Starting a Co-op

A co-op is a business like any other, except that it’s owned by its members/users. Like any business it must register with the Department of Trade & Industry (via the Companies & Intellectual Property Commission, CIPC) to operate legally and to be able to open a bank account.

Besides business registration, anyone operating telecommunications must also be licenced and/or exempted from licencing by ICASA. Here we share the path followed by Zenzeleni Networks Mankosi.

Official instructions are at  http://www.cipc.co.za/index.php/register-your-business/co-operatives/ . A fee of R215 is payable and one has to download, print, sign, scan and upload some documents. The page suggests that one use form CR5 to reserve the co-op’s name, for another R50, but Zenzeleni was able to avoid this by giving the name in its introductory letter.

If you use the model constitution provided, you have to insert your organisation’s objectives. Here are the Zenzeleni co-op’s:

  1. To provide telecommunication services (voice and data) to its members on a not-for-profit basis. The co-operative will negotiate wholesale prices with Internet Service Providers (ISPs) and will maintain and operate a telecommunication network deployed in Mankosi Administrative Area (AA) to reduce the cost of communications amongst its members.
  2. To reinvest the surplus generated by its activities in initiatives aiming at the upliftment of its members, the cooperative will, once a year, select local development initiatives proposed by its members which will receive funding for its start-up and/or expansion.
  3. To operate and maintain solar charging stations to augment the financial sustainability of the telecommunication services. The co-operative will use existing solar power generation and storage systems, and will ensure the security and full charge of the devices.

The Zenzeleni co-op also chose to amend the text of the model constitution by attaching this letter:

“Amendments to sections in the Constitution

“The sections listed below will be amended accordingly.  Bold text substitutes existing text in the constitution attached.

“- Section 35. [1] The term of office of the Directors of the Co-operative shall be one year.

“- Section 44. [2] 80% of the directors shall constitute a quorum of a meeting of the board.

“- Section 68. [a] at least 1% and no more than 5% is set aside as a reserve in the Undivisible Reserve Fund.

“- Section 68. [b] the rest of the surplus is used in initiatives aiming at the upliftment of its members.”

Documents to submit to ICASA

(Please ensure that both the representative of the Coop and a Commissioner of Oaths initial every page of Form M as well as every page of the attachments.):

  • Form M  (signed by a Commissioner of Oaths and a representative of the Coop)
  • Resolution signed by the Directors of the Coop
  • Photocopy with Documentation received from the DTI to confirm registration of the coop
    • Registration letter
    • Registration certificate
    • List of Directors
  • List of access points deployed
  • Short description of the activities

Form M

License exemption

Licence Exemption Regulations

Community Telecoms