On 24 February 2026, the National Defence and Security Council enacted the Law Amending the Cooperative Societies Law (Law No. 8/2026), (“Amendment”) introducing significant changes to the governance, financial management, supervision, and liability framework applicable to cooperative societies in Myanmar.
Key Amendments
1. Supervisory Authority
The definition of “Minister” has been revised to refer to the Union Minister of the Ministry of Cooperatives and Rural Development, clarifying regulatory oversight. The Ministry is empowered, with Union Government approval, to issue rules and regulations, while the Department may issue notifications and directives.
2. Governance and Eligibility Requirements
Societies are required to amend their by-laws to stipulate a five-year term for executive members, auditors, and representatives, limit service to a maximum of two terms (except for primary societies with fewer than 15 members), and establish procedures for filling vacancies. New eligibility criteria for executive members and representatives include a minimum matriculation qualification, at least one year of membership, attendance at a general meeting, good moral character, relevant business understanding, compliance with applicable laws and by-laws, good health, and an age limit of 70 years.
3. Succession of Membership Rights and Obligations
The Amendment expands the scope of succession upon the death of a member or prospective member who has not designated a beneficiary. Under the original law, only the benefits of the deceased were transferred to the prescribed order of successors. The Amendment now provides that, in addition to rights and interests, all payable and receivable debts of the deceased member shall also be transferred in accordance with the statutory order of priority, thereby extending to successors not only the benefits but also the outstanding liabilities associated with the deceased’s membership.
4. Financial Management and Profit Allocation
Societies must allocate 50% of their net annual profit to designated funds and distribute the remaining 50% in accordance with the Law, while making mandatory financial provisions for bad debts, guarantee fees, and the salaries and expenses of executive members and employees. They are also subject to enhanced record-keeping and reporting obligations, including maintaining inventories, financial accounts, and registers, and submitting prescribed reports to the Department; societies receiving government bank loans or State assistance are further subject to audit by the relevant Department.
5. Administrative Sanctions and Appeals
A new administrative enforcement regime authorizes the Director General to take action for non-compliance, including issuing warnings, imposing fines, expelling a member or member society, temporarily suspending registration or cancelling registration. An appeal may be lodged with the Minister within 60 days from the date of the order, and the Minister’s decision is final and conclusive.
6. Criminal Liability
The amendments introduce several key offences and penalties, including imprisonment of up to three years for filing false complaints, and imprisonment of up to seven years and/or fines ranging from MMK 5 million to MMK 50 million for misappropriation or contractual breaches involving societies, with potential liability extending to executive members. They also establish liability for individuals who instigate or assist in the commission of such offences.
Practical Implications
Cooperative societies should promptly review and amend their by-laws, assess executive eligibility, strengthen internal controls and financial governance, and evaluate compliance risks, particularly where government funding or contractual obligations are involved.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
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