to the Registrar for registration a statement in lieu of prospectus in the form and containing the particulars set out in Part I of the Third Schedule and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule: Provided that a statement in lieu of prospectus need not be delivered if within the said period a prospectus relating to the company which complies with the Fourth Schedule is issued and is lodged with the Registrar as required by section fifty -six. (2 ) Every statement in lieu of prospectus delivered under subsection (1) shall, where the persons making any such report as aforesaid have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 5 in Part III of the said Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving reasons therefor. (3 ) If default is made in complying with subsection (1) or (2) the company and every officer of the company who is in default shall be guilty of an offence and liable to a default fine of not exceeding level two. (4 ) Subsections (5) and (6) of section sixty-six shall apply, mutatis mutandis, to every statement in lieu of prospectus lodged under this section as they apply to a statement in lieu of prospectus lodged under that section. (5 ) The removal of the term “(Private)” from the name of a company in compliance with subsection (1) shall not be regarded as a change of name for the purposes of subsection (1) of section thirty-three. [Section as amended by Act No. 22 of 2001] Co-operative Companies 36 Definition of co-operative company (1 ) A co -operative company is a company, other than a private company, which— (a ) in its memorandum states that its main object is one or other or both of the following — (i) the provision for its members of a service facilitating the production or marketing of agricultural produce or livestock; (ii) the sale of goods to its members; and (b ) by its articles— (i) restricts the right to transfer its shares; and (ii) provides that its ordinary shares shall be of one class only; and (iii) subject to section thirty-nine, fixes a limit to the number of shares which may be held by any one member; and (iv) regulates the voting rights of its members in accordance with section thirty-nine; and (v) limits the dividend which may be paid on its shares to a rate not exceeding ten per centum per annum on the amounts paid up thereon; and (vi) provides for the distribution of a part or the whole of its profits amongst its members on the basis of certain or all of their business transactions with the company. (2 ) With the sanction of a special resolution and subject to confirmation by the court, a public company, which is not a co -operative company, may convert itself into a co-operative company. (3 ) For the purposes of paragraph (a) of subsection (1)— “member”, in relation to a co-operative company, includes any person who is a member of a co-operative company which is a member of the first-mentioned co-operative company. 37 Co-operative company to maintain reserve fund (1 ) Every co-operative company shall maintain a reserve fund which may be used for any purpose for which the share capital of the co -operative company may be used but which shall not be available for distribution to members except in the event of the winding-up of the co-operative company. (2 ) The articles of the co-operative company shall provide for the creation and operation of its reserve fund and for the method of determining the amount to be appropriated thereto from the annual surplus of the cooperative company. 38 Consequences of default in complying with conditions for co-operative company Where the memorandum and articles of a company include the provisions which under section thirty-six are required to be included in the memorandum and articles of a company in order to constitute it a co -operative company but default is made in complying with any of those provisions the company shall cease to be entitled to the privileges and exemptions conferred on co-operative companies by this Act and the provisions thereof shall in all respects apply to the company as if it were not a co-operative company: Provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertency or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as to the court seem just and expedient, order that the company be relieved from such consequences as aforesaid.