18.1 Cooperative is encouraged to create funds for various purposes. Creation of a reserve fund is obligatory practically under all laws. Some laws (i.e. Indonesian Cooperative Law) require that separate funds are made from cooperative profits from members and non-members respectively. These funds are particularly reserve fund, and are in most cases not allowed to be used in the society business. The funds are kept in low return high security investments. For the use of said funds in cooperative business, RCS approval must be obtained in most countries. This is not a very satisfactory situation, as the funds belong to the society/members. The General Assembly (GA) should be hold powers to decide on the allocation and use of cooperative funds, as the GA sees fit.
In Fiji (under section 100), 30% of the surplus from members business and 100% surplus from non-members business is locked in a statutory reserve Fund. Twenty-five percent of these funds are further allocated to a National Reserve Investment Trust Fund, administered by the National Cooperative Federation. In addition to this, cooperatives must contribute to the central cooperative fund as prescribed by the Registrar, but no less than dollars 40 annually.
