Starting a cooperative society in Nigeria is fairly easy, as long as the minimum number of people necessary by law is fulfilled. This is because of the government’s promotion and support for cooperatives.
To begin a cooperative society, however, you must have a genuine reason, a savior mindset, willing to bring people together and help one another attain financial and economic freedom. So forming a cooperative society may be one of the best moves you can make right now or in the near future.
What Is A Cooperative Society?
A cooperative society is a jointly owned commercial enterprise that is officially registered and operated by persons who share the same goal and benefit members. Cooperative Societies in Nigeria are governed by the Nigerian Cooperative Societies Act, which requires Cooperative Societies to be registered.
According to the Nigeria Law on Cooperation, a cooperative society is a legal body with its own bank account, balance sheet, stamp, and so on.
Cooperatives in Nigeria are overseen by the Office of the Federal Directorate of Cooperatives, which was formerly under the Ministry of Agriculture but was transferred to the Ministry of Labour and Productivity in 2015.
Depending on the state of registration, several offices under different Ministries handle the registration of cooperative societies.
Starting A Cooperative Society In Nigeria
Every business or endeavour necessitates time, focus, and confidence in one’s abilities to begin. However, the existing laws are more liberal and favorable to cooperatives. So, forming and administering a cooperative may be less difficult than you think. The processes of starting and managing a cooperative society in Nigeria are outlined here:
1. Create The Concept
You came up with the cooperative concept, so you must expand on it. The first consideration should be the type of cooperative you wish to establish, as well as the needs that the cooperative must meet in your community.
If you live on a farm, you could join a farmers’ cooperative. The thrift and credit cooperative is another option, while the multi-purpose cooperative is the most frequent. So consider your surroundings, the situation, and what will benefit you and the greater good.
2. Get People To Join You
Speaking with those you believe will benefit the most from your concept occurs after you’ve developed it with a clear plan. Motivate and persuade others to follow you.
Find people that are eager to join your cooperative and are excited about your company’s concept. Develop your mission statement and fundamental principles during a discussion with potential members. Explain in detail your business idea and how it will improve the lives of cooperative members. Choose the cooperative’s name and address during the meeting.
3. Carryout A Feasibility Study
The cooperative’s long-term viability will be dependent on a thorough feasibility analysis. When doing feasibility studies, you must consider the types of people in your area. Their schooling and background. The next step is to consider the kind of businesses that will be lucrative as well as the market for the firm. You should also evaluate the amount required to get the firm started.
4. Register The Cooperative With CAC
After conducting rigorous feasibility studies and obtaining the necessary cooperative membership, the next step is to register the firm.
As an example, the following information or documents are required for the successful registration of a cooperative in Nigeria:
- The name of the cooperative: this is the name of the cooperative. Although this is not a requirement, the name should reflect the type of cooperative you wish to run.
- The proposed location, address, and local government area of the cooperative: If you are starting a cooperative, you may use your home address as the official address of the cooperative. If the cooperative is among your coworkers, you may choose your workplace as the meeting location. And that is the address you provide.
- The cooperative’s goals and objectives: The cooperative’s goals and objectives must be clearly conveyed and created. This can be accomplished with the required minimum number of members.
Documents Required For Registration Of Cooperative Society In Nigeria
- The Membership bylaws and rules: These are the rules that regulate how the cooperative operates.
- Four copies of the cooperative’s proposed bylaws
- Letter of Intent
- A feasibility study of the cooperative’s proposed business model
- Certified copy of the resolution adopted at the cooperative officer’s first meeting of the members.
- Cooperative official stamp duty (to be presented following name selection, availability, and approval)
Procedure For Registering A cooperative society In Nigeria
- An application is sent to the Director of Cooperatives requesting that your intention to become a Cooperatives Society be duly registered.
- The application must be signed by the minimum number of members required for the cooperative’s category. If you are applying for a multi-purpose cooperative society, for example, 10 people must sign.
- Members are given a form to fill out and return while a name search is performed to determine availability.
- When available, a stamp with the cooperative’s name and logo, along with the other documents indicated above, must be presented for verification and approval.
- If the Director of Cooperatives is pleased after verification, a letter of recognition is issued. This letter authorizes the cooperative to operate as a cooperative society for three years.
- After three years, a certificate of registration will be granted, together with a certified copy of the cooperative’s bylaws. (Note: In other states, the number of years of certificate issuing may be shorter.)
Cost Of Registering A Cooperative Society In Nigeria
The costs associated with establishing a cooperative society vary depending on the type of interest and the applicable state.
You could have to pay something different in Lagos State than you would in Kano, Sokoto, or Ebonyi States.
According to my observation during the process of registering a multipurpose cooperative for a group to which I belong, the cooperative officer in the local government has already created a template of the documents needed for registration. They can also help you in compiling these documents, easing the burden of hiring a lawyer to draft bylaws for your society.