Review of Co-op Laws in Thailand (1997)

----------------------------------------------------------------------
This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
----------------------------------------------------------------------

Part II - Review of Country Laws in Thailand (1997)

Source: Co-operative Laws in Asia and the Pacific
by G.K. Sharma (pp.172-176)

Thailand
*******
The first co-operative law in Thailand called the Amended
Associations Act was enacted in 1916 to register farmers co-operatives
to help particularly rice growers similar to co-operatives in India and
Burma. This Act remained till 1928 when it was replaced by co-operative
societies act of 1928 which allowed other types of co-operatives to be
organised such as land settlement, consumer, marketing, service
co-operatives etc. 

This was amended many times and finally replaced in 1968 by a new
law which has been amended many times and is in operation presently. 

The Act has 119 sections and divided into various parts and chapters.
The important provisions in the act are summarised below.

Section 4 defines `Co-operative Society' which means a group of
Persons who jointly conduct affairs for mutual assistance and are
registered under this act.

Section 5 empowers Minister of Agriculture and Co-operative to
make ministerial regulations.  Section 8 states "the Minister has
the powers to notify from time to time in the government gazette
as to what type of co-operative society in which locality will be
accepted for registration and the occupations of the prospective
members thereof".

The type of co-operative society which will be accepted for
registration shall be prescribed by Agricultural Regulations.

Section 9 exempts co-operatives from payment of registration fee.

Part I : Chapter 1 (Sections 11-18)
-----------------------------------------
It deals with registration of limited co-operative societies. Under section
15 one condition for registration is that "that the co-operative society to
be registered will not be detrimental to the co-operative society system."  An appeal can be to the Minister within 30 days in case of refusal to
register by the Registrar. 

Chapter 2 : Operations of limited co-operatives
--------------------------------------------------------
There are some provisions under which the co-operative has to take
approval of the Registrar such as :

21 (3) to lend money to any other co-operative with the approval of
the Registrar.
21 (5) to receive saving or fixed deposits from members in accordance
with the rules of the co-operative approved by the RCs.
21 (8) to purchase shares of any other co-operative society or institution
whose business is to facilitate or promote the activities of co-operatives
with the approval of the RCs. 
21 (12) to apply for or accept technical assistance from the government,
foreign agencies, or any other person provided it is in accordance with
the policy or direction made or given by the RCs.
22. A loan or guarantee raised or given by a limited co-operative
society shall be limited to the amount approved by RCS.

Section 31 deals with profit distribution. Along with others, it
provides that at least 10% to reserve funds, 5% but not exceeding
five thousand Baht to Co-operative League of Thailand. Bonus to
Board Members and Officials but not exceeding 10% of net profit
and patronage rebate.

It also provides election of board members and inspectors to inspect
the societies and report to AGM.

Chapter 3 : Supervision
----------------------------
The Registrar under this chapter has been given powers to arrange
audit, inspection and conduct enquiry in the affairs of the co-operatives
and take action against the persons found guilty, remove the board as its
members, nominate another board for six months, suspend operations of
co-operative or order for its liquidation. 

Part II : Chapter 1
---------------------
It deals with registration, operation of unlimited co-operatives which
are largely the same as in the case of limited society. One main
difference in case of unlimited society is the Reserve Fund which has to
be not less than 85% of the project. The remaining 15% include 5%
for Public Fund, 5% for Central Fund of unlimited society and 5%
but not more than Baht 5000 to CLT. 

The chapter also deals with the purpose and use of Public Fund,
Central Fund and Reserve Fund. 

Chapter 2
-----------
It deals with dissolution which is similar to as in the case of limited
societies.

Part III : Co-operative Federations

Three or more co-operative societies wishing to operate jointly so
As to accomplish their common object can establish a co-operative
federation. The other provisions in this case are also the same as
applicable to other co-operatives.

Part IV : Amalgamation
-----------------------------
This part deals with the procedure of amalgamation of two or
more societies subject to the approval of the Registrar under
section 81. 

Part V : Liquidation
------------------------
Under section 87 the liquidation of a bankrupt co-operative shall be
made in accordance with the law of bankruptcy.

In other cases the general meeting is to elect a liquidator within
30 days from the date of dissolution or from the date of the order
of dismissing the appeal by the Minister. The liquidator has to
be approved by the Registrar. In case he does not approve the election
of the liquidator he may himself appoint the liquidator.

Under section 93 the liquidator has to prepare a balance sheet which
has to be submitted to the General Body for approval. He has to report
the progress of liquidation to the registrar every six months. Surplus
after meeting all the liabilities is to be transferred to an another
co-operative or to Co-operative League of Thailand with the approval
of General Body or with the approval of the Registrar if General
Body cannot be called within 3 months from the date of the completion
of liquidation.

Part VI : Co-operative League of Thailand
---------------------------------------------------
Under section 104 the Co-operative League of Thailand is to have
the membership of all types of co-operatives, having the object of promoting the activities throughout the Kingdom, without sharing profit
or income. In addition to other usual functions of promotion and guidance under section 105 (6) "act in  compliance with the objects of as entrusted by the government agencies".

Under section 108 "there shall be an executive board consisting of not
less than 12 representatives of co-operative societies elected by the
General Meeting and not more than five persons appointed by the
minister as directors."

The term of the Board is two years (section 110) and under section
109 "the Board shall have the duty to administer the activities of
the CLT."

Part VII
----------
It deals with penalties for offences as also provision to cover societies registered under the old act to come under the new act.

..