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for the purpose of evading the statutory obligations as to
minimum paid-up capital and the proposed restrictions as to
Directors or publication of periodical statements. We,
therefore, recommend that the minimum prescribed paid-up
capital for the foreign Banks should be £P.100,000.
16. In the case of Co-operative Societies registered
as Banks we think that the requirements as to minimum
paid-up capital should refer to the "own funds" of the
Society, that is to say, the paid-up share capital or the
members' contributions as the case may be, together with
reserves, (excluding reserves for bad debts and any other
earmarked reserve of a similar character) and undistributed
profits as recommended by the Registrar of Co-operative
Societies. It has been suggested to us that in the case of
Co-operative Societies whose members undertake a limited
liability by guarantee of a multiple of the amount of their
contributions that this liability of members should be
taken into consideration in applying the provision as to
minimum paid-up capital to such societies. We think,
however, that the suggestion is unjustified and may be
compared to a suggestion made in connection with commercial
Banks that the remaining liability on partly paid shares
should be considered as "paid-up" capital which would defeat
the intention of our recommendation that the minimum paid-up
capital must be paid up in cash. We further recommend
that the question of Reserve Funds to be taken into
consideration as "own funds" for the requirements as to
minimum paid-up capital should be decided on the advice of
the Registrar of Co-operative Societies having regard to
the merits of the individual case.
17. We also discussed the question of the right of
members of Co-operative Societies to obtain refund of their
contributions