Wed, May 20, 2015 - Page 13 News List

Legislature approves amendments to Cooperatives Act to regulate revenue

By Alison Hsiao  /  Staff reporter

Amendments to the Cooperatives Act (合作社法) yesterday cleared the legislature, forbidding profits made from a cooperative’s entrusted businesses to be allocated among cooperative members.

The bill is dubbed “the National Palace Museum clause,” as a museum cooperative caused a controversy by allotting among its members profits acquired from sales of museum products.


The amendments state that the cooperatives’ services should be provided only to members, except those entrusted by the government or public welfare associations or aimed at improving the cooperatives’ development, and that the government agencies and public welfare associations’ entrustment should be approved by their respective authorities.

Also, profits earned from businesses entrusted by the government and public welfare associations, according to the amended act, should not exceed 50 percent of a cooperative’s revenue, while those from services provided to nonmembers for the development of the cooperative should not exceed 30 percent.

The most attention-grabbing restriction was that incomes received from services provided to non-members should be placed in a public accumulation fund and a public welfare fund, rather than distributed among members.

Those who violate this provision are to be fined NT$4,000 to NT$50,000 (US$130.55 to US$1,631.85), while consecutive punishments are to be meted out if the corrections issued fail to be complied with; the cooperative could be ordered to be disincorporated after three unfulfilled correction demands.


The new injunctions are said to be a response to a dispute over the National Palace Museum Staff Cooperative’s distribution of a total surplus of NT$179 million from food services and sales of museum products, entrusted by the museum, to its members during the period between 2001 and 2008.

Democratic Progressive Party (DPP) Legislator Lin Shu-fen (林淑芬) said the museum staff cooperative receives more than NT$100 million in revenue every year, which is mostly generated by businesses entrusted by the government and public welfare associations.

As such, it is a for-profit business and has been evading taxes in the name of the cooperative, she said.

“We hope the spirit of cooperatives can be restored by the amendments after the stigmatization caused by incidents such as the recent scandal involving a museum cooperative’s profiting from nonmembers,” DPP Legislator Yu Mei-nu (尤美女) said.

The Liberty Times (the Taipei Times’ sister newspaper) reported in December last year that the Executive Yuan, the Ministry of the Interior and the National Audit Office all demanded the museum to return the NT$179 million in revenue to the government, with a Control Yuan member threatening to take legal action, but the museum has insisted that the distribution of the profits was legal.

Following a meeting presided over by the Ministry of the Interior in February last year concluding that the distributed surplus should be retrieved, the museum cooperative convened a members’ congress in April last year and resolved against recalling the distributed surplus, the report said.

The Executive Yuan has said the resolution is illegal, as the Civil Code stipulates: “The content of a resolution passed by the general meeting of [corporation] members that violates the act, regulations or the bylaws of the corporation shall be void.”

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