Nghị định 41-CP năm 1997 về Điều lệ mẫu Hợp tác xã thương mại

THE GOVERNMENT ---------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom Happiness --------------
No. 41-CP	Hanoi, April 29, 1997

 

DECREE

ISSUING THE MODEL STATUTE OF COMMERCIAL COOPERATIVES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;
Pursuant to the Law on Cooperatives of March 20, 1996;
At the proposal of the Minister of Trade,

DECREES:

Article 1.- To issue together with this Decree the Model Statute of Commercial Cooperatives.

Article 2.- The Minister of Trade shall have to guide the implementation of this Model Statute.

Article 3.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government and the President of the Vietnam Federation of Cooperatives shall, within their respective powers and responsibilities, organize the implementation of this Decree.

Article 4.- This Decree takes effect 15 days after its signing. The earlier stipulations which are contrary to this Decree are now annulled.

 

ON BEHALF OF THE GOVERNMENT FOR THE PRIME MINISTER DEPUTY PRIME MINISTER Phan Van Khai

 

THE MODEL STATUTE OF COMMERCIAL COOPERATIVES

(Issued together with Decree No.41-CP of April 29, 1997 of the Government)

Chapter I

GENERAL PROVISIONS

Article 1.- Definition of Commercial Cooperative:

A commercial cooperative is an economic organization of persons who share common need and interests, and volunteer to contribute capital and labor to establish it under the Law on Cooperatives and this Model Statute, in order to conduct commercial and commercial service activities, with a view to bringing into play the strength of the collective and of each cooperative member, expanding its business network and raising the service quality, thus contributing to improving socio-economic conditions of cooperative members and the community.

Article 2.- Scope of regulation of the Model Statute:

The Model Statute of Commercial Cooperatives shall apply to cooperatives which operate in one or more domains defined in Clause 3, Article 5 of this Model Statute.

Article 3.- The name, logo, address, telephone and fax numbers and statutory capital of a commercial cooperative:

The specific statute of a commercial cooperative must state its name (the full name in Vietnamese and the abbreviated name); its logo (if any), the address of its head office, its telephone and fax numbers (if any) and its statutory capital.

Article 4.- The principles of organization, rights and obligations of a commercial cooperative:

A commercial cooperative shall be organized in accordance with principles prescribed in Article 7 of the Law on Cooperatives and shall exercise its rights and perform its obligations in accordance with provisions of Articles 8 and 9 of that Law.

Article 5.- Organizational structure and tenets of operation of a commercial cooperative:

1. To be established, a commercial cooperative must have at least 15 members; a cooperative in mountainous, deep-lying and remote areas must have at least 7 members.

2. A commercial cooperative shall be organized in a village, hamlet, ward or commune. Depending on the needs, the capabilities of cooperative members and their managerial capacity, the cooperative can enlarge its organizational structure, regardless of the administrative boundary.

3. The fields of business operation:

A cooperative can select fields for its commercial and commercial service activities which are not prohibited by law;

a) Organizing the consumption of agricultural, forest, aquatic and sea products and foods produced by the cooperative members or other persons in the locality; selling products, goods and supplies in service of production and daily life.

b) Acting as sale and purchase agent for State trade enterprises or enterprises of other economic sectors, including goods for social policies or in service of people in mountainous, deep-lying and remote areas.

c) Organizing the purchase and processing of agricultural, forest, aquatic and sea products in order to raise the value and quality of products in circulation, conducting export activities, thus contributing to improving the living conditions of cooperative members and other people in the locality.

d) Conducting restaurant, guest-house and hotel business in various forms and on different scales to meet the market demand.

e) Providing commercial services of various types to meet the market demand and according to the capacity of the cooperative.

Article 6.- The legal person status and financial autonomy of the commercial cooperative:

1. The cooperative shall have the legal person status from the date it is granted the business registration certificate.

2. The cooperative is an independent cost-accounting business unit, and is equal before law with enterprises of other economic sectors.

3. The cooperative has its own seal and is entitled to open accounts (including foreign currency accounts) at banks.

4. The cooperative is financially autonomous, takes self-liability for its business efficiency by its assets; has to fulfill its obligations toward the State in accordance with the provisions of law. The cooperative is liable for its debts and other obligations with the whole capital and assets under its ownership.

Article 7.- Agencies performing State management over commercial cooperatives:

The commercial cooperatives shall be subject to the State management by the People�s Committees of various levels and specialized management agencies in accordance with provisions of law.

Article 8.- The Party and mass organizations in commercial cooperatives:

The Communist Party of Vietnam�s organization in a cooperatives shall operate under the Constitution, the laws of the State and the regulations of the Party. The Trade Union, other socio-political organizations and militia and self-defense forces in cooperatives shall operate according to the Constitution, laws and the statutes of such organizations.

Chapter II

MEMBERSHIP OF A COMMERCIAL COOPERATIVE

Article 9.- Criteria for commercial cooperative membership:

Every Vietnamese citizen aged from eighteen years upward who has full capacity for civil acts, approves the Statute of a commercial cooperative and voluntarily files application for joining the cooperative can be admitted to the commercial cooperative.

Article 10.- Cooperative member representing a family household:

A family household that wishes to and willingly joins the commercial cooperative shall have to nominate its representative eligible for cooperative membership to make application for membership. The representative of a family household who is a member of the commercial cooperative shall have the same rights and obligations as any other cooperative member.

Article 11.- Rights of the cooperative member:

1. To participate in the congresses of cooperative members, or nominate delegates to attend the congresses and the meetings of cooperative members to discuss and vote on the work of the cooperative.

2. To stand for, nominate or elect members of the Managing Board, the Control Board or other posts in the cooperative.

3. To make proposals or suggestions to the Managing Board, the Manager and the Control Board on the operation and organization of management of the cooperative and request for reply.

4. To request the Managing Board, the Manager or the Control Board to convene an extraordinary congress of cooperative members in accordance with Clause 5, Article 14 of this Model Statute.

5. To be provided with information on the demand, supply capacity, prices, quality of goods and services, forms and modes of services in each specific period.

6. Cooperative members directly working in the cooperative shall be provided by the cooperative with professional training, skill fostering and upgrading, according to the capability of the cooperative.

7. To enjoy dividends annually distributed according to his/her capital and labor contributions and the extent he/she uses the services of the cooperative.

8. To benefit from the common social welfare of the cooperative. The cooperative members shall be entitled to participate in social insurance in accordance with provisions of law.

9. To assign part or the whole of his/her contributed capital and rights and obligations to another cooperative member in accordance with procedures set by the Congress of cooperative members. Such assignment shall be effected only when the total of initially contributed capital and newly contributed capital of the assignee does not exceed the limit prescribed in Point b, Clause 1, Article 24 of this Model Statute.

10. To enjoy priority to work for the cooperative and to be paid according to labor contract between him/her and the cooperative.

11. To be entitled to leave the commercial cooperative; when applying for leaving the cooperative, the applications must be sent to the Managing Board 60 days in advance. The cooperative leavers shall be given back his/her contributed capital and other interests (if any) in accordance with provisions in Point d, Clause 1, Article 24 of this Model Statute. In cases where the cooperative member dies, his/her contributed capital and interests and obligations shall be inherited in accordance with the provisions of law.

12. To be rewarded in accordance with the provisions of the Statute of the cooperative.

13. A commercial cooperative member is entitled to join many cooperatives in different branches and trades.

Article 12.- Obligations of the cooperative member:

1. To abide by the Statute and the Rules of the commercial cooperative and the resolutions of the congress of cooperative members.

2. To contribute capital in accordance with the provisions of the Statute of the cooperative.

3. To protect the assets of the cooperative; to fulfill the economic commitments to the cooperative; to pay social insurance premium in accordance with provisions of law.

4. To bear, within his/her contributed capital, the joint liability for the debts, risks, damage and losses of the cooperative.

5. To compensate for the damage caused by himself/herself to the cooperative in accordance with the resolutions of the Congress of cooperative members.

Article 13.- Termination of cooperative membership:

1. The cooperative membership shall be terminated in one of the following cases:

a) The cooperative member dies;

b) The cooperative member has completely transferred his/her contributed capital as well as his/her interests and obligations to another person in accordance with the provisions in Clause 9, Article 11 of this Model Statute;

c) The cooperative member is allowed to leave the cooperative in accordance with the resolution of the Congress of cooperative members;

d) The cooperative member loses his/her capacity for civil acts;

e) The cooperative member is expelled from the cooperative by the Congress of cooperative members.

2. The interests and obligations of a cooperative member, when his/her cooperative membership is terminated, shall be settled in accordance with Point d, Clause 1, Article 24 of this Model Statute.

Chapter III

ORGANIZATION AND MANAGEMENT OF THE COMMERCIAL COOPERATIVE

Article 14.- The Congress of cooperative members:

1. The Congress of cooperative members or the Congress of delegates of cooperative members (hereafter commonly referred to as the Congress of cooperative members) has the highest decision-making power in the cooperative.

2. The Congress of cooperative members shall discuss and make decisions on the following issues:

a) The annual reports on the operation of the cooperative, the Managing Board and the Control Board;

b) The financial-accounting reports, the decision on profit-sharing proportion and settlement of losses;

c) The orientation of operation, the tasks and objectives and modes for capital mobilization for the next year or the new term of the cooperative;

d) The election or dismissal of the Manager of the cooperative; the election, supplementary election or dismissal of members of the Managing Board and the Control Board;

e) The level of wage, remuneration or average monthly expenses of the Manager and the Deputy Manager of the cooperative (if any) and other members of the Managing Board, the Control Board and other posts of the cooperative;

f) The compensations for damage caused by the cooperative members, the members of the Managing Board, or the Control Board and other managing personnel of the cooperative;

g) The extent of handling of violations by cooperative members as prescribed in Clause 3, Article 35 of this Model Statute;

h) The settlement of protests;

i) The approval of the admission of new cooperative member(s), allowing cooperative member(s) to leave the cooperative or the expulsion of cooperative member(s);

j) The election of delegates to attend congresses of the organization of which the cooperative is a member;

k) The cooperative�s joining or leaving the Union of Cooperatives and the Federation of Cooperatives; the merger, splitting or dissolution of the cooperative;

l) The increase or decrease of the minimum capital contributed by each cooperative member, when necessary;

m) The amendment and supplement to the Statute of the commercial cooperative.

3/ The Congress of cooperative members may also decide other issues proposed by the Managing Board, the Control Board or at least one third of the total number of cooperative members.

4. The regular Congress of cooperative members shall be convened once a year by the Managing Board within three months from the date of closing the annual final accounts. Ten days before the opening of the Congress, the Managing Board shall notify each cooperative member of the convening date, venue and agenda of the Congress.

5. The extraordinary Congress of cooperative members shall be convened in the following cases:

a) When more than one-third of the total number of cooperative members request it;

b) When the number of members of the Managing Board or the Control Board falls short of two-thirds of the number prescribed by the Congress of cooperative members;

c) The Managing Board and the Control Board want to present to the Congress for settlement issues that are beyond their powers;

d) In cases prescribed in Point a, Clause 4, Article 21 of this Model Statute.

Article 15.- The number of cooperative members or delegates of cooperative members (hereafter commonly referred to as cooperative members) and voting at the Congress of cooperative members:

1. The Congress of cooperative members must be attended by at least two thirds of the total number of cooperative members. If the number of participants falls short of this level, the Congress must be postponed; the Managing Board or the Control Board shall have to reconvene the Congress within 15 days.

2. The decisions on the Statute amendment, the merger, splitting or dissolution of the cooperative shall be adopted only when at least three fourths of the cooperative members present at the Congress vote for it. The decisions on other issues shall be adopted when they are voted for by more than half of the cooperative members present at the Congress.

3. A cooperative with a membership of 150 or more may organize a Congress of delegates of cooperative members. Depending on the number of cooperative members, the Managing Board shall decide the number of cooperative members (from 3 to 7 cooperative members) to elect one delegate. If the number of the remaining cooperative members is more than half of the prescribed number of cooperative members for one delegate, one more delegate shall be elected.

4. At the Congress of cooperative members and other meetings of the cooperative, each cooperative member shall have only one vote, irrespective of his/her capital contributions or position in the cooperative.

Article 16.- The Managing Board:

1. The Managing Board of the cooperative is elected by the Congress of cooperative members, takes responsibility for its decisions before the Congress of cooperative members and before law.

2. The Managing Board of the cooperative manages and runs all work of the cooperative. It is composed of the Manager, the Deputy Manager (if any) and other members. The number of members of the Managing Board shall be determined by the Congress of cooperative members. A cooperative with less than fifteen members can elect only the Manager to carry out the tasks and powers of the Managing Board.

3. A member of the Managing Board shall be assigned one or a number of duties in the management of the cooperative.

4. The Managing Board meets at least once every month and each meeting must be attended by at least two-thirds of the members of the Managing Board. The Managing Board shall operate on the principles of collective work and make decisions by majority vote. In cases where the number of votes for is equal to that of votes against, the vote of the person who presides over the meeting shall be the decisive vote; the term of the Managing Board shall be at lest two years and shall not exceed five years to be determined by the Congress of cooperative members.

Article 17.- Criteria for Managing Board membership:

1. A member of the Managing Board must be a cooperative member having professional qualification or experience in commercial-service business, having the ability to manage the cooperative and good ethical qualities.

2. A member of the Managing Board must not concurrently be a member of the Control Board, or the chief accountant or cashier of the cooperative, nor a parent, spouse, offspring or sibling of one of such persons. Besides the above-said criteria, the Congress of cooperative members can set other criteria if necessary.

Article 18.- Duties and powers of the Managing Board:

1. To strictly abide by the Statute of the cooperative and the resolutions of the Congress of cooperative members.

2. To select and appoint the chief accountant, decide on the organizational structure of the specialized and professional sections of the cooperative.

3. To elaborate the orientation and plan for commercial-service business activities, the mode of capital mobilization and other activities of the cooperative.

4. To evaluate the business efficiency; approve the reports on financial final settlement to be submitted to the Congress of cooperative members.

5. To manage the assets and capital of the cooperative.

6. To consider the admission of new cooperative members and the permission for cooperative members to leave the cooperative (except for the expulsion of cooperative members) and report to the Congress of cooperative members for approval.

7. To decide the forms and levels of reward for cooperative members and organizations as well as individuals with meritorious achievements in the building of the cooperative.

8. To decide the handling of violations by cooperative members and managerial personnel of the cooperative in accordance with Clause 2, Article 35 of this Model Statute.

9. To prepare the agenda of the Congress of cooperative members and convene the regular or extraordinary Congress of cooperative members in accordance with Clauses 4 and 5, Article 14 of this Model Statute.

Article 19.- The Manager of the cooperative:

1. The Manager of the cooperative is elected by the Congress of cooperative members from among the members of the Managing Board, is the cooperative�s representative at law and is responsible before the Managing Board, all cooperative members and before law for the management of the cooperative.

2. The Manager of the cooperative has the following duties and powers:

a) To draw up the procedures for the establishment and business registration of the commercial cooperative as prescribed by law;

b) The Manager of the cooperative is the person who runs all concrete activities of the cooperative, including:

- To efficiently use all resources of the cooperative for business, to preserve and develop the capital of the cooperative, and take responsibility for the business efficiency of the cooperative.

- To organize the execution of the plans for business and other activities of the cooperative in accordance with the resolutions of the Congress of cooperative members, the decisions of the Managing Board and to report the results to the Managing Board and the Congress of cooperative members.

- To organize the execution of plans for profit distribution, ensure the interests and obligations of the cooperative members as stipulated by the Statute of the cooperative, the resolutions of the Congress of cooperative members and the decisions of the Managing Board; to pay wages to cooperative members directly engaged in labor and other persons hired by the cooperative under labor contracts.

- To sign the reports, contract documents and vouchers related to the operation of the cooperative within his/her assigned powers and duties.

c) To hire laborers if the cooperative members fail to meet the business requirements of the cooperative; the hiring and sacking of such laborers shall comply with provisions of the Labor Code.

d) To convene and preside over the meetings of the Managing Board.

3. In his/her absence, the Manager of the cooperative can authorize the Deputy Manager (if any) or a member of the Managing Board to run the work of the cooperative.

Article 20.- The Control Board:

1. The Control Board is elected by the Congress of cooperative members for a term corresponding to that of the Managing Board.

2. The Control Board is a body independent from the Managing Board.

3. The members of the Control Board must have professional knowledge and good ethical qualities.

4. A member of the Control Board must not concurrently be a member of the Managing Board, or the chief accountant or cashier of the cooperative, or a parent, spouse, offspring or sibling of one of such persons.

5. The Control Board shall elect its Chairman to run its work. A cooperative with less than fifteen members may elect only one controller. For a cooperative with more than fifteen members, the number of members of the Control Board shall be decided by the Congress of cooperative members.

Article 21.- Duties and powers of the Control Board:

1. To examine and supervise the activities of the Managing Board, the Manager of the cooperative, the professional staff and the cooperative members in the observance of the Law on Cooperatives, the Statute and Rules of the cooperative, the resolutions of the Congress of cooperative members and the commercial policies.

2. To examine the finance, accounting, distribution of income, settlement of losses, the use of funds of the cooperative, the use of assets, borrowed capital and subsidies from the State.

3. The members of the Control Board are entitled to attend meetings of the Managing Board.

4. To prepare the agenda for the extraordinary Congress of cooperative members which shall be convened in one of the following cases:

a) The Managing Board fails to apply or inefficiently applies measures to prevent acts of violation of law, the Statute and Rules of the cooperative and the resolutions of the Congress of cooperative members as requested by the Control Board.

b) The Managing Board fails to convene the extraordinary Congress of cooperative members as prescribed in Points a, b and c, Clause 5, Article 14 of this Model Statute.

5. To receive and settle complaints and denunciations related to the work of the cooperative.

6. To request officials and employees of the cooperative to provide data, documents and other information related to the business activities of the cooperative and the protests and denunciations in service of inspection work, but not to use such documents and information for other purposes.

7. To notify the Managing Board of the results of the inspection and report to the Congress of cooperative members the results of its operation; at the same time certify the public financial reports of the Managing Board.

Article 22.- Leaving the Managing Board and the Control Board:

A member of the Managing Board or the Control Board shall resign from his/her post in one of the following cases:

1. His/her term of office terminates;

2. He/she has sent in his/her resignation which has been approved by the Congress of cooperative members;

3. He/she is no longer a cooperative member;

4. He/she is dismissed by the Congress of cooperative members.

Article 23.- Management of the work of the commercial cooperative in case of vacancy (vacancies) in the Managing Board or the Control Board:

In case of vacancy (vacancies) in the Managing Board or the Control Board, the existing members shall still run the activities of the cooperative as usual until the extraordinary Congress of cooperative members is convened and elects supplementary member (members).

Chapter IV

CAPITAL, ASSETS, DISTRIBUTION OF PROFITS AND SETTLEMENT OF LOSSES

Article 24.- The capital of the commercial cooperative includes:

1. Capital contributed by the cooperative members:

a) When joining the cooperative, cooperative members must contribute shares (hereafter referred to as contributed capital). The minimum level of the contributed capital of each member shall be determined by the Congress of cooperative members. For business branches and trades that require a prescribed capital as stipulated by the Government, the total capital contributed by the cooperative members must not be lower than the prescribed capital set for corresponding branches or trades already registered in accordance with provisions of law.

b) A cooperative member may contribute capital (in cash or in kind) in one lumpsum, which may be higher than the minimum level, but shall not exceed 30 percent of the statutory capital of the cooperative. Cooperative members who are incapable of contributing the minimum capital in one lumpsum may make such contribution in several installments, but the time limit shall not exceed six months. For cooperative members who directly contribute labor to the cooperative or use services of the cooperative, the time limit for capital contribution may be longer (more than six months) and shall be decided by the Congress of cooperative members.

c) The value of the minimum contributed capital of each cooperative member shall be readjusted when necessary, with a view to maintaining and developing the cooperative. The specific level of each readjustment shall be decided by the Congress of cooperative members.

d) The contributed capital shall be returned to the cooperative member in cases specified in Points c, d and e, Clause 1, Article 13 of this Model Statute. The return of capital contributed by cooperative members shall be based on the financial situation of the cooperative at the time of capital reimbursement, after the cooperative has made the annual final settlement and settled all the economic interests and obligations of the cooperative members towards the cooperative. The mode and time limit for returning the contributed capital to the cooperative member shall be decided by the Congress of cooperative members.

2. Capital borrowed from cooperative members and enterprises of other economic sectors with interest rates mutually agreed upon in accordance with provisions of law and the resolutions of the Congress of cooperative members.

3. Capital borrowed from banks and other credit organizations under current policies and regimes.

4. Capital subsidized by the State, capital from other sources of donations (if any).

5. Undistributed funds formed during the process of business operation.

Article 25.- Forms of the ownership over the capital and assets of the commercial cooperative:

The assets (head office premises, stores, warehouses, means and equipment...) and capital (including shares, State-subsidized capital, non-refundable aid, funds...) of the cooperative are under the following forms of ownership:

1. Individual ownership of cooperative members: over the contributed capital and other assets equivalent in the value of the contributed capital.

2. Collective ownership of the cooperative: over assets, State-subsidized capital of the cooperative, other aid and funds set up in accordance with decisions of the Congress of cooperative members.

Article 26.- After-tax profits of the cooperative shall be distributed as follows:

1. To make up for the losses of the previous year (if any).

2. To deduct for various funds of the cooperative:

a) The production and business development fund: shall be used for reinvestment to raise the capital, expand the production, business and commercial service activities of the cooperative.

b) The reserve fund: shall be used to overcome unexpected difficulties in business.

c) The welfare fund: shall be used for social policies in the cooperative and the community.

d) The reward fund: shall be used to encourage and reward persons who have recorded outstanding achievements in business and made contributions to the building of the cooperative.

e) Other funds: shall be used for fostering, training and retraining officials and employees of the cooperative, for marketing, etc.

3. The profits shall be distributed according to the capital and labor contributions of cooperative members, the Statute of the cooperative and the resolutions of the Congress of cooperative members.

4. The profits derived from capital under the collective ownership as mentioned in Clause 2, Article 25 of this Model Statute shall be supplemented to the production and business development fund of the cooperative.

5. If the cooperative achieves high annual business efficiency, it can deduct parts of the production and business development fund and the welfare fund for each cooperative member�s contributed capital so as to raise the value of his/her shares.

6. The remaining profits shall be distributed according to the extent the services of the cooperative are used.

The percentage of annual profit distribution shall be determined by the Congress of cooperative members.

Article 27.- The cooperative makes losses in its business or deficits in its capital and assets:

1. In case where the losses are incurred due to objective causes, the cooperative shall be entitled to make deductions from various funds, the profits of the following accounting period or from contributed capital of cooperative members to make up therefor.

2. If the losses are caused by individuals due to subjective reasons, the concerned individuals shall, depending on the extent of the losses, have to make compensation.

3. Depending on the extent of losses or deficits, the Congress of cooperative members shall decide the amounts to be made up for or compensated.

Article 28.- Settlement of assets and capital when the commercial cooperative is dissolved:

1. When being dissolved, the cooperative must hand over the State-subsidized capital, infrastructure and public welfare works which are being used jointly by cooperative members and local people, such as: kindergartens, creches, cultural houses, power stations... to the local administration for management and use for public purposes.

2. The remainders of the assets, capital, funds... after setting all debts of the cooperative and the dissolution costs shall be distributed to the cooperative members according to their contributed capital values at the time of dissolution.

Chapter V

JOINING THE UNION OF COOPERATIVES AND THE FEDERATION OF COOPERATIVES, MERGER, SPLITTING, DISSOLUTION AND BANKRUPTCY OF THE COOPERATIVE

Article 29.- Joining the Union of Commercial Cooperatives:

A cooperative can join or leave the Union of Commercial Cooperatives or the Union of Cooperatives in various branches and trades; can merge itself into another cooperative or split itself into two or more cooperatives. The Congress of cooperative members shall decide the organizational structure suitable to concrete conditions of the cooperative in accordance with provisions of law.

Article 30.- The procedures for joining or leaving the Union of Cooperatives, merging or splitting the commercial cooperative shall be carried out in accordance with provisions of the Law on Cooperatives and the relevant legal documents.

Article 31.- The process of joining or leaving the Federation of Cooperatives by the commercial cooperative must comply with provisions of the Law on Cooperatives and the Statute of such organization.

Article 32.- The commercial cooperative shall be dissolved in the following cases:

1. Voluntary dissolution under the resolution of the Congress of cooperative members.

2. Compulsory dissolution in one of the following cases:

a) After twelve months from the date it is granted the business registration certificate, the cooperative still fails to commence its operation.

b) The cooperative had commenced its operation after being granted the business registration certificate but it has ceased operating for twelve consecutive months.

c) For six consecutive months, the membership of the cooperative does not reach the minimum level as prescribed in Clause 1, Article 5 of this Model Statute.

d) For eighteen consecutive months, the cooperative fails to organize its regular Congress of cooperative members without plausible reasons.

e) Other cases as prescribed by law.

Article 33.- Bankruptcy of the commercial cooperative:

The request for declaration of bankruptcy of the commercial cooperative shall be handled in accordance with the Law on Bankruptcy of Enterprises.

Chapter VI

REWARD AND HANDLING OF VIOLATIONS

Article 34.- Reward:

1. The cooperative members, officials or employees of the cooperative who have recorded outstanding achievements in production, business and commercial service activities, in the protection of the cooperative�s assets, have had innovations that have yielded economic efficiency or meritorious contributions to the building of the commercial cooperative shall be given material and spiritual rewards.

2. Organizations and individuals outside the cooperative who have contributed to the building of the cooperative shall also be rewarded.

3. The form and level of reward in each case shall be decided by the Managing Board.

Article 35.- Handling of violations:

1. Any person who violates the Law on Cooperatives, the Model Statute, the Statute and the Rules of the cooperative and the resolutions of the Congress of cooperative members shall, depending on the nature and extent of violations, be reprimanded, warned, demoted or expelled from the cooperative or be subject to administrative sanctions or examined for penal liability; if damage is caused to the assets of the cooperative, compensation must be made.

2. The Managing Board is entitled to reprimand, warn or demote people holding various posts in the cooperative (except for the members of the Managing Board and the Control Board) and request the Congress of cooperative members to expel cooperative members.

3. The Congress of cooperative members can reprimand, warn, dismiss the members of the Managing Board, the Control Board and expel cooperative members from the cooperative.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 36.- The specific statute of each commercial cooperative:

Pursuant to the Law on Cooperatives and this Model Statute, commercial cooperatives shall elaborate their own specific statutes, the specific statute of each cooperative must not be contrary to the provisions of the Model Statute, and must be approved by the Congress of cooperative members and the agency that has granted the business registration certificate to the cooperative.

Article 37.- Amendment and supplement to the specific Statute of the commercial cooperative:

Only the Congress of cooperative members has the right to amend and/or supplement the specific Statute of the commercial cooperative and such amendment and supplement must be approved by the agency that has granted the business registration certificate to the cooperative.