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INDUSTRIAL AND PROVIDENT SOCIETIES ACT (NORTHERN IRELAND) 1969 - SECT 88

General reserve and application of profits.

88.(1) Subject to the provisions of this section, the funds of a credit union
shall be applied to carrying out the objects of the credit union.

(2) At least twenty per cent. of any profit resulting from the operations of a
credit union during a year of account shall be transferred to a general
reserve until such time as it is equal to at least ten per cent. of the total
assets of the credit union and thereafter such sum shall be transferred to
that reserve as is necessary to maintain it at not lesss than ten per cent.
but not more than twenty per cent. of the total assets.

(3) Not less than ninety per cent. of any balance of profit remaining at the
end of a year of account after subsection (2) has been complied with shall be
applied in one or more of the following ways as the credit union shall in
general meeting determine:

(a)in the payment to members of a dividend on the amount of their paid up
shares;

(b)as a rebate of interest paid or due by members who have received loans from
the credit union, such rebate being based on the business done by such members
during the year of account;

(c)for any social, cultural or charitable purpose;

(4) In ascertaining the profit of a credit union in respect of any
year of account, all operating expenses in that year shall be taken into
account and provision made for depreciation of assets and for bad and doubtful
debts, but no provision shall be made in respect of amounts to be paid by way
of dividend.

(5) Where the amount standing to the credit of the general reserve exceeds
twenty per cent. of the total assets of the credit union at the end of any
year of account, the credit union shall, and where that amount exceeds ten per
cent. may, if the credit union in general meeting so determines, transfer to
the revenue account, and treat as revenue for that year, so much of that
amount as represents such excess.

© 1969 Crown Copyright

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