities shall be registered with the Cooperatives at the Regional or City Administration level.
Any Cooperative formed by two or more cooperatives which cannot be registered at the regional level due to their special nature and is formed by two or more Cooperatives located in two regions or City Administrations shall be registered at the level of the Federal Cooperative Agency.
The Cooperative League will be registered at the national level.
The relevant authority shall certify the registration application submitted by the Cooperative in accordance with the registration form or format by the bylaws and business plan. 1 copy of the bylaws certified by the Registrar shall be provided to the Registrar's Cooperative.
The basic information of any Cooperative being collected in the form or format prepared by the appropriate authority and shall be renewed at least every three years.
Any Cooperative shall obtain a registration certificate from the appropriate authority in accordance with the provisions of Proclamation No. 985/2009 before being organized and operational.
All members of the newly formed Cooperative, through management committee members elected by the General Assembly, shall apply to the appropriate authority for certification of legal status by meeting the requirements for registration.
Any person or cooperative that is prepared to work together being organized shall be registered with the appropriate authority and receive a certificate of legal identity in order to fulfill the purpose for which it was established and to be accepted before the law.
Any cooperative shall obtain a certificate of the permanent legal entity authorized by the appropriate authority by meeting with registration requirements ahead of time.
All members of the newly formed Cooperative, through management committee members elected by the General Assembly, shall apply to the appropriate authority for certification of legal status by meeting the requirements for registration.
Any person or cooperative that is prepared to work together being organized shall be registered with the appropriate authority and receive a certificate of legal identity in order to fulfill the purpose for which it was established and to be accepted before the law.
Any cooperative shall obtain a certificate of the permanent legal entity authorized by the appropriate authority by meeting with registration requirements ahead of time.
If Cooperatives are organized at all levels and do not meet the required criteria, they will be issued a one-year temporary legal identity certificate.
Any cooperative that has received a temporary certificate will have the rights and obligations within the timeframe of registration.
If the Cooperative meets the unfulfilled requirements within the stipulated time, after appropriate payment a permanent certificate shall be issued and the temporary registration certificate shall be returned.
A cooperative that has received a temporary registration certificate in accordance with this Directive shall be legally unacceptable after a year if it does not meet the required criteria within one year. The Cooperative shall be dissolved by the appropriate authority and ends its legal existence.
Cooperative that does not fully comply with the requirements for registration shall be provided a temporary registration certificate for a period not exceeding one year and meet the rest of the requirements within the stipulated time frame.
Any Cooperative that does not meet the remaining requirements within the one-year deadline shall be deemed to have ceased to exist and shall have to return the temporary registration certificate received on time.
Requests for a replacement of certificate of registration of Cooperatives shall be made only when the registration certificate has been lost or damaged or the name has been changed if the following found fulfilled.
If the request for a replacement registration certificate is not convincing, the appropriate authority shall notify the Cooperative in writing stating the reasons why it will not be issued within two consecutive working days.
Any cooperative submitted for registration shall be given a colorful certificate indicating its level of performance in accordance with the established criteria.
Cooperatives that fail to achieve their basic objectives will be given a red certificate.
Any Cooperative holding a red certificate that has not been amended for more than two consecutive times may decide to dissolve or consolidate it based on the study of the appropriate authority at all levels.
Any Cooperative organized in accordance with the Cooperatives Proclamation No. 147/91 shall renew its registration within 1 year from the date of its publication in accordance with Article 20, Sub-Article 1 of Proclamation No. 985/2009.
A valid certificate shall not be valid for more than three years after its establishment or renewal.
The registration certificate must be renewed by the appropriate authority at each level no later than one month after the expiration date.
Any Cooperative that is not renewed within this time limit will not be legally recognized. Therefore, the registration certificate may be revoked by the appropriate authority.
Any Cooperative that has not renewed its registration certificate in accordance with sub-article (6) of Article 37 of this Directive shall be subject to the following measures by the appropriate authority: Suspended any support from the government; Any terms and conditions entered into agreement by the Registration Certificate shall not apply; The appropriate authority may announce the registration certificate invalid using various means of communication.
Any Cooperative who refuses to renew a registration certificate following an action shall not be accepted. The appropriate authority shall, in accordance with the law, return the registration certificate.
Members must pay registration fee at once upon joining.
Registration fee will not be refunded to the member for any reason and no benefit may be claimed.
Registration fee rates for new members will not change from time to time unless the bylaws have been amended.
Members' purchases exceeding limits will have the difference returned without interest after investigation.
Unsold shares due to low financial capacity of members shall be sold based on General Assembly decision.
Members' purchases exceeding limits and the difference shall be returned to the member without interest after a through investigation of the records.
Unsold shares that are declared for sale to members by cooperative society but remained unsold due to low financial capacity of members shall be sold based on the decision of General Assembly meeting.
Shares in kind are sold based on feasibility study, member payment capacity, and local situation.
The estimated value of property for shares must be fixed by a professional or committee and recorded as current market value.
The value of property used for shares cannot be higher or lower than its estimated value and will not be subjected to price fluctuations.
If the estimated value of the property is less than the value of the share, the member must pay the difference in cash.
If the value of the property is more than 10% of the share allowed to be purchased, the difference must be returned in cash to the member.
If the difference cannot be made immediately, it must be paid according to the agreement terms.
If the property transferred by a member is a fixed asset, ownership rights must be transferred to the cooperative and registered in the cooperative's name.
No member may claim ownership of property transferred for share payments.
Additional shares to be sold shall be sold in full within the time limit specified in the Cooperatives Proclamation.
Dividends received from net profit can be used to purchase additional shares upon member request.
Reserve fund cannot be used beyond 75% without research-based decision.
Cooperatives' loans shall not exceed the amount of capital they have.
Savings and Credit Cooperatives must be insured for loans.
Borrowing cooperatives must meet specific conditions including good credit history, absence of continuous loss, clear loan purpose, experience, business plan, credit management history, financial statements, and reasonable guarantees.
Borrowing members must meet obligations like repayment history, no previous loan guarantee, written request for loan use, experience in loan use, business plan, and adequate guarantee.
Cooperative loan warranties must be verified by relevant authorities.
Any cooperative has the right to repay the debt by selling the warranted property legally or using the money as compensation if the debt or property is not repaid on time.
Interest-free services shall be implemented in accordance with the bylaws of cooperatives.
Every Cooperative must establish a system of loan life insurance for borrowers to ensure its loans.
If a member resigns, dies, or is dismissed, remaining shares and benefits are respected only after cooperative debts are paid.
Member shares/benefits cannot be responsible, seized, or sold for debt or liability outside the cooperative.
If the cooperative owes a member debt, it is compensated by reducing the member's share or other benefits.
Member shares and benefits can only be transferred upon member application.
Heirs may become members by paying a new registration fee for inherited shares and benefits.
Cooperatives must have their own name, logo, and seal, registered and confirmed by law.
Names, logos, and seals of cooperatives must not be the same and misleading.
The seal of any cooperative shall bear the name and logo and may be round at the bottom and rectangular at the top in shape.
The name, logo, and seal of any cooperative shall be used only if it is confirmed by law that it has not been complained about by a third party.
No one may use the name 'Cooperative' on names, logos, and seals without permission from the appropriate authority.
Cooperatives with similar functions and purposes cannot be established in the same operational area.
Cooperatives cannot open main offices or branches outside their operational area.
Cooperatives engaged in marketing may open offices or shops out of their operational area for efficiency.
Branches or offices outside the operational area must be accepted by the General Assembly, included in bylaws, and notified to the appropriate authority.
Closing branches or offices outside the operational area requires General Assembly acceptance, no third-party claim, and notification to the appropriate authority within fifteen days.
Cooperatives cannot have the same name as other cooperatives in the registration area.
A cooperative name cannot be used for another cooperative organized within the same operational area if it was previously registered.
The name, logo, and seal of any cooperative shall be used only if it is confirmed by law that it has not been complained about by a third party.
The logo and seal of any cooperative shall not be the same and misleading.
No one may use the name "Cooperative" on names, logos, and seals without the permission of the appropriate authority.
Cooperatives must record income and expenses daily, close monthly and annually, and prepare for audit.
Cash shall not be kept on hand or in safes beyond the amount stated in the bylaws.
Money collected for registration and share by founding committee members must be kept in a block saving account until the cooperative is registered.
Money collected from registration and share may be saved in an interest-free account for cooperatives engaged in interest-free practices.
No cooperative shall conduct business unless registered.
A cooperative cannot open its main office or branches out of its operational area, except for the head office with permission for efficiency.
Cooperatives engaged in marketing may open offices or shops out of their operational area for efficiency.
Branches or offices outside the operational area must be accepted by the General Assembly, included in bylaws, and notified to the appropriate authority.
Closing branches or offices outside the operational area requires General Assembly acceptance, no third-party claim, and notification to the appropriate authority within fifteen days.
No one may use the name "Cooperative" on names, logos, and seals without permission from the appropriate authority.
Cooperatives cannot have the same name as other cooperatives in the registration area.
A cooperative name cannot be used for another cooperative organized within the same operational area if it was previously registered.
The name, logo, and seal of any cooperative shall be used only if it is confirmed by law that it has not been complained about by a third party.
The logo and seal of any cooperative shall not be the same and misleading.
No one may use the name "Cooperative" on names, logos, and seals without the permission of the appropriate authority.
The legal existence of any cooperative is effective from the date of registration.
Cooperatives must be registered at appropriate levels (woreda, zonal, regional, federal).
The Cooperative League is registered at the national level.
Registration certificates must be kept in transparent places.
Temporary registration certificates are issued for one year if criteria are not met, with potential extension.
Replacement registration certificates are issued upon loss, damage, or name change.
Standard-based registration certificates (green, yellow, red) are issued based on performance.
Registration certificates must be renewed every three years.
Any cooperative not renewed within the time limit will not be legally recognized and its registration certificate may be revoked.
Cooperatives must have at least 80 members for livestock, 100 for crop, 250 for local consumer, 100 for institutional consumer, 100 for local savings and credit, 80 for institutional savings and credit, 50 (rural) or 24 (urban) for housing, 250 for multi-purpose farmers, 50 for horticulture/irrigation, and a minimum of 10 for resource-based cooperatives.
Members must pay required fees to participate in elections.
Management committee members cannot be re-elected after completing their second term without a one-year break.
Management committee members have a term limit of two consecutive three-year terms.
The management committee cannot operate outside the scope of its duties and responsibilities set forth in its bylaws.
Control committee members must be cooperative members, fulfill obligations, collaborate, have good manners, and be free from dishonesty charges.
The control committee is accountable to the General Assembly.
Any cooperative shall have a control committee of 3 or 5 members.
Sub-committee members must be cooperative members, fulfill obligations, collaborate, have knowledge/experience, and be literate.
Sub-committees are formed according to bylaws and have distinct functions.
Management committee members chair sub-committees.
Sub-committees cannot have more than 3 distinct functions and responsibilities.
Committee members acting contrary to rules are suspended and presented to the General Assembly.
Replacement committee members are elected by the General Assembly.
If a committee member is absent for three consecutive terms without good reason, they are deemed resigned and replaced by a pre-elected member.
A manager cannot start new business activities unless for contract enforcement or account verification.
Managers are responsible for statements, assets, and documents from the Management Committee or Board until the end of the financial year.
Managers cannot start new business activities unless for contract enforcement or account verification.
Managers are responsible for statements, assets, and documents from the Management Committee or Board until the end of the financial year.
Liquidators cannot start new activities unless for the purpose of enforcing the contract of the existing Cooperative or for the purpose of account verifying. They are individually and collectively responsible for any activity outside of this.
Liquidators are responsible for statements, Cooperative's assets and documents from the Management Committee or Board of the Cooperative until the end of the financial year.
The property of the Cooperative shall not be divided before the debts of the cooperative have been paid.
The Cooperative's money or property shall not be distributed to its members unless it has been paid to the creditors and deposited in the designated area for those who have not received their due time.
Undivided Cooperative property and money may not be used in any way for the members or any other party to make loans or debts or to debt compensation or gifts or rewards or grants and so on.
If the cooperative is operating in a reserve account deducted from its annual profit under the proclamation, it shall not be divided.
Land or houses acquired by the government to contribute to the Cooperatives shall not be divided.
Undividendable property of the Cooperative shall be converted into cash and deposited in the account of the Special Cooperative Fund.
Land or property given free of charge by the government for the purpose of promoting cooperatives and cooperatives shall be returned to the relevant government body.
Conciliation is considered a final judgment without appeal between the parties.
Conciliation is void if it is against the law or good deeds and is related to another contract.
Conciliation by one of the parties in the same case does not obligate the other parties.
Arbitrators hear and conduct proceedings of disputes in accordance with the rules of civil procedure code.
The disputed parties must avoid tasks that could impede the work of the arbitrator or make it more difficult.
The disputed parties shall not take their case to court before the end of the proceedings unless the parties have stated that the arbitrators' decision has not been made.
Disputed parties to arbitration shall not be heard unless legally competent.
The party to be referred to the arbitral tribunal shall be the person directly involved or legally delegated.
Disputed parties to arbitration shall not be heard unless they agree to the terms of the arbitral tribunal and the dispute is completed according to the due process form.
Arbitrators have no right to wages unless agreed.
Cooperatives must be strengthened by focusing on specific issues like organization, management, operations, extension services, governance, member participation, financial capacity, property administration, saving culture, market share, inter-cooperative relationships, infrastructure, and information systems.
Cooperatives should not have redundant structural chains of command and must encourage creativity and knowledge transfer.
Cooperative organizational structures must conduct their activities with competent and skilled manpower.
Cooperatives may not have redundant structural chains of command and must encourage creativity and knowledge transfer.
Cooperative organizational structures must conduct their activities with competent and skilled manpower.
The cooperative should not have redundant structural chains of command and must encourage creativity and transfer of knowledge.
The organizational structure of cooperatives must conduct their activities with competent and skilled manpower in order to be competitive and exemplary.
Cooperatives may not have redundant structural chains of command and must encourage creativity and knowledge transfer.
The organizational structure of cooperatives must conduct their activities with competent and skilled manpower in order to be competitive and exemplary.
Cooperatives may not have redundant structural chains of command and must encourage creativity and knowledge transfer.
The organizational structure of cooperatives must conduct their activities with competent and skilled manpower in order to be competitive and exemplary.
Cooperative organizers must be free from influence, use professional neutrality, and be free from economic and financial dependence.
Cooperative organizers must be self-sufficient, conduct thorough research, and avoid haste and carelessness.
Cooperative organizers must be free from negligence, cautious, prudent, and fully aware of their duties.
Cooperative organizers must be honest, sociable, ethical, respected in the community, and collaborate professionally.
Cooperative organizers must have an in-depth understanding of various fields and concepts.
Cooperative organizers must know, respect, and abide by relevant laws and regulations.
Cooperative organizers must perform duties honestly, carefully, responsibly, and respect the cooperative's mission.
Cooperative organizers must make impartial decisions and provide professional advice without prejudice or conflict of interest.
Cooperative organizers must maintain confidentiality of information obtained from cooperatives.
Cooperative organizers must have sufficient knowledge, skills, and experience and continuously improve their professionalism.
Registrar and Data Management Professionals must implement a consistent and mutually beneficial system.
Registrar and Data Management Professionals must exercise professional neutrality, adhere to regulations, protect themselves from dependence, and provide professional support.
Registrar and Data Management Professionals must be self-sufficient in knowledge.
Registrar and Data Management Professionals must conduct activities based on knowledge, free from haste and indifference.
Registrar and Data Management Professionals must be free from negligence, cautious, and attentive.
Relationships in the workplace, community, and with cooperatives must be neutral, honest, friendly, and ethical.
Registrar and Data Management Professionals must know, respect, and abide by relevant laws and regulations.
Registrar and Data Management Professionals must provide reliable service, avoid undermining the profession's credibility, and respect the cooperative's purpose.
Registrar and Data Management Professionals must be free from discrimination and conflicts of interest, making honest and neutral decisions.
The confidentiality of information obtained by cooperatives must not be used for personal interest or outside legal/ethical principles.
Any directive or customary practice that contravenes and contradicts this Directive shall not apply.
Concerned organs have an obligation to cooperate for the implementation of this directive.
This directive can be amended by the Federal Cooperative Agency as needed.
A cooperative may be divided into two or more parties for various reasons, including large membership, inability to provide services, large operational areas, low member participation, geographical/administrative demarcation, researched importance, different member needs, member requests, weakened capital capacity, or conducive management/administration.
Mergers or divisions require proof of member benefit, member consent, two-thirds majority vote, appropriate authority approval, consideration of economic/social impact, audited accounts, secure storage of records, debt payment guarantees for dismissed members/debtors, and transfer of rights/obligations.
Former employees are treated according to labor law and contracts.
Disputes over mergers/divisions are handled by the appropriate authority, with rights of members/creditors/employees protected.
Reorganized cooperatives are registered following formal processes, with professional support provided.
Liquidators cannot start new activities unless for contract enforcement or account verification.
Liquidators are responsible for statements, assets, and documents from the Management Committee or Board until the end of the financial year.
The property of the cooperative shall not be divided before the debts of the cooperative have been paid.
The cooperative's money or property shall not be distributed to its members unless it has been paid to the creditors and deposited in the designated area for those who have not received their due time.
Undivided cooperative property and money may not be used for loans, debts, compensation, gifts, or rewards.
If the cooperative is operating in a reserve account deducted from its annual profit, it shall not be divided.
Land or houses acquired by the government to contribute to cooperatives shall not be divided.
Undividendable property of the cooperative is used to expand future cooperatives or deposited in a Special Cooperative Fund.
Land or property given free of charge by the government for the purpose of promoting cooperatives shall be returned to the relevant government body.
Conciliation is considered a final judgment without appeal and is void if against the law or good deeds.
Arbitrators hear and conduct proceedings according to the civil procedure code.
Disputed parties must avoid tasks that impede arbitrators' work.
Disputed parties cannot take their case to court before arbitration proceedings end unless agreed.
Disputed parties must be legally competent and directly involved or delegated.
Disputed parties must agree to arbitral tribunal terms and follow due process.
Arbitrators have no right to wages unless agreed.
Cooperatives must be strengthened by focusing on specific areas like organization, management, operations, extension services, governance, member participation, financial capacity, property administration, saving culture, market share, inter-cooperative relationships, infrastructure, and information systems.
Cooperatives should use cost-effective and time-saving technology.
Cooperative organizers must identify and address gaps, establish cooperative funds/councils/federations/leagues, conduct research, develop model documents, develop policies, develop training curricula, expand practices, develop strategic alternatives, implement projects, establish registration systems, and develop merger/division/dissolution systems.
Community basin users have rights to use resources, form user groups, and participate in awareness forums.
Community basin users have obligations to participate in development, protect resources, pay fees, participate in planning, and maintain infrastructure.
Members failing to fulfill duties may be dismissed.
Non-member basin users have rights to use resources, become members, and participate in awareness forums.
Non-member basin users have obligations to participate in development, refrain from harmful activities, avoid resource depletion, and cooperate during disasters.
Community basin cooperatives receive benefits, support, and supervision.
Stakeholders coordinate to organize, register, build capacity, monitor, and support cooperatives.
Individuals owning land in two basin areas may only be members of one cooperative unless land is transferred.
Couples can be members; internal rules may clarify engagement.
Forestry cooperatives organized under basins may receive benefits from relevant proclamations.
Members leasing land receive benefits after contract expiry or if they don't continue membership.
Resigning members must repay loans/debts.
Similar community beneficiaries may form cooperatives based on feasibility studies.
Two or more similar cooperatives can be established in one kebele based on feasibility.
Bylaws determine revolving fund distribution requirements and interest rates.
Revolving funds/assets remain with the cooperative, distributed upon dissolution.
Ownership of community basin user cooperatives requires proof of land ownership, registration certificate, and management plan.
Land administration bodies verify ownership.
Existing cooperatives on public land should accept others as members.
New basin user cooperatives may be established based on study if conditions are unsuitable for existing ones.
Linkages between forest development and community basin user cooperatives should be strengthened.
Community basin user cooperatives must register separately and receive separate certificates.
Temporary registration certificates are issued if requirements are not fully met.
Cooperative organizers must be consistent, free from influence, knowledge-based, cautious, honest, ethical, have integrated support, understand law, provide reliable service, be neutral, maintain confidentiality, and have professional qualification.
Registration and data management professionals must implement a consistent system, exercise neutrality, be knowledge-based, cautious, honest, ethical, understand law, provide reliable service, be impartial, and maintain confidentiality.
Farmers' Organization Directive No. 001 is repealed.
Any directive or customary practice contradicting this directive is non-applicable.
The directive can be amended by the Federal Cooperative Agency as needed.

Penalties

Any cooperative that does not start its normal activities within six months of receiving the Certificate of Registration, without good reason, shall be punished in accordance with Article 19, Sub-Article 2 of Proclamation 985/2009.
Cooperatives that do not renew their registration certificates within the specified time limit will not be legally recognized, and their registration certificates may be revoked by the appropriate authority.
A cooperative that has received a temporary registration certificate shall be legally unacceptable after a year if it does not meet the required criteria within one year. The Cooperative shall be dissolved by the appropriate authority and end its legal existence.

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Any Cooperative that does not meet the remaining requirements within the one-year deadline shall be deemed to have ceased to exist and shall have to return the temporary registration certificate received on time.
If a committee member is found to have committed an act contrary to the rules of the cooperative, they shall be suspended and presented to the general assembly for a decision.
If a committee member is found to be absent for three consecutive terms without good reason, they shall be deemed to have resigned and will be replaced.
Liquidators who fail to submit assets and documents within seven days of dismissal shall be held accountable in accordance with applicable law.
If a cooperative is found to be operating outside the Proclamation, rules, and regulations, its registration certificate may be suspended.
If a cooperative is found to be harming the rights and interests of members or the economy of the country, its registration certificate may be suspended.
If a cooperative does not comply with government policy and is decided to be suspended, its registration certificate may be suspended.
If a cooperative fails to renew its registration period with due support or fulfill its obligations, its registration certificate may be suspended.
If a cooperative is found to have obtained the registration certificate through fraud or forgery, its registration certificate may be cancelled.
If the Certificate of Registration is used for any purpose other than intended or transferred to another body, its registration certificate may be cancelled.
If a cooperative is not renewed in accordance with the law, its registration certificate may be cancelled.
If found to be operating outside the Proclamation, regulations, and Directives, its registration certificate may be cancelled.
If a cooperative is suspended more than twice, its registration certificate may be cancelled.
If confirmed by the appropriate authority that the cooperative has ceased to exist, its registration certificate may be cancelled.
When a cooperative is suspended or dissolved, the appropriate authority may file a complaint in accordance with the Cooperative Proclamation 985/2009.
If the appropriate authority does not agree with the offer and decides to lift the ban or continue the dissolution, the General Assembly may appeal to the Higher Court within 30 days.
Liquidators who fail to submit assets and documents within seven days of dismissal shall be held accountable in accordance with applicable law.
If a cooperative is found to be operating outside the Proclamation, rules, and regulations, its registration certificate may be suspended.
If a cooperative is found to be harming the rights and interests of members or the economy of the country, its registration certificate may be suspended.
If a cooperative does not comply with government policy and is decided to be suspended, its registration certificate may be suspended.
If a cooperative fails to renew its registration period with due support or fulfill its obligations, its registration certificate may be suspended.
If a cooperative is found to have obtained the registration certificate through fraud or forgery, its registration certificate may be cancelled.
If the Certificate of Registration is used for any purpose other than intended or transferred to another body, its registration certificate may be cancelled.
If a cooperative is not renewed in accordance with the law, its registration certificate may be cancelled.
If found to be operating outside the Proclamation, regulations, and Directives, its registration certificate may be cancelled.
If a cooperative is suspended more than twice, its registration certificate may be cancelled.
If confirmed by the appropriate authority that the cooperative has ceased to exist, its registration certificate may be cancelled.
When a cooperative is suspended or dissolved, the appropriate authority may file a complaint in accordance with the Cooperative Proclamation 985/2009.
If the appropriate authority does not agree with the offer and decides to lift the ban or continue the dissolution, the General Assembly may appeal to the Higher Court within 30 days.
If a cooperative is found to be operating outside the Proclamation, rules, and regulations, its registration certificate may be suspended.
If a cooperative is found to be harming the rights and interests of members or the economy of the country, its registration certificate may be suspended.
If a cooperative does not comply with government policy and is decided to be suspended, its registration certificate may be suspended.
If a cooperative fails to renew its registration period with due support or fulfill its obligations, its registration certificate may be suspended.
If a cooperative is found to have obtained the registration certificate through fraud or forgery, its registration certificate may be cancelled.
If the Certificate of Registration is used for any purpose other than intended or transferred to another body, its registration certificate may be cancelled.
If a cooperative is not renewed in accordance with the law, its registration certificate may be cancelled.
If found to be operating outside the Proclamation, regulations, and Directives, its registration certificate may be cancelled.
If a cooperative is suspended more than twice, its registration certificate may be cancelled.
If confirmed by the appropriate authority that the cooperative has ceased to exist, its registration certificate may be cancelled.
When a cooperative is suspended or dissolved, the appropriate authority may file a complaint in accordance with the Cooperative Proclamation 985/2009.
If the appropriate authority does not agree with the offer and decides to lift the ban or continue the dissolution, the General Assembly may appeal to the Higher Court within 30 days.

Objectives

To provide a clear overview of the current and future types of cooperatives and organizational standards.
To modernize cooperatives with a uniform organization, registration, and operating system.
To improve the role and responsibilities of members, management, and employees.

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To inform cooperatives about capital formation, alternative financing, dividend distribution, loan management, mergers, and disbursements.
To establish clear procedures for cooperatives' interactions with members, authorities, stakeholders, and each other.
To strengthen the existing federal and state governments that provide and register extension services for cooperatives.
To ensure cooperatives operate in accordance with cooperative principles, values, and ethical values.

Organizations

Ethiopian Cooperative Commission
Federal Cooperative Agency

Legal references

Cooperatives Proclamation No. 985/2009
Community Basin Development and Management Proclamation No. 1223/2012
Cooperatives Proclamation No. 147/91

Original sourcehttps://justice.gov.et/en/directives/cooperative-organizational-directive-no-896-2022/

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