Formation of Staff Cooperative Societies in Nigeria
Legal Nuggets
- A cooperative society is a voluntary association of individuals, united by a common bond, who come together with the objective of promoting the economic interest of its members through joint savings, investment, loans or ownership of common property.
- In Nigeria, cooperative societies are regulated by the Nigerian Co-Operative Societies Act (the Act). The Act empowers the President or Governor of each state to appoint a Federal or State Director for cooperatives, who will be in charge of registering and regulating the operations and activities of cooperative societies within each state.
- An application for registration is required to be made to the Director by at least ten individuals qualified for membership of the society. Upon registration, a cooperative society assumes corporate personality with the right to sue or be sued in its corporate name and all other entitlements of a body having legal personality. The operations of the cooperative society are guided by rules and bye-laws made by members of the cooperative.
- A staff cooperative society is usually structured as an autonomous body made up exclusively of employees or certain cadres thereof. However, there is no legal stipulation regarding the involvement of an employer in a cooperative society. Thus, an employer’s participation in a staff cooperative is a commercial decision to be reached based on an analysis of the risks and benefits the employer will derive from such participation.