Co-operative Law of 1991

     ___________________________________________________
     This document has been made available in electronic 
    format by the International Co-operative Alliance ICA 
    -----------------------------------------------------
                         November 1995

                    ICA Studies and Reports
           Co-operatives in Eastern & Central Europe

                           Bulgaria
               by Professor Dinonysos Mavrogiannis


Annex 3
Co-operative Law of 1991 (*)

Chapter One - General Provisions

Definition
Article 1 
1.  A co-operative shall be a voluntary organisation of
physical persons with variable capital and a variable number
of members, who shall engage in economic and other activities
based on mutual assistance and co-operation in order to
promote their interests.

2.  A co-operative shall be a corporate entity.

State Assistance and Promotion 
Article 2
The State shall assist and promote the co-operatives by means
of allowances against tax, favourable interest rates, lower
customs duties and other economic concessions.

Item 5 of Article 37 is changed as follows: "The co-operatives
of handicapped citizens are relieved of the turnover tax on
goods and services produced or rendered by themselves. Those
registered after 1 July 1992 enjoy this relief by virtue of an
order determined by the Council of Ministers."

Paragraph 1, Item 3 of the additional regulations is changed
as follows:
" The State, municipality and other firms and organisations
must complete the restitution of co-operative property as
detailed in item 1 within a term of 18 months after the law
comes into force. The co-operatives and co-operative unions
must present written requests to them within the same period
of time".
Paragraph 7, Item 2, of the previous and final enactments is
cancelled.
Paragraph 8 of the previous and final enactments is cancelled.
Paragraph 9, sentence 2, of the previous and final enactments
is changed as follows: "their shares are determined by the
years during which their land was part of the agricultural
co-operative." 

Chapter Two - Co-operatives
Section I - Constitution

Constitutional Procedure
Article 3
1.  A co-operative shall be constituted by not fewer than
seven responsible individuals whose constituent assembly shall
resolve to constitute the co-operative, adopt its Statutes and
elect its Board of Directors and Board of Controllers.

2.  The Statutes shall establish:
i)  the name, the registered address and the purpose of the
co-operative;
ii)  the eligibility, rights and obligations of its members;
iii) the managing bodies of the co-operative and their
prerogatives;
iv)  the procedure for passing resolutions;
v)   the amount of the members' subscription and size of
shareholding;
vi)  the conditions and procedure for the contribution of
land;
vii) the distribution of income, profits or losses, funds,
dividends and patronage and the land rent;
viii) the manner in which co-operative property may be
disposed of;
ix)  the grounds and procedure for the termination of
membership.

3.  The Statutes may further settle other matters insofar as
these are not settled by the law.

4.  The Memorandum of Incorporation and the Statutes shall be
signed by the founding members.

Registration
Article 4
A co-operative shall be registered with the district court
nearest to its registered address by its Board of Directors.
The application shall be accompanied by the following:  1)
copies of the Memorandum of Incorporation and the Statutes; 
2)  specimens of the signatures of the co-operative's
authorized representatives, witnessed by a public notary; 
3)  certificates for each member of the Board of Directors and
Board of Controllers showing that none has a criminal record;
4)  affidavits signed by the members of the Board of Directors
and Board of Controllers to the effect that they are not
related to one another by marriage and are not close blood
relatives.

Incorporation
Article 5
A co-operative shall be incorporated on the day of its
registration by the relevant district court.

Cancellation
Article 6
Should a co-operative fail to become a going concern within
one year of its registration, it shall be struck from the
register at the request of the Public Prosecutor's Office.

Liability for Actions Preceding Incorporation
Article 7
An act performed on behalf of a co-operative prior to the date
of its incorporation shall give rise to rights and obligations
on the part of the said co-operative if carried out by persons
duly authorized by the founding members. In the absence of
such an authorization, the individuals concerned will be held
severally and jointly liable for any obligations thus assumed.
Should a co-operative fail to be incorporated, all founding
members shall bear joint liability except those who have
refused to issue authorization.

Section II - Membership, Rights and Obligations

Membership
Article 8
1.  Anyone who subscribes to a co-operative's Statutes and is
above the age of 16 or, if a student, the age of 15, is
eligible for membership.

2.   Simultaneous membership of more than one co-operative is
permitted.

Admission of New Members
Article 9
1.  Prospective members must submit a written application to
be reviewed by the Board of Directors at its next meeting or,
if this is less than 14 days after receipt of the application,
at its second earliest meeting.

2.  The resolution of the Board of Directors requires the
endorsement of the General Meeting.

3.  On refusal by the Board of Directors to approve an
application, an appeal may be made to the General Meeting
within 14 days of receiving written notice of the refusal.
Should the General Meeting overrule the Board of Directors,
the applicant shall be considered admitted as of the date of
the General Meeting's resolution.

4.  Should an applicant fail to appeal within the time
established by paragraph 3, or should the General Meeting
confirm the refusal, the applicant may not file a new
application for membership until one year has elapsed.

5.  All newly-admitted members are to be recorded in the
register of members.


Rights of Members
Article 10
1.   A member of a co-operative shall have the following
rights:
i)   to participate in, and benefit from, the co-operative's
activity;
ii)  to participate in and vote at its General Meeting, and be
elected to the managing bodies of the co-operative;
iii) to question its managing bodies as to their failures to
implement adopted resolutions, and to have access to all
information concerning his own interests;
iv)  to seek the overturning of any resolutions or actions of
the co-operative's bodies which contravene the Law or its
Statutes or are inappropriate;
v)   to receive a dividend;
vi)  to reclaim his or her share of the founding capital upon
termination of membership;
vii) to receive social security and medical services in
accordance with the law.

2.   A co-operative member who has contributed land shall also
enjoy the following rights:

i)   to retain ownership of the land as real estate or in the
form of shares of equal value;
ii)  to retain ownership of crops grown on the contributed
land;
iii) to sell his or her land to other members of the
co-operative;
iv)  to receive rent on any land thus contributed;
v)   to receive part of this rent in the form of farm produce.

3.  A member of a producers' co-operative shall have the right
to be employed there in a job befitting his skills and age.

Obligations of Members
Article 11
1.  A member of a co-operative shall observe its Statutes and
the resolutions of its managing bodies.

2.  A member under legal age shall pay in his share of the
capital pursuant to the provisions of the Persons and Family
Act.

Employment Relations and Social Security
Article 12
1.  The employment relations, medical care and social security
of non-members employed by a co-operative shall be settled in
accordance with the legislation currently in force.

2.  Control over the observance of employment, medical and
social security legislation by a co-operative shall be
exercised by a social affairs committee elected by the General
Meeting.

Discipline
Article 13
1.  A member may be given a reprimand or notice of expulsion
for failure to carry out his obligations to the co-operative.

2.  The reprimand or notice of expulsion is to be issued by
the Board of Directors.



Termination of Membership
Article 14
1.   Membership of a co-operative shall cease upon any of the
following occurrences:

i)   withdrawal from the co-operative;
ii)  joining of another co-operative by a procedure
established in the Statutes;
iii) expulsion;
iv)  death.

2.   Membership shall cease upon termination of the
co-operative by liquidation.

Expulsion of Members
Article 15
1.    A co-operative shall be free to expel a member for an
intentional violation of the law, the Statutes or the
resolutions of the co-operative's managing bodies.

2.   The Board of Directors shall be free to suspend a member
prior to a final ruling on his expulsion by the General
Meeting. The member shall be invited to attend the meeting.

Material Consequences
Article 16
1.   The share of a former member shall be reimbursed to him
or his heirs after the approval of the co-operative's annual
balance sheet.

2.   The amount of a reimbursed share shall be preserved,
unless the Statutes provide otherwise.

3.   A former member who has contributed land and has retained
ownership of an equivalent share, or that member's heirs,
shall be reimbursed with land equal in quantity and quality to
that originally contributed.

4.   The right to reimbursement of a share shall expire after
five years, and the right to a dividend, after three.


Section III - Managing Bodies

I. General Meeting - Membership and Prerogatives
Article 17
1.   The General Meeting of a co-operative shall consist of
all its members. A co-operative with a very large membership,
or operating in several communities, shall be free to
establish instead a Meeting of Plenipotentiaries elected by a
secret ballot. The number of plenipotentiaries shall not be
less than one hundred. A Meeting of Plenipotentiaries shall
enjoy all rights vested in a General Meeting.



2.   A General Meeting shall:

i)   draw up, adopt and amend the Statutes;
ii)  elect and dismiss the Chairman of the co-operative;
iii) establish the number of members of the Board or Directors
and the Board of Controllers, and elect these by secret
ballot;
iv)  approve the annual report of the Board of Directors and,
after hearing the report of the Board of Controllers, the
balance sheet and the distribution of income;
v)   approve the report of the Board of Controllers;
vi)  resolve on the joining or withdrawal from a co-operative
alliance and on the purposes thereof;
vii) elect delegates, to the General Meeting (Congress) of the
co-operative alliance of which the co-operative is a member;
viii) approve any cancellation of cash debts to the
co-operative, or their rescheduling;
ix)   approve any disposal of co-operative-owned fixed assets;
x)   endorse the Board of Directors' resolution on the
admission of new members or, on overturning such a resolution,
terminate membership as of the date of the meeting;
xi)  expel members;
xii) approve any voluntary capital raising among the members;
xiii) rescind resolutions or acts of the other managing bodies
of the co-operative which it considers to be contrary to the
law or the Statutes, or to be inexpedient;
xiv) resolve any questions arising from the results of an
audit of the co-operative;
xv)  be responsible for the final decision regarding the
reconstruction or termination of the co-operative, or an
application for its liquidation.

3.    The General Meeting shall be competent to make decisions
on all matters pertaining to the co-operative and its
activities, even when not expressly authorized by Law or by
the Statutes.

Convocation
Article 18
1.    A General Meeting shall be convened by the Board of
Directors upon a written invitation communicated by the
procedure established in the Statutes. The invitation shall
indicate the agenda, the day, time and venue of the General
Meeting. A General Meeting may only decide on matters not
indicated on the invitation if it is attended by all members
and the decision is passed unanimously.
    
2.   A General Meeting shall be convened as follows:

i)   regularly, once a year, to hear a report on the
co-operative's activity;

ii)  extraordinarily, by a resolution of the Board of
Directors, or as the result of a motion by the Board of
Controllers or by one-third of the members of the
co-operative. Should the Board of  Directors fail to convene a
General Meeting, this shall be done by the Board of
Controllers, or by one-third of the members of  the
co-operative.

iii) The Board of Directors shall convene the General Meeting
on any matter within the General Meeting's exclusive
competence within fourteen days of a request to do so. Should
the  Board of Directors fail to do this, the General Meeting
shall be convened according to the procedure established under
paragraph 2.

Quorum
Article 19
1.   A General Meeting shall be legitimate if attended by more
than half of its members. A General Meeting convened to adopt
the Statutes, or to resolve on the reconstruction or
liquidation of a co-operative, shall be legitimate if attended
by more than two-thirds of its members.

2.   In the absence of the required number of members, the
meeting shall be postponed and shall be held seven days later
with the same agenda. Should a quorum still be lacking, the
meeting shall open one hour later, regardless of the number of
members attending.

Resolutions
Article 20
1.   Resolutions of the General Meeting shall require a simple
majority vote by those present, unless otherwise provided by
the Statutes.

2.   Resolutions pursuant to Article 17, paragraph 2,
subparagraphs 1, 3, 7, 8, 9, 10 and 14 shall require a
majority of two-thirds of all members.

3.   Voting at a General Meeting shall be by a show of hands,
except when provided otherwise by law. A General Meeting may
resolve to hold votes by secret ballot for some matters.

Voting Rights
Article 21
Each member shall be entitled to one vote, which shall be cast
personally, regardless of his share of the nominal capital.


II. Board of Directors - Composition
Article 22
1.   The members of a Board of Directors shall be elected from
amongst the membership and will serve for a term of three
years. A new Board of Directors shall have among its members
not more than two thirds of those who served on the outgoing
Board.

2.   Those ineligible for election to the Board of Directors
are:

i)   anyone under 18 years of age, with the exception of
students in school co-operatives;
ii)  anyone prohibited from occupying a managerial, accounting
or materially liable post;
iii) anyone married to, or closely related to, another member
of the Board of Directors or the Board of Controllers;
iv)  or anyone placed under a legal interdiction.

Prerogatives
Article 23
1.   The Board of Directors shall implement the resolutions of
the General Meeting, direct the activities of the co-operative
and perform any other functions entrusted to it by the law or
the Statutes. It shall report to the General Meeting.

2.   The Board of Directors shall be free to appoint an
Executive Director and other executives, whenever this is
permitted by the Statutes.

3.   The Board of Directors shall be free to set up
commissions, councils and other auxiliary bodies to assist it
in its work.

Convocation
Article 24
1.   Meetings of the Board of Directors shall be convened by
its Chairman at least once a month. He/she  must also call a
meeting of the Board of Directors within seven days of a
request to do so by one-third of its members. Should he/she
fail to do this, the meeting shall be convened by the Board of
Controllers.

2.   The decisions of the Board of Directors shall be
legitimate if a meeting is attended by at least two-thirds of
its members. 

Resolutions
Article 25
Resolutions of the Board of Directors shall be passed by a
show of hands and require a simple majority of its members,
unless otherwise dictated by the Statutes.

Liability
Article 26
Members of the Board of Directors shall be jointly liable for
any damages caused by them to the co-operative.

Court Representation
Article 27
In a judicial dispute between a co-operative and the members
of its Board of Directors, the co-operative may be represented
by one or several persons elected by the General Meeting.

III. Chairman
Article 28
1.   The Chairman of a co-operative shall also serve as
Chairman of the Board of Directors, in which he shall be
entitled to an ordinary vote.
2.   The Chairman of a co-operative shall:
i)   represent the co-operative;
ii)  organise the implementation of the resolutions passed by
the General Meeting and Board of Directors;
iii) manage the day-to-day activities of the co-operative.

IV. Board of Controllers - Composition
Article 29 
1.   The members of a Board of Controllers shall be elected
from the co-operative's members and will serve for a period of
three years. The Board of Controllers shall elect a Chairman
from its members.

2.   Any person prohibited by virtue of Article 22, paragraph
2, or any member of the co-operative who in the previous year
has occupied a post of material or accounting responsibility
or who sat on the Board of Directors, shall be ineligible for
election to the Board of Controllers.

Prerogatives
Article 30 
1.   A Board of Controllers shall control the activities of
the co-operative and report to its General Meeting.

2.   A member of the Board of Controllers shall be free to
attend the meetings of the Board of Directors and shall be
entitled to a deciding vote.

3.   A member of the Board of Controllers shall enjoy the
authority of an auditor, provided he meets the professional
requirements.

4.   The Board of Controllers shall convene the General
Meeting whenever it uncovers an important violation of the Law
or Statutes by the Board of Directors.

5.   The provisions of Article 26 shall also apply to the
members of the Board of Controllers.


Section IV - Property, Distribution of Income, Taxation

Property
Article 31 
1.   If a co-operative owns, or has other material rights over
long-term and short-term assets, trademarks, industrial
prototypes, licences, securities, company stock and debtors,
these are regarded as co-operative property.

2.   A co-operative's property shall be exclusively managed by
its members through their elected bodies.

3.   No object owned by a co-operative shall be acquirable by
virtue of a limitation.

Sources of income
Article 32
A co-operative shall have the following sources of income:
1.   members' subscriptions,
2.   members' paid-up capital,
3.   additional capital contributions by members,
4.   business earnings,
5.   loans,
6.   other income.

Payments by Members
Article 33 
1.   Each member of a co-operative shall pay a subscription
fee and his share of the called-up capital, the amount of
which is established by the statutes.

2.   The total of paid-up capital shall form the capital of
the co-op.

3.   Evidence of ownership over land contributed to a
co-operative shall be in the form of a deed or a final ruling
of the municipal land commission. A memorandum of land
contribution shall be signed by the contributing member and
the Chairman of the Board of Directors, and shall be recorded
in the public notary's register.

4.   A member's share of capital shall be exempt from
distraint or confiscation.

5.   Members shall be free to extend loans to a co-operative.
These shall not be considered part of its capital.

6.   The interest rate on such loans shall be established by
the co-operative's General Meeting.

Material Liability of Co-operatives
Article 34
1.   A co-operative shall be held liable to the extent of its
assets.

2.   A member of a co-operative shall be held liable to the
extent of his/her share.

Distribution of Income, Profit and Losses
Article 35
1.   A co-operative shall keep its books in accordance with
the Accountancy Act.

2.   The distribution of income, profit and losses, the nature
of a co-operative's cash funds and the manner in which they
are maintained and spent shall be established by its General
Meeting.

3.   The amounts set aside for the different cash funds shall
be charged to the co-operative's income. The residual income
shall be distributed to members as dividends following a
resolution of the General Meeting.

Co-operative Funds
Article 36
1.   A co-operative shall maintain a contingency reserve, and
any other cash funds established by the General Meeting.

2.   A portion of the income established by the General
meeting, and amounting to not less than 20 per cent of the
co-operative's capital, shall be deducted each year towards
its contingency reserve.

3.    Any loss reported by a co-operative during a calendar
year shall be charged either against its contingency reserve
or against future profits by virtue of a resolution of its
General Meeting.

Taxes and Tax Concessions
Article 37
1.   A co-operative shall pay to the State any taxes on
turnover, customs and excise duties established by the law.

2.   A co-operative shall be exempt of any tax or duty related
to its incorporation, reconstruction, winding-up or
liquidation.

3.   A co-operative member shall be exempt from any tax or
duty on paid-in capital and the relevant transfer of rights.

4.   Any dividend reinvested by a member in the co-operative
shall be exempt from tax.

5.   A co-operative of disabled persons or students shall be
exempt of any tax or duty.

6.   The Council of Ministers shall be free to introduce, at
its discretion, tax concessions or exemptions concerning
certain co-operative activities and the regions in which they
are performed.

Saving and Loan Activities
Article 38
A co-operative shall be free to engage in savings and loan
activities by virtue of a resolution of its General Meeting.

Mutual Assurance Society
Article 39
1.   A co-operative shall be free to set up a mutual assurance
society for its members.

2.   A mutual assurance society shall be viewed as a corporate
entity by virtue of the opening of a separate bank account.

3.   This Law shall also apply to the co-operative's mutual
assurance society.


Section V - Reconstruction, Termination, Liquidation

Reconstruction
Article 40 
1.   The terms of any merger or amalgamation of co-operatives
shall be negotiable between their Boards of Directors, subject
to approval by their General Meetings.

2.   Any division of, or separation from, a co-operative shall
require the approval of its General Meeting.

De Jure Membership
Article 41
Members of amalgamating co-operatives shall acquire membership
in the new co-operative; members of dividing co-operatives
shall acquire membership in the newly-formed co-operatives.


Liability Following Reconstruction
Article 42 
1.   Co-operatives formed as the result of a division shall
bear joint liability for the obligations of the original
co-operative.

2.   A co-operative formed as a result of a separation shall
bear joint liability with the original co-operative for any
prior obligations.

Termination of Co-operative
Article 43
1.   A co-operative shall be terminated:
i)   by a resolution of the General Meeting;
ii)  by a district court ruling sought by the Office of the
Public Prosecutor whenever the co-operative:
a. pursues aims prohibited by law, or engages in prohibited
economic activity;
b. has been left with fewer members than the established
minimum and has failed to gain the required number of new
members within a period of six months.

iii)  upon expiry of the term for which it had been set up, or
as otherwise provided for in the Statutes;
iv)   upon declaring insolvency.

2.    A terminated co-operative shall be placed in
liquidation.

Liquidators
Article 44
1.    Upon terminating the activity of a co-operative, the
General Meeting shall appoint a liquidator, or a three-member
board of liquidators, and shall establish the liquidation
period. A liquidator does not have to be a member of the
co-operative.
2.    In the case of a court-ordered liquidation, the
liquidators and the liquidation period shall be established by
the court.
3.    Any person excluded from membership of the Board of
Directors under Article 22, paragraph 2 above shall be
ineligible to serve as liquidator.

Effect of Termination and Liquidation 
Article 45
1.   The termination of a co-operative and its placement into
liquidation shall be subject to registration.

2.   The termination and liquidation of a co-operative shall
take effect from the day on which the ruling concerning the
registration is promulgated.

Rights and Obligations of Liquidators
Article 46
1.   Liquidators shall have the rights and obligations of the
Board of Directors. A co-operative shall be represented by the
liquidator or, in the case of a board of liquidators, by a
board member appointed by the General Meeting or the court.

2.   Liquidators shall wind up the day-to-day operations of
the co-operative, convert its property into cash, collect its
receivable income and settle its liabilities.

3.   Liquidators shall be free to terminate contracts
concluded by the co-operative prior to its going into
liquidation, and to compensate the other parties for any
damages suffered. Such compensation shall be settled on the
same terms as the other debts of the co-operative.

Creditors' Claims
Article 47
1.   The creditors of a co-operative in the process of
liquidation shall lodge with the liquidators all claims,
regardless of origin, security or ease of execution, within
one month from the day of the promulgation referred to under
Article 45, paragraph 2.

2.   The Liquidators shall write to all creditors for whom an
address is held to inform them how they may lodge their
claims.

3.   Liquidators shall notify creditors of any disputed claims
by the procedure described under the preceding paragraph.
Should such a creditor file a claim within one month of
receipt of the said notification, the liquidators shall enter
into such claims as disputed liabilities in the liquidation
balance sheet.

Satisfaction of Creditors
Article 48
1.   Should the property of a co-operative prove insufficient
to satisfy all creditors, the liquidators shall satisfy the
privileged claims in accordance with their order, and the
remainder shall be used to satisfy the other claims in
proportion to their size.

2.   A creditor who has failed to lodge a claim within the
established time may be repaid with funds left over from the
distribution.

3.   Members' shares shall be reimbursed only after all other
liabilities have been settled. Should the residue prove
sufficient, it shall be distributed proportionally to each
member's share.

Execution
Article 49
There shall be no separate claim against the property of a
co-operative in liquidation.

Winding Up of a Co-operative
Article 50
1.   The liquidators shall report to the General Meeting on
the final distribution of the property, and the General
Meeting shall then resolve to wind up the co-operative.

2.   In a court-ordered termination, the liquidators shall
submit their report to the court, which shall order the
winding up of the co-operative.

3.   The liquidators shall request the court to register a
resolution pursuant to paragraphs 1 or 2 within seven days
from its passage.

Disposal of Residual Assets
Article 51
Any residual assets from the liquidation of a co-operative
shall be distributed among its members in proportion to each
member's share, except when provided otherwise by its
Statutes.

Perpetuation of Terminated Co-operative
Article 52
Should a co-operative be terminated by a resolution of its
General Meeting, the latter shall be free to resolve on
continuing its activity until the conclusion of the
liquidation. The General Meeting shall then conduct an
election pursuant to Article 18, paragraph 2, subparagraphs 2
and 3, and shall register that resolution with the court.

Liquidators' Costs
Article 53
The costs of the liquidators shall be approved by the body
established pursuant to Article 50 and shall be born by the
co-operative. Such costs must be paid prior to the settlement
of any other debts.

Liability of Liquidators
Article 54
Liquidators shall bear joint liability for any damages caused
to a co-operative.

Section VI Co-operative Enterprise
Constitution, Reconstruction and Termination
Article 55
1.   A co-operative shall be free to constitute co-operative
enterprises for particular economic activities.

2.   A co-operative enterprise may be a corporate entity.

3.   A co-operative enterprise shall be constituted,
reconstructed or terminated by a resolution of the
co-operative's General Meeting. The relevant resolution shall
establish the name, registered address, purpose and the assets
placed at the disposal of the co-operative enterprise.

4.   The regulations concerning the structure and activities
of an enterprise shall be approved by the co-operative's Board
of Directors.

Assets belonging to an Enterprise
Article 56
1.   The assets of an enterprise shall be owned by the
founding co-operative, which shall use and dispose of them in
accordance with the established regulations.
2.   The manner in which an enterprise's income is to be
distributed shall be established by the enterprise's founding
body.

Enterprise Manager
Article 57
An enterprise shall be represented by its manager, who shall
be appointed and dismissed by the Board of Directors of the
founding co-operative.

Chapter Three
Joint Co-operative Enterprises

Constitution
Article 58
1.   Co-operatives shall be free to constitute joint
co-operative enterprises which engage in activities of common
interest.

2.   The General Meetings of the co-operatives referred to in
paragraph 1 shall decide the constitution of a joint
co-operative enterprise and shall elect plenipotentiaries to
its constituent assembly.

3.   A joint co-operative enterprise shall be regarded as an
independent corporate entity.

Reference
Article 59
The provisions of Chapters Two and Five shall apply to all
matters pertaining to the joint co-operative enterprise which
are not settled by this Chapter.

Chapter Four
Co-operative Alliances

Constitution
Article 60
1.   By virtue of a resolution of their general meetings
co-operatives shall be free to join any territorial, sectorial
or other alliance.

2.   A co-operative alliance shall consist of at least two
co-operatives.

3.   Co-operative alliances shall be free to form their own
unions or federations.

Functions
Article 61
A co-operative alliance shall:
1.   assist its members in the attainment of their goals and
objectives;
2.   evolve guidelines for the development of co-operative
activity;
3.   defend the interests of its members in dealings with the
State, public and other bodies and organisations;
4.   engage in any other functions established by its
Statutes.

Managing bodies
Article 62
1.   A co-operative alliance shall have the following managing
bodies: a General Meeting, a Board of Directors, a Chairman,
and a Board of Controllers. The members of the Board of
Directors shall be elected by the General Meeting for a term
of three years.

2.   If provided for by the Statutes, the Board of Directors
shall elect from among its members an Executive Committee and
shall further establish that Committee's prerogatives and
procedures for passing resolutions.

3.   The General Meeting of a co-operative alliance shall
consist of authorized plenipotentiaries elected by the general
meetings of the constituent co-operative organisations as
established by its Statutes.

Cash Funds
Article 63
1.   A co-operative alliance shall be free to set up cash
funds for the purpose of mutual assistance, education,
occupational training etc.
2.   Such cash funds shall be set up by a resolution of the
alliance's General Meeting.

Chapter Five
Judicial Control

Grounds and Procedure
Article 64
1.   The district court at which a co-operative has its
registered address shall be free to enjoin any resolution or
act of a co-operative's managing body should it find the
co-operative in contravention of the law or the Statutes.

2.   The injunction may be sought by any member of the
co-operative, by its Board of Controllers, or by the Office of
the Public Prosecutor.

3.   A member of the co-operative shall be free to file a suit
pursuant to the preceding paragraph within two weeks of the
day of the resolution or, in the case of a resolution passed
in his absence, within two weeks of the day of finding out or
receiving notification. In a suit seeking injunction of an
act, the fourteen-day period shall begin on the day on which
the member of the co-operative acquires knowledge thereof. In
any case, a suit may be filed within a year from the date of
the passage of the contested resolution or the committing of
the contested act.

4.   A co-operative's Board of Controllers shall be free to
seek an injunction within two weeks of the passage of a
resolution or committing of an act.

Court Ruling
Article 65
1.   The court shall be free to annul a resolution or act in
its entirety or in part, or to deny action thereof.

2.   The court's ruling shall be subject to appeal according
to the generally-established procedure.

Joining an Existing Suit
Article 66
 1.  Any other member of the co-operative or the Board of
Controllers shall also be free to join the suit and shall be
free to press the claim after it is waived by the original
claimant.

2.   In a suit filed against a resolution or action by a
co-operative's managing body, a member shall be free to seek
compensation for material damages caused by any violation of
his or her rights by the said resolution or act.

Suspension of Execution
Article 67
The district court shall be free to suspend the execution of a
resolution or act against which a suit has been lodged pending
its own ruling.

Additional Provisions
Clause 1
1.   The rights of existing and restored co-operatives over
any property confiscated or nationalized after 10 September,
1944 are hereby reinstated.

2.   Evidence of ownership of such property shall be in the
form of deeds, protocols, balance sheets, receipts for taxes,
duties or insurance premiums, court decisions or other written
evidence. In the absence of such evidence, ownership shall be
claimed by the generally-established procedure. No stamp duty
shall be paid on legal proceedings connected with such claims.

3.   All State, municipal and other companies and
organisations shall reinstate such co-operative property
within six months of the date on which this Law comes into
effect.

4.   The terms and procedure for the reinstatement of property
shall be established by the Council of Ministers.

Clause 2
1.   All property of the co-operatives alliances owned at the
time of the passage of this Law shall be divided among their
constituent co-operatives in proportion to their stock
(contributions) in the alliance's funds. A recipient
co-operative shall dispose of such property in accordance with
this Law.

2.   Resolutions concerning the distribution of property
pursuant to paragraph 1 shall be passed by the general meeting
of the respective alliance.

3.   The general meeting of a co-operative alliance shall
resolve on what portion of these funds shall be transformed
into cash funds of the alliance pursuant to Article 63 of this
Law.

Clause 3
A co-operative which receives stock or cash pursuant to Clause
2 shall place such assets in its contingency reserve.

Transitional and Concluding Provisions
Clause 4
This Law shall supersede the Law on Co-operative Organisations 
(published in Durzhaven Vestnik No 102/1983, amended in No.
46/1989).

Clause 5
Obligations pursuant to Clauses 2 and 3 of the Additional
Provisions of this Law shall be settled within six months from
the date on which this Law comes into effect.

Clause 6
This Law shall supersede Decree No. 922 of 1989 Concerning
Land Use and Farming (published in Durzaven Vestnik No.
39/1989, amended in No. 10/1990).

Clause 7
1.   An organisation constituted and incorporated by virtue of
Decree 922 shall acquire the statute of a co-operative in the
sense of this Law if incorporated prior to 1 March, 1992.
2.   The incorporation of a newly-constituted co-operative
shall not require a resolution of the general meeting of the
organization in the sense of paragraph 1.

Clause 8
The following shall be entitled to a vote at a general meeting
convened to establish the rent for and the share in the
property of an organization in the sense of Clause 7,
paragraph 1:
1.   a member of the co-operative, or an attorney of his/her
heirs;
2.   a non-member owner of land cultivated by a farming
organization, or an attorney of his/her heirs;
3.   a person who has been in the employment of the farming
organization for not less than five years on the date on which
this Law comes into effect.

Clause 9
A land owner or his/her heirs shall be entitled to a share of
the property of a co-operative farm, even if  he/she was not a
member of that farm for the years during which his/her land
has been cultivated by it.

Clause 10
The owner of land and of a share of the property of a
co-operative farm shall be entitled to rent and dividends from
the date on which the Farmland Ownership and Use Act comes
into force.

This Law was passed by the Grand National Assembly on 19 July,
1991, and is sealed with the State Seal.


Nikolai Todorov
Chairman
Grand National Assembly