S-38 - Cooperative Syndicates Act

Full text
39. The association may, by by-law, order the creation, out of a portion of its yearly profits, of one or more funds under such names as it may select, which funds cannot be wholly or partially divided among the associates or auxiliary members, except in case of dissolution. The by-laws shall prescribe the amount and the manner of forming such funds, their object and management, the conditions required to vary the same, the proportion of the yearly profits to be set apart for their accumulation, and the amount they must respectively attain.
Each credit association shall apply at least ten per cent of its net annual profits to the creation of such funds, until they have reached, by successive annual applications, an amount equal to at least the maximum of the liabilities represented at any time by the shares of the association, and any other resources thereof; and when this limit is reached, the said percentage of the profits may be diminished, but not below five per cent so long as the aggregate of such fund is less than twice the maximum amount of the liabilities. Whenever the said maximum has been diminished by withdrawals, or whenever the funds, whether once complete or in course of formation, have been impaired, the payments above mentioned shall be continued or resumed until the said funds have reached the limit prescribed by this section. Nevertheless if the liabilities are less than the aggregate of the said funds, the difference shall not under any circumstances be divided between the members.
At least one-half of such funds shall be invested in the manner prescribed by section 40.
R. S. 1964, c. 294, s. 39.