Cooperative Legislation

Housing Cooperative Law

Preamble
The People's Assembly has decided the following law, which we have issued:
Issuance Articles

The provisions of the law herein on Housing Cooperatives shall apply
Housing Cooperative units shall not subject to law no. 317 for year 1965 on cooperative societies and law no. 128 for year 1957 on exempting cooperative societies from taxes and fees in addition to the provisions of law no 109 for year 1975 on the consumer cooperatives. The provisions of the regulations, general organizational decisions and internal systems with regard to housing cooperative societies shall continue to be enforced as of the date of adopting this law herein in a manner that does not conflict with its provisions until the issuance of regulations and general organizational decisions and bylaws in accordance with the provisions of the law herein.

Construction and housing cooperative societies existing at the time this law comes into effect shall  re-declare their bylaws and regulations in accordance with the provisions of the law herein.

In case such declaration has not been made within a year, the competent governor shall form a temporary board of directors to undertake the declaration within a year as of the date of its formation, otherwise such cooperative society shall be dissolved by a decision of the competent minister.

            The urgent general assembly shall replace the extraordinary general assembly in the declaration process, and the federal societies shall replace the general cooperative society in its rights and obligations assumed at the time of issuance of this law.

A temporary board of directors shall partake the duties and responsibilities of the union stipulated in the law herein. The board of directors shall be appointed for two (2) years through which the declaration process of the union bylaws and the formation of the union board of directors shall be completed provided that 3/4 of the members of the board of directors shall be members of the construction and housing cooperative societies.
Cooperative societies board of directors shall partake its duties throughout the enforcement of such law temporarily until the board is formed pursuant to the law herein.
In the provisions of the law herein: Competent minister shall be deemed to mean: the Minister of Housing, Utilities and Urban Communities Competent administrative authority shall be deemed to mean the General Authority for Construction and Housing Cooperatives The union shall be deemed to mean the Central Housing Cooperative Union

Other  provisions contradicting the provisions of the law herein shall be cancelled.

The provisions of the law herein shall be published in the official gazette and shall apply as of the date of publication. This law shall be sealed with the seal of state and shall apply as one of its laws.

Housing Cooperative Law Chapter 1

Housing cooperative is a type of cooperatives that aims at providing affordable housing units and services to  members in accordance with the cooperative principles and values and the state’s socio-economic development plan.

Construction and Housing Cooperative societies fund shall be possessed by the such societies and shall not be divided among members. Any authority shall not dispose of the share of such cooperative societies according to the provisions of the law herein.

Through a presidential resolution, public ownership of a project or public funds shall be transferred to cooperative ownership through paying installments without interests and the competent authority shall direct this project to establish a cooperative society
Cooperative ownership shall have all the civil and criminal guarantees and privileges prescribed for public ownership, and shall not be permissible to own the funds of cooperative societies or acquisition of any in-kind right over them by prescription, and it is permissible, after the consent of the competent administrative authority, to pay the infringement that occurs on the funds of these societies through an administrative manner. The competent administrative authority shall have the right to collect the dues of the housing cooperative units from the members and shall have the right to seek help, free of charge, from governmental or local agencies, including dues of the federation.
Construction and housing cooperative societies shall not dispose of real estate that they construct or acquire for non-members of the association unless by a decision of the general assembly after taking the opinion of the administrative authority and the federation
Without prejudice to the fixed-date dispositions prior to the enforcement of this law, a member shall not, during the ten years following the date of Allocation , dispose of the cooperative real estate allocated to him or devolved to him other than the spouse or relatives up to the third degree and the person to whom the disposition was made shall become a member of the society by virtue of the law. In the event of disposition to the cooperative society within the aforementioned ten years, the disposition shall be made at the prevailing price at the time of sale pursuant to the law herein. If the cooperative society does not accept the purchase at the aforementioned price, the matter shall be presented to the competent administrative authority, which may decide whether to buy the property at the price referred to, or permit the member to dispose of it to a third party who becomes a member of the cooperative society by virtue of the law.
Referring to lands allocated to members as of the date of this law’s entry into force, if the member does not build a complete housing unit within five years as of the date of the decision to allocate the land with full utilities, the general assembly may cancel the allocation of such land to him unless he presents justifications that the GA accepts. This provision herein shall apply to the member who is lax in paying the sums determined by the cooperative society in return for allocating a real estate to him or paying the value of utilities within the due date for in accordance with the provisions of the internal system.

A- The cooperative real estate shall remain loaded with the costs and committed to construction requirements imposed by the internal system of the cooperative society on its real estate no matter how the actions of the transfer of ownership proceeded.

B- A member may not, as of the date the law herein entered into force , acquire more than one cooperative property as ownership, unless it is not another cooperative housing  unit in one of the resorts, and repeated usage of such property in violation of this article is null and void.

A member may not during the five years following his receipt of the housing unit allocated to him, use the unit for other than residence purposes in accordance with the provisions of this law.

Chapter Two – Housing Cooperative Units

Cooperative housing entities shall include: 1- Construction and Housing Cooperative Societies 2- Joint Construction and Housing Cooperative Societies 3- Federal Construction and Housing Cooperative Societies 4- Central Housing Cooperative Union

The Construction and Housing Cooperative Society shall be composed of at least thirty (30)  members to work together to achieve their common interests by providing affordable cooperative housing units,  their maintenance, along with residential services; in addition, the incorporation capital may not be less than three hundred pounds.

The Union  may decide to increase the minimum for each of the number of members and the founding capital referred to in the previous paragraph, and this does not apply over existing  cooperative societies at the time of such decision.

The joint construction and housing society shall consist of two or more cooperative societies that share a common interest. The Federal cooperative society shall consist, after the approval of the Federation, of at least five construction and housing cooperative societies located in one governorate district and as soon as it is declared, the cooperative units that are registered or declared become members therein, and the cooperative societies existing in a governorate in which a federal society has not been established may temporarily join the nearest federal society after the approval of the federation until a federal society is established in this province.

The Federation Association is formed after the approval of the Union from at least five cooperative societies for building and housing located within the jurisdiction of a single governorate. Once registered, the registered cooperative units or those that will be registered within its area of operation become its members. The existing societies in a governorate where no Federation Association has been established may temporarily join the nearest Federation Association after the Union’s approval, until a Federation Association is established in that governorate.

The federation consists of cooperative units for construction and housing at the level of the Republic, and all these units become members of the federation once it is established.

Provisions related to building and housing cooperative societies shall apply  to joint and federal societies and the central cooperative union in matters other than those related to a special provision in this law including the exemptions and privileges stipulated in this law.

Chapter Three The Construction and Housing Cooperative Society

The construction and housing cooperative society shall be deemed to be a democratic mass organization that works to provide housing for its members and provide the necessary services for the integration of the residential environment and the commitment of the residential community to care and maintenance. The society sets an annual plan for its activities for each fiscal year and determines the means of its implementation.

Housing Cooperative Law – Chapter Three – Building and Housing Cooperative Association – Section One – Establishment and Registration

Individuals who participate in the establishment of a construction and housing cooperative society and sign the founding contract are considered to be its founders and assume responsibility for setting up its system.
The following procedures shall be followed when establishing and declaring the construction and housing cooperative society: 1- The applicants for the establishment shall prepare the by-laws of the society and sign it along with the founding contract, and elect a tripartite committee from among themselves to delegate it In undertaking the incorporation procedures and accepting subscribers until the date of sending the call for the first general assembly meeting, and ratifying the signatures of the founders from the competent authority in the governorate. 2- The tripartite committee shall collect the subscription value of the incorporation applicants and deposit it in a bank that is located in the same district where the society’s headquarters is located within seven days as of the date of collection. 3- The tripartite committee shall submit to the competent authority in the governorate the association’s articles of incorporation and bylaws signed by the founders. And attesting their signatures or the minutes of the meeting of the founders and the receipt evidencing the deposit of the founding capital. 4- The competent authority in the governorate may request the tripartite committee, by registered receipt letter to submit papers or complete the necessary data to complete the month within the date it specifies. As a result of this request, the validity of the period referred to in Clause 5 of this Article shall be suspended until the date of completing the papers or the required data. 5- The competent authority in the governorate shall decide on the month’s request within sixty days from the date of its submission to it, otherwise the society shall be deemed to be registered by virtue of the law, and the competent authority shall carry out the registration and publication. 6 – The cooperative society shall be notarized in the register prepared for that regard, and the governor shall provide both the authority and the union with a copy of the articles of incorporation. And the rules of procedure and the number of its registration in the register and the publication of a summary of the founding contract and the rules of procedure of the association in the Egyptian Gazette. 7- The cooperative society shall acquire legal personality as soon as it is declared, and every activity undertaken by the incorporation applicants in the name of the association before that. 8- When the refusal decision becomes final, the tripartite committee shall return the subscription value collected on the basis of the foundation to the founders. After deducting the value of the incorporation expenses approved by the competent authority in the governorate in proportion to the contribution of each member.

Chapter 2 Internal system

The minister shall issue the rules to be followed when setting a cooperative society internal system

This system shall include the following:

  1. The name of the society reflecting its cooperative personality, its headquarter and district
  2. The purpose and activities of the cooperative society
  3. The bylaws of the cooperative society taking into consideration democracy, equity and equal opportunities
  4. Share values Membership fees
  5. Membership eligibly criteria and the duration of reviewing the membership request, interactions among members, rights, obligations and punishments along with conditions of withdrawing the membership and the consequences of withdrawal
  6. Wavering and returning the share value along with the real estate to the cooperative society along with withdrawal and re-allocating of empty lands and returning its values in addition to the annual return on such payments after deducting the share of the cooperative society
  7. The start and end date of the fiscal year and the rules of preparing the final account
  8. Financial and administrative documents of cooperative societies
  9. The procedures and regulations of distributing the surplus and collecting allocations
  10. The board members eligibility criteria and the number of board members along with the election procedures in addition to the duties and responsibilities of the chairman, vice chairman, secretary and financial supervisors.
  11. The rules of the rewards of the board members and the workers of the cooperative society
  12. The board convention date and the duties of each board member
  13. The reasons of board membership termination and administrative punishments
  14. The rules of accepting the membership of successors and choosing the member representative in case the member shall fulfill the obligations of the cooperative society.
  15. The rules and procedures of the general assembly meetings and its agenda in addition to the rules of voting including the members who have the right to vote
  16. The rules of investing the profits and deposits of the cooperative society along with lending procedures.
  17. The procedures to be followed when contracting to purchase a real state

The condition in which the member (by the virtue of article 9 in the law herein) may have the right to dispose of his allocated unit to use

Chapter 4 Membership and duties of members

Each Egyptian who is eligible to be a member in a cooperative society according to its bylaws shall have the right to join the society and the board shall not accept further members if the activity of the society does not allow to increase the number of members.

The member shall not be a member in the cooperative society in the following cases:

  • Withdrawal of the membership
  • Not meeting one of the eligible criteria
  • The delay of paying the debts within one year after the due date
  • Committing one of the crimes prescribed in the punishment chapter by the virtue of this law
  • Death of the member
  • Terminating the membership by the virtue of its bylaws

The member shall no longer be a member if the abovementioned cases occurred, after that the general assembly shall call the member concerned to defend himself and the member may not attend to defend himself in the last case.

Chapter 5 Funding

The cooperative society’s capital shall consist of unlimited number of shares; each share costs 10 EGP that shall be paid in the subscription process. The capital shares shall not be seized unless to pay the due of the member to the society The internal system shall state that the members shall pay a regular subscription fees in a due date to cover the maintenance and administrative services and an annual membership fees in a specific date determined by the general assembly as well. The shares shall only be wavered to members of the cooperative society or other members who may accept to join the cooperative society by being a member.

The cooperative societies shall have the right to get loans from the administrative competent authority. Such authorities shall not have the right to take any return on investment (ROI) through such loans that are estimated at a price higher than the ROI paid by agricultural societies to the village bank.

The state shall stipulate in the bylaws how the abovementioned entities shall compensate the ROI.

Construction projects that aims at providing residential units to be owned or rented by the members shall have the priority over other cooperative projects to obtain lands and get loans along with other cooperative facilities.

The public sector entities shall have the right to allocate the no interest loans needed to fund the activities of the construction and housing cooperative societies through the units profits. Such cooperative societies shall get the loans by a resolution from economic unity board chairman.
The cooperative society board shall have the right to accept grants and recommendations allocated to serve the society The administrative authority shall accept the grants and recommendations offered to the cooperative society

Chapter 6 Administration The General Assembly (GA)

The General Assembly (GA) is the apex body that has the right to dispose of real estates, waver rights and use questionable debts.

The general assembly shall consist of members who aged 18 years old and  have been members for 2 months. Each member shall have 1 vote regardless of the number of shares they have.

In case of the cooperative societies which have more than 500 members, the number of delegates that the general assembly may assign shall not be less than 1/10 the number of the GA members.
The tripartite committee prescribed in article 18 shall call the general assembly to convene within 60 days as of the date of declaring the internal system of the cooperative society. The GA Agenda shall include the following: • Approving the foundation expenses • Adopting the annual action plan prepared by the tripartite committee • Electing the 1st board of directors In case the tripartite committee members failed to partake these duties, the cooperative union may have the right to call the founders to replace such members.

The GA is called to convene within the five months following the end of the fiscal year to tackle the topics to be discussed in the agenda including :

  1. The board of directors, union, and the competent authority reports
  2. The general budget and final accounts
  3. Adopting the draft of distributing the surplus of the previous fiscal year
  4. Determining the board of directors and workers reward
  5. Adopting the allocations and reserves and determining the loans limits for the upcoming fiscal year
  6. Adopting the society’s upcoming annual action plan
  7. Adopting the grants of part time allowance of the upcoming fiscal year
  8. Electing the board of directors and completing its formation
  9. Adopting the regulations concerning construction, division and administrative and financial regulations determined by the union and the competent authority

The annual GA may have the right to examine the topics of discussions in the agenda related to the urgent GA.

The urgent GA shall be called to convene to discuss topics that serves the public interest or combat a threat including the following:

  1. Amending the regulations of construction and other financial or administrative regulations
  2. Amending the annual plan if needed
  3. Discussing the temporary board of directors report and electing another board of directors if necessary
  4. Adopting transferring or limiting the disposition of property
  5. Termination of board of directors membership
  6. Electing new members to form the board of directors other than the members whose membership is terminated for any reason
  7. Electing a board of directors whose assignment is over
  8. Firing a member/ members of the cooperative society

The urgent GA may have the right to examine any  topics to be discussed in the agenda

The extraordinary general assembly is called to consider the following:

  • Amending the internal system.

2 – Division of the cooperative society.

3 – Merger and amalgamation cases.

4 – Dissolution and liquidation of the cooperative society.

The decisions of the extraordinary general assembly shall not be implemented except after they are notarized in the register prepared for that in the competent authority in the governorate and published in the official gazette. Or after 60 days as of the date of notification of this authority.

The board of directors shall call the annual, urgent or extraordinary GA to convene by itself or through fifth of the number of the members or upon the request of the union or the competent authority. If the Board of Directors does not call for a meeting within fifteen days as of the date of receiving the request by a registered receipt letter , the union may have the right to direct a call for a meeting. In this case, the Board of Directors shall put all data and documents related to the agenda under the consideration of the union.

The call for the GA meeting shall indicate its agenda, date and place of the convention, within the dates specified by its internal system.

The general assembly may not consider matters other than those listed on the agenda. The meeting will be held at the cooperative society’s headquarters.

It may be held in other than its headquarters  upon  the request of the union or its approval.

The call for the GA meeting  shall be notified to the union and to the competent administrative authority on the day on which the invitation is sent to the members.

The convening of the annual or urgent general assembly shall not be valid unless attended by the absolute majority of its members. If this quorum is not completed at the specified time, the assembly may convene after an hour has elapsed from this time in the presence of at least one-tenth of the members.  In case this last quorum is not completed, so the cooperative union shall re-direct the call for a meeting within the fifteen days following the first date.  In this case, the meeting of the General Assembly is valid if any number of members is present.

The decisions of the secret general assembly and the urgent general assembly shall be issued with the approval of the absolute majority of the number of members present. In case the votes are equal, the presented issue was considered rejected.

The extraordinary GA shall not be valid unless the attendance of two third of the GA members in person through the attendance of the representatives. As for the amendment of the internal system, the convention shall be valid by the attendance of the absolute majority

The decisions of the extraordinary general assembly shall be issued with the approval of two-thirds of the members. In case the quorum is not completed, it is not permissible to re-submit the issue to the extraordinary general assembly before the lapse of three months as of the first convention date.

A member of the annual or urgent general assembly shall attend its meetings in person. However, in all cases and in accordance with the provisions of the internal system, it is permissible to deputize in writing in the presence of the general assembly, and it is not permissible to deputize Member for more than one member. The member shall apologize for not attending the general assembly meetings in writing to the president of the cooperative society or his representative before the date of the meeting.

Chapter 6 Section 2 The society administration Board of directors

The cooperative society’s board of directors shall manage its affairs, and shall be competent to consider all issues that the law did not provide for the society’s competence. The Board of Directors shall be elected from among the members of the General Assembly by secret ballot for a period of five years and the number of members of the Board of Directors may not be less than five. The board of directors shall represent the society before others and before the judicial, and its president shall act on its behalf.

The meeting of the Board of Directors shall not be valid unless attended by the majority of its members, and its decisions shall be issued with the approval of the absolute majority of the number of the attending  members. If the votes are equal, the opinion of the session chairperson shall prevail.

At the end of the fiscal year, the Board of Directors shall assign a chartered accountant registered in the General Register of Accountants and Auditors to prepare the final accounts and the general budget and the surplus distribution by the virtue of the provisions of this law and the internal system. The board shall submit this data within six months as of the end of the fiscal year to the union and the administrative competent authority for review in accordance with the provisions of this law. The board shall present this data, accompanied by the documents proving it, along with its annual report and the reports of the union and the competent authority at the headquarters of the society for a period of at least eight days prior to the date of the meeting of the general assembly, while enabling members to view them until they are approved.

Taking into account the special conditions prescribed in the by-laws, those who are nominated for membership in the Board of Directors of the cooperative society shall:

  1. have full civil capacity.
  2. Be a resident or work  in the area where the society is located, with the exception of summer resort society.
  3. be able to read and write.
  4. have paid his obligations due to the cooperative society.
  5. have been a member of the society for at least six months prior to the date of starting the nomination process
  6. not have been convicted of a felony or imprisonment for a crime involving moral turpitude or dishonesty, unless he has been rehabilitated.
  7. not be a worker in the society, the competent administrative authority, or one of the bodies that supervises, directs, or finances. As for cooperative societies consisting of workers in the abovementioned entities, they are excluded from this condition.
  8. Not be among those who practice any of the activities that fall within the objectives of the society and conflict with the objectives of it.
  9. Not be a member of more than two boards of directors of a housing cooperative society at the same level. The board may not include more than two members who are related by kinship up to the second degree, and in the case of multiple winners in the election from relatives , the winner shall be the one who got the highest number of votes.

The society’s board member is prohibited to do the following:

  • To compete with the society by presenting in his name, whether for his own account or for the account of others, or in the name of the one who transfers donations related to the activity of the society in the auctions or practices announced by the government, public bodies, public sector units, and local government units.
  • The society, whether we account for him or for the account of others, or in the name of his dependents, by a sale, lease, supply or exploitation contract for one of its resources, or by another contract. It relates to its transactions other than what is permitted by its internal system.

The members of the board of directors and the society’s managers are jointly responsible among themselves for any obligations, compensation or losses incurred by the society as a result of their management of it in violation of the law or the decisions implementing the rules or the internal system of the society or its annual plan, or the decisions of the general assembly. They are also responsible for the actions that are beyond their control or which are considered a violation of their duties.

The president of the society must inform the Union and the administrative Authority of every change that occurs in the membership and composition of the board of directors, provided that the notification includes a statement of the names of the people who were affected by the change, their jobs in the board and their addresses.

 The board of directors must provide a copy of the meeting minutes of its sessions and the general assemblies as well as the decisions issued in any of them to  the Union and the competent administrative authority within fifteen days from the date of the meeting.

 The board of directors must secure, to the appropriate extent, the warehouses of the society, its stores, its establishments and its funds.

The Board of Directors shall be assisted in performing its function, when necessary, by an executive body. The Board shall be responsible for the appointment of this body and the direct supervision of its work within the limits of the regulations approved by the General Assembly in this regard where the chairman of this body is also appointed by the board of directors.
It is permitted to transfer or return workers in the government, public authorities, public sector units, and local government bodies to work in the cooperative societies as long as they are not employed in the competent administrative authority or in one of the agencies which are responsible for the supervision, guidance, or financing process. After the approval of the Union, employees may be delegated or transferred from one society to another practicing the same activity, or between the societies and the aforementioned Union.

 It is not permitted to work in both of the competent administrative authority or any of the state’s agencies supervising the housing cooperative sector or union and in the cooperative units whether in the management or consultancy, with or without payment.

 A model list for workers in cooperative units is issued by a decision of the competent Minister based on a proposal to the competent administrative authority and taking  into consideration the opinion of the Union which includes the benefits and guarantees that ensure stability and good workflow.

Chapter Seven Distribute the surplus and form the reserve

After deducting all expenses, depreciations, allocations and burdens that the society is legally committed to during the ending fiscal year, the surplus revenues will be distributed as follows: )ِA) 15 % to form the legal reserve. (B) 5% for the public services performed by the Central Cooperative Union. (c) 10% for the services performed by the society in its area of work. (D) 15% as a maximum for the remuneration of the members of the Board of Directors. (E) 5% as a maximum share of workers in the society. (f) 5% for cooperative training that the Union performs according to a plan to be developed in coordination with the competent administrative authority. (g) 5% to be deposited in a special account in the Union to be invested and allocated to fulfill the obligations of the societies exempted by their employees. The remainder shall be allocated, in addition to the return on deposits, and the remaining undistributed from the aforementioned percentages for the establishment, completion and maintenance of common services for residential communities and improving the affairs of the region.

 An addition to the percentage is added to the balance of the legal reserve allocated for the annual surplus are the following resources

 (A) Gifts and bequests that are not specified for a specific purpose.

)B) Amounts for which the right to claim legally forfeits. The right to claim the value of the shares and the payment of bonuses shall lapse after three years from their due date.

(c) Revenue generated from selling fixed assets exceeding their estimated inventory values.

The share allocated for the remuneration of the members of the Board of Directors shall be taken into account including the extent of implementation of the annual plan for the fiscal year for which the  distribution is made and the extent of perseverance to attend the meetings of the General Assembly and the board, and it is also taken into account the period spent by the member in the board during the fiscal year.

The right of a member of the Board of Directors to remuneration shall be forfeited in the following cases:

  • If he did not attend half of the Board of Directors meetings during the fiscal year even if his failure was with an acceptable excuse.
  • If he fails, without an acceptable excuse, to attend the annual general assembly meeting or half of the urgent or extraordinary general assembly meetings that are held during the year .

3- If he resigns from the membership of the board before the beginning of the second half of the fiscal year.

In distributing the allowance for the workers’ share in the society’s surplus, the extent of their contribution to increasing production and improving performance is taken into account in accordance with the rules established by the society’s board of directors.

Housing Cooperative Law - Chapter Eight - Termination, Dissolution, Liquidation, Merging, and Division of Associations - Section One - Termination, Dissolution, and Liquidation

The society is terminated by a reasoned decision from the competent Minister at the request of the governor and after taking the Union’s opinion and the competent administrative authority in the following cases: 1 – If the business related to its establishment is finalized. 2 – If the society merged with another one, or if it was divided into more than one society. 3-If the number of its members is less than the minimum required to establish it.
Without prejudice to the right of the exceptional general assembly to decide the dissolution of the society, the cooperative society may be dissolved by a reasoned decision from the competent Minister based on the request of the governor after taking the Union’s opinion and the competent administrative authority in the two following cases: 1- If it encounters obstacles that prevent it from continuing its work regularly or its commitment. 2- If all or part of the capital perishes and it becomes difficult to Continue their work or resulting in loss.

 The competent Minister may not delegate anyone for the issues mentioned in the previous two articles

The Union shall proceed with the dissolution procedures from the date of publication of the dissolution decision of the society in the Egyptian Gazette. However, the decision may include granting the Union the authority to reserve the society’s funds and assets from the date of issuance of the decision. The competent administrative authority approves the liquidation accounts.
It shall not be distributed to the members from the liquidation more than what they paid from the value of their shares and the deposits due to them and no distribution may be made before the liquidation accounts are published in their final form in accordance with the provisions of this law.

  In the event that the completion of the liquidation work and the extraction of the closing accounts for it are delayed due to the existence of new disputes, the exempted person shall prepare a temporary financial center for the liquidation, and he shall pay to the members the value of all or some of their shares in the light of  The financial position allows it after withholding the necessary amounts to meet the society’s obligations.

 The Union shall spend from its own funds to carry on the liquidation activities, in the event that the funds of the societies that have passed or dissolved are insufficient, and it is not committed before its creditors, except within the limits of the liquidation outcome.

 Liquidation accounts are published in the Egyptian Gazette and any interested party may challenge these accounts within the 60 days following publication before the Court of First Instance where the headquarters of the society is located. In addition, it includes all appeals to issue a single judgment that will be an argument against all creditors, and a summary of this judgment will be published in the Egyptian Gazette.

The right to sue the members of the society’s board of directors because of their actions forfeits the right to file a lawsuit against the union after the lapse of one year from the date of publication of the liquidation account or the summary of the final judgment, as well.

Section 2 Merger and division

The extraordinary general assembly may decide to merge the cooperative society into another society, or accept the merger of another society in it, or merge the society with another into a new society, or divide the society into two or more societies. In the event of dividing the society into two or more societies, a decision must be concluded where the division is as follows: (1) The work area of the new societies, provided that this is done within the scope of work. (2) Determining the financial centers and distributing the original assets of the society among the new societies
A joint committee of the societies to be merged or the society to be divided shall draw up a draft of the new internal system in accordance with the objectives of the merger or division and shall be approved by the competent exceptional general assemblies in the same session in which the merger or division is decided. According to the status of the legal person in its new status, this decision and a summary of the internal system shall be published in accordance with the provisions of this law.

Chapter Nine Rights, guarantees, and appeals against the decisions of the monitoring authorities and the managing bodies of the Society

Any interested party may appeal against the administrative decisions issued by rejecting the request to register the cooperative society, or by stopping the implementation of the decision of the board of directors or the general assembly, or revoking the membership of a member of the board of directors, or dissolving the board and appointing a member. A temporary board of directors, or the termination, dissolution, merger, or division of the society before the competent administrative court. As for the decisions issued in the second part of the union, the appeal against them shall be before the Administrative Court. Under all circumstances, the court may rule in an urgent manner to suspend the implementation of the contested decision, when requested.

Chapter Ten Exemptions and benefits

cooperative units are exempted from: A- Taxes on commercial and industrial profits, non-commercial professions and interests on deposits in banks and savings. 2- Taxes and fees decided by the local councils in accordance with the local government system law. 3- Customs taxes, customs statistical fees, import fees, additional fees, and all taxes, fees that are due on the occasion of the entry of goods in relation to what is imported for its account and necessary for its activity, including tools, basic building materials, machinery, equipment, spare parts, and means of transporting materials, according to lists drawn up by the competent Minister, and notified to the Minister of Finance. When disposing of one of these commodities, the value of taxes and fees shall be due on the disposer assessing their value according to their condition and the applicable tax category on the date of disposal. 4- The debt tax, which is the burden of paying it on the cooperative society with regard to what is related to its activity such as contracts, documents, papers, publications, indications, records, advertisements, posters, and others. 5- Fees due on contracts and documents related to its incorporation, amendment of its by-laws and publication, fees for authentication of signatures in relation to the said contracts and documents, and fees for influencing, numbering and stamping books. 6- The monthly fees that are to be paid by it in relation to the contracts to which it is a party and related to the rights in real estate and the fees for authentication and authentication of signatures in relation to these contracts. 7- Relative fees prescribed for the documentation and publication of all papers, contracts, mortgages, subrogation, waivers, deletion, registration lists and their renewals that are paid to the society, identification lists, real estate certificates and information related to loans provided by banks, companies and public bodies to societies through financing the projects they undertake. All purchase, sale, and mortgage contracts issued by cooperative societies for housing construction for its members regarding land and buildings are subject to a comprehensive fee of five pounds, whatever the value of the property, in return for all that is related to registration processes, such as registration, documentation, and others, for both the society and the member. 8. Fees for building approvals and licenses and land divisions. – Judicial fees due for disputes arising from the application of provisions. 9- Judicial fees due for disputes arising from the application of provisions of this law. 10 – Fees for publication in the Egyptian Gazette, which takes place in implementation of the provisions of this law. Provided that the exemption for the Union is limited to what is stipulated in items (4), (5),(1), (7), (9), (10) of this article.
State lands that are allocated to housing cooperative units are sold with a reduction of 25% from the price determined at the time of sale, and it is permitted with the approval of the Minister of Finance increasing the amount of the discount not exceeding 50% of the price referred to.

Cooperative units have the right to carry out their activities with the prescribed privileges for the public sector companies and the private societies of public benefit, especially in obtaining building supplies, goods, lands and buildings necessary to achieve its purposes.

Cooperative societies shall be granted a reduction of 25% from the value of rail transport fares, means of transport owned by the public sectors and their economic units with regard to equipment, machinery and building materials necessary for their activity.
Luxury housing projects do not enjoy privileges or exemptions provided for in this law.

Chapter Ten Joint and Federal Societies

The competent Minister issues – based on what the union presents and the approval of the competent administrative authority, the procedures for establishing and declaring the joint society and the federal society, which must be taken into account in preparing its bylaws.
The capital of each of the joint and federal societies consists of unlimited number of shares, the value of each of which is fifty pounds, to be paid in full upon subscription, provided that each society to which it belongs contributes a steadily increasing percentage with the capital Its money is determined by the internal system. The competent administrative authority shall set the rules for subscription to the foundation money and the increase system.
The joint assembly undertakes the implementation of a joint project for the benefit of the public societies belonging to it and holding loans on its behalf, and may be imposed by its management and maintained on behalf of these societies.
The Federal Society performs various services for the societies it is affiliated with, and undertakes in particular the following: 1- Conducting the necessary studies and statistics to limit the needs of the societies to which it is affiliated, whether in terms of lands or building materials. 2- Work to provide the needs of societies from building lands owned by the state or the public sector as much as possible, or provide them from the private sector at the lowest possible price, as well as obtain building materials and requirements from their direct sources at wholesale price. 3- Establishing factories to produce or manufacture building materials at the lowest possible cost. 4- Possess the means of transportation necessary to transport building materials and perform services. 5- Providing the societies to which it belongs with the necessary expertise and establishing graphic, design and execution offices. 6- Executing one or more joint projects to reconcile similar societies. 7- Borrowing to achieve the aforementioned purposes pursuant to regulations included in the internal system set by the competent administrative authority. 8- Import what is necessary to perform its purposes. The Federal Assembly undertakes the competences delegated to it by the Union.

All liquidation products in joint and Union societies are distributed to the societies to which they belong in accordance with the rules included in the by-laws.

Chapter 12 The Central Housing Cooperative Union (CHCU)

The union sets its internal system and is issued by a decision from the competent Minister based on the proposal of the competent administrative authority, accompanied by its approval. The internal system determines how the member units are represented in the general assembly.
The resources of the Union are composed as follows: 1) Subscriptions paid to him by the member units, in accordance with the categories and the regulations included in the Union’s internal system. 2) Provision for general services in surplus units. 3) Subsidies provided by the government and public legal persons. 4) Allocation for cooperative training in the surplus of cooperative units. 5) gifts and bequests accepted by the Board of Directors. 6) Surplus of the liquidation of building and housing cooperative societies 7) The return on investment of its money and the income obtained from the established projects.
The remainder of the proceeds of the liquidation of societies shall be given to the Union and a special account shall be opened for it, and the Union shall spend from this account to support the housing cooperative units in coordination with the competent administrative authority.
The Union, in accordance with the plan it lays down and approved by the competent Minister, assists the housing cooperative units in performing their mission and shall be responsible for the civil supervision of these units. In addition, it undertakes the following responsibilities: (First) Proposing the general policy for housing cooperatives in partnership with the competent administrative authority. (Second) Preparing statistics and data on housing cooperatives in collaboration with the competent administrative authority. (Third) Spreading the cooperative culture and supporting cooperative education, including: 1 – Spreading and supporting the cooperative movement, preparing conscious cooperative leaders who believe in cooperation, and encouraging and sponsoring postgraduate studies in the field of cooperative work. 3- Exchange of cooperative experiences in the Arab, African and international environment. 4- Establishing partnerships with cooperative and accountable movements abroad. 5- Conducting specialized research and studies, all data and information, and drawing conclusions from them, and issuing necessary cooperative newspapers and pamphlets to publish all documents, decisions, and research related to housing cooperative activity. 6- Establishing, owning and managing training centers, supporting the bodies that do this, the competent bodies, and implementing training plans and cooperative culture. 7- Holding a cooperative conference for the housing cooperation sector, in accordance with the rules and procedures stipulated in the internal system of the Union, and following up the implementation of recommendations and participating in cooperative conferences. (Fourth) Protection of its cooperative units by all means including: 1- Presentation of the cooperative housing system inside and outside the country and joining international cooperative organizations. 2 – Coordination between the cooperative housing activity and other cooperative sectors. 3- collaborating with the competent administrative authority in preparing the ideal financial, administrative and structural bylaws and regulations necessary for the proper functioning of the cooperative units and to have them approved by the Minister. 4- Directing the cooperative units and guiding them to the appropriate accounting, financial and administrative systems. 5-Providing cooperative technical advice and expressing legal opinion, and in this regard he has the right to seek the opinion of the State Council. 6-Reconciliation between units, boards of directors, or members of each of them in case of any disputes. (Fifth) Monitoring the regularity and good workflow of the cooperative units including the periodic and annual review of the units’ accounts and budgets and receiving copies of the minutes of the meetings of the Board of Directors and the general assemblies and the decisions issued by them as well as examining the units’ work and following up their activities. (Sixth) Undertaking the work of liquidating units that expire or dissolve.
The Union’s board members shall consist of the following: A- 15 members to be elected by the housing cooperative societies’ board members and this shall be presented by the internal system of the Union itself. B- 5 members to be elected by the Federal societies’ board members and this shall be presented by the internal system of the Union itself. C- 5 members to be assigned by the competent Minister and mentioned members shall be experts in the related cooperative sector and not related to the administrative authority. The chairman of the abovementioned administrative authority or his representative shall attend the board meetings of the Union with no right to vote.
The board members of the Union shall present copies of its meeting minutes as well as the meeting minutes of its general assemblies and all the decisions taken to the competent Minister.
All interested parties may appeal the decisions issued by the Union before the Administrative Court of the state’s Council.

Chapter 13 The Country's Supervision

The competent Minister shall be responsible for all terms of references appointed to the relevant administrative authority as mentioned in this law.

The Accountability State Authority shall revise the accounts of the Union and the Federal and Joint societies without prejudice to the appointment of auditors from the enlisted ones.

The Union or the competent administrative authority, each within the limits of its competence,  shall interrogate the board members and all employees of the previously mentioned cooperative units.

If requested by the Union or the administrative authority, the Administrative Prosecution Authority shall be responsible for the interrogation.

All  investigations conducted with board members shall be done with the knowledge of the Administrative Prosecution Authority

The competent Administrative Authority shall follow up the cooperative societies’ plans through reports provided by the Union with the right to contact them directly in this concern.
The competent administrative authority has the right to inspect, guide and review all decisions issued by the cooperative housing units. Furthermore, this authority has the right, on the basis of a reasoned decision, to stop any violations of the provisions of this law or any relevant bylaws issued to implement its terms within thirty days of being notified. The administrative authority shall inform the housing cooperative unit and the Union of any issued decisions in this concern and their reasons within the aforementioned period of time, otherwise, the decisions will be enforceable. As a result of the decisions of the competent administrative authority of suspension within the mentioned period, all other consequences shall be suspended.
The competent administrative authority has the right to suspend the membership of the board members of the cooperative housing units after the approval of the Union under the following conditions: (1) Failing to meet the terms and conditions of membership. (b) Failing to attend 4 successive sessions without an excuse to be approved by other board members and as long as he is notified before the fourth session through a registered letter of access. (c) Failing to maintain the cooperative unit’s records, papers and seals or intentionally damaging, misusing, hiding or disposing them without the board members’ decision. (D) Violation of the regulations established by the board members. (E) Deliberately making false statements or concealing the truth with an intention to obstruct the process of supervision or monitoring by any means, failing to implement laws and instructions issued in terms of the law or obtaining illegal benefits. (F) Failing to return the deficit in the personal pledge within the period specified by the council. (g) Harming the housing cooperative unit by any means, disrupting the work system or obstructing its activity intentionally or by negligence. For the validity of the decision to revoke membership, it is required that it be reasoned and preceded by an investigation of the council member’s defense in writing. If he fails, without an acceptable excuse, to appear for the investigation at the specified date after being notified twice by a registered letter with access, his membership shall be forfeited without the need for an investigation of his defense.
The competent administrative authority, during the investigation with the board member, may stop him from carrying out his work in the council after the approval of the Central Housing Cooperative Union for a period not exceeding 3 months until a decision is made on the matter of dropping his membership. If this period ends without taking an action, the board member shall return back to his work. The board member whose membership is forfeited or suspended must hand over what he entrusts of the cooperative unit’s funds, papers and records to the unit’s board of directors.
Based on what is presented by the Union and taking into consideration the administrative authority’s opinion, The competent Minister shall issue a reasoned decision to dissolve the society’s board of directors if it repeatedly commits violations that necessitate the suspension of its decisions in accordance with the provisions of this law or if it does not meet for six consecutive months or if it is lax in its submitting the general or closing budgets for a period of more than 6 months from the date of the end of the fiscal year. The dissolution decision must be preceded by a written investigation in which the defense of the board members is permitted in accordance with the provisions of this law. The Union’s board of directors shall be dissolved with a reasoned decision from the competent Minister and after conducting an investigation pursuant to this law.
The dissolution decision shall include the assignment of a temporary board of directors of 5 members from the General Assembly nominated by the Union who meet the nomination conditions of the board of directors membership. In case of the dissolution of the Union, the competent Minister shall assign the temporary board of directors. In all cases, the temporary board of directors shall have the rights and duties of the nominated ones in accordance with the provisions of this law. The temporary board shall be assigned for a non-renewable year. The dissolution decision and the assignment of the temporary board of directors shall be published in the Egyptian Gazette and it shall come into force as from the date of issue.

The temporary board of directors, pursuant to the provisions of this law,  shall be responsible for searching the conditions of the housing cooperative unit and the reasons that led to the irregularity of its work as well as the evaluation of this in charge of its management, the preparation of records about the unit’s condition, taking needed actions and correcting the conditions of the unit.

The temporary board of directors shall invite the general assembly to elect a new board of directors a month before the end of its term from among its members. If it ends before the assignment of a new board, the General Assembly shall be invited by the Union taking into consideration article no. 4 of the issuance law.

Without prejudice to the unit’s access to be assisted by an auditor to set its accounts and budgets, the Union shall audit the housing cooperative units’ accounts and budgets at the end of the fiscal year to build units at the society’s headquarters. Furthermore, it shall review their balance sheets and budgets and compare them with the records and documents to be signed afterwards. The technical agencies assigned by the Union shall be responsible for this review or whomever it chooses from among the trade union accountants in case of insufficient agencies. The Union shall finalize the review process within 60 days from the date of receipt of the final accounts and the budget and the distribution of the surplus revenues of the unit. It also shall send a signed copy of it to the unit and the competent administrative authority. The competent administrative authority shall prepare its reports with the final result and send it to the relevant society within 30 days from the day of receipt of the final accounts and the reviewed report from the Union. The unit’s board of directors shall implement the notes included in the reviewed report, prepare the closing accounts, budget and the surplus revenue distribution project and obtain the confirmation of the Union and the competent administrative authority before presenting them before the General Assembly.
The state shall allocate the needed funds annually within the budget of the competent administrative authority to support the housing cooperative units which includes the following in specific: (1) The funds necessary for the employees of the agencies responsible for auditing the units’ accounts. (2) The funds necessary to meet the costs and burdens resulting from carrying out the other tasks assigned to it by the country.

Chapter 14 penalties

In applying the provisions of the Penal Code: (A) The founders and members of the boards of directors of the housing cooperatives units mentioned in this law as well as the delegates responsible for the dissolution process, auditors, managers and employees of these units are considered as public officials. (B) The funds of the housing cooperative units are considered as public funds, including members’ savings and other funds deposited with them. (C) The papers, documents, records, books and seals of the housing cooperative units shall be considered as official papers, documents, books and seals.

 Unless a higher penalty is provided in any other law, the following shall be punished with imprisonment and a fine not exceeding 1,000 EGP or with one of these two penalties:

  • Members of the boards of directors of housing cooperative units, founders and employees of cooperative units, inspectors in the authorities that have, in accordance with this law, the right to supervise, direct and audit this society, and auditors and delegates responsible for the dissolution process if intentionally providing false statements or numbers about the status of the society or concealing some or all facts about the documents related to them before the competent administrative authority or the general assemblies.
  • Members of the boards of directors of the cooperative units, the founders and their employees, the auditors and the delegates responsible for the dissolution process if they do not implement the obligations in accordance with this law, the implementation laws and the internal system of the society. In addition, if they deliberately obstruct the work of the inspection bodies that this law has exempted from control, supervision, inspection and auditing.
  • Members of the boards of directors of housing cooperative units, founders, employees, auditors and delegates responsible for the dissolution process if they kept the unit’s funds in violation of what is included in its bylaws or the decisions of the general assembly and the organizational decisions in spite of asking them to return them.
  • The founders of a housing cooperative society if they carried out an activity in the name of the society before being published in the Egyptian Gazette.
  • The boards of directors and managers of the housing cooperative units, if they:
  • Intentionally distributing any item of the distribution in contravention of the final accounts approved by the general assembly or according to a final account established.
  • Make any distributions or dispose of the unit’s funds or its surplus in violation of the provisions of this law or the internal system of the unit or its financial and administrative regulations.
  • Issuing shares at a value less than or exceeding their nominal value or changing the facts and data related to the membership or the contribution.
  • Lending money or making deposits or deductions in violation of the provisions of this law or the internal system of the unit.
  • Making an advantage of their authority or their positions to achieve personal benefits or to benefit some members rather than others in violation of the provisions of this law or the internal system or exploiting the name of the unit or its funds as well as intentionally not observing justice in the distribution of the services among all members or the non-performance of the Union’s benefits.
  • The board members who authorize others in violation of the provisions of this law to perform the functions of the board or the unit.
  • The board members whose membership has expired or forfeited and members of the temporary board of directors whose term has expired, managers, workers and delegates who are responsible for the dissolution process if they refuse to hand over the unit’s funds, assets, records, books, documents, papers and seals to whoever replaces them within the period specified for that after being notified by a registered letter of access.
  • Whoever participates in proceeding the activities of a dissolved unit or disposing of its funds in violation of the provision of this law.
  • Every person who uses the word “cooperative” in violation of the provisions of this law in his communication with others or in any other announcement published to the public about the business he manages or the projects he operates in the name of “cooperative” or any designation that informs the public that this work or project is a cooperative one and if it is also understood that this work or project is a cooperative society, a branch or an agency related to it.

 In this case, in addition to the prescribed penalty, the name shall be removed and the judgment shall be published at the convict’s expense in one of the daily newspapers.

(J) Anyone who intentionally publishes incorrect reports or information about the financial or administrative status of the activity of a cooperative unit, whatever the form of these reports and the place of their publication. The penalty is multiplied by the multiplicity of publication.

(K) Anyone who obtains an advantage that he is not entitled to in accordance with the provisions of this law or the internal system, or a loan or building requirements which are not totally or partially used for the purpose designated for it unless this is for a compelling excuse approved by the Board of Directors of the cooperative unit and the Union.

 Collections and detention specialists and the employees of the competent administrative authority who are assigned officially by the president of the competent administrative authority who are responsible for the monitoring, inspection and investigation process shall have the capacity of judicial detection.