Cooperative Societies Law

Purpose and scope

• Governs cooperative societies formed by individuals to improve their members' economic and social conditions in production, consumption or services (Article 2).

Key rules, rights and obligations

• A society needs at least twelve members, no member may hold more than ten percent of the capital, and exceptionally it may be formed with five (Article 3).
• Founders apply for registration with a feasibility study, meeting minutes, the memorandum and the basic statute (Article 11), and the ministry reviews them and completes registration (Article 12).
• The general assembly is the supreme authority and meets at least once a year; a quarter of members form a quorum, or a tenth at a meeting adjourned by fifteen days (Article 22).
• The cooperative sector may receive support such as land grants and easier loans from government funds (Article 35).

Violations, penalties and common problems

• The minister may dissolve a society in cases including not starting work within two years, losses above half the paid-up capital, departing from its objectives, or repeated breaches of the law (Article 37).
• Common problem: membership falling below the minimum, which is a ground for dissolution (Article 37).

Procedures and key deadlines

• The general assembly may decide to dissolve the society by a majority of at least three-quarters of members (Article 37).
• A summary of the liquidation account is published in a local newspaper, and any member may challenge it before the minister within thirty days of publication (Article 39).

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.