40 Death of member: distribution of property not exceeding £5,000
(1) This section applies if—
(a) a member of a registered society dies,
(b) the member's property in the society (as at death) in respect of shares, loans or deposits does not exceed £5,000, and
(c) that property is not the subject of a nomination under section 37 (nomination by member of entitlement to property in society on member's death).
(2) The society's committee may, without letters of administration or probate of any will (or, in Scotland, confirmation) having been obtained, distribute that property among such persons as appear to the committee (on such evidence as it considers satisfactory) to be entitled by law to receive it.
(3) A payment or transfer made under this section to a person appearing to the committee at the time of the payment or transfer to be entitled under this section is valid and effectual against any demand made upon the committee or society by any other person.
(4) An order under section 6 of the Administration of Estates (Small Payments) Act 1965 (power to provide for increases in amounts disposable on death without representation) has effect in relation to the limit in subsection (1)(b) as it has effect in relation to the limits referred to in section 1 of that Act.
(1) This section applies to an officer of a registered society who receives or is in charge of money.
(2) If the society's rules so require, the officer must (before undertaking the duties of office) give security in such sum as the society's committee may direct conditioned for—
(a) the officer rendering an accurate account of all moneys received and paid by the officer on account of the society, at such times as its rules provide or as the society or its committee requires, and
(b) the payment of all sums due from the officer to the society.
(3) The security must be given by the officer—
(a) becoming bound, with or without a surety (or, in Scotland, cautioner) as the society's committee may require, in a bond in one of the forms set out in Schedule 1 or in such other form as the committee may approve, or
(b) giving the security of a guarantee society.
42 Duty of certain officers and employees to account
(1) This section applies to—
(a) an officer of a registered society who receives or is in charge of money, and
(b) an employee of a registered society who receives or is in charge of money and is not engaged under a special agreement to account.
A person to whom this section applies is referred to below as a “relevant person”.
(2) A relevant person must render such an account as the society or its committee may require (to be examined and allowed or disallowed by it)—
(a) at such time as the relevant person is required to do so by the society's rules, or
(b) on demand, or
(c) on notice in writing requiring the relevant person to do so, given or left at that person's last or usual place of residence.
(3) A relevant person must, on demand or on the giving of notice of a kind mentioned in subsection (2)(c), pay over all moneys and deliver all property for the time being in the relevant person's hands or custody to such person as the society or its committee may appoint.
(4) Duties imposed on a relevant person under subsection (2) or (3) are, after that person's death, to be treated as imposed on the person's personal representatives.
(5) In case of any neglect or refusal to comply with the preceding provisions of this section, the society may—
(a) sue on any bond or security given under section 41, or
(b) apply to—
(i) the county court (which may proceed in a summary way) or a magistrates' court, or
(ii) in Scotland, the sheriff.
(6) The order of the county court, magistrates' court or sheriff is final and conclusive (despite anything in section 77 of the County Courts Act 1984).
43 Capacity of a society and relationship with its rules
(1) The validity of an act done by a registered society may not be called into question on the ground of lack of capacity by reason of anything in the society's registered rules.
(2) A member of a registered society may bring proceedings to restrain the doing of an act which would, but for subsection (1), be beyond the society's capacity.
(3) But proceedings may not be brought in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.
(4) It remains the duty of the members of a registered society's committee to observe any limitations on their powers flowing from the society's registered rules.
(5) Action by the members of the committee which would, but for subsection (1), be beyond the society's capacity may be ratified by the society only by a special resolution.
(6) A special resolution ratifying such action does not affect any liability incurred by a member of the committee or any other person; relief from any such liability must be agreed to separately by special resolution.
(7) In the case of a charitable registered society whose registered office is in England or Wales, ratification under subsection (5) is ineffective without the prior written consent of the Charity Commission for England and Wales.
(8) Section 44 contains provisions about special resolutions under this section.
(9) This section is subject to—
(a) section 47 (application to charitable societies);
(b) section 48 (transactions with members of the committee and connected persons in excess of powers).
(1) This section supplements section 43.
(2) A resolution is a “special resolution” if—
(a) it is passed at a general meeting by at least 75% of the eligible members who vote, and
(b) at least 21 days' notice of the meeting, specifying the intention to propose the resolution, is given in accordance with the society's rules.
(3) In subsection (2)—
(a) “eligible member” means a member who is entitled to vote;
(b) references to voting are to voting in person or, where the society's rules allow proxies, by proxy.
(4) A copy of a special resolution, signed by the chair of the meeting at which the resolution was passed and countersigned by the society's secretary, must be sent to the FCA and registered by it.
(5) The resolution does not take effect until a copy of it has been registered.
(1) In favour of a person dealing with a registered society in good faith, the power of the committee to bind the society (or to authorise others to do so) is treated as free of any limitation under the society's registered rules.
(2) For this purpose—
(a) a person “deals with” a society if the person is a party to any transaction or other act to which the society is a party,
(b) a person is not regarded as acting in bad faith by reason only of knowing that an act is beyond the powers of the committee under the society's registered rules, and
(c) a person is presumed to have acted in good faith unless the contrary is proved.
(3) The references above to limitations on the powers of the committee under the society's registered rules include limitations deriving—
(a) from a resolution of the society in general meeting or a meeting of any class of members, or
(b) from any agreement between the members of the society or of any class of members.
(4) Subsection (1) does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the committee.
(5) But proceedings may not be brought in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.
(6) Subsection (1) does not affect any liability incurred by a member of the committee, or any other person, by reason of the committee's exceeding its powers.
(7) This section is subject to—
(a) section 47 (application to charitable societies);
(b) section 48 (transactions with members of the committee and connected persons in excess of powers).
46 No duty to enquire as to capacity of society or authority of committee
A party to a transaction with a registered society is not bound to enquire as to—
(a) whether the transaction is permitted by the society's registered rules, or
(b) any limitation on the powers of the committee to bind the society or authorise others to do so.
47 Application of sections 43 and 45 to charitable societies
(1) Sections 43 and 45 (capacity of society not limited by its rules and power of committee to bind society) apply to an act of a charitable registered society only in favour of—
(a) a person who—
(i) gives full consideration in money or money's worth in relation to the act, and
(ii) does not know that the act is not permitted by the society's registered rules or is beyond the powers of the committee (as the case may be), or
(b) a person who does not know at the time the act is done that the society is a charity.
(2) However, where a charitable registered society purports to transfer or grant an interest in property, the fact that—
(a) the act was not permitted by the society's registered rules, or (as the case may be)
(b) the committee in connection with the act exceeded any limitation on its powers under those rules,
does not affect the title of a person who subsequently acquires the property (or any interest in it) for full consideration without actual notice of any such circumstances affecting the validity of the society's act.
(3) In any proceedings arising out of subsection (1) a person who alleges—
(a) that a person knew that an act was not permitted by the society's registered rules or was beyond the powers of the committee, or
(b) that a person knew that the society was a charity,
has the burden of proving the allegation.
48 Transactions with committee members etc in excess of powers
(1) This section applies where—
(a) a registered society enters into a transaction the parties to which include—
(i) a member of the society's committee, or
(ii) a person connected with such a member, and
(b) in connection with the transaction, the society's committee exceeds any limitation on its powers under the society's registered rules.
(2) The transaction is voidable at the instance of the society.
(3) Whether or not it is avoided, a party to the transaction who is within subsection (1)(a)(i) or (ii), and any member of the committee who authorised the transaction, is liable—
(a) to account to the society for any gain made directly or indirectly by the transaction, and
(b) to indemnify the society for any loss or damage resulting from the transaction.
(4) Nothing in the above provisions excludes the operation of any other enactment or rule of law by virtue of which the transaction may be called in question or any liability to the society may arise.
(5) The transaction ceases to be voidable if—
(a) restitution of any money or other asset which was the subject matter of the transaction is no longer possible,
(b) the society is indemnified for any loss or damage resulting from the transaction,
(c) rights acquired bona fide for value and without actual notice of the committee's exceeding its powers by a person who is not party to the transaction would be affected by the avoidance, or
(d) the transaction is ratified by the society in general meeting in such a way as the case may require.
(6) A person other than a member of the committee is not liable under subsection (3) if the person shows that at the time the transaction was entered into the person did not know that the committee was exceeding its powers.
(7) This section does not affect the operation of section 45 (power of committee to bind the society) in relation to any party to the transaction not within subsection (1)(a)(i) or (ii) above.
(8) But if the transaction is voidable by virtue of this section and valid by virtue of that section in favour of such a person, the appropriate court may, on the application of that person or the society, make such order affirming, severing or setting aside the transaction, on such terms, as appear to the court to be just.
(9) In the case of a charitable registered society whose registered office is in England or Wales, any ratification of the transaction is ineffective without the prior written consent of the Charity Commission for England and Wales.
(1) This section supplements section 48.
(2) “The appropriate court”, in relation to a registered society, means the court having jurisdiction to wind up the society under the provisions of the Insolvency Act 1986 as applied by section 123.
(3) “Transaction” includes any act.
(4) The reference in section 48(1) to limitations under the society's registered rules includes limitations deriving—
(a) from a resolution of the society in general meeting or a meeting of any class of members, or
(b) from any agreement between the members of the society or of any class of members.
(5) Sections 252 to 255 of the Companies Act 2006 apply for the purposes of references to a person's being “connected” with a committee member—
(a) as if any reference to a director of a company were to a member of a committee of a registered society, and
(b) subject to such other adaptations and modifications as may be specified by regulations made by the Treasury under this section.
(1) Notwithstanding any enactment or rule of law, a registered society need not have a common seal.
(2) A registered society which has a common seal must have its registered name engraved in legible characters on the seal.
(3) A registered society which decides to have a common seal must not cause such a seal to be made unless its registered rules contain provision for the custody and use of that seal.
(4) An officer of a registered society, or a person acting on behalf of a registered society, commits an offence if the officer or person uses or authorises the use of a seal purporting to be the society's common seal which does not have the society's registered name engraved in legible characters on it.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
51 Power of society to have official seal for use abroad
(1) This section applies to a registered society if—
(a) it has a common seal, and
(b) its objects require or comprise the transaction of business in foreign countries.
(2) The society may, if authorised by its registered rules, have an official seal for use in any territory, district, or place outside the United Kingdom.
(3) An “official seal” is a facsimile of the society's common seal with the addition on its face of the name of every territory, district or place where it is to be used.
(4) The official seal, when duly affixed to a document, has the same effect as the society's common seal.
(1) If a registered society has an official seal, it may authorise any person appointed for the purpose as respects any territory, district or place appearing on the face of that seal to affix it to any deed or other document to which the society is party there.
(2) An authorisation for the purposes of subsection (1) must be given—
(a) in the case of a society whose registered office is in Scotland, by writing subscribed or authenticated in accordance with the Requirements of Writing (Scotland) Act 1995;
(b) in any other case, by writing under the society's common seal.
(3) As between the society and a person dealing with such an agent, the agent's authority continues—
(a) if a period is mentioned in the authorisation, during that period, or
(b) if no period is mentioned there, until notice of the revocation or determination of the agent's authority has been given to the person dealing with the agent.
(4) The person affixing the official seal must certify in writing on the deed or other instrument to which the seal is affixed the date on which and the place at which it is affixed.
53 Methods for execution of documents: England and Wales
(1) This section contains provisions about the execution of documents by a registered society under the law of England and Wales.
(2) A registered society which has a common seal may execute a document by affixing its common seal to it.
(3) A document—
(a) signed by 2 authorised signatories (see subsection (6)), and
(b) expressed (in whatever form of words) to be executed by a registered society,
has the same effect as if it were executed under the society's common seal.
(4) A document executed by a registered society which makes it clear on its face that it is intended by the person or persons making it to be a deed—
(a) has effect, upon delivery, as a deed, and
(b) is presumed to be delivered upon its being executed by the society, unless a contrary intention is proved.
(5) In favour of a purchaser—
(a) a document is treated as duly executed by a registered society if it purports to be signed by 2 authorised signatories, and
(b) where it makes it clear on its face that it is intended by the person or persons making it to be a deed, is treated as delivered upon its being executed.
“Purchaser” here means a purchaser in good faith for valuable consideration, and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.
(6) For the purposes of this section, in relation to a society—
(a) each of the members of the society's committee is an authorised signatory, and
(b) the society's secretary is also an authorised signatory.
(7) Subsections (3) to (5) apply whether or not the society has a common seal.
54 Method for execution of contracts under seal: England and Wales
(1) A contract which, if made between individuals, would be by law required—
(a) to be in writing, and
(b) to be under seal (if made according to the law of England and Wales),
may be made, varied or discharged on behalf of a registered society in writing under its common seal.
(2) This section does not affect the application of the Corporate Bodies' Contracts Act 1960.
(3) This section does not apply to Scotland.
Under the law of Scotland, for the purposes of any enactment—
(a) providing for a document to be executed by a registered society by affixing its common seal, or
(b) referring (in whatever terms) to a document so executed,
a document signed or subscribed (or, in the case of an electronic document, authenticated) by or on behalf of the society in accordance with the provisions of the Requirements of Writing (Scotland) Act 1995 has effect as if so executed.
56 Execution of documents: presumption of validity of officer's signature
(1) This section applies to a document—
(a) by which a contract is purportedly made, varied or discharged by or on behalf of a registered society, and
(b) which is purportedly signed by a person holding an office in the society.
(2) The signature is presumed, unless the contrary is proved, to be the signature of a person holding that office at the time the signature was made.
57 Contracts, deeds and obligations made before registration of society
(1) A contract that purports to be made by or on behalf of a registered society at a time when the society has not been registered under this Act has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the society or as agent for it.
(2) Accordingly, the contract is to be treated as—
(a) imposing on that person all the obligations it purports to impose on the society, and
(b) conferring on that person all the rights it purports to confer on the society.
(3) Subsections (1) and (2) apply—
(a) to the making of a deed under the law of England and Wales, and
(b) to the undertaking of an obligation under the law of Scotland,
as they apply to the making of a contract.
(4) In subsection (1)—
(a) the reference to a registered society includes a Northern Ireland society, and
(b) the reference to this Act includes the relevant Northern Ireland law.
“Northern Ireland society” and “the relevant Northern Ireland law” have the same meaning as in section 142.
A bill of exchange or promissory note is treated as made, accepted or endorsed on behalf of a registered society if made, accepted or endorsed in the name of, or by or on behalf or account of, the society by a person acting under its authority.
59 Charges on assets of English and Welsh societies
(1) This section applies to an instrument executed by a registered society whose registered office is in England or Wales which creates or is evidence of a fixed or floating charge on assets of the society.
(2) If an application for the recording of the charge is made in accordance with subsection (3), the instrument is not a bill of sale for the purposes of the Bills of Sale Acts 1878 and 1882 and is not invalidated by those Acts.
(3) An application is made by delivering to the FCA (by post or otherwise), within the period of 21 days beginning with the date of execution of the instrument (subject to any extension under section 60)—
(a) a copy of the instrument, authenticated in the manner directed by the FCA,
(b) such additional particulars relating to the charge as may be required by the FCA, authenticated in the manner directed by the FCA, and
(c) the appropriate fee.
(4) If an application is made in accordance with subsection (3), the FCA must—
(a) give the person who makes the application an acknowledgment of the application, bearing the FCA's seal,
(b) place the copy of the instrument included in the application, a note of any particulars included in it, and a copy of the acknowledgement on a file kept by the FCA in respect of the society, and
(c) make the file available for inspection during office hours by members of the public on payment of the appropriate fee.
(5) “The appropriate fee” means the fee required by rules made in accordance with paragraph 23 of Schedule 1ZA to the Financial Services and Markets Act 2000.
(6) This section does not apply to a debenture registered under section 14 of the Agricultural Credits Act 1928 (debenture of registered society creating floating charge over farming stock).
60 Section 59: power to extend time for making application or to rectify errors
(1) This section applies where—
(a) a registered society has executed an instrument to which section 59 applies, and
(b) it appears to the FCA (on the application of the society or any other person claiming the benefit of the instrument) that by reason of inadvertence or other sufficient cause—
(i) an application for recording the charge was not made within the period mentioned in section 59(3), or
(ii) any matters were omitted from, or mis-stated in, such an application.
(2) The FCA may, on such terms as it considers appropriate, give a direction—
(a) extending the period for making such an application, or
(b) requiring the omission or mis-statement to be rectified.
61 Notification of transactions relating to charges recorded under section 59
(1) The FCA may, under section 143, make provision for—
(a) the giving to the FCA of notice of any release, discharge or other transaction relating to a charge in respect of which an application under section 59 has been made;
(b) the inclusion in the file mentioned in that section of any such notice appearing to the FCA to relate to the charge.
(2) Nothing in this section limits the generality of the power to give directions conferred by section 143.
(1) The relevant provisions (which relate to floating charges) apply to a registered society as they apply to an incorporated company, subject to the general and specific modifications mentioned below.
(2) In this Chapter “the relevant provisions” means—
(a) Chapter 1 of Part 18 of the Companies Act 1985 (“the 1985 Act”), and
(b) section 122(2) of the Insolvency Act 1986 (“the 1986 Act”).
(3) The general modifications are—
(a) a reference to a company or incorporated company is to be read as a registered society;
(b) a reference to the registrar or the registrar of companies is to be read as the FCA;
(c) a reference (however expressed) to—
(i) registration of a floating charge,
(ii) registration in accordance with Chapter 2 of Part 25 of the Companies Act 2006, or
(iii) delivery to, or receipt by, the registrar of particulars for registration,
is to be read as delivery to the FCA of any document required by section 63(2) to be so delivered.
(4) The specific modifications are—
(a) in section 122(2) of the 1986 Act, a reference to the Court of Session is to be read as any sheriff court;
(b) section 462(5) of the 1985 Act is subject only to such provisions of that Act as apply (by virtue of section 123) to registered societies;
(c) section 466 of that Act has effect as if subsections (4) and (5) and the words “subsection (4) of” in subsection (6) were omitted.
(5) Subsection (6) applies where any assets of a registered society are subject to—
(a) a floating charge created under the relevant provisions as applied by this section, and
(b) an agricultural charge created under Part 2 of the Agricultural Credits (Scotland) Act 1929 (“the 1929 Act”).
(6) Sections 463(1)(c) and 464(4)(b) of the 1985 Act have effect for the purpose of determining the relative ranking of those charges as if the agricultural charge were a floating charge created under the relevant provisions and registered under the 1985 Act at the same time as it was registered under Part 2 of the 1929 Act.
(7) This Chapter does not apply in relation to a registered society whose registered office is in England or Wales.
63 Filing of information relating to charges created by virtue of section 62
(1) This section applies in relation to a floating charge created by a registered society under the relevant provisions as applied by section 62.
(2) The following must be delivered to the FCA (by post or otherwise) within the period of 21 days beginning with the day of execution of the instrument creating the charge (or within any extended period allowed under subsection (6))—
(a) a copy of the instrument, authenticated in the manner directed by the FCA,
(b) a note, authenticated in the manner directed by the FCA, of such particulars relating to the charge as may be required by the FCA, and
(c) the appropriate fee.
(3) If subsection (2) is not complied with, the charge is void against any person other than the society.
(4) Where a person delivers to the FCA a document within subsection (2)(a) or (b) together with the appropriate fee, the FCA must—
(a) give the person an acknowledgement, bearing the FCA’s seal, that states the date and time of delivery,
(b) place the document and a copy of the acknowledgement on a file kept by the FCA in respect of the society, and
(c) make the file available for inspection during office hours by members of the public on payment of the appropriate fee.
(5) Subsection (6) applies if it appears to the FCA (on the application of the society or any other person claiming the benefit of the instrument) that by reason of inadvertence or other sufficient cause—
(a) a duly authenticated copy of the instrument was not delivered to the FCA within the period of 21 days mentioned in subsection (2), or
(b) any matters were omitted from, or mis-stated in, the note under subsection (2)(b).
(6) The FCA may, on such terms as it considers appropriate, give a direction—
(a) extending the period, or
(b) requiring the omission or mis-statement to be rectified.
(7) “The appropriate fee” means the fee required by rules made by the FCA (in accordance with paragraph 23 of Schedule 1ZA to the Financial Services and Markets Act 2000).
(1) The FCA may, under section 143, make provision for—
(a) the giving to the FCA of notice of any release, discharge or other transaction relating to a charge created by an instrument a copy of which has been delivered to the FCA in pursuance of section 63;
(b) the giving to the FCA of notice of any security granted by a registered society over any of its assets otherwise than under the relevant provisions as applied by section 62;
(c) the inclusion in the file mentioned in section 63 of any notice within paragraph (a) or (b) of this subsection.
Nothing in this subsection limits the generality of the power to give directions conferred by section 143.
(2) The Court of Session may by Act of Sederunt make rules prescribing the nature of the documents with which, in relation to a charge of a kind mentioned in subsection (1)(a), the creditor may require to be provided for identifying the assets affected by the charge and establishing the society's title to them.
65 English and Welsh societies: restriction on appointment of administrative receiver
(1) The holder of a qualifying floating charge in respect of the property of a relevant society whose registered office is situated in England and Wales may not appoint an administrative receiver of the society.
(2) This section applies to a floating charge which is created by a relevant society on or after 6th April 2014 and is either—
(a) a charge in respect of which an application under section 59 has been made; or
(b) a charge created by a debenture registered under section 9 of the Agricultural Credits Act 1928 as applied by section 14 of that Act.
(3) This section applies in spite of any provision of an agreement or instrument which purports to empower a person to appoint an administrative receiver (by whatever name).
(4) In this section—
“administrative receiver”, in relation to a relevant society, means—
a receiver or manager of the whole (or substantially the whole) of the society's property appointed by or on behalf of the holder of a floating charge, or by such a charge and one or more other securities, or
a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the society's property;
“holder of a qualifying floating charge in respect of the property of a relevant society” has the meaning given in paragraph 14 of Schedule B1 to the Insolvency Act 1986 as applied in relation to a relevant society by an order under section 118;
“relevant society” means a registered society which is not—
a private registered provider of social housing; or
registered as a social landlord under Part 1 of the Housing Act 1996 or under Part 2 of the Housing (Scotland) Act 2010.
66 Duty to account etc of receiver or manager of a society's property
(1) This section applies to a receiver or manager of a registered society's property who has been appointed under the powers contained in any instrument.
(2) The receiver or manager must—
(a) within one month from the date of appointment, notify the FCA of the appointment;
(b) within one month (or such longer period as the FCA may allow) after the end of each relevant period, deliver to the FCA a return showing receipts and payments in that relevant period;
(c) within one month after ceasing to act as receiver or manager, deliver to the FCA a return showing—
(i) receipts and payments in the final period, and
(ii) the total amount of payments and receipts in all preceding relevant periods.
References here to receipts and payments are to receipts and payments of the receiver or manager.
(3) For the purposes of subsection (2) the relevant periods are—
(a) the period of 6 months beginning with the date of appointment, and
(b) each subsequent period of 6 months for which the person is receiver or manager.
(4) If the society is a PRA-authorised person—
(a) the receiver or manager must send to the PRA a copy of any notification or return sent under subsection (2) to the FCA;
(b) the FCA must consult the PRA before allowing a period of more than one month under subsection (2)(b).
67 Registered society with withdrawable share capital not to carry on banking etc
(1) A registered society which has any withdrawable share capital must not carry on the business of banking.
(2) For this purpose the taking of deposits of not more than £400 in any one payment and not more than £400 for any one depositor, payable on not less than 2 clear days' notice, is not to be treated as carrying on the business of banking.
(3) A registered society which takes deposits must not make any payment of withdrawable capital while any payment due on account of any deposit is unsatisfied.
(4) A registered society which contravenes this section commits an offence and is liable on summary conviction to a fine not exceeding level 1 on the standard scale.
(1) The Treasury may by order substitute for the sums for the time being specified in section 67(2) such other sums (being not less than the minimum sums) as they consider appropriate.
(2) The “minimum sums” are—
(a) in the case of the first sum specified in section 67(2) (the limit of deposits that can be taken at any one time), £10;
(b) in the case of the second sum specified there (the maximum amount that can be taken from any one depositor), £250.
(3) The order may—
(a) make any such provision in connection with altering the limits for the time being applicable under section 67(2) as was made by section 1 of the Industrial and Provident Societies Act 1978 in connection with the alteration made by section 1(1) of that Act, and
(b) contain such other transitional, consequential, incidental or supplementary provisions as appear to the Treasury to be necessary or appropriate in that connection.
69 Society carrying on banking must display statement
(1) A registered society which carries on the business of banking must display a statement complying with section 70 in a conspicuous position in—
(a) its registered office, and
(b) every other office or place of business belonging to the society where the business of banking is carried on.
(2) Section 67(2) (taking of deposits below limits specified there not to be treated as carrying on the business of banking) applies for the purposes of this section.
(3) A registered society which fails to comply with this section commits an offence and is liable on summary conviction to a fine not exceeding level 1 on the standard scale.
(1) The statement required by section 69 is to be in the following form (or as near to it as is possible in the circumstances)—
1 Capital of the society—
(a) nominal amount of each share;
(b) number of shares issued;
(c) amount paid up on shares.
2 Liabilities of the society on the relevant date—
(a) on judgments;
(b) on specialty;
(c) on notes or bills;
(d) on simple contract;
(e) on estimated liabilities.
3 Assets of the society on the relevant date—
(a) government securities (stating them);
(b) bills of exchange and promissory notes;
(c) cash at the bankers;
(d) other securities.
(2) “The relevant date” is—
(a) 1 January (for the period beginning with the first Monday in the following February and ending immediately before the first Monday in the following August);
(b) 1 July (for the period beginning with the first Monday in the following August and ending immediately before the first Monday in the following February).
71 Discharge of mortgages of property in England and Wales
(1) This section applies where—
(a) there is a mortgage or other assurance (“the charge”) of any property in England or Wales to a registered society,
(b) a receipt in full for all moneys secured on the property by the charge is endorsed on, or annexed to, the charge,
(c) the receipt is in a form set out in Part 1 of Schedule 2 or is in any other form specified in the society's rules (or in a schedule to those rules), and
(d) the receipt is signed by 2 members of the society's committee and countersigned by its secretary (or, if the society is in liquidation, is signed by the liquidator or liquidators for the time being, described as such).
(2) For the purposes of the provisions of section 115 of the Law of Property Act 1925 (reconveyances of mortgages by endorsed receipts) specified below, the receipt is treated as meeting the requirements of subsection (1) of that section—
(a) subsection (1) so far as it relates to the operation of a receipt of a kind mentioned in that subsection;
(b) if the receipt states the name of the person who pays the money, subsection (2);
(c) subsections (3), (6), (8), (10) and (11);
(d) where consistent with the terms of the form used for the receipt, subsection (7).
(1) This section applies to land in Scotland that is held in security by a registered society by virtue of a heritable security.
(2) If the heritable security is constituted by an ex facie absolute conveyance (whether or not qualified by a back letter), a receipt in Form C in Part 2 of Schedule 2 (or as nearly as may be in that form) that is endorsed on or annexed to the conveyance has the following effect on being registered in the General Register of Sasines—
(a) it effectually discharges the heritable security and disburdens the land comprised in it, and
(b) it vests that land in the person entitled to it at the date the receipt is granted, in the same way and to the same effect as if the society had granted a conveyance containing all usual and necessary clauses and the conveyance had been duly registered in the General Register of Sasines.
(3) In any other case—
(a) where the heritable security is recorded in the General Register of Sasines, a receipt in Form D in Part 2 of Schedule 2 (or as nearly as may be in that form) that is endorsed on or annexed to the deed constituting the heritable security, upon being recorded in the General Register of Sasines, effectually discharges the heritable security and disburdens the land comprised in it, in the same way and to the same effect as if the society had granted a discharge and the discharge had been duly recorded in the General Register of Sasines, and
(b) where the heritable security is registered in the Land Register of Scotland, a receipt in Form E in Part 2 of Schedule 2 (or as nearly as may be in that form) that is endorsed on or annexed to the deed constituting the heritable security, upon being registered in the Land Register of Scotland, effectually discharges the heritable security and disburdens the land comprised in it, in the same way and to the same effect as if the society had granted a discharge and the discharge had been duly registered in the Land Register of Scotland.
(4) The fee payable in respect of the registration of the receipt may not exceed 25 pence.
(5) In this section—
“a receipt”, in relation to any security, means a receipt for all moneys advanced by the society on the security of the property comprised in the security;
“conveyance” and “deed” have the meaning given by the Conveyancing (Scotland) Act 1924.
73 Discharge of securities: other property in Scotland
(1) This section applies to property other than land that is held in security by a registered society in Scotland.
(2) A receipt in Form F in Part 2 of Schedule 2 (or as nearly as may be in that form)—
(a) discharges the security, and
(b) vests the property comprised in it in the person entitled to it at the date the receipt is granted without the necessity of any further deed.
(3) But where the original security was intimated to any person, a receipt has the effect mentioned in subsection (2) only when it is duly intimated to that person.
(4) The fee payable in respect of the registration of the receipt may not exceed 25 pence.
(5) In this section—
“a receipt”, in relation to any security, means a receipt for all moneys advanced by the society on the security of the property comprised in the security;
“deed” has the meaning given by the Conveyancing (Scotland) Act 1924.
74 Receipt on payment of moneys secured to a society
On payment of all moneys intended to be secured to a registered society on the security of any property, the debtor is entitled (or the debtor's successor is, or the debtor's representatives are, entitled) to a receipt in the appropriate form specified in Schedule 2.
(1) A registered society must ensure that proper books of account are kept with respect to its transactions and its assets and liabilities.
(2) The duty under subsection (1) includes a duty to ensure that there are kept such books as are necessary to—
(a) give a true and fair view of the state of the society's affairs, and
(b) explain its transactions.
(3) A registered society must establish and maintain a satisfactory system of control of its—
(a) books of account,
(b) cash holdings, and
(c) receipts and remittances.
(1) A registered society may keep a book of account by—
(a) making entries in bound books, or
(b) recording the matters in question in any other way.
(2) Where a book of account is kept otherwise than by making entries in a bound book, the society must take adequate precautions for—
(a) guarding against falsification, and
(b) facilitating its discovery.
77 Year of account: societies registered on or after 8 January 2012
(1) This section applies to a registered society registered on or after 8 January 2012.
(2) The society's first year of account is the period of more than 6 months but not more than 18 months that—
(a) begins with the date of the society's registration, and
(b) ends with its accounting reference date.
(3) Each subsequent year of account—
(a) begins immediately after the end of the previous year of account, and
(b) ends with its next accounting reference date.
(4) In each calendar year, the society's “accounting reference date” is (subject to subsection (5)) the last day of the month in which the anniversary of the society's registration falls.
(5) The society may by notice to the FCA specify a new accounting reference date having effect in relation to its current and subsequent years of account.
(6) A notice under subsection (5) must state whether the current year of account—
(a) is to be shortened, so as to come to an end on the first occasion on which the new accounting reference date falls or fell after the beginning of the year of account, or
(b) is to be extended, so as to come to an end on the second such occasion.
(7) A notice extending the current year of account has no effect if—
(a) it is given less than 5 years after the end of a year of account that was extended under this section, or
(b) it would extend the year of account so that it would exceed 18 months.
(8) If the society is dissolved by an instrument of dissolution under section 119, its last year of account ends with the date of the instrument of dissolution.
78 Year of account: societies registered on or before 7 January 2012
(1) This section applies to a registered society to which section 77 (year of account: societies registered on or after 8 January 2012) does not apply.
(2) A year of account—
(a) begins immediately after the end of the previous year of account, and
(b) ends with—
(i) the date of the last balance sheet published by the society in the relevant period, or
(ii) if no balance sheet is published in that period, the 31 December in that period.
(3) The “relevant period”—
(a) begins with the 31 August following the beginning of the year of account, and
(b) ends with the following 31 January.
(4) The society may by notice to the FCA alter the date on which its current and subsequent years of account end to a date other than that provided for by subsection (2)(b).
(5) A notice under subsection (4) must state whether it extends or shortens the current year of account.
(6) A notice extending the current year of account has no effect if—
(a) it is given less than 5 years after the end of a year of account that was extended under this section, or
(b) it would extend the year of account so that it would exceed 18 months.
(7) If the society is dissolved by an instrument of dissolution under section 119, its last year of account ends with the date of the instrument of dissolution.
A registered society must ensure that there is prepared, in respect of each year of account—
(a) a revenue account for that year which deals with the society's affairs as a whole, or
(b) two or more revenue accounts for that year which deal separately with particular businesses carried on by the society.