Co-Operative Societies Act 2008
123. Dividend or bonus
1. Subject to this section and sections 119 and 120, any surplus may be distributed by way of dividend or bonus amongst its members in proportion to their patronage with the society at such rate as may be prescribed.
2. No registered society shall—
a. pay a dividend or bonus or distribute any part of its accumulated funds before the balance sheet has been certified by an auditor approved or appointed by the Registrar; or
b. pay a dividend or make any payment on account out of profits until the Reserve Fund has reached a proportion of not less than 10 percent of the total liabilities of the society.
3. A bonus based on wages or on the value of the products of a member or a bonus or rebate on patronage calculated in proportion to the amount of the business done by each member with the registered society may be distributed periodically to the members from surplus funds after the deduction of all expenditure and after making provision for bad and doubtful debts and making allocation for the Reserve Fund.