Amendment of Net Profit Distribution Ratios in Cooperative Societies
The Minister of Social Affairs, Labor, Family, and Childhood, Dr. Amthal Al-Huwail, issued a ministerial decision regarding the amendment of the executive regulations of Decree-Law No. 24 of 1979 concerning Cooperative Societies, as amended by Law No. 118 of 2013. The decision, published in the Official Gazette “Al-Kuwait Al-Yaum,” stipulates the following:
Article One
The provisions of Article (30) of Ministerial Decision No. (165T) of 2013, referred to above, are hereby replaced with the following text:
Article (30)
Net profits shall be distributed as follows:
1. 20% to the legal reserve until it reaches five times the actual capital at the end of the fiscal year in which profits are distributed, after which the cooperative shall begin deducting 2.5% annually.
2. 15% allocated for social, cultural, and recreational services in the cooperative’s area of operation for the benefit of its members.
3. 5% for national projects determined by the Ministry in coordination with the relevant union, for which the Undersecretary of the Ministry shall issue the necessary decisions and instructions.
4. Share dividends at a rate not exceeding 2% of the capital, taking into account the admission and withdrawal dates of each shareholder.
5. Returns on members’ purchases from the cooperative during the fiscal year ending, capped at 15% per Kuwaiti Dinar, within the limit of annual purchases not exceeding 10,000 Kuwaiti Dinars per member.
6. The remainder shall be distributed as a bonus to the members of the Board of Directors, not exceeding 10%, subject to approval by the General Assembly, or up to the maximum limit specified by a ministerial decision, whichever is lower.
7. The remaining balance shall then be transferred to the allocation specified in paragraph (2) of Article (29).
Article Two
Any provision conflicting with the terms of this decision is hereby repealed. This decision shall take effect from the date of its publication in the Official Gazette, and the competent authorities are tasked with implementing its provisions.
