Division of credit union

(1) Any credit union may, by special resolution, resolve to divide itself into two or more credit unions, and any such resolution, (hereinafter in this section referred as a “preliminary resolution”), shall contain proposals for the division of the credit union into new credit unions, and the vesting of the assets and liabilities of the credit union, and may specify the area of operation of, and the members who will constitute, each of the new credit unions. (2) A copy of the preliminary resolution shall be sent to all members and creditors of the credit union and to the Registrar and notice of the resolution shall also be given to all other persons whose interests may be affected by the division of the (3) A member of a credit union may, notwithstanding any by-law to the contrary, by notice given to the credit union within a period of three months from receipt of the preliminary resolution, indicate his intention not to become a member of any of the new credit unions. (4) Any creditor of the credit union may, notwithstanding any agreement to the contrary, by notice given to the credit union within a period of three months from receipt of the preliminary resolution, indicate the intention not to demand the payment of moneys due. 60 Credit Unions Act (5) Any other person whose interest may be affected by the division may, by notice given to the credit union, object to the division unless his claim is satisfied. (6) Three (3) months after receipt of the preliminary resolution by all the members and creditors of the credit union and of the notice to other persons given under sub-section (2), a general meeting of the credit union, of which at least twenty-one clear days’ notice shall be given to its members, shall be convened for consideration of the preliminary resolution. (7) If, at the general meeting referred to in sub-section (6), the preliminary resolution is passed by not less than two-thirds of the members present and voting either without changes or with such changes as in the opinion of the Registrar are not material, the Registrar may, subject to sub-section (9), register the new credit unions; and upon such registration, the original credit union shall be deemed to be dissolved and its registration cancelled. (8) The decision of the Registrar under sub-section (7) as to whether or not any changes made in the preliminary resolution are material, may be subject to an appeal. (9) At the general meetings referred to in sub-sections (6) and (7), provision shall be made by another resolution for– (a) repayment of the share capital of all members who have given notice under sub-section (3); (b) satisfaction of the claims of all the creditors who have given notice under sub-section (4); (c) satisfaction of the claims of such of the other persons who have given notice under sub- section (5), Credit Unions Act 61 provided that no member or creditor or other person shall be entitled to such repayment or satisfaction until the preliminary resolution is confirmed as provided in sub-section (7). (10) The registration of new credit unions established pursuant to this section shall be deemed to be sufficient to vest the assets and liabilities of the original credit union in the manner specified in the preliminary resolution as considered and confirmed in accordance with sub-sections (6) and (7). CAP. 250. CAP. 317.