How To Register A Cooperative In South Africa
Cooperatives are becoming an increasingly popular business model in South Africa due to their focus on communal ownership and democratic decision-making. Registering a cooperative may initially seem overwhelming, but the process can be broken down into several manageable steps.
- Step 1: Define Your Cooperative
- Step 2: Recruit Members
- Step 3: Draft and Adopt Constitution
- Step 4: Register the Cooperative
- Step 5: Start Operating Your Cooperative
Step 1: Define Your Cooperative
The first step in registering a cooperative is to define its purpose and goals. This involves choosing a name for the cooperative and determining its mission, objectives, and target audience. It is important to ensure that the objectives of the cooperative align with the principles of cooperation, which include voluntary membership, democratic governance, and distribution of surplus to members.
Step 2: Recruit Members
Once the purpose and goals have been defined, the next step is to recruit members who share the same vision for the cooperative. At least five members are required to form a cooperative in South Africa, and they must sign a statement of intent to form a cooperative.
Step 2.1: Decide on Membership Requirements
Before recruiting members, it is important to decide on the membership requirements of the cooperative. This may include criteria such as age, residency, skills, or occupation.
Step 2.2: Determine Member Shares
The cooperative must also determine how member shares will be structured. Members' shares represent their ownership in the cooperative and entitle them to a share of the cooperative's profits. This can be based on the amount of financial contribution made by each member or can be divided equally among members.
Step 3: Draft and Adopt Constitution
The next step is to draft and adopt a constitution for the cooperative. The constitution should outline the purpose and goals of the cooperative, the rights and responsibilities of members, and the procedures for decision-making, among other things.
Step 4: Register the Cooperative
After the constitution has been adopted, the cooperative can be registered with the South African government. The Cooperative Banks Development Agency (CBDA) is responsible for the registration and regulation of cooperatives in South Africa.
Step 4.1: Obtain Required Documents
Before registering the cooperative, it is necessary to obtain the required documents, including the statement of intent, the constitution of the cooperative, and proof of payment of the registration fee.
Step 4.2: Register with CBDA
The next step is to register the cooperative with the CBDA. This can be done through their website or at their offices. The registration fee varies depending on the size and nature of the cooperative.
Step 4.3: Obtain Tax Clearance Certificate and Other Necessary Documents
After registering the cooperative, it is important to obtain a tax clearance certificate and other necessary documents such as a business license and permits.
Step 5: Start Operating Your Cooperative
Once the cooperative has been registered and all the necessary documents have been obtained, it is time to start operating. This involves implementing the goals and objectives of the cooperative and adhering to the principles of cooperation.
Step 5.1: Elect a Board of Directors
The cooperative must elect a board of directors to manage its affairs. The board of directors is responsible for making decisions on behalf of the cooperative and ensuring that the cooperative's objectives are met.
Step 5.2: Promote and Market the Cooperative
Lastly, it is important to promote and market the cooperative to attract new members and customers. This can be done through various marketing channels such as social media, community events, and word of mouth.
Registering a cooperative in South Africa involves several steps, including defining the purpose and goals of the cooperative, recruiting members, drafting and adopting a constitution, registering the cooperative with the government, and starting to operate. By following these steps, a cooperative can register successfully and operate democratically and sustainably.