THE AGRICULTURAL COOPERATIVE SOCIETY LAW
Law No. 132 of 1947
Revised 27 times during years 1948-1993.
Last Revision in 1993 (Laws No. 63 and 70)
CHAPTERI. GENERAL PROVISIONS
Article 1. Object of This Law. This Law has for its objective the promotion of the sound development of the farmers' cooperative system, thereby improving agricultural productivity and the socio-economic status of farmers, as well as ensuring the development of the national economy.
Article 2. General Effect of Registration. Any matters to be registered under the provisions of this Law have no validity against a third person until after the registration has taken effect.
Article 3. Definitions of the Terms. 1. The term "farmer", as used herein, shall be defined to mean an individual who is operating agriculture in person or who is engaged in agriculture.
2. The term "agriculture", as used herein, shall be defined to mean such business as crop culture, animal husbandry and sericulture (including other business incidental thereto).
3. Firewood- and charcoal-producing business (including other business incidental thereto) carried on by the same individuals who operate or are engaged in the business provided for in the foregoing Paragraph shall be construed as "agriculture" under this Law.
CHAPTER II. AGRICULTURAL COOPERATIVE AND FEDERATION OF AGRICULTURAL COOPERATIVES
Section 1. General Rules
Article 4. Designation. 1. The term "agricultural cooperative" or "federation of agricultural cooperatives" shall be used in the designation of any agricultural cooperatives or any federations of agricultural cooperatives.
2. No one other than an agricultural cooperative or a federation of agricultural cooperatives shall use the term "agricultural cooperative" or "federation of agricultural cooperatives" in its designation.
Article 5. Juridical Person. An agricultural cooperative and a federation of agricultural cooperatives (hereinafter generically referred to as "cooperative") shall be of a juridical person.
Article 6. Tax Exemption. The amount equivalent to the surplus dividends which are paid by a cooperative in proportion to the rate at which its business is utilized shall, in accordance with the provision of the Corporate Tax Law, be counted as the amount of loss on the income of the said cooperative for each business year.
Article 7. Address. The address of a cooperative shall be the place where its principal office is located.
Article 8. Object of Business. A cooperative has for its objective the performance of business in order to serve its members and member cooperatives (hereinafter in this Chapter, generically referred to as "members") to the maximum degree, and it shall not be allowed to do its business for profit-making purposes.
Article 9. Exemption from the Application of the Anti-Monopoly Act. Under Act No. 54 of 1947 (Act Concerning Prohibition of Private Monopoly and Maintenance of Fair Trade), a cooperative shall be construed as a society meeting the requirements specified in each of the Items of Article 24 of the same Act (Concerning non-applicable activities of the Act).
Section 2. Business
Article 10. Scope of Business. 1. A cooperative may conduct all or any of the following businesses:
(1) Accommodating funds needed for the Members' business or living;
(2) Accepting the Members' savings or installment savings;
(3) Providing with supplies required for the Members' business or living;
(3:2) Installation of joint-use facilities (excluding medical facilities or concerning welfare of elderly people) necessary for the Members' business or living;
(4) Facilities for promoting cooperation in farming or for increasing the farm labour efficiency;
(5) Development, improvement or management of lands available for agricultural purposes; selling, leasing or exchanging lands available for agricultural purposes; or installation or management of agricultural water facilities;
(6) Transportation, processing, storing or sale of the Members' produces;
(7) Facilities related to rural industries;
(8) Facilities related to mutual relief insurance;
(9) Medical facilities;
(9:2) Facilities related to the welfare of elderly people;
(10) Educational facilities for improving the Members' farming techniques or their managerial conditions, or the facilities for improving the rural life and culture;
(11) Conclusion of collective agreements aimed at improving the Members' economic status;
(12) Any other business incidental to the business specified in each of the foregoing Items.
2. An agricultural cooperative which shall assign the capital stock contribution to the members (referred to hereinafter as "capital stock cooperative") may, in addition to those businesses specified in the foregoing Paragraph, conduct farm management also on commission from its Members.
3. An agricultural cooperative carrying on side by side the businesses under Items 1 and 2 of Paragraph 1 may accept the trust offered by the Members for the purpose of employing the immovables under each of the following Items by way of leasing them, or for the purpose of selling them.
(1) Agricultural lands (i.e., the agricultural lands under Paragraph 1 of Article 2 of the AgriculturalLand Law) or grasslands (i.e., the grasslands under the same Paragraph) belonging to the trustors at the time when the trust is accepted;
(2) Any other immovables which are deemed under the Ministerial Order as pertinent to be left in trust together with the agricultural lands or grasslands under the foregoing Item and which are belonging to the trustors at the time when the trust is accepted.
4. A cooperative which does not assign a capital stock contribution to its Members (hereinafter referred to as "non-capital stock cooperative") shall not conduct the kinds of business specified in Item 2 or 8 of Paragraph 1, irrespective of the provisions of the same Paragraph.
5. Capital stock cooperative may, in addition to those businesses given in Paragraph 1, conduct some or all of the following businesses:
(1) The business of selling off or leasing (including the sale or leasing of the said land or facilities following construction of houses or other installations), on behalf of members, of member-owned transferable farmland and other plots (i.e., the members' farmland or other land, which it is deemed appropriate to use for purposes other than agriculture. The same applies hereinafter), or of making some changes in the plots of the same land;
(2) The business of renting from members their transferable farmland or of re-leasing the plots of land (including making some changes in the plots of land or building houses or other facilities on the land and then re-leasing the land, or selling or leasing the facilities thereof);
(3) The business of buying up from members the transferable land owned by the members and of selling or leasing that land (including making some changes in plots, or building houses and other facilities on the land and then selling or leasing the land or the facilities thereof).
6. A cooperative which conducts the business as specified in Item 2 of Paragraph 1 may conduct some or all of the following activities for its members.
(1) Discounting of bills;
(2) Exchange transactions;
(3) Guarantee of liability or acceptance of bills;
(4) Lending of securities;
(5) Underwriting of government bonds and prefectural bonds or government-guaranteed bonds (referred to hereinafter as "government bonds, etc.") (excluding those for sale), or handling of flotation of government bonds, etc., for underwriting;
(6) Acquisition or transfer of monetary claims (including those that can be specified by negotiable certificates of deposit and other certificates laid down by the ministerial ordinance);
(7) Handling of private placement of securities;
(8) Handling of business in place of the Norin Chukin Bank and other banking institutions designated by the competent minister of state;
(9) Handling of receipt of money for the government, local public entities, companies, etc., and other monetary business operations;
(10) Protective custody of securities, precious metals and other items;
(11) Exchange of money;
(12) Placement, etc., of financial futures transactions, etc., which are prescribed by Paragraph 8, Article 2 of the Financial Futures Transactions Law (Law No. 77, 1988);
(13) Any other business incidental to the business specified in each of the foregoing items.
7. A cooperative engaging in both of the activities under Item 1 and Item 2, Paragraph 1, shall be able to perform business (the business, conducted under the foregoing paragraph, is excluded) related to securities or transactions, which are specified in each item of Paragraph 2, Article 65 of the Securities Transactions Law (Law No. 25, 1948) insofar as the said activities do not hinder the performance of the business.
8. A cooperative engaging in both of the activities under Item I and Item 2, Paragraph 1, shall be able to perform trust business service that is specified in Paragraph 1, Article 1 of the Law Pertaining to the Concurrent Performance of Trust Business by Banking Institutions (Law No. 43, 1943) insofar as the said activities do not hinder the performance of the service.
9. A federation of agricultural cooperatives engaging in both of the activities under Item 1 and Item 2, Paragraph 1, shall be able to conduct the following business insofar as the said activities do not hinder the performance of the business:
(1) Flotation of prefectural bonds or debentures, and other bonds or acceptance of their management;
(2) Trust business concerning mortgage bonds, which is conducted in accordance with the Law for Mortgage Debentures in Trust (Law No. 52, 1905).
10. "Government-guaranteed bonds" under Item 5, Paragraph 6, refer to debentures and other bonds, the redemption of whose principals and the payment of interests on which are guaranteed by the government.
11. The business, which is conducted under Item 6, Paragraph 6, shall include that specified in each item of Paragraph 8, Article 2 of the Securities Transactions Law in regard to monetary claims which can be indicated by certificates laid down by Item 6, Paragraph 6 and which fall under the category of securities.
12. "Handling of private placement of securities" under Item 7, Paragraph 6, refers to the handling of private placement of securities (as prescribed by Item 6, Paragraph 8, Article 2, of the Securities Transactions Law).
13. A cooperative shall obtain the approval of the administrative authorities when it intends to handle the business of floatation of securities under Item 5, Paragraph 6.
14. When a cooperative intends to conduct the business specified in Paragraph 7, it shall obtain the approval of the administrative authorities if the said business involves unspecified and many partners, by determining its contents and method of operation. The same procedure may apply when the cooperative intends to change the contents and method of operation of the authorized business.
15. When a cooperative intends to perform the trust-related business specified in Paragraph 8, in accordance with the same paragraph, it shall obtain the approval of the administrative authorities by determining the type of business and method of operation. The same procedure may apply when the cooperative intends to alter the type of the said business or the method of business operation.
16. A federation of agricultural cooperatives shall obtain the approval of the competent minister of state when it intends to conduct the business specified in Paragraph 9, in accordance with the same paragraph.
17. A cooperative entering into the business as specified in Item 9, Paragraph 6, shall be deemed a bank in the application of the Commercial Code's (Law no. 48, 1899) Item 8 proviso, Paragraph 1, Article 168, Paragraph 2, Article 170, Item 10, Paragraph 2, Article 175, Paragraph 4, of the same article (including instances wherein the provisions are applied correspondingly in Article 280-14 of the Commercial Code), Article 178 (including instances wherein the provisions are applied correspondingly in Paragraph 1, Article 280-14, and Paragraph 3, Article 341-16, of the same code). Article 189 (Paragraph 1, Article 280-14 and Paragraph 3, Article 341-16, of the same code, and Paragraph 3, Article 12, of the Limited Company Law (including instances wherein the provisions are applied correspondingly in Article 57 of the same law), Item 4, Article 341-12 and Paragraph 2, Article 341-16, Item 4 proviso, Article 7, and Paragraph 2, Article 12, of the Limited Company Law (including instances wherein the provisions are applied correspondingly in Article 57 of the same law), and Item 10, Article 80, Item 4, Article 82, Item 6, Article 95, and Item 2, Article 96 (confined to provisions relating to Item 4, Article 82) of the Commercial Registration Law (Law No. 125, 1963).
18. A cooperative shall be deemed a bank in the application of the Foreign Exchange and Foreign Trade Control Law (Law no. 228, 1949).
19. In the matter of the business under Paragraph 9, a federation of agricultural cooperatives shall be deemed a company or a bank as prescribed by the Cabinet ordinance, in the application of the Law Pertaining to Mortgage Debentures in Trust and other laws laid down by the Cabinet ordinance. In this case, the provision of Paragraph 2 proviso, Article 3, of the Trust Business Law (Law No. 65, 1922) shall not apply.
20. A cooperative may, in accordance with the provision of its articles of incorporation, enable people other than members to use its facilities (in the case of facilities specified in Item 3 and Item 4, Paragraph 6, and Paragraph 9, they are confined to those laid down by the ministerial ordinance). With the exception, however, of instances wherein services are offered by the facilities under Item 2 to Item 13, Paragraph 6 and under Paragraph 7 to Paragraph 9, the amount of services available to non-members in a business year (in case services under Item 1, Paragraph 1, and Item 1, Paragraph 6, are provided together, the combined total amount of these services) shall not exceed one-fifth (the rate set by the Cabinet ordinance applies to services specified by the ordinance) of the services available to members in the said business year.
21. A cooperative pursuing both of the businesses under Item 1 and Item 2, Paragraph 1, which is deemed by the administrative authorities to be necessary and appropriate to allow the use of it facilities under Item 1, Paragraph 1, and Item 1, Paragraph 6, by non-members in excess of the extent prescribed by the proviso of the foregoing paragraph in order to ensure the stable and efficient operation of funds in view of the accommodation of funds to members, and the operation of other funds, agricultural and economic conditions in communities in the cooperative territory, may enable non-members to use its facilities, irrespective of the rules of the proviso of the foregoing paragraph, unless the amount of services offered by the facilities to non-members in a business year exceeds the amount obtained by multiplying the combined total of savings and installment savings of the cooperative for the same business year with the rate set by the Cabinet ordinance within 15 percent.
22. The administrative authorities shall listen to the views of the competent minister when they intend to make the designation referred to in the foregoing paragraph.
23. In spite of the provision of Paragraph 20, a cooperative may, under its articles of incorporation, extend loans as specified in the following Items insofar as the activities do not hinder the performance of the business for its members.
(1) Loans to local public organizations or non-profit juridical persons in which the local public entity is the principal constituent, principal investor, or otherwise has contributed more than one half of the assets, such loans being limited to cases specified in the Cabinet Order.
(2) Such loans as are specified in the Cabinet Order and extended as funds needed to improve the industrial fundamentals and the living environments in a farming district (those under the foregoing Item are excluded).
(3) Loans to banks and other banking institutions.
24. In applying the Paragraph 20 proviso and Paragraph 21 provision concerning the utilization of the business under Item 1, Item 2 and Item 8, Paragraph 1, or Item 9:2, Paragraph 2 and Paragraph 3 or Paragraph 5, the persons meeting the following requirements shall be deemed cooperative members:
In the case of the business under Item 1, Paragraph 1, persons belonging to cooperative members' households, or those non-profit juridical persons, other than local public bodies, to which a cooperative extends loans on the security of their savings or installment savings.
In the case of the business under Item 2, Paragraph 1, persons belonging to cooperative members' households and non-profit juridical persons.
In the case of the business under Item 8 or Item 9-2, Paragraph 1, persons belonging to cooperative members' households.
In the case of the business under Paragraph 2 and Paragraph 3 or Paragraph 5, persons belonging to cooperative members' households; persons who were cooperative members or belonged to cooperative members' households at the time when a cooperative accepted the commission or the trust or when they were granted loans (regarding the business under Item 2, Paragraph 1, they include those persons who acquired property rights of the plot of land concerned from the then cooperative members or those who belonged to cooperative members' households.)
25. A federation of agricultural cooperatives conducting the business under Item 2, Paragraph 1 shall not engage in types of business specified in Item 1, Paragraph 1, and those incidental to the business specified in Item 1 or Item 2, Paragraph 1 and any business other than those under Paragraph 6 to Paragraph 9, irrespective of the provisions of Paragraph 1 and Paragraph 5.
26. A federation of agricultural cooperatives carrying on the business under Item 8 of Paragraph 1 may not engage in any kind of business other than those incidental to the business specified in the same Item.
Article 11. Credit Business Regulations. 1. A cooperative shall lay down credit business regulations and obtain approval thereof from the administrative authorities when it intends to perform the business under Item 2, Paragraph 1, of the preceding article.
2. The credit business regulations in the preceding paragraph shall contain matters laid down by the Ministerial Ordinance concerning types of credit business under Item 1 and Item 2, Paragraph 1, of the preceding article (including those incidental to these businesses) and credit business (which refer to those under Item 6 to Item 9; the same hereinafter) and the method of business operation.
3. Alterations or abolition of the credit business regulations shall not become valid without approval thereof from the administrative authorities.
Article 11:2. Securing Sound Management. The competent minister, in a bid to contribute to the sound operation of the credit business of a cooperative engaging in both of the activities under Item 1 and Item 2, Paragraph 1, Article 10, shall be able to establish criteria on the basis of which whether the owned capital of the cooperative in question will be judged sufficient and also if the cooperative is managed on a wholesome basis, in view of the assets, etc., it possesses.
Article 11:3. Limit to Extension of Credit to One and Same Person. 1. Credit extended to one and the same person (including credit accommodation to those having special relations, laid down by the Cabinet ordinance, with the said one and the same person. The same applies hereinafter in this article) shall not exceed the amount (referred to hereinafter in this article as "line of credit") obtained by multiplying the combined total of the subscriptions and reserves (referred to those provided for by the Cabinet ordinance in terms of subscriptions and reserves) by the Cabinet ordinance-specified rate. This rule, however, does not apply when the amount of credit extended by the said cooperative to one and the same person exceeds the credit line as a result of those receiving credit accommodation merging or obtaining the transfer of business, and when approval is obtained thereof from the administrative authorities under other unavoidable circumstances prescribed by the Cabinet ordinance.