Co-operatives Act 1992 No 18
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have all commenced. See Historical notes Responsible Minister
Minister for Commerce jointly with the Minister for Fair Trading
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Contents Long title Part 1 Preliminary Division 1 Introduction 1 Name of Act 2 Commencement 3 Objects of this Act 3A Application to co-operative housing societies and other
bodies Division 2 Interpretation 4 Division of functions under this Act 5 Definitions 5A Qualified privilege 5B Exercise of Registrar’s functions Division 3 The co-operative principles 6 Co-operative principles 7 Interpretation to promote co-operative
principles Division 4 Application of Corporations Act to
co-operatives 8 Definitions 9 Excluded matter 10 Applying the Corporations legislation to
co-operatives 11 Modifications to applied provisions 12 (Repealed) Part 2 Formation Division 1 Types of co-operatives 13 Types of co-operatives 14 Trading co-operatives 15 Non-trading co-operatives Division 2 Formation meeting 16 Formation meeting Division 3 Approval of disclosure statement and
rules 17 Approval of disclosure statement 18 Approval of rules Division 4 Registration of proposed co-operative 19 Application for registration of proposed
co-operative 20 Registration of co-operative 21 Incorporation and certificate of registration Division 5 Registration of existing body corporate 22 Existing body corporate can be registered 23 Formation meeting 24 Application for registration 25 Requirements for registration 26 Certificate of registration 27 Effect of registration Division 6 Conversion of co-operative 28 Conversion of co-operative Division 7 Appeals 28A Appeal against refusal to approve draft disclosure
statement 28B Appeal against refusal to approve draft rules 28C Appeal against refusal to register 28D Registrar to comply with Court order Division 8 General 28E Stamp duty exemption for certain co-operatives 28F Acceptance of money by proposed co-operative 28G Issue of duplicate certificate Part 3 Legal capacity, powers etc Division 1 General powers 29 Effect of incorporation 30 Power to form companies, enter into joint ventures
etc Division 2 Doctrine of ultra vires abolished 31 Interpretation 32 Objects of this Division 33 Legal capacity 34 Restrictions on co-operatives in rules 35 Results of contravention of restriction in
rules Division 3 Persons having dealings with
co-operatives 36 Assumptions entitled to be made 37 Assumptions 38 Person who knows or ought to know is not entitled to make
assumptions 39 (Repealed) 40 Lodgment of documents etc not to constitute constructive
notice 41 Effect of fraud Divisions 4, 5 42–44(Repealed) Division 6 Authentication and execution of documents and
confirmation of contracts 45 Contractual formalities 46 Execution under common seal 47 Authentication need not be under seal 48 Co-operative may authorise person to execute
deeds 48A Common seal 49 Official seal 50 Other requirements as to consent or sanction not
affected 51 Transitional Division 7 Pre-registration contracts 52 Contracts before registration 53 Person may be released from liability but is not entitled
to indemnity 54 Division replaces other rights and liabilities 55–61 (Repealed) Part 4 Membership Division 1 General 62 Becoming a member 63 Membership may be joint 64 Qualification for membership—likelihood of being
active member 65 Members under 18 years of age 66 Members of associations 67 Members of federations 68 Representatives of bodies corporate 69 Notification of shareholders and share holdings 70 Circumstances in which membership ceases—all
co-operatives 71 Additional circumstances in which membership
ceases—co-operatives with share capital 72 (Repealed) 73 Carrying on business with too few members Division 2 Rights and liabilities of members 74 Rights of membership not exercisable until registered
etc 75 Liability of members to creditors 76 Liability of members to co-operative 76A Co-operative to provide information to person intending
to become member 77 Entry fees and regular subscriptions 78 Members etc may be required to deal with
co-operative 79 Fines payable by members 80 Charge and set-off of co-operative 81 Repayment of shares on expulsion Division 3 Death of member 81A Meaning of “interest” 82 Transfer of share or interest on death of
member 83 Transfer of small shareholdings and interests on
death 84 (Repealed) 85 (Renumbered as sec
81A) 86 Value of shares and interests 87 Stamp Duties Act
1920 88 Co-operative protected Division 4 Disputes involving members 89 Grievance procedure 90 Application to Court 91–95 (Repealed) Division 5 Oppressive conduct of affairs 95A Extended meaning of “member” 95B Application of Division 96 Who may apply for court order 97 (Repealed) 98 Orders that Court may make 99 Basis on which Court makes orders 100 Winding up not to be ordered if oppressed members
prejudiced 101 Application of winding up provisions 102 Changes to rules 103 Copy of order to be lodged with Registrar 104 Compliance with orders Division 6 Proceedings on behalf of co-operative by members
and others 105 Bringing, or intervening in, proceedings on behalf of
co-operative 105A Applying for and granting leave 105B Substitution of another person for person granted
leave 105C Effect of ratification by members 105D Leave to discontinue, compromise or settle proceedings
brought, or intervened in, with leave 105E General powers of the Court 105F Power of Court to make costs order Part 5 Rules 106 Effect of rules 107 Content of rules 108 Purchase and inspection of copy of rules 109 (Repealed) 109A Model rules 110 Rules can only be altered in accordance with this
Act 111 Alteration by special resolution 112 Alteration by resolution of the board 113 Alteration does not take effect until
registered 113A Appeal against refusal to register alteration 113B Registrar to comply with Court order 114 False copies of rules Part 6 Active membership requirements Division 1 Definitions etc 115 Primary activity—meaning 116 Active membership—explanation 117 Active membership provisions and
resolutions—explanation Division 2 Rules to contain active membership
provisions 118 Number of primary activities required 119 Rules to contain active membership provisions 120 Failure to have active membership provisions 121 Factors and considerations for determining primary
activities etc 122 Regular subscription—active membership of
non-trading co-operative 123 Active membership provisions—trading
co-operatives Division 3 Active membership resolutions 124 Prior approval of active membership
resolutions 125 Appeal against refusal of approval 126 Notice of meeting 126A Eligibility to vote on active membership
resolution 126B Eligibility of directors to vote on proposal at board
meeting 126C Other entitlements of members not affected Division 4 Cancellation of membership etc of inactive
members 127 Cancellation of membership of inactive member 128 Shares to be forfeited if membership cancelled 129 Order of Council against cancellation 130 Deferral of forfeiture by board 131 Cancellation of membership prohibited in certain
circumstances 132 Notice of intention to cancel membership 133 Failure to cancel membership—offence by
director 134 Repayment of amounts due in respect of cancelled
membership 135 Interest on deposits, debentures and CCUs 136 Repayment of deposits, debentures and CCUs 137 Register of cancelled memberships 138 (Repealed) Division 5 Entitlements of former members 139 Former shareholders to be regarded as shareholders for
certain purposes 140 Entitlements of former shareholders on mergers
etc 141 Set-off of amounts repaid etc on forfeited
shares 142 Entitlement to distribution from reserves 143 Minister may exempt co-operatives from
provisions Part 7 Shares Division 1 Preliminary 144 Share capital required except for non-profit
co-operatives 145 Restrictions on conversion to co-operative without share
capital 146 Nature of share in co-operative Division 1A Disclosure 146A Disclosure to intending members in trading
co-operative 146B Content of disclosure statement to intending
members 146C Exemptions from disclosure requirements Division 2 Issue of shares 146D Adoption of certain Corporations Act provisions about
shares 147 Shares—general 148 Minimum number of shares to be subscribed for 149 Minimum paid up amount 150 Shares not to be issued at a discount 151 Issue of shares at a premium 152 Joint ownership of shares 153 Dividends etc 154 Issue of shares to active members in exchange for
property 155 Members may be required to take up additional
shares 156 Bonus share issues Division 3 Beneficial and non-beneficial interests in
shares 157 Notice of non-beneficial ownership at time of
transfer 158 Notice of non-beneficial ownership not notified at time
of transfer 159 Registration as beneficial owner of shares notified as
non-beneficially transferred 160 Notification of change in nature of
shareholding 161 Presumption of awareness 162 Presumption that shares held non-beneficially 163 Noting of beneficial and non-beneficial interests in
register of members 164 Registration as trustee etc on death of owner of
shares 165 Registration as administrator of estate on incapacity of
shareholder 166 Registration as Official Trustee in Bankruptcy 167 Liabilities of person registered as trustee or
administrator 168 Notification of trusts in register of members 169 No notice of trust except as provided by this
Division Division 4 Sale etc of shares 170 Sale or transfer of shares 170A Transfer on death of member 170B Restriction on total shareholding 171 Transfer not effective until registered Division 5 Repurchase etc of shares 172 Purchase and repayment of shares 173 Deposits, debentures or CCUs in lieu of payment when
share repurchased 174 Cancellation of shares Part 8 Voting Division 1 Voting entitlements 175 Voting to which this Part applies 176 Voting 177 Rules of certain co-operatives formed to carry on club
may restrict voting rights 178 Effect of relevant share and voting interests on voting
rights 179 Voting by proxy 180 Effect of unpaid borrowings 181 Inactive members not entitled to vote 181A Control of the right to vote 182 Effect of sale etc of shares 183 Restriction on voting entitlement under power of
attorney 183A Restriction on voting by representatives of bodies
corporate 184 Rights of representatives to vote etc 185 Other entitlements etc of members unaffected by
ineligibility to vote 186 Vote of disentitled member to be disregarded Division 2 Resolutions 187 Decisions of co-operative usually to be by ordinary
resolution 188 Ordinary resolutions 189 Special resolutions 190 How majority obtained is ascertained 190A Disallowance by Registrar 190B Effect of special resolution 191 Declaration of passing of special resolution 192 Lodgment of special resolution 192A Decision of Registrar on application to register special
resolution 193 Postal ballots 194 Special postal ballots 194A When is a special postal ballot required? 195 Holding of postal ballot on requisition 195A Expenses involved in postal ballots on
requisition 196 Resolution by circulation of document—fewer than 50
members 197 Circulation of members resolutions etc Division 3 Meetings 198 Annual general meetings 199 Special general meetings 199A Notice of meetings 199B Quorum at meetings 200 No entitlement to be present at meetings where membership
required to be cancelled 201 Decision at meetings 202 Convening of general meeting on requisition 203 Minutes Part 9 Management and administration of
co-operatives Division 1 The Board 204 Board of directors 205 Election of directors 206 Qualification of directors 206A (Repealed) 207 Qualifications for directors of associations and
federations 208 Disqualified persons 209 Meeting of the board of directors 210 Transaction of business outside meetings 211 Deputy directors 212 Filling of vacancies on board 213 Delegation by board 214 Exercise of functions on behalf of board 215 Minister may appoint director 216 Election of employees as directors 217 Revocation of approval etc 218 Removal from and vacation of office Division 1A Secretary of a co-operative 219 Secretary Division 2 Duties and liabilities of directors, officers and
employees 220 Meaning of “officer” 221 Officers must act honestly 222 Standard of care and diligence required 223 Improper use of information or position 224 Court may order payment of compensation 225 Recovery of damages by co-operative 226 Other duties and liabilities not affected 227 (Repealed) 228 Indemnification of officers and auditors 229 Application of Corporations Act provisions concerning
officers of co-operatives Division 3 Restrictions on directors and officers 230 Directors’ remuneration 231 (Repealed) 232 Financial accommodation to directors and
associates 233 Restriction on directors of certain co-operatives selling
land to co-operative 233A Management contracts Division 4 Directors’ interests in contracts
etc 234 Declaration of interest 235–237 (Repealed) 238 Declarations to be recorded in minutes 239 Division does not affect other laws or rules 240 (Repealed) 241 Certain interests need not be declared 242 (Repealed) Division 5 Financial statements, reports and
audits 243 Requirements for financial records, statements and
reports 244 Power of Registrar to grant exemptions 245 Meaning of “entity” and
“control” 246 Disclosure by directors 247 Protection of auditors etc 248 Financial year Division 6 Registers, records and returns 249 Registers to be kept by co-operatives 250 Location of registers 251 Inspection of registers etc 251A Use of information on registers 251B Notice of appointment etc of directors and
officers 252 Annual report 253 List of members to be furnished at request of
Registrar 254 Special return to be furnished at request of
Registrar Division 7 Name and registered office 255 Name to include certain matter 256 Approval for omission of “Limited” 257 Use of abbreviations 258 Name to appear on business documents etc 259 Change of name of co-operative 260 Restriction on use of word “co-operative” or
similar words 261 Registered office of co-operative Part 10 Funds, property etc Division 1 Power to raise money etc 262 Meaning of obtaining financial accommodation 263 Fund raising to be in accordance with Act and
regulations 263A Limits on deposit taking 263B Members etc not required to see to application of
money 264 Registrar’s directions concerning fund
raising 265 Subordinated debt 266 Application of Corporations Act to issues of
debentures 266A Disclosure statement 266B Approval of board for transfer of debentures 267 Application of Corporations Act—re-issue of
redeemed debentures 268 Compulsory loan by member to co-operative 268A Interest payable on compulsory loan Division 2 Co-operative capital units (CCUs) 269 General nature of CCU 269A Priority of CCUs on winding up 270 Division 1 applies to issue of CCUs 271 CCUs can be issued to non-members 272 Minimum requirements for rules concerning CCUs 273 CCUs not to be issued unless terms of issue approved by
Registrar 274 Directors’ duties concerning CCUs 275 Redemption of CCUs 276 Capital redemption reserve 277 Issue of shares in substitution for redemption Division 3 Charges 278 Registration of charges 279 Receivers and managers Division 4 Disposal of surplus from activities 280 Retention of surplus for benefit of
co-operative 281 Application for charitable purposes or members’
purposes 282 Distribution of surplus or reserves to members 283 Application of surplus to other persons Division 5 Prudential standards etc 284 Prudential standards may be prescribed 285 Acquisition and disposal of assets Part 11 Restrictions on the acquisition of interests in
co-operatives Division 1 Restrictions on share and voting
interests 286 Notice required to be given of voting interest 287 Notice required to be given of substantial share
interest 288 Requirements for notices 289 Maximum permissible level of share interest 290 Shares to be forfeited to remedy contravention 291 Powers of board in response to suspected
contravention 292 Powers of Court with respect to contraventions 293 Co-operative to inform Registrar of interest over
20% 294 Co-operative to keep register 295 Unlisted companies to provide list of shareholders
etc 296 Excess share interest not to affect loan
liability 297 Extent of operation of Division 298 Registrar may grant exemption from Division Division 2 Restrictions on certain share offers 299 Share offers to which Division applies 300 Requirements to be satisfied before offer can be
made 301 Some offers totally prohibited if they
discriminate 302 Offers to be submitted to board first 303, 304 (Repealed) 305 Announcements of proposed takeovers concerning proposed
company 306 Additional disclosure requirements for offers involving
conversion to company 307 Consequences of prohibited offer 308 Council may grant exemptions Part 12 Merger, transfer of engagements, winding up
etc Division 1 Merger and transfer of engagements 309 Application of Division 310 Mergers and transfers of engagements of local
co-operatives 311 Requirements before application can be made 311A Disclosure statement required 311B Making an application 311C Approval of merger 312 Exemptions concerning mergers 313 Approval of transfer of engagements 314 Transfer of engagements by direction of
Registrar 315 Representations to Council on direction to transfer
engagements Division 3 Transfer of incorporation 316 Application for transfer 317 Meaning of “new body” and
“transfer” 318 New body ceases to be registered as
co-operative 319 Transfer not to impose greater liability etc 320 Effect of new certificate of incorporation 321 New body is a continuation of the co-operative 322 Stamp duty Division 4 Winding up 323 Methods of winding up 324 Winding up on Registrar’s certificate 325 Application of Corporations Act to winding up 326 Restrictions on voluntary winding up 327 Commencement of members’ voluntary winding
up 328 Distribution of surplus—non-trading
co-operatives 329 Liquidator—vacancy may be filled by
Registrar 330 Review of liquidator’s remuneration 331 Liability of member to contribute in a winding up where
shares forfeited etc Division 5 Administration of co-operative—application
of Corporations Act 332 Adoption of Part 5.3A of Corporations Act 332A Appointment of administrator by Registrar Division 6 Appointment of administrator 333 Appointment of administrator of co-operative 334 Effect of appointment of administrator 335 Revocation of appointment 336 Expenses of administration 337 Liabilities arising from administration 337A Additional powers of Registrar 337B Stay of proceedings 337C Administrator to report to Registrar 338 Council may direct revocation of administrator’s
appointment Division 7 Effect of merger etc on property, liabilities
etc 339 How this Division applies to a merger 340 How this Division applies to a transfer of
engagements 341 How this Division applies to a transfer of
incorporation 342 Effect of merger on property, liabilities etc Division 8 Miscellaneous 343 Grounds for winding up, transfer of engagements,
appointment of administrator 343A (Repealed) 343B Application of Corporations Act concerning insolvent
co-operatives Part 13 Arrangements and reconstructions Division 1 General requirements 344 Requirements for binding compromise or
arrangement 345 Court ordered meeting of creditors 346 Registrar to be given notice and opportunity to make
submissions 347 Results of 2 or more meetings 348 Persons disqualified from administering compromise
etc 349 Application of provisions of Corporations Act to person
appointed 350 Copy of order to be attached to rules 351 Directors to arrange for reports 352 Power of Court to restrain further proceedings 353 Court need not approve compromise or arrangement
takeovers Division 2 Explanatory statements 354 Explanatory statement required to accompany notice of
meeting etc 355 Requirements for explanatory statement 356 Contravention of Division—offence by
co-operative 357 Provisions for facilitating reconstructions and
mergers Division 3 Acquisition of shares of dissenting
shareholders 358 Definitions 359 Schemes and contracts to which Division
applies 360 Acquisition of shares pursuant to notice to dissenting
shareholder 361 Restrictions when excluded shares exceed 10% 362 Remaining shareholders may require acquisition 363 Transfer of shares pursuant to compulsory
acquisition 364 Disposal of consideration for shares compulsorily
acquired Division 4 Miscellaneous 365 Notification of appointment of scheme manager 366 Power of Court to require reports 367 Effect of out-of-jurisdiction compromise or
arrangement 368 Jurisdiction to be exercised in harmony with Corporations
Act jurisdiction 369 Registrar may appear etc Part 13A Foreign co-operatives Division 1 Introductory 369A Definitions 369B Co-operatives law Division 2 Registration of foreign co-operatives 369C Operation of foreign co-operatives in New South
Wales 369D What constitutes carrying on business 369E Application for registration of participating
co-operative 369F Application for registration of non-participating
co-operative 369G Registrar to approve rules of non-participating
co-operative 369H Name of foreign co-operative 369I Registration of foreign co-operative 369J Application of Act and regulations to foreign
co-operatives 369K Registrar to be notified of certain changes 369L Balance sheets 369M Cessation of business 369N Co-operative proposing to register as a foreign
co-operative Division 3 Mergers and transfers of engagements 369O Who is the appropriate Registrar? 369P Authority for merger or transfer of
engagements 369Q Requirements before application can be made 369R Disclosure statement required 369S Making an application 369T Approval of merger 369U Approval of transfer of engagements 369V Effect of merger or transfer of engagements 369W Division applies instead of certain other provisions of
this Act Part 14 Supervision and protection of
co-operatives Division 1 Supervision and inspection 370 Definitions 371 “Co-operative” includes subsidiaries, foreign
co-operatives and co-operative ventures 372 Appointment of inspectors 373 Registrar and investigators have functions of
inspectors 374 Inspector’s certificate of authority 375 Inspectors may require certain persons to appear, answer
questions and produce documents 376 Inspectors’ powers of entry 377 Powers of inspectors on premises entered 378 Functions of inspectors in relation to relevant
documents 379 Offence—failing to comply with requirements of
inspector 380 Protection from incrimination 381 Search warrants 382 Copies or extracts of records to be admitted in
evidence 383 Privilege 384 Police aid for inspectors Division 2 Inquiries 385 Definitions 386 Appointment of investigators 387 Powers of investigators 388 Examination of involved person 389 Privilege 390 Offences by involved person 391 Offences relating to documents 392 Record of examination 393 Report of investigator 394 Proceedings following inquiry 395 Admission of investigator’s report as
evidence 396 Costs of inquiry Division 3 Prevention of fraud etc 397 Falsification of records 398 Fraud or misappropriation 399 Offering or paying commission 400 Accepting commission 401 False statements in loan application etc Division 4 Miscellaneous powers of the Registrar 402 Application for special meeting or inquiry 403 Holding of special meeting 404 Expenses of special meeting or inquiry 405 Power to hold special inquiry into
co-operative 406 Special meeting following inquiry 407 Information and evidence 408 Extension or abridgment of time 408A Power of Registrar to intervene in
proceedings Part 15 Administration of this Act Division 1 The Registrar 409 Registrar’s functions 410 Register of Co-operatives 410A Keeping of registers 411 Delegation by Registrar 412 Approvals by Registrar 413 Disposal of records by Registrar 413A Inspection of Register 413B Lodgment of documents 413C Method of lodgment 413D Power of Registrar to refuse to register or reject
documents Division 2 The Council 414 Constitution of Council 415 Nominations 416 Minister and Registrar may attend meetings 417 Functions of the Council 418 Delegation by Council to Registrar 419 Appeal to Court from decision of Council Division 3 Evidence 420 Certificate of incorporation 421 Certificate evidence 422 Orders etc published in the Gazette 423 Records kept by co-operatives 424 Minutes 425 Official certificates etc 426 The Registrar and proceedings 427 Rules 428 Registers Part 16 Offences and proceedings 429 Offences by officers of co-operatives 430 Notice to be given of conviction for offence 431 Secrecy 432 False or misleading statements 433 Further offence for continuing failure to do required
act 434 Civil remedies 435 Proceedings for offences etc Part 17 General 436 (Renumbered as sec 10) 436A (Renumbered as sec 11) 436B (Renumbered as sec 12) 437 Exemption from stamp duty 438 (Repealed) 439 Co-operative ceasing to exist 440 Service of documents on co-operative 440A Service on member of co-operative 441 Reciprocal arrangements 442 Translations of documents 443 Injunctions 443A Power of Court to punish for contempt 444 Savings and transitional provisions 445 (Repealed) 446 Regulations Schedule 1 Matters for which rules must make
provision Schedule 2 Relevant interests, associates, related
bodies Schedule 3 Registration etc of charges Schedule 4 Receivers, and other controllers, of property of
co-operatives Schedule 5 Members and procedure of the Council Schedule 6 Savings and transitional provisions Schedule 7 (Repealed) Historical notes
An Act to provide for the establishment of co-operatives and the
regulation of their operations; and for related
purposes. Part 1 Preliminary Division 1 Introduction 1 Name of Act This Act may be cited as the Co-operatives Act
1992. 2 Commencement This Act commences on a day or days to be appointed by
proclamation. 3 Objects of this Act (cf Vic Act s 3) The objects of this Act are:(a) to enable the formation, registration and operation of
co-operatives, and
(b) to promote co-operative philosophy, principles, practices and
objectives, and
(c) to protect the interests of co-operatives, their members and the
public in the operations and activities of co-operatives,
and
(d) to ensure that the directors of co-operatives are accountable for
their actions and decisions to the members of co-operatives,
and
(e) to encourage and facilitate self-management by co-operatives at
all levels, and
(f) to encourage the development, integration and strengthening of
co-operatives at local, regional, national and international levels by
supporting and fostering State and National peak organisations and
co-operative instrumentalities.
3A Application to co-operative housing societies and other
bodies Except where expressly provided by this Act and except as provided
by the regulations, this Act does not apply to or in respect of:(a) a co-operative housing body under the Co-operative Housing and Starr-Bowkett Societies Act
1998, or
(b) a body that is of the same nature as such a co-operative housing
body but that is not registered under that Act.
Division 2 Interpretation 4 Division of functions under this Act (1) The Minister has the function of determining policies for the
administration of this Act. (2) The Registrar is to exercise the functions of Registrar in
accordance with the policies determined by the Minister for the administration
of this Act. (3) The Council is, in the exercise of its functions, to have regard
to the policies determined by the Minister for the administration of this Act
and is to exercise its functions in a manner that is consistent with those
policies.
5 Definitions (cf Vic Act s 4) (1) In this Act:agreement means an
agreement, arrangement or understanding: (a) whether formal or informal or partly formal and partly
informal,
(b) whether written or oral or partly written and partly oral,
and
(c) whether or not having legal or equitable force and whether or not
based on legal or equitable rights.
alter, in
relation to the rules of a co-operative, includes add to, substitute and
rescind. associate has the meaning
given by Schedule 2. association means an
association registered under this Act. board
means the board of directors of a co-operative and includes a committee of
management of a co-operative. CCU means a
co-operative capital unit, as provided for by Division 2 of Part
10. component
co-operative means a member of an association. co-operative means a
body registered under this Act as a co-operative and includes an association
or federation. Corporations Act
means the Corporations Act 2001 of
the Commonwealth. Council means the
Co-operatives Council constituted under this Act. Court
means the Supreme Court. debenture means a document
issued by a co-operative that evidences or acknowledges indebtedness of the
co-operative in respect of money that is or may be deposited with or lent to
the co-operative, whether constituting a charge on property of the
co-operative or not, other than: (a) a cheque, order for the payment of money or bill of exchange,
or
(b) a promissory note having a face value of not less than $50,000,
or
(c) any other document of a class that is prescribed as exempt from
this definition,
and includes a unit of a debenture.deed of
arrangement means a deed of arrangement executed under Part 5.3A of
the Corporations Act as applying under this Act or such a deed as varied and
in force from time to time. deposit taking
co-operative means a co-operative which is permitted to under
section 263A accept money on deposit. director, in relation to a
co-operative, includes: (a) a person who occupies or acts in the position of a director or
member of the board of the co-operative, whether or not the person is called a
director and whether or not the person is validly appointed or duly authorised
to act in the position, and
(b) a person in accordance with whose directions or instructions the
directors or members of the board of the co-operative are accustomed to
act.
federation means a
federation registered under this Act. financial records
includes: (a) invoices, receipts, orders for the payment of money, bills of
exchange, cheques, promissory notes and vouchers, and
(b) documents of prime entry, and
(c) working papers and other documents needed to explain:(i) the methods by which financial statements are made up,
and
(ii) adjustments to be made in preparing financial
statements.
financial
statements means: (a) a profit and loss statement, and
(b) a balance sheet, and
(c) a statement of cash flows, and
(d) if required by the accounting standards under the Corporations Act
applying under this Act—a consolidated profit and loss statement,
balance sheet and statement of cash flows.
foreign
co-operative means a body corporate that is registered, incorporated
or formed under, or subject to, a law in force outside New South Wales
(including outside Australia), that regulates co-operatives or organisations
having attributes the same as or similar to co-operatives but does not
include: (a) a body incorporated under the Corporations Act,
or
(b) a financial institution or foreign society registered under
financial institutions legislation within the meaning of the
Financial Institutions (NSW)
Code.
holding
co-operative, in relation to a subsidiary, means the co-operative of
which the subsidiary is a subsidiary. inspector means a person
appointed as an inspector under section 372. model
rules means the model rules approved by the Registrar under Part
5. mortgage includes lien,
charge or other security over property. non-trading
co-operative means a non-trading co-operative that complies with
section 15. officer, in relation to a
co-operative, means: (a) a director, secretary or employee of the co-operative,
or
(b) a person who is concerned, or takes part, in the management of the
co-operative, whether or not as a director, or
(c) a receiver and manager, appointed under a power contained in an
instrument, of property of the co-operative, or
(d) an administrator of a deed of arrangement executed by the
co-operative, or
(e) a liquidator or provisional liquidator appointed in a voluntary
winding up of the co-operative, or
(f) an administrator of the co-operative appointed under Part 5.3A of
the Corporations Act as applying under this Act or under Division 6 of Part 12
of this Act, or
(g) a trustee or other person administering a compromise or
arrangement made between the co-operative and another person or other
persons.
primary
activity is defined by section 115. principal executive
officer, in relation to a co-operative or to a subsidiary of a
co-operative, means the principal executive officer of the co-operative or
subsidiary for the time being, by whatever name called, and whether or not
that officer is a director or the secretary. records includes books,
financial records, financial statements, minutes, registers, deeds, writings,
documents and other sources of information compiled, recorded or stored in
written form or on microfilm, or by electronic process, or in any other manner
or by any other means. Register means the Register
of Co-operatives established under Part 15. Registrar—see
section 5B. related (in the context of
related bodies corporate) has the meaning given by Schedule 2. relevant
interest has the meaning given by Schedule 2. rule means
registered rule of a co-operative for the time being in force. seal, in
relation to a co-operative, means common seal or official seal. share
means share in the share capital of a co-operative. subordinated debt
has the meaning given by section 265. subsidiary has the same
meaning as in the Corporations Act. surplus, in relation to a
co-operative, means the excess of income over expenditure after making proper
allowance for taxation expense, depreciation in value of the property of the
co-operative and for future contingencies. trading
co-operative means a trading co-operative that complies with section
14. (2) Words and expressions that have a defined meaning in the
Corporations Act have, when used in this Act in relation to a body corporate
that is not a co-operative, the same meaning as in the Corporations
Act. (3) In this Act:(a) a reference to a function includes a reference to a power,
authority and duty, and
(b) a reference to the exercise of a function includes, in relation to
a duty, a reference to the performance of the duty.
(4) Notes included in this Act do not form part of this
Act. (5) A reference in this Act to a provision of the Corporations Act
that is applied by or under this Act (or a part of this Act) is a reference to
that provision to the extent that it is declared to apply to a matter for the
purposes of Part 3 of the Corporations
(Ancillary Provisions) Act 2001 as a law of this
State. Note. For the purposes of comparison, a number of provisions of this Act
contain bracketed notes in headings, drawing attention (“cf”) to
equivalent or comparable (though not necessarily identical) provisions of the
Co-operatives Act 1996 of Victoria,
abbreviated in the notes as “Vic Act”.
5A Qualified privilege (cf Vic Act s 5) (1) If this Act provides that a person has qualified privilege in
respect of an act, matter or thing, the person, in respect of that act, matter
or thing:(a) has qualified privilege in proceedings for defamation,
or
(b) is not, in the absence of malice on the person’s part,
liable to an action for defamation at the suit of a
person.
(2) In subsection (1):malice
includes ill-will to the person concerned or any other improper
motive. (3) Neither this section nor a provision of this Act that provides as
mentioned in subsection (1) limits or affects any right, privilege or immunity
that a person has, apart from this section or such a provision, as defendant
in proceedings, or an action, for defamation.
5B Exercise of Registrar’s functions (1) The functions expressed to be conferred or imposed on the
“Registrar” by or under this Act are to be exercised by the
Director-General of the Department of Fair Trading. (2) For that purpose, a reference in this Act to the Registrar is to
be read as a reference to the Director-General of the Department of Fair
Trading.
Division 3 The co-operative principles 6 Co-operative principles (cf Vic Act s 6) In this Act, a reference to co-operative
principles is a reference to the principles adopted by the
International Co-operative Alliance, being the following principles:Voluntary and open
membership Co-operatives are voluntary organisations, open to all persons
able to use their services and willing to accept the responsibilities of
membership, without gender, social, racial, political or religious
discrimination. Democratic member
control Co-operatives are democratic organisations controlled by their
members, who actively participate in setting their policies and making
decisions. Men and women serving as elected representatives are accountable to
the membership. In primary co-operatives members have equal voting rights (one
member, one vote) and co-operatives at other levels are organised in a
democratic manner. Member economic
participation Members contribute equitably to, and democratically control, the
capital of their co-operative. At least part of that capital is usually the
common property of the co-operative. They usually receive limited
compensation, if any, on capital subscribed as a condition of membership.
Members allocate surpluses for any or all of the following purposes:
developing the co-operative, possibly by setting up reserves, part of which at
least would be indivisible; benefiting members in proportion to their
transactions with the co-operative; and supporting other activities approved
by the membership. Autonomy and
independence Co-operatives are autonomous, self help organisations controlled
by their members. If they enter into agreements with other organisations,
including governments, or raise capital from external sources, they do so on
terms that ensure democratic control by their members and maintain their
co-operative autonomy. Education, training and
information Co-operatives provide education and training for their members,
elected representatives, managers and employees so they can contribute
effectively to the development of their co-operatives. They inform the general
public, particularly young people and opinion leaders, about the nature and
benefits of co-operation. Co-operation among
co-operatives Co-operatives serve their members most effectively and strengthen
the co-operative movement by working together through local, national,
regional and international structures. Concern for the
community While focusing on member needs, co-operatives work for the
sustainable development of their communities through policies accepted by
their members.
7 Interpretation to promote co-operative
principles (cf Vic Act s 7) (1) In the interpretation of a provision of this Act or the
regulations, a construction that would promote co-operative principles is to
be preferred to a construction that would not promote co-operative
principles.
Division 4 Application of Corporations Act to
co-operatives 8 Definitions (cf Vic Act s 8) In this Division:excluded
Corporations legislation provision means any provision of the
Corporations legislation that does not apply to co-operatives as a law of the
Commonwealth.
9 Excluded matter (cf Vic Act s 9) (1) A co-operative is declared to be an excluded matter for the
purposes of section 5F of the Corporations Act in relation to the whole of the
Corporations legislation other than to the extent specified in this
section.Note. This section ensures that neither the Corporations Act nor Part 3
of the Australian Securities and Investments
Commission Act 2001 of the Commonwealth will apply to a
co-operative, other than to the extent specified in this section. Section 5F
of the Corporations Act provides that if a State law declares a matter to be
an excluded matter in relation to the whole of the Corporations legislation
other than to a specified extent, then that legislation will not apply, except
to the specified extent, in relation to that matter in the State concerned.
However, other provisions of this Act apply certain provisions of the
Corporations legislation to co-operatives as laws of this
State. (2) Subsection (1) does not exclude the application of the following
provisions of the Corporations legislation to co-operatives to the extent that
those provisions would otherwise be applicable to them:(a) provisions that relate to any matter that the regulations provide
is not to be excluded from the operation of the Corporations
Act,
(b) provisions that relate to the role of a co-operative in the
formation of a company,
(c) provisions that relate to substantial holdings of shares, by or
involving a co-operative, in a company,
(d) provisions that confer or impose functions on a co-operative as a
member, or former member, of a corporation,
(e) provisions that relate to dealings by a co-operative in securities
of a body corporate, other than securities of the co-operative
itself,
(f) provisions that confer or impose functions on a co-operative in
its dealings with a corporation, not being dealings in securities of the
co-operative,
(g) provisions that relate to securities of a co-operative, other than
shares in, CCUs issued by, debentures of or deposits with a
co-operative,
(h) provisions relating to derivatives,
(i) provisions relating to:(i) financial services licensees (as defined in section 761A of the
Corporations Act) whose licence covers dealing in, or providing advice about,
securities, or
(ii) regulated principals (as defined in section 1430 of the
Corporations Act) when dealing in, or providing advice about, securities as
authorised by Subdivision D of Division 1 of Part 10.2 of that
Act,
(j) provisions relating to the carrying on of a financial services
business (as defined in section 761A of the Corporations Act) relating to
securities,
(k) provisions relating to financial statements, and audits of
financial statements, of:(i) financial services licensees (as defined in section 761A of the
Corporations Act) whose licence covers dealing in, or providing advice about,
securities, or
(ii) regulated principals (as defined in section 1430 of the
Corporations Act) when dealing in, or providing advice about, securities as
authorised by Subdivision D of Division 1 of Part 10.2 of that
Act,
(l) provisions relating to money and scrip of clients of:(i) financial services licensees (as defined in section 761A of the
Corporations Act) whose licence covers dealing in, or providing advice about,
securities, or
(ii) regulated principals (as defined in section 1430 of the
Corporations Act) when dealing in, or providing advice about, securities as
authorised by Subdivision D of Division 1 of Part 10.2 of that
Act,
(m) provisions relating to registers of interests in
securities,
(n) provisions relating to powers of a Court to cure procedural
irregularities and to make other orders.
(3) It is declared that subsection (1) does not operate to exclude the
operation of the following provisions of the Corporations Act except in
relation to shares in, CCUs issued by, debentures of or deposits with a
co-operative:(a) Part 1.2A (Disclosing entities),
(b) Chapter 2L (Debentures),
(c) Chapter 6D (Fundraising),
(d) Part 7.10 (Market misconduct and other prohibited conduct relating
to financial products and financial services).
(4) Subsection (1) does not apply if the co-operative is directed by
an order of the Court under section 98 (j), or applies in accordance with the
provisions of Division 3 of Part 12, to become registered as a company under
the Corporations Act to the extent necessary for a co-operative to be
registered as a company under Chapter 5B of that
Act.
10 Applying the Corporations legislation to
co-operatives (cf Vic Act s 10) (1) The regulations may declare any matter relating to co-operatives
to be an applied Corporations legislation matter for the purposes of Part 3 of
the Corporations (Ancillary Provisions) Act
2001 in relation to any excluded Corporations legislation
provision or provisions (with such modifications as may be specified in the
declaration).Note. Part 3 of the Corporations
(Ancillary Provisions) Act 2001 provides for the application
of provisions of the Corporations Act
2001 and Part 3 of the Australian
Securities and Investments Commission Act 2001 of the
Commonwealth as laws of the State in respect of any matter declared by a law
of the State (whether with or without modification) to be an applied
Corporations legislation matter for the purposes of that Part in relation to
those Commonwealth provisions. Section 14 (2) of the Corporations (Ancillary Provisions) Act
2001 ensures that a declaration made for the purposes of Part
3 of that Act only operates to apply a provision of the Corporations
legislation to a matter as a law of the State if that provision does not
already apply to the matter as a law of the Commonwealth. If a provision
referred to in a declaration already applies as a law of the Commonwealth,
nothing in the declaration will affect its continued operation as a law of the
Commonwealth. (2) Without limiting subsection (1), any such regulations may:(a) specify modifications to the definitions and other interpretative
provisions of the Corporations legislation relevant to any excluded
Corporations legislation provision that is the subject of the declaration,
and
(b) provide for ASIC to exercise a function under any excluded
Corporations legislation provision that is the subject of the declaration, but
only if:(i) ASIC is to exercise that function pursuant to an agreement of the
kind referred to in section 11 (8) or (9A) (b) of the Australian Securities and Investments Commission Act
2001 of the Commonwealth, and
(ii) ASIC is authorised to exercise that function under section 11 of
the Australian Securities and Investments
Commission Act 2001 of the Commonwealth,
and
(c) specify that a reference to ASIC in any excluded Corporations
legislation provision that is the subject of the declaration is to be read as
a reference to another person, and
(d) identify any excluded Corporations legislation provision to which
the declaration relates by reference to that provision as in force at a
particular time, and
(e) specify a court of this State (other than the Supreme Court) to
exercise any function conferred on a court or the Court by any excluded
Corporations legislation provision to which the declaration
relates.
(3) Words and expressions used in this section and also in Part 3 of
the Corporations (Ancillary Provisions) Act
2001 have the same meanings as they have in that
Part.
11 Modifications to applied provisions (cf Vic Act s 11) (1) If a provision of this Act declares a matter to be an applied
Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act
2001 (the declaratory
provision) in relation to any provisions of the Corporations
legislation (the applied
provisions), the declaratory provision is taken to specify the
following modifications:(a) a reference in the applied provisions to the constitution of a
company is to be read as a reference to rules,
(b) a cross-reference in the applied provisions to another provision
of the Corporations Act is, if that cross-reference is not appropriate
(because for example the provision cross-referred to is not among the applied
provisions), to be read as a cross-reference to the equivalent provision of
this Act,
(c) a reference in the applied provisions to the Commonwealth is to be
read as a reference to New South Wales,
(d) any of the applied provisions that are not relevant to
co-operatives or which are incapable of application to co-operatives are to be
ignored,
(e) modifications directed by the Registrar under subsection
(2).
(2) The Registrar may, by order published in the Gazette, give
directions as to the modifications that are necessary or desirable for the
effectual operation of applied provisions.
12 (Repealed) Part 2 Formation Division 1 Types of co-operatives 13 Types of co-operatives (cf Vic Act s 13) (1) A body may be registered under this Act as a
co-operative. (2) A co-operative may be either:(a) a trading co-operative, or
(b) a non-trading co-operative.
14 Trading co-operatives (cf Vic Act s 14) (1) A trading co-operative must have a share
capital. (2) A trading co-operative is a co-operative that gives returns or
distributions on surplus or share capital. (3) A trading co-operative must have a membership of:(a) 2 or more co-operatives, in the case of an association,
and
(b) 2 or more associations, in the case of a federation,
and
(c) 5 or more active members, in the case of any other trading
co-operative, or such lesser number as the Registrar may approve in a
particular case.
15 Non-trading co-operatives (cf Vic Act s 15) (1) A non-trading co-operative must not give returns or distributions
on surplus or share capital to members other than the nominal value of shares
(if any) at winding up. (2) A non-trading co-operative may or may not have a share
capital. (3) A non-trading co-operative must have a membership of:(a) 2 or more co-operatives, in the case of an association,
and
(b) 2 or more associations, in the case of a federation,
and
(c) 5 or more active members, in the case of any other non-trading
co-operative, or such lesser number as the Registrar may approve in a
particular case.
Division 2 Formation meeting 16 Formation meeting (cf Vic Act s 16) (1) Before a proposed co-operative (other than an existing body
corporate) can be registered, a formation meeting must be held in accordance
with this section. (2) At the formation meeting:(a) a disclosure statement approved under section 17 must be presented
to the meeting, and
(b) the proposed rules of the co-operative approved under section 18
in respect of the proposed co-operative, and including active membership
provisions in accordance with Part 6, must be passed by two-thirds of the
proposed members of the proposed co-operative attending the meeting,
and
(c) the proposed members of the proposed co-operative must sign the
application for membership which must be in a form approved by the Registrar,
and
(d) the proposed members must elect the first directors of the
proposed co-operative in accordance with the proposed rules,
and
(e) the proposed members must authorise a person:(i) to apply to the Registrar for registration of the proposed
co-operative, and
(ii) to do any act or thing necessary to have the proposed co-operative
registered.
(3) The formation meeting must be held by:(a) not less than 2 suitably qualified co-operatives, in the case of
an association, and
(b) not less than 2 suitably qualified associations, in the case of a
federation, and
(c) not less than 5 persons suitably qualified to be members of the
proposed co-operative in the case of any other co-operative, or such lesser
number as the Registrar may have approved under section 14 or
15.
(4) For the purposes of subsection (3), a person is suitably qualified
to be a member if:(a) there are reasonable grounds to believe the person will be an
active member of the proposed co-operative, and
(b) in the case of a natural person, the person has attained the age
of 18, and
(c) the person satisfies any other requirements for membership set out
in the proposed rules.
(5) Each co-operative forming a proposed association and each
association forming a proposed federation may be represented at the formation
meeting by one person.
Division 3 Approval of disclosure statement and
rules 17 Approval of disclosure statement (cf Vic Act s 17) (1) A draft disclosure statement of a proposed co-operative must be
submitted to the Registrar at least 28 days (or such shorter period as the
Registrar may allow in a particular case) before the formation meeting is due
to be held. (2) The disclosure statement of a proposed trading co-operative must
contain the information necessary to ensure that prospective members are
adequately informed of the nature and extent of a person’s financial
involvement or liability as a member of the co-operative including so far as
applicable:(a) the estimated costs of formation, and
(b) the nature of the proposed membership of the co-operative,
and
(c) the rights and liabilities attaching to shares in the proposed
co-operative (including the capital required for the co-operative),
and
(d) the projected income and expenditure of the co-operative for its
first year of operation, and
(e) information about any contracts required to be entered into by the
co-operative, and
(f) any other information that the Registrar
directs.
(3) The disclosure statement of a proposed trading co-operative must
not include a statement purporting to be made by an expert or to be based on a
statement made by an expert unless:(a) the expert has given, and has not withdrawn, the expert’s
written consent to the submission of the disclosure statement with the
statement included in the form and context in which it is included,
and
(b) there appears in the disclosure statement a statement that the
expert has given, and has not withdrawn, the expert’s
consent.
(4) The disclosure statement of a proposed non-trading co-operative
must be in a form approved by the Registrar and contain such information as is
required by the Registrar. (5) The Registrar may:(a) approve the draft statement as submitted, or
(b) approve the draft statement with specified amendments,
or
(c) approve a different statement to that submitted,
or
(d) refuse to approve the statement.
(5A) The Registrar may require the person who submitted the draft
statement to give the Registrar any additional information that the Registrar
reasonably requires. When the information has been provided the Registrar may
then act under subsection (5). (6) Approval may be given at any time before the formation meeting is
held. (7) Subject to subsection (8), the Registrar approves of a disclosure
statement by giving notice of the approval of the statement to the person who
submitted the draft statement to the Registrar. (8) The Registrar is to be considered to have approved the disclosure
statement as submitted to the Registrar unless at least 5 days before the
formation meeting is due to be held:(a) the Registrar gives notice of approval of a different disclosure
statement, or
(b) the Registrar gives notice to the person who submitted the draft
statement that the Registrar is still considering the matter or requires
additional information, or
(c) the Registrar gives notice of refusal to approve the disclosure
statement.
(9) A notice under this section must be in
writing. (10) The Registrar may approve a disclosure statement with or without
conditions. (11) In the case of a proposed non-trading co-operative, the Registrar
may, in a particular case and either unconditionally or subject to conditions,
dispense with the requirement that a disclosure statement be presented to the
formation meeting. Note. This section draws a distinction between requirements for
disclosure statements for proposed trading and non-trading co-operatives.
While the requirements for non-trading co-operatives are less onerous than
those for trading co-operatives, the Registrar may require a non-trading
co-operative to comply with requirements that are comparable to those for
trading co-operatives.
18 Approval of rules (cf Vic Act s 18) (1) A draft of the rules proposed for the co-operative (including
active membership provisions in accordance with Part 6) must be submitted to
the Registrar at least 28 days (or such shorter period as the Registrar may
allow in a particular case) before the formation meeting is due to be
held. (2) The proposed rules must:(a) be in accordance with section 107, and
(b) be in a form that may reasonably be approved,
and
(c) if the rules contain any alterations of the model rules, be
accompanied by a statement setting out the alterations and the reasons for the
alterations.
(3) If the rules do not make provision for any matter included in the
model rules, the Registrar may approve the relevant provisions of the model
rules as rules of the co-operative. (4) The Registrar may:(a) approve the rules as submitted, or
(b) approve different rules to those submitted, or
(c) refuse to approve the rules.
(5) The Registrar approves of the rules by giving written notice of
the approval of the rules to the person who submitted the draft alterations to
the Registrar. (6) The Registrar must give written notice of the refusal to approve
the rules to the person who submitted the rules to the
Registrar.
Division 4 Registration of proposed co-operative 19 Application for registration of proposed
co-operative (cf Vic Act s 19) (1) An application for registration of a proposed co-operative (other
than an existing body corporate) must:(a) be made in the form approved by the Registrar,
and
(b) be accompanied by the fee prescribed by the regulations,
and
(c) be signed by:(i) at least 2 directors in the case of an association or federation,
and
(ii) at least 5 suitably qualified members, including 2 directors
elected at the formation meeting, in the case of any other proposed
co-operative, or such lesser number of qualified members as the Registrar may
have approved under section 14 or 15, and
(d) be accompanied by:(i) 2 copies of the proposed rules signed and certified by the persons
who acted as chairperson and secretary at the formation meeting,
and
(ii) a copy of the disclosure statement presented to the formation
meeting signed and certified by the persons who acted as chairperson and
secretary at the formation meeting, and
(iii) a statement listing the name, address, occupation and place and
date of birth of each director, and
(iv) any other particulars that the Registrar may require in a
particular case.
(2) The application must be lodged with the Registrar within 2 months
after closure of the formation meeting for the proposed co-operative or within
such extended period as the Registrar may allow.
20 Registration of co-operative (cf Vic Act s 20) (1) When an application is made under this Division for registration
of a proposed co-operative, the Registrar must register the co-operative and
its rules if satisfied that the requirements for registration of the
co-operative have been met. (2) The requirements for registration of a co-operative under this
Division are as follows:(a) the proposed rules of the proposed co-operative must be the rules
approved by the Registrar under section 18, and
(b) the requirements of this Act and the regulations must have been
complied with in respect of the proposed co-operative and compliance must be
likely to continue, and
(c) the proposed co-operative must be designed to function in
accordance with the co-operative principles or, if it is not designed to
function entirely in accordance with the co-operative principles, the
Registrar must be satisfied that there are special reasons why the
co-operative should be registered under this Act, and
(d) there must be no reasonable cause for refusing registration of the
proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met, the Registrar is to:(a) refuse registration of the co-operative, or
(b) refer the application to the Council for its
recommendation.
(4) If the Registrar refuses registration of the co-operative, the
applicants for registration may request the Registrar to refer the application
to the Council and the Registrar must comply with such a request. A request
made by or on behalf of a majority of the persons elected as referred to in
section 16 (2) (d) (the persons to be proposed as the first directors of the
co-operative) is taken to have been made by the applicants for
registration. (5) If the application is referred to the Council, the Council must
either recommend registration or recommend refusal of registration but may
only recommend refusal if of the opinion that:(a) the requirements for registration of the co-operative have not
been met, or
(b) the proposed co-operative would not be a genuine co-operative,
or
(c) the proposed co-operative is not designed or intended to serve
fairly the interests of its members and prospective
members.
(6) The Registrar is required to comply with the Council’s
recommendation.
21 Incorporation and certificate of registration (cf Vic Act s 21) (1) The incorporation of the co-operative takes effect on the
registration of the co-operative. (2) On the registration of the co-operative, the Registrar must issue
a certificate of registration.
Division 5 Registration of existing body corporate 22 Existing body corporate can be registered (cf Vic Act s 22) A body corporate (other than a co-operative deemed to be
registered under this Act) may apply to the Registrar to be registered as a
co-operative under this Act, if before or after the commencement of this Act,
the body corporate was:(a) incorporated or registered or deemed to be registered under the
Corporations Act, or
(b) incorporated or registered under any other Act relating to the
incorporation or registration of bodies corporate.
23 Formation meeting (cf Vic Act s 23) (1) Before applying for registration as a co-operative, the body
corporate must pass a special resolution in accordance with its articles of
association or rules approving of:(a) the proposed registration, and
(b) any alterations of its existing memorandum and articles of
association or rules necessary to enable the body corporate to comply with
this Act.
(2) At the meeting to pass the special resolution:(a) the proposed rules of the proposed co-operative approved under
section 18, and including active membership provisions in accordance with Part
6, must also be passed by special resolution, and
(b) in the case of a proposed trading co-operative, a disclosure
statement approved under section 17 must be presented to the
meeting.
24 Application for registration (cf Vic Act s 24) An application for registration must be:(a) in the form approved by the Registrar, and
(b) accompanied by the fee prescribed by the regulations,
and
(c) accompanied by:(i) a declaration in writing signed by the directors or the committee
of management of the body corporate stating that at a meeting of the directors
or committee they formed the opinion that the body corporate will be able to
pay its debts as they fall due, and
(ii) a report in the form approved by the Registrar as to the affairs
of the body corporate and showing its assets and liabilities, made up to the
latest practicable date before the application, and
(iii) a copy of the memorandum and articles of association or rules of
the body corporate in force at the date of the application,
and
(iv) 2 copies of the proposed rules of the co-operative, as provided
for by the special resolution, and
(vi) a list containing the name, address, occupation and place and date
of birth of each director, and
(vii) evidence to the satisfaction of the Registrar of the incorporation
of the existing body corporate, and
(viii) any other particulars that the Registrar may require in a
particular case.
25 Requirements for registration (cf Vic Act s 25) (1) When an application is made for registration of a co-operative
under this Division, the Registrar must register the body corporate as a
co-operative under this Act and register its rules under this Act if the
Registrar is satisfied that the requirements for registration of the
co-operative have been met. (2) The requirements for registration of a co-operative under this
Division are as follows:(a) the proposed rules of the proposed co-operative must be the rules
approved by the Registrar under section 18, and
(b) the requirements of this Act and the regulations must have been
complied with in respect of the proposed co-operative and compliance must be
likely to continue, and
(c) there must be no reasonable cause for refusing registration of the
proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met the Registrar may refuse to
register the co-operative and its rules. (4) If the Registrar has determined under this section to register a
body corporate under this Act, the body corporate must notify the authority
responsible for registering the body corporate under the law under which it
was previously registered of that determination. (5) Despite anything to the contrary in this Division, the
registration of a body corporate as a co-operative does not take effect until
the body corporate ceases to be registered under the law under which it was
previously registered. (6) The body corporate must notify the Registrar in writing within 7
days after ceasing to be registered under that other
law.
26 Certificate of registration (cf Vic Act s 26) (1) On the registration of the body corporate as a co-operative the
Registrar must:(a) issue a certificate of registration, and
(b) publish notice of the issue of the certificate in the
Gazette.
(2) The corporate name of a body corporate registered as a
co-operative is the name approved by the Registrar, as specified in the
certificate of registration issued by the
Registrar.
27 Effect of registration (cf Vic Act s 27) (1) The body corporate is to be taken to be incorporated under this
Act on its registration. (2) Except as expressly provided in this Act or the regulations, the
registration and incorporation of the body corporate as a co-operative does
not prejudice any right of a member in respect of any shares held at the time
of registration and incorporation. (3) The change of registration and incorporation does not affect the
identity of the body corporate which is deemed to be the same body after
registration as a co-operative as it was before and no act, matter or thing is
affected by the change.
Division 6 Conversion of co-operative 28 Conversion of co-operative (cf Vic Act s 28) (1) A co-operative may, by alteration of its rules, convert from a
trading co-operative to a non-trading co-operative or vice
versa. (2) An alteration of the rules for the conversion of a co-operative
must be approved by special resolution passed by means of a special postal
ballot.
Division 7 Appeals 28A Appeal against refusal to approve draft disclosure
statement (cf Vic Act s 29) The person who submitted a draft disclosure statement to the
Registrar under this Act may appeal to the Court against:(a) a decision of the Registrar to refuse to approve the statement,
or
(b) a failure of the Registrar to approve the
statement.
28B Appeal against refusal to approve draft rules (cf Vic Act s 30) The person who submitted draft rules to the Registrar under this
Act may appeal to the Court against:(a) a decision of the Registrar to refuse to approve the rules,
or
(b) a failure of the Registrar to approve the
rules.
28C Appeal against refusal to register (cf Vic Act s 31) The applicants for registration of a proposed co-operative under
this Part may appeal to the Court against:(a) a decision of the Council to recommend the refusal of the
registration of a co-operative, or
(b) in the case of a body corporate converting to a co-operative,
against a failure of the Registrar to register the
co-operative.
28D Registrar to comply with Court order (cf Vic Act s 32) The Registrar must comply with an order of the Court on an appeal
under this Division.
Division 8 General 28E Stamp duty exemption for certain co-operatives (cf Vic Act s 33) (1) This section applies to a co-operative that:(a) has as its primary activity the providing of any community service
or benefit, and
(b) was, before it was incorporated under this Act, an unincorporated
club, association or body operating to provide sporting or recreational
facilities for its members and not carried on for the pecuniary profit of its
members.
(2) An instrument or document transferring to such a co-operative any
property which was, immediately before the co-operative was so incorporated,
held by or on behalf of the unincorporated club, association or body is not
chargeable with stamp duty.
28F Acceptance of money by proposed co-operative (cf Vic Act s 34) (1) A proposed co-operative or any person on its behalf or otherwise
which accepts any money for the proposed co-operative before the proposed
co-operative is registered must hold that money on trust until the
co-operative is registered. (2) If a co-operative is not registered within the period of 3 months
after the acceptance of any money under subsection (1), the proposed
co-operative or the person who accepted the money on its behalf must refund
the money to the person who paid it. Maximum penalty: 60 penalty
units.
28G Issue of duplicate certificate (cf Vic Act s 35) The Registrar must issue a duplicate certificate of
registration:(a) if the Registrar is satisfied that the original certificate is
lost or destroyed, and
(b) on payment of the fee prescribed by the
regulations.
Part 3 Legal capacity, powers etc Division 1 General powers 29 Effect of incorporation (cf Vic Act s 36) As a body corporate, a co-operative:(a) has perpetual succession, and
(b) has a common seal, and
(c) may sue and be sued in its corporate name, and
(d) subject to this Act, is capable of taking, purchasing, leasing,
holding, selling and disposing of real and personal property,
and
(e) may do and suffer all acts and things that bodies corporate may by
law do and suffer and which are necessary or
expedient.
30 Power to form companies, enter into joint ventures
etc Without limiting any other provision of this Part, a co-operative
has power:(a) to form or participate in the formation of a body corporate or
unit trust,
(b) to acquire interests in and sell or otherwise dispose of interests
in bodies corporate, unit trusts and joint ventures,
(c) to form or enter into a partnership, joint venture or other
association with other persons or bodies.
Division 2 Doctrine of ultra vires abolished 31 Interpretation In this Division:(a) a reference to the doing of an act by a co-operative includes a
reference to the making of an agreement by the co-operative and a reference to
a transfer of property to or by the co-operative, and
(b) a reference to legal capacity includes a reference to
powers.
32 Objects of this Division (1) The objects of this Division are:(a) to provide that the doctrine of ultra vires does not apply to
co-operatives, and
(b) without affecting the validity of a co-operative’s dealings
with outsiders, to ensure that the co-operative’s officers and members
give effect to provisions of the co-operative’s rules relating to the
primary activities or powers of the co-operative.
(2) This Division is to be construed and have effect
accordingly.
33 Legal capacity (cf Vic Act s 40) (1) A co-operative has, both within and outside the State, the legal
capacity of a natural person. (2) Without limiting subsection (1), a co-operative has, both within
and outside the State, power:(a) to issue and allot fully or partly paid shares in the
co-operative, and
(b) to issue debentures of the co-operative, and
(c) to distribute any of the property of the co-operative among the
members, in kind or otherwise, and
(d) to give security by charging uncalled capital,
and
(e) to grant a charge on property of the co-operative,
and
(f) to procure the co-operative to be registered or recognised as a
body corporate in any place outside the State, and
(g) to do any other act that it is authorised to do by any other law
(including a law of a place outside the State).
(3) Subsections (1) and (2) have effect in relation to a
co-operative:(a) subject to this Act and the regulations but despite section 34
(2), and
(b) if the co-operative’s rules contain an express or implied
restriction on, or an express or implied prohibition of, the exercise by the
co-operative of any of its powers, despite that restriction or prohibition,
and
(c) if the rules of the co-operative contain a provision stating the
objects of the co-operative, despite that fact.
(4) The fact that the doing of an act by a co-operative would not be,
or is not, in its best interests does not affect its legal capacity to do the
act.
34 Restrictions on co-operatives in rules (1) A co-operative’s rules may contain an express restriction
on, or an express prohibition of, the exercise by the co-operative of a power
of the co-operative. (2) A co-operative contravenes this section if:(a) it exercises a power contrary to an express restriction on, or an
express prohibition of, the exercise of that power, being a restriction or
prohibition contained in the co-operative’s rules,
or
(b) the rules of the co-operative contain a provision stating the
objects of the co-operative and the co-operative does an act otherwise than in
pursuance of those objects.
(3) An officer of a co-operative who is involved in a contravention by
the co-operative of this section also contravenes this
section. (4) A person who contravenes this section is not guilty of an
offence.
35 Results of contravention of restriction in
rules (1) The exercise of a power or the doing of an act in contravention of
section 34 is not invalid merely because of the
contravention. (2) An act of an officer of a co-operative is not invalid merely
because, by doing the act, the officer contravenes section
34. (3) The fact that the exercise of a power or the doing of an act
contravenes or would contravene section 34 may be asserted or relied on only
in:(a) a prosecution of a person for an offence against this Act,
or
(b) an application for an order under Division 5 of Part 4 (Oppressive
conduct of affairs), or
(c) an application for an injunction under section 443 (Injunctions)
to restrain the co-operative from entering into an agreement,
or
(d) proceedings (other than an application for an injunction) by the
co-operative, or by a member of the co-operative, against the present or
former officers of the co-operative, or
(e) an application by the Registrar or by a member of the co-operative
for the winding up of the co-operative.
(4) If (but for subsection (3)) the Court would have power under
section 443 to grant, on the application of a person, an injunction
restraining a co-operative, or an officer of a co-operative, from engaging in
particular conduct constituting a contravention of section 34, the Court may,
on the application of that person, order the co-operative or the officer to
pay damages to that person or any other person.
Division 3 Persons having dealings with
co-operatives 36 Assumptions entitled to be made (cf Vic Act s 43) (1) A person is entitled to make the assumptions in section 37 in
relation to:(a) dealings with a co-operative, and
(b) dealings with a person who has, or purports to have, directly or
indirectly acquired title to property from a
co-operative.
(2) If a person is entitled to assume a matter, the co-operative or
anyone referred to in subsection (1) is not entitled to assert in proceedings
in relation to the dealings that the matter is
incorrect.
37 Assumptions (cf Vic Act s 44) (1) Rules complied with
A person may assume that the co-operative’s rules have been
complied with. (2) Director or officer
A person may assume that anyone who appears, from information
provided by the co-operative that is available to the public from the
Registrar, to be a director or officer of the co-operative:(a) has been duly appointed, and
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by a director or officer of a similar
co-operative.
(3) Officer or agent
A person may assume that anyone who is held out by the
co-operative to be an officer or agent of the co-operative:(a) has been duly appointed, and
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by that kind of officer or agent of a
similar co-operative.
(4) Officer or agent with authority to warrant that document
is genuine or true copy
A person may assume that anyone who is, or may be assumed to be,
an officer or agent of the co-operative who has the authority to issue a
document or a certified copy of a document on its behalf also has authority to
warrant that the document is genuine or is a true
copy. (5) Document duly executed
A person may assume that a document has been duly executed by the
co-operative if it is signed by 2 people, one of whom is, or may be assumed to
be, a director of the co-operative, and the other a director or officer of the
co-operative. (6) Document duly sealed
A person may assume that a document has been duly sealed by the
co-operative if it bears what appears to be an impression of the
co-operative’s seal and the sealing of the document appears to be
witnessed by 2 people, one of whom is, or may be assumed to be, a director of
the co-operative, and the other a director or officer of the
co-operative. (7) Proper performance of duties
A person may assume that the officers and agents of the
co-operative properly perform their duties to the
co-operative.
38 Person who knows or ought to know is not entitled to make
assumptions (cf Vic Act s 45) This Division does not entitle a person to make an assumption, and
does not prevent an assertion being made in relation to an assumption,
if:(a) the person has actual knowledge that the assumption is not
correct, or
(b) the person’s connection or relationship with the
co-operative is such that the person ought to know that the assumption is not
correct.
39 (Repealed) 40 Lodgment of documents etc not to constitute constructive
notice (1) A person is not to be considered to have knowledge of a
co-operative’s rules, any of the contents of a co-operative’s
rules, a document, the contents of a document, or any particulars, merely
because of either or both of the following:(a) the rules, the document or the particulars have been lodged with
the Registrar,
(b) the rules, the document or the particulars are referred to in any
other document that has been lodged with the Registrar, or lodged with a
person under a previous law corresponding to a provision of this
Act.
(2) Subsection (1) does not apply in relation to a document, or in
relation to the contents of a document, that has been lodged under Division 3
(Charges) of Part 10 to the extent that the document relates to a charge that
is registrable under that Division or law. (3) Despite subsection (1), a member of a co-operative is to be
considered to have knowledge of the rules of the
co-operative.
41 Effect of fraud (1) A person’s entitlement under this Division to make an
assumption is not affected merely by the fact that any person:(a) has acted or is acting fraudulently in relation to the dealing or
acquisition or purported acquisition of title to property to which the
assumption relates, or
(b) has forged a document that appears to have been sealed on behalf
of a co-operative.
(2) However, the person is not entitled to make the assumption if the
person has actual knowledge of that fraudulent action or
forgery.
Divisions 4, 5 42–44(Repealed) Division 6 Authentication and execution of documents and
confirmation of contracts 45 Contractual formalities (1) So far as concerns the formalities of making, varying or
discharging a contract, a person acting under the express or implied authority
of a co-operative may make, vary or discharge a contract in the name of, or on
behalf of, the co-operative as if that contract were made, varied or
discharged by a natural person. (2) The making, varying or discharging of a contract in accordance
with subsection (1) is effectual in law and binds the co-operative and other
parties to the contract. (3) This section does not prevent a co-operative from making, varying
or discharging a contract under its common seal.
46 Execution under common seal A contract or other document executed, or purporting to have been
executed, under the common seal of a co-operative is not invalid merely
because a person attesting the affixing of the common seal was in any way,
whether directly or indirectly, interested in that contract or other document
or in the matter to which that contract or other document
relates. 47 Authentication need not be under seal (cf Vic Act s 50) A document or proceeding requiring authentication by a
co-operative may be authenticated by the signature of 2 people, one of whom is
a director of the co-operative and one of whom is a director or an officer of
the co-operative and need not be authenticated under the seal of the
co-operative.
48 Co-operative may authorise person to execute
deeds (1) A co-operative may, by writing under its common seal, empower a
person, either generally or in respect of a specified matter or specified
matters, as its agent or attorney to execute deeds on its
behalf. (2) A deed signed by such an agent or attorney on behalf of the
co-operative and under his, her or its seal, or under the appropriate official
seal of the co-operative, binds the co-operative and has effect as if it were
under the common seal of the co-operative. (3) The authority of such an agent or attorney, as between the
co-operative and a person dealing with him, her or it, continues during the
period (if any) mentioned in the instrument conferring the authority or, if no
period is so mentioned, until notice of the revocation or termination of his,
her or its authority has been given to the person dealing with him, her or
it.
48A Common seal (cf Vic Act s 48) A document or proceeding requiring authentication by a
co-operative may be authenticated under the common seal of the
co-operative.
49 Official seal (1) A co-operative may, if authorised by its rules, have for use in
place of its common seal outside the State where its common seal is kept one
or more official seals, each of which must be a facsimile of the common seal
of the co-operative with the addition on its face of the name of every place
where it is to be used. (2) The person affixing such an official seal must, in writing signed
by the person, certify on the instrument to which it is affixed the date on
which and the place at which it is affixed. (3) A document sealed with such an official seal is to be considered
to be sealed with the common seal of the
co-operative.
50 Other requirements as to consent or sanction not
affected This Division does not affect the operation of a law that requires
some consent or sanction to be obtained, or some procedure to be complied
with, in relation to the making, varying or discharging of a
contract. 51 Transitional This Division does not apply in relation to the making, varying or
discharging of a contract before the commencement of this section, but applies
otherwise in relation to a co-operative whether it gives its authority before,
on or after that commencement. Division 7 Pre-registration contracts 52 Contracts before registration (cf Vic Act s 56) (1) If a person enters into, or purports to enter into, a contract on
behalf of, or for the benefit of, a proposed co-operative, the co-operative
becomes bound by the contract and entitled to its benefit if the co-operative,
or a co-operative that is reasonably identifiable with it, is registered and
ratifies the contract:(a) within a reasonable period after the contract is entered into,
or
(b) within any period agreed to by the parties to the
contract.
(2) The person is released from any liability under the
pre-registration contract if the co-operative enters into another contract in
substitution for it:(a) within a reasonable period after the pre-registration contract is
entered into, or
(b) within any period agreed to by the parties to the pre-registration
contract.
(3) The person is liable to pay damages to each other party to the
pre-registration contract if a co-operative is not registered, or a
co-operative is registered but does not ratify the contract or enter into a
substitute for it:(a) within a reasonable period after the contract is entered into,
or
(b) within any period agreed to by the parties to the
contract.
(4) The maximum amount of damages the person is liable to pay to a
party is the amount the co-operative would be liable to pay to the party if
the co-operative had been registered and had ratified the contract and then
completely failed to perform it. (5) If proceedings are brought to recover damages under subsection (3)
because the co-operative is registered but does not ratify the
pre-registration contract or enter into a substitute for it, the Court may do
anything that it thinks just in the circumstances, including ordering the
co-operative:(a) to pay all or part of the damages that the person is liable to
pay, or
(b) to transfer property that the co-operative received because of the
contract to a party to the contract, or
(c) to pay an amount to a party to the
contract.
(6) If the co-operative ratifies the pre-registration contract but
fails to perform all or part of it, the Court may order the person to pay all
or part of the damages that the co-operative is ordered to
pay.
53 Person may be released from liability but is not entitled
to indemnity (cf Vic Act s 57) (1) Any of the parties to the pre-registration contract may release
the person who entered into, or purported to enter into, the contract from any
liability in relation to the contract. (2) The release must be in writing. (3) The party giving the release is not entitled to recover damages
under section 52 from the person. (4) Despite any rule of law or equity, the person does not have any
right of indemnity against the co-operative in respect of the person’s
liability under this Division. This is so even if the person was acting, or
purporting to act, as trustee for the co-operative.
54 Division replaces other rights and liabilities (cf Vic Act s 58) This Division replaces any rights or liabilities anyone would
otherwise have in relation to the pre-registration
contract.
55–61 (Repealed) Part 4 Membership Division 1 General 62 Becoming a member (cf Vic Act s 64) (1) On the registration of a co-operative, the persons who signed the
application for registration become members of the
co-operative. (2) Other persons may be admitted as members of the co-operative as
provided by its rules. (2A) A person under the age of 18 years may be admitted as a member of
the co-operative unless the rules of the co-operative otherwise
provide. (3) A body corporate is not (merely because it is a body corporate)
disqualified from being a member of a co-operative unless the
co-operative’s rules provide that bodies corporate are disqualified from
being members. (4) If 2 or more co-operatives are merged, the members of the merged
co-operative are:(a) the members of the merging co-operatives, and
(b) other persons admitted as members of the merged co-operative in
accordance with its rules.
63 Membership may be joint Membership of a co-operative may be individual and, unless the
rules of the co-operative provide otherwise, may be
joint. 64 Qualification for membership—likelihood of being
active member (1) A person is not qualified to be admitted to membership of a
co-operative unless there are reasonable grounds for believing that the person
will be an active member of the co-operative. (2) The board of a co-operative is under a duty to ensure that a
person who is not qualified to be admitted to membership is not
admitted. (3) The rules of a co-operative must contain provisions that:(a) impose a duty on all persons who become members to become active
members, and
(b) explain the consequences of failing to become or ceasing to be an
active member.
65 Members under 18 years of age (cf Vic Act s 69) (1) A member of a co-operative is not entitled to avoid any obligation
or liability as a member under any contract, deed or other document entered
into as a member on any ground relating to
minority. (2) A person under the age of 18 years is not competent to hold any
office in a co-operative. (3) A member of a co-operative who is under 18 years of age is not
entitled to the vote attached to membership. (4) This section applies only to natural
persons.
66 Members of associations (cf Vic Act s 65) (1) The members of an association are:(a) the component co-operatives by which the association is formed,
and
(b) any other co-operative, admitted to membership in accordance with
the rules of the association, and
(c) any other body corporate or other body admitted to membership in
accordance with subsection (2).
(2) A body corporate or other body (not being a co-operative) may be
admitted to membership of the association as a component co-operative
if:(a) it is incorporated or registered under any other law, whether or
not a law of New South Wales, and
(b) in the opinion of the board of the association, it is designed to
function in accordance with co-operative principles, and
(c) it is eligible to be admitted to membership in accordance with the
rules of the association.
67 Members of federations (cf Vic Act s 66) (1) The members of a federation of associations are:(a) the associations by which the federation is formed,
and
(b) any other associations admitted to membership in accordance with
the rules of the federation, and
(c) any other bodies corporate admitted to membership in accordance
with subsection (2).
(2) If the Registrar certifies that there is no association to which a
particular body corporate could conveniently or appropriately be admitted to
membership, the body corporate may be admitted to membership of a
federation.
68 Representatives of bodies corporate (cf Vic Act s 70) (1) If a body corporate is a member of a co-operative, it may by
instrument served on the co-operative appoint a person to represent it in
respect of its membership. (2) A body corporate must not appoint a person to represent the body
corporate as a member of a co-operative, if he or she is currently a member of
the co-operative or a representative of another body corporate
member.Maximum penalty: 10 penalty
units. (3) The power to appoint a representative is subject to any
restriction imposed by the rules of the co-operative as to the entitlement of
a person to represent a body corporate. (4) A person is not qualified to be appointed as the representative of
a company that is not a listed corporation (within the meaning of the
Corporations Act) unless the person is an officer, member or employee of the
company. (5) A person appointed in accordance with this section to represent a
member who is a body corporate is to be considered to be that member for the
purpose of voting at meetings of a co-operative.
69 Notification of shareholders and share holdings (cf Vic Act s 71) On the request of the board of directors of the co-operative, a
body corporate which is a member of the co-operative must make available for
inspection by the board of directors of the co-operative:(a) a list of the names of all the shareholders of that body corporate
and the number of shares held by each shareholder, or
(b) in the case of a body corporate without share capital, a list of
the members of the body corporate.
Maximum penalty: 20 penalty
units.
70 Circumstances in which membership ceases—all
co-operatives (cf Vic Act s 72) (1) A person ceases to be a member of a co-operative in each of the
following circumstances and as otherwise provided by this Act:(a) if the member’s membership is cancelled under Part 6 (Active
membership requirements),
(b) if the member is expelled in accordance with the rules of the
co-operative,
(c) if:(i) the member becomes bankrupt, or
(ii) the member’s property becomes subject to control under the
law relating to bankruptcy,
unless provision is made to the contrary in the rules of the
co-operative,
(d) on death,
(e) if the contract of membership is rescinded on the ground of
misrepresentation or mistake,
(f) in the case of a member that is a body corporate, if the body is
deregistered.
(2) On the death of a member, the member’s estate remains liable
as the member until the member’s personal representative or some other
person is registered in the member’s place.
71 Additional circumstances in which membership
ceases—co-operatives with share capital In the case of a co-operative that has a share capital, a member
ceases to be a member in each of the following additional
circumstances:(a) if the member’s share is transferred to another person in
accordance with the rules of the co-operative, and the transferee is
registered as holder in his or her place,
(b) if the member’s share is forfeited in accordance with this
Act or the rules of the co-operative,
(c) if the member’s share is sold by the co-operative under a
power conferred by the rules of the co-operative, and the purchaser is
registered as holder in his or her place,
(d) if the member’s share is purchased by the co-operative in
accordance with the provisions of this Act,
(e) if the amount paid up on the member’s shares is repaid to
the member in accordance with the rules of the
co-operative.
72 (Repealed) 73 Carrying on business with too few members (cf Vic Act s 74) (1) If a co-operative continues to carry on business for more than 28
days after the number of members is reduced below the minimum number of
members allowed, every person who is a director of the co-operative during the
time when it so continues to carry on business and who knows it is carrying on
business with fewer than the minimum number of members allowed is guilty of an
offence.Maximum penalty: 20 penalty
units. (2) Each person who is guilty of an offence under subsection (1) is
also liable to satisfy all obligations of the co-operative incurred after the
28 days referred to in subsection (1), and may be sued without any other
member being joined in the action. (3) The minimum number of members allowed is:(a) for an association or federation—2 members,
or
(b) for any other co-operative—5 members, or such lesser number
as the Registrar may have approved on the formation of the
co-operative.
(4) The Registrar may, by order, extend and further extend in a
particular case the period of 28 days referred to in subsection
(1). (5) An application for an extension must be made:(a) in a form approved by the Registrar, and
(b) before the period to be extended
expires.
Division 2 Rights and liabilities of members 74 Rights of membership not exercisable until registered
etc (cf Vic Act s 75) (1) A member of a co-operative is not entitled to exercise any rights
of membership until:(a) the member’s name appears in the register of members,
and
(b) the member has made such payment to the co-operative in respect of
membership or acquired such share or interest as may be provided in the rules
of the co-operative.
(2) The board of a co-operative must ensure that the name of a person
admitted to membership is recorded in the register of members within 28 days
after the person is admitted to membership. Maximum penalty: 20 penalty
units.
75 Liability of members to creditors A member of a co-operative is not, as such a member, under any
personal liability to a creditor of the co-operative. 76 Liability of members to co-operative (1) A member of a co-operative is not, as such a member, under any
personal liability to the co-operative, except as provided by this
section. (2) A member of a co-operative with a share capital is liable to the
co-operative for the amount, if any, unpaid on the shares held by the member
together with any charges payable by the member to the co-operative as
required by the rules of the co-operative. (3) A member of a co-operative without a share capital is liable to
the co-operative for any charges payable by the member to the co-operative as
required by the rules of the co-operative.
76A Co-operative to provide information to person intending
to become member (cf Vic Act s 77) (1) The board of a co-operative must provide each person intending to
become a member of the co-operative with:(a) a consolidated copy of the rules of the co-operative,
and
(b) a copy of all special resolutions applicable to the member passed
by the members of the co-operative, except special resolutions providing for
an alteration of the rules of the co-operative, and
(c) a copy of the last annual report of the co-operative under section
252.
(2) The board of a non-trading co-operative or, with the consent of
the Registrar, the board of a trading co-operative may comply with subsection
(1) by:(a) giving the person intending to become a member notice that the
documents referred to in that subsection may be inspected by the person at the
registered office of the co-operative and at each other office of the
co-operative in or outside New South Wales (including outside Australia),
and
(b) making those documents available for
inspection.
(3) The Registrar’s consent under subsection (2) may be given
unconditionally or subject to conditions. The board of a co-operative to which
consent has been granted subject to conditions must comply with those
conditions in order to comply with subsection (2).
77 Entry fees and regular subscriptions (cf Vic Act s 78) (1) The rules of a co-operative may:(a) require the payment by members of entry fees and regular
subscriptions, and
(b) provide for the repayment of those fees and subscriptions on a
person ceasing to be a member.
(1A) A member’s regular subscription may be based on the dealings
between the member and the co-operative or may be otherwise determined in
accordance with the rules of the co-operative. (2) A co-operative must give to any person intending to become a
member written notice of any entry fees or regular subscriptions payable by a
member to the co-operative. (3) A person who becomes a member of the co-operative is not liable to
pay any entry fees or regular subscriptions except:(a) those fees or subscriptions of which the person was given written
notice before becoming a member, and
(b) any regular subscriptions which may be imposed by any subsequent
alteration of the rules and of which the member has been given
notice.
78 Members etc may be required to deal with
co-operative (1) The rules of a co-operative may contain provisions that require a
member to have any specified dealings with the co-operative for a fixed period
and to enter into a contract for that purpose. (2) A co-operative may, if authorised by its rules, make a contract
with a member containing provisions that require the member to have any
specified dealings with the co-operative for a fixed
period. (3) In particular, any such provisions of the rules or a contract may
require a member:(a) to sell products through or to the co-operative,
or
(b) to obtain supplies or services through or from the co-operative,
or
(c) to pay to the co-operative specified sums as liquidated damages
for any failure to comply with a requirement authorised by this
section.
(4) Any sum so required to be paid to the co-operative as liquidated
damages is for the purposes of section 80 (Charge and set off of co-operative)
to be considered to be a debt due from the member to the
co-operative. (5) A contract authorised by this section is binding on the
co-operative and all other parties even though but for this Act the contract
would be invalid as being in restraint of trade. (6) Rules authorised by this section are authorised even though, but
for this section, the rules might be invalid as being in restraint of
trade.
79 Fines payable by members (1) A co-operative may impose a fine on a member for any infringement
of the rules or by-laws of the co-operative. (2) The rules of the co-operative must specify the maximum fine that
may be imposed on a member and a fine that is greater than that maximum must
not be imposed. (3) No fine exceeding $20 is to be imposed unless:(a) written notice of intention to impose the fine and the reason for
it has been given to the member, and
(b) the member has been given a reasonable opportunity to appear
before the board in person (with or without witnesses), or to send to the
board a written statement, for the purpose of showing cause why the fine
should not be imposed.
(4) The co-operative may set off the whole or any part of the fine
against any money due to the member in respect of any produce delivered by the
member to the co-operative, but no part of the fine is to be set off against
any advance due to the member from the co-operative in accordance with the
rules against produce so delivered. (5) A member is not to be considered to have infringed the rules of a
co-operative by a failure to deliver produce to the co-operative if the
failure was due to the fact that before becoming a member of the co-operative
the member had bound himself or herself under the rules of another
co-operative to deliver the produce to that other co-operative and had
actually delivered the produce to that
co-operative.
80 Charge and set-off of co-operative (cf Vic Act s 81) (1) A co-operative has, in respect of any debt due from a member or
past member to the co-operative, a charge on each of the following:(a) the share or interest in the capital and the credit balance and
deposits of the member or past member,
(b) any dividend, interest, bonus or rebate payable to the member or
past member,
(c) any entry fees and regular subscriptions required to be repaid to
a member when the member ceases to be a member.
(2) The co-operative may set off any amount paid on account of that
share or other thing, or any amount credited or payable to the member or past
member, in or towards payment of the debt. (3) The charge created by this section may be enforced by the
appropriation by the co-operative of the thing that is subject to the charge,
but only after at least 7 days’ notice has been given to the member or
past member. (4) Any share in respect of which capital has been so appropriated is
to be cancelled.
81 Repayment of shares on expulsion (1) When a member is expelled from a co-operative in accordance with
its rules, the co-operative is to repay to the member the amount paid up on
the shares held by the member at the date of expulsion, less any amount owed
by the member to the co-operative at the date of expulsion under the rules of
the co-operative or any contract or otherwise. (2) If the balance sheet of the co-operative last issued before the
expulsion of a member of the co-operative disclosed a loss or deficiency,
there is to be a proportionate reduction in the capital to be repaid to the
member. (3) That reduction is to be by an amount that bears to the amount of
the loss or deficiency so disclosed the same proportion as the number of
shares held by the member bore to the total number of shares held by all
members of the co-operative as at the date of expulsion of the
member. (4) Payment of any amount due to a member under this section is to be
made at such time as may be determined by the board of the co-operative, but
not later than 12 months after the date of
expulsion. (4A) However, if the board considers that repayment within 12 months
would adversely affect the financial position of the co-operative, or the
former member consents in writing:(a) the board may defer payment until a later time determined by the
board, or
(b) the co-operative may appropriate the amount as a donation to the
co-operative, but only if the former member consents in writing to the
donation.
(4B) If payment is deferred, the amount owing to the former member must
be applied as follows:(a) if the co-operative is a deposit-taking co-operative—the
co-operative may apply the amount as a deposit by the former member with the
co-operative (subject to the requirements of section 135 as to interest on the
deposit and to the requirements of section 136),
(b) the co-operative may allot or issue debentures or CCUs of the
co-operative to the former member in satisfaction of the
amount.
(5) Shares in respect of which capital has been repaid are to be
cancelled.
Division 3 Death of member 81A Meaning of “interest” For the purposes of this Division, a deceased member’s
interest in a
co-operative includes each of the following:• the member’s membership itself
• any credit balance due to the member
• any loan from or to or deposit with the
co-operative
• any surplus arising on the sale by the co-operative as mortgagee
of any property mortgaged by the deceased to the
co-operative.
82 Transfer of share or interest on death of
member (cf Vic Act s 84) Subject to section 170A, on the death of a member, the board is to
transfer the deceased member’s share or interest in the co-operative
to:(a) the personal representative of the deceased member,
or
(b) to such person as the deceased’s personal representative may
specify in an application made to the co-operative within 3 months after the
death of the member.
83 Transfer of small shareholdings and interests on
death (1) If the total value of a deceased member’s shares or interest
in a co-operative is less than $10,000 (or such other amount as may be
prescribed), the board may, on the basis of such evidence as it considers
sufficient, transfer the shares or interest in accordance with whichever of
the following paragraphs is appropriate:(a) if the member or person dies testate—to the person who
appears to the board to be entitled to the shares or interest under the will
of the deceased member or person,
(b) if the member or person dies intestate—to any person who
appears to the board to be entitled to obtain a grant of administration of the
estate of the deceased and that person is then to hold the shares or interest
on the same trusts as if he or she had obtained such a
grant.
(2) No transfer is to be made under this section after evidence has
been produced to the co-operative of the grant of letters of administration of
the estate, or probate of the will, of the deceased
member. (3) In this section, the transfer of an interest
includes the payment of money.
84 (Repealed) 85 (Renumbered as sec
81A) 86 Value of shares and interests The value of the shares or interest of a deceased member is to be
determined for the purposes of this Division in accordance with the rules of
the co-operative. 87 Stamp Duties Act
1920 The provisions of this Division are subject to section 122 (No
dealings with shares etc of deceased persons to be registered without
certificate of Chief Commissioner) of the Stamp Duties Act
1920. 88 Co-operative protected Any transfer of property made by the board of a co-operative in
accordance with the provisions of this Division is valid and effectual against
any demand made on the co-operative by any other
person. Division 4 Disputes involving members 89 Grievance procedure (cf Vic Act s 88) (1) The rules of a co-operative must set out a grievance procedure for
dealing with any dispute under the rules between:(a) a member and another member, or
(b) a member and the co-operative.
(2) A member may appoint any person to act on behalf of the member in
the grievance procedure. (3) The grievance procedure must allow for natural justice to be
applied. (4) In this section and section 90, member includes any person
who was a member not more than 6 months before the dispute
occurred.
90 Application to Court (cf Vic Act s 89) (1) The Court may, on the application of a member or the co-operative,
make an order declaring and enforcing:(a) the rights or obligations of members of the co-operative between
themselves, or
(b) the rights or obligations of the co-operative and any member
between themselves.
(2) An order may be made under this section whether or not a right of
a proprietary nature is involved and whether or not the applicant has an
interest in the property of the co-operative. (3) The Court may refuse to make an order on the application or may
make an order for costs against a party, whether successful or not, if it is
of the opinion that:(a) the issue raised in the application is trivial,
or
(b) having regard to the importance of the issue, the nature of the
co-operative, any other available method of resolving the issue, the costs
involved, lapse of time, acquiescence or any other relevant circumstance, it
was unreasonable to make the application, or
(c) the unreasonable or improper conduct of a party:(i) has been responsible for the making of the application,
or
(ii) has added to the cost of the
proceedings.
91–95 (Repealed) Division 5 Oppressive conduct of affairs 95A Extended meaning of “member” (cf Vic Act s 90) In this Division, a reference to a member of a co-operative
includes, in the case of a co-operative that has a share capital, a reference
to a person to whom a share in the co-operative has been transmitted by will
or by operation of law.
95B Application of Division (cf Vic Act s 91) This Division does not apply in respect of anything done under or
for the purposes of Part 6.
96 Who may apply for court order The following persons may apply to the Court for an order under
this Division:(a) the Registrar,
(b) a member who believes that the affairs of the co-operative are
being conducted in a manner that is oppressive or unfairly prejudicial to, or
unfairly discriminatory against, a member or members, or in a manner that is
contrary to the interests of the members as a whole,
(c) a member who believes that an act or omission, or a proposed act
or omission, by or on behalf of the co-operative, or a resolution, or a
proposed resolution, of a class of members, was or would be oppressive or
unfairly prejudicial to, or unfairly discriminatory against, a member or
members or was or would be contrary to the interests of the members as a
whole.
97 (Repealed) 98 Orders that Court may make (cf Vic Act s 93) On application under this Division, the Court may make such order
or orders as it thinks fit including (without being limited to) one or more of
the following orders:(a) an order that the Registrar appoint an administrator of the
co-operative,
(b) an order that the co-operative be wound up,
(c) an order for regulating the conduct of affairs of the co-operative
in the future,
(d) an order for the repayment of the member’s shares in
accordance with the provisions of this Act for repayment of share
capital,
(e) an order for the purchase of the shares of any member by the
co-operative and for the reduction accordingly of the co-operative’s
capital,
(f) an order directing the co-operative to institute, prosecute,
defend or discontinue specified proceedings, or authorising a member or
members of the co-operative to institute, prosecute, defend or discontinue
specified proceedings in the name and on behalf of the
co-operative,
(g) an order appointing a receiver or a receiver and manager of
property of the co-operative,
(h) an order restraining a person from engaging in specified conduct
or from doing a specified act or thing,
(i) an order requiring a person to do a specified act or
thing,
(j) an order directing a co-operative to become registered as a
company under the Corporations Act,
(k) an order as to costs.
99 Basis on which Court makes orders The Court may make an order under this Division if of the
opinion:(a) that affairs of a co-operative are being conducted in a manner
that is oppressive or unfairly prejudicial to, or unfairly discriminatory
against, a member or members (the oppressed member or
members), whether or not in the capacity of a member or members, or
in a manner that is contrary to the interests of the members as a whole,
or
(b) that an act or omission, or a proposed act or omission, by or on
behalf of a co-operative, or a resolution, or a proposed resolution, of a
class of members of a co-operative, was or would be oppressive or unfairly
prejudicial to, or unfairly discriminatory against, a member or members (the
oppressed
member or members), whether or not in the capacity of a member or
members, or was or would be contrary to the interests of the members as a
whole.
100 Winding up not to be ordered if oppressed members
prejudiced The Court is not to make an order under this Division for the
winding up of a co-operative if it is of the opinion that the winding up of
the co-operative would unfairly prejudice the oppressed member or
members. 101 Application of winding up provisions (cf Vic Act s 96) If an order that a co-operative be wound up is made under this
Division, the provisions of this Act relating to the winding up of
co-operatives apply, with such adaptations as are necessary, as if the order
had been made or an application duly filed in the Court by the
co-operative.
102 Changes to rules If an order under this Division makes any alteration to the rules
of a co-operative:(a) the alteration has effect as if it had been duly made by special
resolution of the co-operative, and
(b) the co-operative must not (despite any other provisions of this
Act) without the leave of the Court make any further alteration to the rules
inconsistent with the provisions of the order.
103 Copy of order to be lodged with Registrar (cf Vic Act s 98) An applicant for an order under this Division must lodge an office
copy of the order with the Registrar within 14 days after it is
made.Maximum penalty: 10 penalty
units.
104 Compliance with orders A person must not contravene an order under this Division that is
applicable to the person.Maximum penalty: 50 penalty units or imprisonment for 12 months,
or both. Division 6 Proceedings on behalf of co-operative by members
and others 105 Bringing, or intervening in, proceedings on behalf of
co-operative (cf Vic Act s 99) (1) A person may bring proceedings on behalf of a co-operative, or
intervene in any proceedings to which a co-operative is a party, for the
purpose of taking responsibility on behalf of the co-operative for those
proceedings, or for a particular step in those proceedings, (for example,
compromising or settling them), if:(a) the person is:(i) a member, former member, or person entitled to be registered as a
member, of the co-operative or of a related body corporate,
or
(ii) an officer or former officer of the co-operative,
or
(iii) the Registrar, and
(b) the person is acting with leave granted under section
105A.
(2) Proceedings brought on behalf of a co-operative may be brought in
the co-operative’s name.
105A Applying for and granting leave (cf Vic Act s 100) (1) A person referred to in section 105 (1) (a) may apply to the Court
for leave to bring, or to intervene in,
proceedings. (2) The Court may grant the application if it is satisfied
that:(a) it is probable that the co-operative will not itself bring the
proceedings, or properly take responsibility for them, or for the step in
them, and
(b) the applicant is acting in good faith, and
(c) it is in the best interests of the co-operative that the applicant
be granted leave, and
(d) if the applicant is applying for leave to bring proceedings, there
is a serious question to be tried, and
(e) either:(i) at least 14 days before making the application, the applicant gave
written notice to the co-operative of the intention to apply for leave and of
the reasons for applying, or
(ii) it is appropriate to grant leave even if subparagraph (i) is not
satisfied.
105B Substitution of another person for person granted
leave (cf Vic Act s 101) (1) Any of the following persons may apply to the Court for an order
that they be substituted for a person to whom leave has been granted under
section 105A:(a) a member, former member, or person entitled to be registered as a
member, of the co-operative or a related body corporate,
or
(b) an officer, or former officer, of the co-operative,
or
(c) the Registrar.
(2) The application may be made whether or not the other person has
already brought the proceedings or made the
intervention. (3) The Court may make the order if it is satisfied that:(a) the applicant is acting in good faith, and
(b) in all the circumstances, it is appropriate to make the
order.
(4) An order substituting one person for another person has the effect
that:(a) the grant of leave is taken to have been made in favour of the
substituted person, and
(b) if the other person has already brought the proceedings or
intervened, the substituted person is taken to have brought those proceedings
or to have made that intervention.
105C Effect of ratification by members (cf Vic Act s 102) (1) A ratification or approval of conduct by members of a
co-operative:(a) does not prevent a person from bringing or intervening in
proceedings with leave under section 105A or from applying for leave under
that section, and
(b) does not have the effect that proceedings brought or intervened in
with leave under section 105A must be determined in favour of the defendant,
or that an application for leave under that section must be
refused.
(2) The Court may take into account a ratification or an approval of
the conduct by members of a co-operative in deciding what order or judgment
(including as to damages) to make in proceedings brought or intervened in with
leave under section 105A or in relation to an application for leave under that
section. (3) In taking a ratification or approval into account under subsection
(2), the Court may have regard to:(a) how well-informed about the conduct the members were when deciding
whether to ratify or approve the conduct, and
(b) whether the members who ratified or approved the conduct were
acting for proper purposes.
105D Leave to discontinue, compromise or settle proceedings
brought, or intervened in, with leave (cf Vic Act s 103) Proceedings brought or intervened in with leave must not be
discontinued, compromised or settled without the leave of the
Court.
105E General powers of the Court (cf Vic Act s 104) (1) The Court may make any orders, and give any directions, that it
thinks just in relation to proceedings brought or intervened in with leave, or
in relation to an application for leave, including:(a) interim orders, and
(b) directions about the conduct of the proceedings, including
requiring mediation, and
(c) an order directing the co-operative, or an officer of the
co-operative, to do, or not to do, any act, and
(d) an order appointing an independent person to investigate, and
report to the Court, on:(i) the financial affairs of the co-operative, or
(ii) the facts or circumstances which gave rise to the cause of action
the subject of the proceedings, or
(iii) the costs incurred in the proceedings and the person granted
leave.
(2) A person appointed by the Court under subsection (1) (d) is
entitled, on giving reasonable notice to the co-operative, to inspect and make
copies of any books of the co-operative for any purpose connected with their
appointment.
105F Power of Court to make costs order (cf Vic Act s 105) At any time, the Court may, in relation to proceedings brought or
intervened in with leave under section 105A or an application for leave under
that section, make any orders it thinks just about the costs of the person who
applied for or was granted leave, of the co-operative or of any other party to
the proceedings or application, including an order requiring indemnification
for costs.
Part 5 Rules 106 Effect of rules (1) The rules of a co-operative have the effect of a contract under
seal:(a) between the co-operative and each member, and
(b) between the co-operative and each director, the principal
executive officer and the secretary of the co-operative,
and
(c) between a member and each other member.
(2) Under the contract, each of those persons agrees to observe and
perform the provisions of the rules as in force for the time being so far as
those provisions are applicable to that person.
107 Content of rules (cf Vic Act s 107) (1) The rules of a co-operative must set out or otherwise make
provision for the matters specified in Schedule 1. (2) The rules must be divided into paragraphs numbered
consecutively. (3) The rules may state the objects of the
co-operative. (4) The rules may incorporate any provision of the model rules
approved under section 109A. (5) The rules may provide for the imposition of a fine on a member for
any infringement of the rules. (6) If the rules provide for the imposition of a fine, the rules must
specify the maximum fine that may be imposed on a
member. (7) The maximum fine fixed by the rules must not exceed any amount
that may be prescribed as the maximum fine. (8) The rules may contain other provisions not inconsistent with this
Act or the regulations.
108 Purchase and inspection of copy of rules (cf Vic Act s 108) (1) Any member is entitled to obtain from a co-operative a copy of its
rules on payment of the amount required by the rules of the co-operative or,
if the rules do not prescribe an amount, on payment of
$5. (2) The amount required by the rules must not exceed the fee
prescribed by the regulations for obtaining a copy of the rules from the
Registrar. (3) Any person is entitled to obtain from the Registrar a copy of the
rules of a co-operative on payment of the fee prescribed by the
regulations.
109 (Repealed) 109A Model rules (cf Vic Act s 110) (1) The Registrar may by notice published in the Government Gazette
approve model rules for co-operatives or for any class of co-operatives and
alter or repeal the model rules from time to time. (2) The model rules may make provision for anything for which the
rules of a co-operative may make provision. (3) If the model rules provide for a matter and the rules of a
co-operative of the class to which the model rules apply do not provide for
that matter, the provision of the model rules relating to that matter is
deemed to be included in the rules of the
co-operative.
110 Rules can only be altered in accordance with this
Act (cf Vic Act s 111) (1) The rules of a co-operative cannot be altered except as provided
by this Act. (2) (Repealed)
111 Alteration by special resolution (cf Vic Act s 113) The rules of a co-operative must be altered by special resolution
unless otherwise specified in this Act.
112 Alteration by resolution of the board (1) The rules of a co-operative may be altered by a resolution passed
by the board if:(a) the alteration does no more than give effect to a requirement,
restriction or prohibition imposed by or under the authority of this Act,
or
(b) the Registrar is satisfied that approval of the alteration by the
members of the co-operative is not necessary and alteration by the board would
be appropriate.
(2) If the rules of a co-operative are altered pursuant to this
section, the co-operative must cause the alteration to be notified in writing
to its members as soon as practicable after the alteration takes effect and in
any event not later than the date on which notice is given to the members of
the next annual general meeting of the co-operative following the taking
effect of the alteration.
113 Alteration does not take effect until
registered (cf Vic Act s 115) (1) An alteration of the rules of a co-operative does not take effect
unless and until it is registered by the Registrar. (2) An application for registration of an alteration must:(a) be made in a form approved by the Registrar,
and
(b) be made within 28 days, or such other period as may be prescribed
by the regulations, after the alteration is made, and
(c) be accompanied by a consolidated copy of the rules of the
co-operative, including the alteration.
(3) The Registrar must register the alteration unless:(a) the Registrar is satisfied that the alteration is contrary to this
Act or the regulations, or
(b) the Registrar has other reasonable cause to refuse to register the
alteration.
(4) The Registrar may refer any alteration to the Council for advice
and report but is not required to follow the advice of the Council on the
alteration. (5) A certificate of registration of any alteration of the rules of a
co-operative given by the Registrar is, in favour of any person giving
financial accommodation to the co-operative on the faith of the certificate or
in favour of any guarantor of that financial accommodation, conclusive
evidence that the alteration in the rules was duly
made.
113A Appeal against refusal to register alteration (cf Vic Act s 117) A co-operative may appeal to the Court against:(a) a decision of the Registrar to refuse to register an alteration of
its rules, or
(b) a failure of the Registrar to register an alteration of its
rules.
113B Registrar to comply with Court order (cf Vic Act s 118) The Registrar must comply with an order of the Court on an appeal
under this Part.
114 False copies of rules (1) A person who gives to a member of a co-operative or to a person
intending or applying to become a member of a co-operative a copy of any rules
or any alterations of rules, other than those which have been duly registered,
representing that they are binding on the members of the co-operative is
guilty of an offence.Maximum penalty: 10 penalty
units. (2) Any person who makes an alteration to any of the rules of a
co-operative after they have been registered and circulates them representing
that they have been duly registered when they have not been is guilty of an
offence.Maximum penalty: 10 penalty
units.
Part 6 Active membership requirements Division 1 Definitions etc 115 Primary activity—meaning A primary activity of a co-operative is an activity specified in
the rules of the co-operative as a primary activity of the
co-operative. 116 Active membership—explanation For the purposes of this Act, a member of a co-operative is an
active member of the co-operative if the member:(a) utilises or supports an activity of, or maintains a relationship
or an arrangement with, the co-operative, in connection with the carrying on
of a primary activity of the co-operative, in the manner and to the extent
which the rules of the co-operative provide is sufficient to establish active
membership, or
(b) maintains such other relationship or arrangement with the
co-operative in connection with the carrying on of a primary activity of the
co-operative as the regulations provide is sufficient to establish active
membership.
117 Active membership provisions and
resolutions—explanation (1) Active membership provisions in the rules of a co-operative are
provisions in the rules which specify:(a) which of the activities of the co-operative are the primary
activities of the co-operative, and
(b) the manner in which and the extent to which a member of the
co-operative is required to utilise or support an activity of, or maintain a
relationship or an arrangement with, the co-operative, in connection with the
carrying on of a primary activity of the co-operative, in order to establish
active membership of the co-operative.
(2) An active membership resolution is a resolution which would, if
given effect to, make or amend active membership provisions in the rules of a
co-operative.
Division 2 Rules to contain active membership
provisions 118 Number of primary activities required A co-operative must have at least 1 primary
activity. 119 Rules to contain active membership provisions (1) The board of a co-operative must ensure that the rules of the
co-operative contain active membership provisions in accordance with this
Part. (2) An alteration of the rules of a co-operative effected for the
purposes of this section is not an alteration which may be effected by a
resolution passed by the board under section 112.
120 Failure to have active membership provisions (1) If the rules of a co-operative do not contain active membership
provisions as required by this Part, the Council may by resolution alter the
rules of the co-operative so that they contain active membership
provisions. (2) The active membership provisions are to be provisions that in the
opinion of the Council are appropriate to the co-operative concerned, having
regard to:(a) the rules and activities of the co-operative,
and
(b) the membership structure of the co-operative,
and
(c) such other matters as the Council thinks are
relevant.
(3) Before taking action under this section, the Council must:(a) give notice in writing to the co-operative concerned that it
proposes to take the action, and
(b) take into account any representations made by the co-operative
concerning the matter within the time allowed by the notice for the making of
representations.
(4) A resolution of the Council under this section operates to alter
the rules of the co-operative accordingly, but section 113 (Alteration does
not take effect until registered) applies to any such
alteration. (5) The fact that active membership provisions in the rules of a
co-operative resulted from the operation of this section does not prevent the
alteration of those provisions in accordance with this
Act.
121 Factors and considerations for determining primary
activities etc (cf Vic Act s 124) (1) The board of a co-operative must ensure that the relevant factors
and considerations are taken into account in determining the following:(a) which of the activities of a co-operative are its primary
activities,
(b) the manner and extent to which a member is required to utilise or
support an activity of, or maintain a relationship with, a co-operative, in
connection with the carrying on of a primary activity of the co-operative, to
establish active membership of the co-operative.
(2) The relevant
factors and considerations are as follows:(a) the primary activity or (if more than one) the primary activities
taken together should constitute the basic purpose for which the co-operative
exists and a significant contribution to the business of the
co-operative,
(b) the manner and extent of required utilisation, support or
relationship should be reasonable when considered in relation to the
activities of the co-operative as a whole,
(c) such other factors and considerations as may be
prescribed.
(3) The regulations may provide for the matters to be taken into
account in determining whether an activity or activities makes or make a
significant contribution to the business of the co-operative and for that
purpose may specify minimum percentages of turnover, minimum amounts of income
or minimum amounts of business necessary to constitute “significant
contribution”. (4) Factors and considerations may be prescribed so as to apply to
co-operatives generally, to a specified class of co-operatives or to a
specified individual co-operative. (5) Nothing in this section limits the right of active members other
than the board of the co-operative to propose an active membership
resolution.
122 Regular subscription—active membership of
non-trading co-operative (cf Vic Act s 126) (1) Active membership provisions for a non-trading co-operative may
include provision that the payment of a regular subscription by a member of
the co-operative, to be applied in connection with a primary activity of the
co-operative, is sufficient to establish active membership of the
co-operative. (2) A member of a co-operative who would, on payment of such a
subscription, be an active member of a co-operative is to be considered to be
an active member until the subscription is due and
payable.
123 Active membership provisions—trading
co-operatives (cf Vic Act s 125) (1) (Repealed) (2) The only active membership provisions which may be contained in
the rules of a trading co-operative are:(a) provisions requiring a member to utilise an activity of the
co-operative in connection with the carrying on of a primary activity
specified in the provisions to establish active membership,
and
(b) such other active membership provisions as the Council may
approve.
(3) A reference in this section, and in any active membership
provisions of the rules of a co-operative, to the supply to or purchase from a
co-operative by a member of goods or produce includes a reference to:(a) the supply to or purchase from a body corporate constituted by an
Act for the purpose of the marketing of goods or produce if the body corporate
in turn supplies to or purchases from the co-operative,
and
(b) the existence of a relationship or arrangement between the member
and the co-operative which is prescribed by the regulations as being
sufficient to establish the relationship of supplier or
purchaser.
Division 3 Active membership resolutions 124 Prior approval of active membership
resolutions (1) An active membership resolution cannot be proposed at a meeting of
a co-operative unless:(a) before the meeting, the Registrar has approved in writing of the
terms of the proposed resolution, or
(b) the active membership provisions which would result from the
proposed resolution fall within guidelines approved of in writing by the
Registrar before the meeting.
(2) Before giving an approval under this section, the Registrar may
require additional information from the proposers of the resolution for the
purpose of deciding whether or not to approve of the
resolution. (3) If the Registrar refuses approval, the Registrar must inform the
co-operative in writing of the reasons for the
refusal.
125 Appeal against refusal of approval (1) The co-operative is entitled to have a decision of the Registrar
to refuse approval of a proposed active membership resolution reviewed if the
reason for the refusal is that the resolution would result in active
membership provisions which are not appropriate for the co-operative or would
result in unreasonable active membership
provisions. (2) The review is to be carried out by the Council at the request of
the co-operative. (3) The Council may recommend to the Registrar that the Registrar
approve of the proposed resolution and the Registrar is to comply with such a
recommendation.
126 Notice of meeting (1) At least 21 days’ written notice must be given to members of
a co-operative of a meeting at which an active membership resolution is to be
proposed. (2) The notice must, in addition to the other matters required to be
specified:(a) specify whether the member is eligible to vote on the resolution,
and
(b) specify the full text of the proposed resolution,
and
(c) contain a copy of section 127 (Cancellation of membership of
inactive member).
(3) If the notice to a member states that he or she is not eligible to
vote on a resolution, the member may, after endeavouring to settle the matter
with the co-operative, apply to the Registrar for a determination as to the
member’s eligibility. (4) The Registrar may determine the matter, on the information
available to the Registrar, by direction in writing to the co-operative and
the member. (5) The Registrar’s determination as to eligibility has effect
but only if given before the meeting concerned is due to be
held.
126A Eligibility to vote on active membership
resolution (cf Vic Act s 128) The only members of a co-operative who are eligible to vote on an
active membership resolution when the rules do not contain active membership
provisions are those members who would be active members if the resolution had
already taken effect.
126B Eligibility of directors to vote on proposal at board
meeting (cf Vic Act s 129) If the board of a co-operative is meeting to consider a proposal
to submit an active membership resolution to a meeting of the
co-operative:(a) subject to paragraph (b), a director is only eligible to vote on
that proposal if he or she would be eligible to vote on the resolution at the
meeting of the co-operative, or
(b) if less than 2 directors (whether or not they are present at the
meeting of the board of directors) would be eligible to vote on the resolution
at the meeting of the co-operative, all the directors are eligible to vote on
that proposal at the meeting of the board of
directors.
126C Other entitlements of members not affected (cf Vic Act s 130) A provision of this Division which renders a member of a
co-operative ineligible to vote on a resolution does not affect any other
right, entitlement, obligation or duty of the member as a
member.
Division 4 Cancellation of membership etc of inactive
members 127 Cancellation of membership of inactive member (cf Vic Act s 131) (1) The board of a co-operative must declare the membership of a
member cancelled if:(a) the whereabouts of the member are not presently known to the
co-operative and have not been known to the co-operative for at least the
required period before that time, or
(b) the member is not presently an active member of the co-operative
and has not been an active member of the co-operative at any time during the
required period immediately before that time.
(2) This section applies to a member only if he or she was a member of
the co-operative throughout the required period. (3) The question of whether a member was an active member at a
particular time in the past is to be determined as if the active membership
provisions concerned had been in force at that
time. (4) The board’s declaration under this section has the effect of
cancelling the membership concerned. (5) A person may apply to the Council for an order under section 129
in respect of the cancellation of the person’s membership under this
section. (6) In this section the required
period in relation to a co-operative, means:(a) 3 years, or
(b) if a shorter period is provided for in the rules of the
co-operative, that shorter period.
128 Shares to be forfeited if membership cancelled (cf Vic Act s 134) (1) If a co-operative has a share capital, the board of the
co-operative is to declare the shares of a member to be forfeited at the same
time as the member’s membership is cancelled under section
127. (2) The board’s declaration has the effect of forfeiting the
shares concerned. (3) Nothing in this section affects the operation of section
134.
129 Order of Council against cancellation (1) The Council may, if satisfied in a particular case that the
cancellation of a member’s membership under section 127 was or would be
unreasonable, direct by order in writing that the membership should not have
been cancelled or should not be cancelled. (2) While such an order is in force:(a) the membership concerned is not required to be cancelled and any
shareholding of the member is not required to be forfeited,
and
(b) the person whose membership was cancelled is entitled to be
reinstated as a member of the co-operative with all the rights and
entitlements (including any shareholding) attaching to or arising from the
former membership.
(3) Reinstatement of a member under this section is to be effected in
accordance with the directions of the Council.
130 Deferral of forfeiture by board (cf Vic Act s 134) (1) The board of a co-operative may by resolution defer cancellation
of a member’s membership for a period of up to 12 months:(a) if the board has reasonable grounds to believe that a member has
ceased to be an active member due to unusual circumstances which prevent the
member fulfilling his or her active membership obligations,
or
(b) if:(i) the board thinks that during that period an active membership
resolution may be put to the members of the co-operative,
and
(ii) the effect of the resolution would be relevant to the question of
whether the member is an active member.
(2) The board of the co-operative must review the resolution to defer
before the end of the deferral period to determine if a further resolution
should be made under subsection (1).
131 Cancellation of membership prohibited in certain
circumstances (cf Vic Act s 135) Unless the regulations otherwise provide, the board of a
co-operative must not declare the membership of a member to be cancelled under
this Part:(aa) if the co-operative is insolvent or there are reasonable grounds
for suspecting that the co-operative is insolvent, or
(a) if the co-operative is under administration under Part 5.3A of the
Corporations Act as applying under this Act, or
(b) if a compromise or an arrangement is being administered in respect
of the co-operative, or
(c) if the co-operative is in the course of being wound-up,
or
(d) if an appointment of a receiver (whether or not a receiver and
manager) of any property of the co-operative is in force,
or
(e) if the co-operative has, for the purposes of being registered as a
company under the Corporations Act, filed with the Registrar a copy of the
entry made in the minute book of the co-operative under section 193 (Postal
ballots), or
(f) in such other circumstances as may be
prescribed.
132 Notice of intention to cancel membership (1) The board of a co-operative must ensure that not less than 1
month’s notice of its intention to declare the membership of a member to
be cancelled is given to the member:(a) by notice in writing sent to the member by post,
or
(b) if the member’s whereabouts are unknown to the co-operative,
by notice published in a newspaper circulating in the district in which the
registered office of the co-operative is situated.
(2) No notice is required to be given under this section if the
member’s whereabouts are unknown to the co-operative and the amount
required to be repaid to the member in respect of the cancelled membership
(whether by reason of the cancellation of shares or otherwise) does not exceed
$50.
133 Failure to cancel membership—offence by
director (cf Vic Act s 133) If the board of a co-operative fails to cancel the membership of a
member as required by this Part, a director of the co-operative who did not
use all due diligence to prevent that failure is guilty of an
offence.Maximum penalty: 20 penalty
units.
134 Repayment of amounts due in respect of cancelled
membership (cf Vic Act s 138) (1) If the membership of a member of a co-operative is cancelled under
this Part, the co-operative must, within 12 months after the date of
cancellation:(a) repay to the former member the amount due to the member in respect
of that cancellation, or
(b) apply that amount in accordance with subsection (2) if:(i) the board is of the opinion that repayment would adversely affect
the financial position of the co-operative, or
(ii) the board and the former member so
agree.
(2) The amount due may be applied as follows:(a) if the co-operative is a deposit-taking co-operative, the
co-operative may apply the amount as a deposit by the former member with the
co-operative (subject to the requirements of section 135 as to interest on the
deposit),
(b) the co-operative may allot or issue debentures or CCUs of the
co-operative to the former member in satisfaction of the
amount,
(c) the co-operative may appropriate the amount due as a donation to
the co-operative, but only if the former member consents in writing to the
donation.
(3) The amount due to a member in respect of the cancellation of
membership includes any amount paid up in respect of shares forfeited as a
result of the cancellation of membership. (4) If the former member is subsequently readmitted to membership, any
amount held by the co-operative under this section must, if the member so
requests, be applied towards the cost of admission to membership (including
any subscription for share capital). (5) If:(a) a former member cannot be found, after the use of all due
diligence by the co-operative to find the former member,
and
(b) the amount otherwise required to be paid under this section does
not exceed $100 (or any other amount that may be prescribed by the
regulations),
the co-operative may retain that amount.
135 Interest on deposits, debentures and CCUs (cf Vic Act s 139) (1) This section applies when the amount due to a former member under
section 81 or 134 is applied as a deposit with the co-operative or the
co-operative allots or issues debentures or CCUs to the former member in
satisfaction of the amount. (2) The deposit, debenture or CCU bears interest during any
period:(a) in the case of a co-operative with share capital:(i) at the rate (or, if there is more than one rate, at the higher or
highest rate) of dividend payable in respect of that period on the share
capital of the co-operative, or
(ii) if the rate of dividend payable in respect of that period has not
been determined, at the rate (or the higher or highest rate) payable in
respect of the immediately preceding period for which a rate has been
determined, or
(iii) if a rate of dividend has never been determined in respect of the
share capital of the co-operative, at the rate that the board of the
co-operative considers reasonable, or
(b) in the case of a co-operative without share capital, at the rate
that the board of the co-operative considers reasonable,
or
(c) if the rules provide for a rate to be payable that is higher than
the rate applicable under paragraph (a) or (b), at that higher
rate.
(3) A former member may agree to the rate of interest being less than
that which would otherwise be payable under this section and may agree to no
interest being paid. (4) The following provisions of the Corporations Act (as applied by
section 266 of this Act) do not apply to an allotment or issue of debentures
under this section:(a) Chapter 2L (Debentures),
(b) Chapter 6D (Fundraising).
136 Repayment of deposits, debentures and CCUs (1) A deposit, debenture or CCU to which an amount due to a former
member is transferred under section 81 or this Division is to be repaid to the
former member as soon as repayment would not, in the opinion of the board,
adversely affect the financial position of the
co-operative. (2) The deposit, debenture or CCU must in any case be repaid within 10
years (or within such shorter period as the rules of the co-operative may
require) after cancellation of the member’s
membership. (3) The Council may extend the period for repayment under subsection
(2) of any deposit, debenture or CCU to which an amount due to a former member
was transferred before the date of assent to the Statute Law
(Miscellaneous Provisions) Act (No 2) 1997, if satisfied that
repayment of the amount within that period would cause the co-operative
financial hardship. (4) An extension of a period by the Council is to be for such period
as it considers reasonable and may be given subject to
conditions. (5) The period for repayment is extended accordingly, but only while
the co-operative complies with any conditions to which the extension is
subject. (6) The Council may, on the application of the former member
concerned, reduce the period for repayment under subsection (2) if satisfied
that it would be reasonable in the particular case to require repayment of the
amount within the shorter period.
137 Register of cancelled memberships A co-operative is to keep a register specifying the prescribed
particulars of persons whose membership has been cancelled under this
Part. 138 (Repealed) Division 5 Entitlements of former members 139 Former shareholders to be regarded as shareholders for
certain purposes (1) This section applies to a co-operative only if the co-operative
has a share capital. (2) Even though a person’s shares in a co-operative have been
forfeited under this Part, the person is to be regarded as the holder of
shares in the co-operative (the same in all respects as those that were
forfeited) for the following purposes:(a) the entitlements of a shareholder in respect of the purchase of
shares in the co-operative pursuant to an offer described in section 299 (a),
(b) or (c), or the purchase of all the shares in the co-operative, if the
offer or purchase occurs within 5 years after the person’s shares were
forfeited,
(b) the entitlement of a shareholder when the co-operative becomes
registered as a company if the relevant special resolution under section 316
(2) is passed within 5 years after the person’s shares were
forfeited,
(c) the entitlement of a shareholder to a distribution of surplus in a
winding-up of the co-operative that commences within 5 years after the
person’s shares were forfeited.
(3) Subsection (2) (a) does not apply in respect of:(a) an offer described in section 299 (a) or (c) that is made by
another co-operative, or
(b) the purchase of all the shares in the co-operative by another
co-operative.
(4) Subsection (2) (c) does not apply if the winding-up is for the
purposes of a merger under Division 1 of Part 12. (5) To remove doubt, it is declared that the entitlement under
subsection (2) (a) of a person whose shares have been forfeited does not
include an entitlement to vote on any matter. (6) This section does not apply to a forfeited shareholding in a
co-operative if section 140 operates to require that forfeited shareholding to
be regarded as a forfeited shareholding in another
co-operative.
140 Entitlements of former shareholders on mergers
etc (cf Vic Act s 144) (1) This section applies when a person’s shares in a
co-operative (the original
co-operative) are forfeited under this Part and within 5 years after
that forfeiture:(a) the original co-operative becomes a subsidiary of another
co-operative (the new
co-operative), or
(b) another co-operative (the new
co-operative) is created as a result of a merger under Division 1 of
Part 12 involving the original co-operative, or
(c) the engagements of the original co-operative are transferred to
another co-operative (the new
co-operative) under Division 1 of Part
12.
(2) That person is, for the purposes of the operation of section 139
(and the further operation of this section) to be regarded as having held
shares in the new co-operative and as having had those shares in the new
co-operative forfeited under this Part when the person’s shares in the
original co-operative were forfeited. (3) The extent of the forfeited shareholding in the new co-operative
is as determined in accordance with the following:(a) if the entitlement of active members of the original co-operative
in the circumstances concerned is solely an entitlement to be allotted shares
in the new co-operative, the forfeited shareholding in the new co-operative is
the shareholding to which the person would have been entitled had the
person’s shares in the original co-operative not been
forfeited,
(b) in any other case, the forfeited shareholding in the new
co-operative is the shareholding that is the same in all respects as the
forfeited shareholding in the original
co-operative.
(4) The determination under subsection (3) (a) of the person’s
shareholding in the new co-operative is to be made:(a) solely on the basis of the person’s shareholding in the
original co-operative when the shares were forfeited or (in a further
operation of this section in respect of the person) when the person was first
to be regarded as having a forfeited shareholding in the original
co-operative, and
(b) without regard to any additional shareholding in the original
co-operative to which the person would have become entitled had the shares not
been forfeited (whether as a result of any bonus share issue or
otherwise).
141 Set-off of amounts repaid etc on forfeited
shares (cf Vic Act s 145) (1) If a person has an entitlement because of the operation of section
140, the entitlement operates to extinguish any liability of the
co-operative:(a) to repay to the person under section 134 (Repayment of amounts due
in respect of cancelled membership) any amount in respect of the forfeited
shares concerned, or
(b) in respect of a deposit held by the co-operative, or debentures or
CCUs allotted or issued to the person, under section 134 in respect of the
forfeited shares concerned (except a liability to pay interest that is due but
unpaid).
(2) If an amount has been repaid to a person under section 134 or 136,
the amount repaid is to be set-off against any entitlement of the person under
section 139 in respect of the forfeited shares
concerned. (3) If the amount repaid cannot be set-off against the entitlement
because the entitlement is not, or is only partly, an entitlement to money,
the entitlement is lost unless the person pays to the co-operative the amount
repaid to the person and does so within the period required under subsection
(4). (4) If the circumstances specified in subsection (3) arise, the
co-operative concerned must:(a) give notice in writing of the matter by post to the person
concerned at the person’s address last known to the co-operative,
specifying a period of not less than 28 days after the notice is given during
which any amount repaid must be paid to the co-operative,
and
(b) publish a general notice to that effect in a newspaper circulating
in the district in which the registered office of the co-operative is
situated.
142 Entitlement to distribution from reserves A person whose membership of a co-operative has been cancelled
under this Part is nevertheless to be considered to still be a member for the
purposes of any distribution from reserves of the co-operative that takes
place within 5 years after the person’s membership was
cancelled. 143 Minister may exempt co-operatives from
provisions (1) The Minister may, after consultation with the Council, by order in
writing exempt a specified co-operative or a co-operative that is a member of
a specified class of co-operatives from all or specified provisions of this
Division. (2) An exemption may be granted unconditionally or subject to
conditions. A co-operative that contravenes a condition of an exemption is
taken not to be exempt from the relevant provision or provisions of this
Division.
Part 7 Shares Division 1 Preliminary 144 Share capital required except for non-profit
co-operatives (1) (Repealed) (2) A co-operative may convert from being a co-operative with a share
capital to being a co-operative without a share capital, and vice versa, by
appropriate alteration of its rules. (3) Conversion to a co-operative without a share capital is subject to
the restrictions imposed by section 145.
145 Restrictions on conversion to co-operative without share
capital (1) Conversion to a co-operative without a share capital cannot be
effected unless the Council approves in writing of the conversion but the
Council’s approval is not required if all the members of the
co-operative have an equal shareholding. (2) An alteration of the rules for the conversion cannot be passed
until at least 2 weeks after a notice has been published in a newspaper
circulating generally in the district in which the registered office of the
co-operative is situated advising of the proposal to submit the proposed
alteration to members of the co-operative. (3) The Registrar may refuse to register the alteration for conversion
if satisfied that:(a) the holders in aggregate of not less than 10% of the number of
issued shares of the co-operative object to the conversion,
or
(b) the holders in aggregate of not less than 10% of the nominal value
of all debentures, deposits and CCUs issued by the co-operative object to the
conversion, or
(c) creditors of the co-operative to whom not less than 20% of the
aggregate debt of the co-operative is owed object to the
conversion.
(4) The Registrar is not to register an alteration of the rules of a
co-operative for its conversion to a co-operative without a share capital
unless satisfied that the co-operative is not and will not be carried on for
the pecuniary profit of its members.
146 Nature of share in co-operative (1) A share or other interest in a co-operative:(a) is personal property,
(b) is transferable or transmissible as provided by this Act and the
rules of the co-operative,
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
(2) Subject to subsection (1):(a) the laws applicable to ownership of and dealing with personal
property apply to a share or other interest of a member in a co-operative as
they apply to other property, and
(b) equitable interests in respect of a share or other interest of a
member in a co-operative may be created, dealt with and enforced as in the
case of other personal property.
Division 1A Disclosure 146A Disclosure to intending members in trading
co-operative (1) The board of a trading co-operative must give a person who intends
to acquire shares in the co-operative and is not already a member of the
co-operative a current disclosure statement that:(a) has been approved by the Registrar under section 17 (Approval of
disclosure statement), or
(b) complies with section 146B and has been filed by the co-operative
with the Registrar.
(2) The disclosure statement must be given before the person becomes
bound to acquire the shares. (3) The disclosure statement is in addition to any information
required to be provided to the person under Part 4
(Membership). (4) A disclosure statement is current until whichever of the following
happens first after the statement is prepared:(a) there is a change in the rights or liabilities attaching to any
class of share in the co-operative,
(b) there is a significant change in the financial position or
prospects of the co-operative,
(c) any of the next financial, directors’ or auditors’
reports required to be prepared under section 243 (1) become
available.
(5) If a disclosure statement stops being a current disclosure
statement because of a change mentioned in subsection (4) (a) or (b), the
co-operative must, within 14 days after the change:(a) give the Registrar written notice:(i) that the disclosure statement is no longer current because of a
change mentioned in subsection (4) (a), or
(ii) that the disclosure statement is no longer current because of a
change mentioned in subsection (4) (b), and
(b) file a current disclosure statement with the Registrar that
complies with section 146B.
146B Content of disclosure statement to intending
members A disclosure statement given to a person because of section 146A
(1) (b) must contain:(a) a statement of the rights and liabilities attaching to shares in
the co-operative concerned, and
(b) a copy of the last annual report of the co-operative required
under section 252, unless a copy of the report:(i) has already been given to the person under this Act,
or
(ii) has been made available for inspection under a notice given to the
person under section 76A, and
(c) any other relevant information about the financial position and
prospects of the co-operative if there has been a significant change since the
date of the last annual report, and
(d) any other information that the Registrar
directs.
146C Exemptions from disclosure requirements (1) The Registrar may, by notice in the Gazette, exempt the board or
boards of a trading co-operative or a class of trading co-operatives from a
requirement under section 146A or 146B. (2) An exemption under this section may be given only if the Registrar
is satisfied that compliance with the requirement would be inappropriate in
the circumstances or would impose an unreasonable
burden. (3) An exemption under this section may be given unconditionally or
subject to conditions. A board that contravenes a condition of an exemption is
taken not to be exempt from a requirement under section 146A or
146B.
Division 2 Issue of shares 146D Adoption of certain Corporations Act provisions about
shares (1) The shares of a co-operative are declared to be applied
Corporations legislation matters for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act
2001 in relation to sections 716 (2), 722, 723, 724, 725, 728,
729, 730, 733, 734 and 737 of the Corporations Act, subject to the following
modifications:(a) a reference in those sections to a company is to be read as a
reference to a co-operative, and
(b) a reference in those sections to ASIC is to be read as a reference
to the Registrar, and
(c) a reference in those sections to a disclosure document is to be
read so as to include a reference to a disclosure statement, of any type,
under this Act, and
(d) such other modifications (within the meaning of Part 3 of the
Corporations (Ancillary Provisions) Act
2001) as may be prescribed by the
regulations.
(2) However, subsection (1) applies only if:(a) the shares are offered to persons who are not members of the
co-operative, or
(b) the invitation is made to persons who are not members of the
co-operative.
147 Shares—general (cf Vic Act s 150) (1) The share capital of a co-operative varies in amount according to
the nominal value of shares from time to time
subscribed. (2) Shares are to be of a fixed amount which is to be specified in the
rules of the co-operative. (3) A co-operative may have more than one class of shares provided the
share holding and the rights of shareholders comply with the co-operative
principles. (4) Subject to this Part and Part 4, shares must not be issued to a
non-member.
148 Minimum number of shares to be subscribed for (1) A member of a co-operative with a share capital must subscribe for
such minimum number of shares as may be required by the
rules. (2) The minimum number may be determined by reference to the use made
by the member of the co-operative or in any other manner specified in the
rules. (3) An alteration of the rules as to the minimum number of shares to
be subscribed for does not operate to require an existing member of the
co-operative to subscribe for additional shares (but an existing member is not
prevented from agreeing to subscribe for additional
shares). (4) This section does not affect section 155 (Members may be required
to take up additional shares).
149 Minimum paid up amount (cf Vic Act s 151) (1) No share is to be allotted unless at least 10% of the nominal
value of the share has been paid. (2) Any balance unpaid in respect of shares at the time of allotment
is to be paid by periodic subscriptions or in such manner as may be specified
in the rules or permitted by this Act. (3) This section does not apply to a bonus share issued under section
151 (4) (a), 156 or 282.
150 Shares not to be issued at a discount A co-operative must not issue shares at a
discount. 151 Issue of shares at a premium (cf Vic Act s 153) (1) A trading co-operative may issue shares at a
premium. (2) A premium may be in the form of cash or other valuable
consideration. (3) If a trading co-operative issues shares for which it receives a
premium, a sum equal to the aggregate amount or value of the premiums on those
shares must be transferred to a share premium
account. (4) The share premium account is to be regarded as paid up share
capital of the trading co-operative and may be applied in any one or more of
the following ways:(a) in paying up unissued shares to be issued to members of the
co-operative as fully paid bonus shares,
(b) in paying up in whole or in part the balance unpaid on shares
previously issued to members of the co-operative,
(c) in the payment of dividends, if those dividends are satisfied by
the issue of shares to members of the co-operative,
(d) in writing off the preliminary expenses of the
co-operative,
(e) in providing for the premium payable on redemption of shares,
debentures or CCUs.
152 Joint ownership of shares A share may be held by 2 or more persons jointly, unless the rules
of the co-operative provide otherwise. 153 Dividends etc (1), (2) (Repealed) (3) The rules of a co-operative may authorise the payment, in respect
of shares held in excess of a specified number, of a rate of dividend that is
higher than the rate of dividend payable in respect of shares not in excess of
that number. (4) The rules of a co-operative may authorise the payment of different
rates of dividend on shares based on the business done by shareholders with
the co-operative. (5) Any dividend, bonus or rebate to a member must be applied to
paying off any subscription or calls on shares which may at the time the
dividend, bonus or rebate becomes payable be due by the member and
unpaid.
154 Issue of shares to active members in exchange for
property A co-operative may, if authorised by its rules to do so, issue
fully paid up shares to an active member of the co-operative the consideration
for which is real or personal property of at least the value of the equivalent
cash consideration. 155 Members may be required to take up additional
shares (cf Vic Act s 155) (1) If authorised by the rules of the co-operative, the board of a
trading co-operative may require a member to take up or subscribe for
additional shares in accordance with a proposal approved by a special
resolution of the co-operative. (2) The board of a trading co-operative may deduct amounts in payment
for additional shares from money due to members in respect of dealings with
the co-operative, in accordance with a proposal approved by a special
resolution of the co-operative. (3) Any proposal to require a member to take up or subscribe for
additional shares must:(a) be accompanied by a disclosure statement, approved by the
Registrar, that explains the purpose for which the funds raised by the issue
of the additional shares are to be used, and
(b) clearly show the total number of additional shares to be issued
and the basis on which the shares are to be apportioned amongst members,
and
(c) be accompanied by a statement informing the member that the member
may inform the board by notice on or before the date specified in the
statement (being a date before the passing of the special resolution) that the
member resigns on the passing of the special
resolution.
(4) Any proposal to deduct amounts in payment for additional shares
from money due to members in respect of their dealings with the trading
co-operative must clearly show:(a) the basis on which the deductions are to be made,
and
(b) the time and manner of making those
deductions.
(5) A proposal approved under this section is binding on:(a) all members of the trading co-operative at the date of the passing
of the special resolution other than a member who has given a notice of
resignation in accordance with subsection (3) (c), and
(b) all persons who become members of the trading co-operative after
that date and before the total number of shares to be issued pursuant to the
proposal has been issued.
(6) Sections 17 (except subsections (2), (4) and (11)) and 28A apply
to the approval of a disclosure statement under this section with any
necessary modifications and in particular as if any reference in section 17 to
a formation meeting were a reference to the special
resolution. (7) The requirements in respect of a proposal to take up additional
shares under subsection (3) do not apply to the issue of bonus shares under
section 151 (4) (a), 156 or 282 (1) (b).
156 Bonus share issues (cf Vic Act ss 156 and 158) (1) The rules of a trading co-operative may authorise the issue of
bonus shares to members of the co-operative if the assets of the co-operative
(other than those acquired for resale at a profit):(a) have been sold at a profit, or
(b) have been revalued at a greater value than that disclosed prior to
the revaluation in the books of the co-operative.
(2) Bonus shares may be issued in accordance with the rules, subject
to the following restrictions:(a) each issue must have been approved by a special resolution of the
co-operative,
(b) they are to be issued as fully paid up shares with no payment
required to be made by a member of the co-operative to whom they are
issued,
(c) they are to be issued only in respect of shares that are fully
paid up as at the date of issue of the bonus shares,
(d) the total nominal value of bonus shares issued by a co-operative
under this section during any 12 month period must not exceed 20% or such
other percentage as may be prescribed of the nominal value of the issued share
capital of the co-operative immediately before the date of issue of the bonus
shares.
(3) Notice of the meeting or postal ballot at which a resolution is to
be proposed as a special resolution for the purpose of approving a bonus share
issue must be accompanied by:(a) a statement of the value of the assets concerned as disclosed in
the books of the co-operative before the sale or revaluation,
and
(b) if the issue arises from, or partly from, a sale of assets, a
statement of the price for which the assets were sold, and
(c) if the issue arises from, or partly from, a revaluation of assets,
a certificate of value of the assets, being a certificate furnished in respect
of a valuation made not more than 12 months before the date of the notice by a
prescribed person or a person having prescribed qualifications,
and
(d) particulars of acquisitions of shares in the co-operative made
during the 3 years immediately preceding the date of the notice by or on
behalf of each of its directors and his or her spouse and the father, mother,
children, brothers and sisters of each such director and spouse,
and
(e) a certificate signed by 2 directors of the co-operative stating
that to the best of their knowledge and belief the issue of bonus shares would
not be imprudent and that no circumstances are known to them as to why the
issue should not take place.
(f) (Repealed)
Division 3 Beneficial and non-beneficial interests in
shares 157 Notice of non-beneficial ownership at time of
transfer (1) If it may reasonably be expected (having regard to all relevant
circumstances) that on registration of a transfer of shares the transferee
will hold some or all of the shares non-beneficially, the instrument of
transfer must include a non-beneficial
ownership notice. (2) A non-beneficial ownership notice is a notice that:(a) contains a statement to the effect that, on registration of the
transfer, the transferee will hold particular shares non-beneficially,
and
(b) sets out particulars of those shares, and
(c) is signed by or on behalf of the
transferee.
(3) The transferee is guilty of an offence if this section is not
complied with when an instrument of transfer of shares is lodged by or on
behalf of the transferee with the co-operative for registration of the
transfer.Maximum penalty: 10 penalty units or imprisonment for 3 months, or
both. (4) An offence under this section does not affect the validity of the
registration of a transfer of shares.
158 Notice of non-beneficial ownership not notified at time
of transfer (cf Vic Act s 160) (1) If on the registration of an instrument of transfer of shares the
transferee holds non-beneficially any of the shares transferred, notice of
that fact must be given to the co-operative except in respect of any shares
for which particulars were set out in a non-beneficial ownership notice under
section 157 included in the instrument of transfer. (2) The notice must:(a) set out the name and address of the transferee,
and
(b) contain a statement to the effect that, as from registration of
the transfer, the transferee holds the shares non-beneficially,
and
(c) set out particulars of those shares, and
(d) be signed by or on behalf of the
transferee.
(3) The notice must be given within 14 days after the registration of
the transfer (even if before the end of that 14 days the transferee begins to
hold any of the relevant shares beneficially). (4) The transferee is guilty of an offence if this section is not
complied with.Maximum penalty: 10 penalty units or imprisonment for 3 months, or
both. (5) This section does not apply in respect of any shares for which
particulars were set out in a non-beneficial ownership notice under section
157 included in the instrument of transfer.
159 Registration as beneficial owner of shares notified as
non-beneficially transferred (1) If an instrument of transfer of shares lodged with a co-operative
includes a non-beneficial ownership notice (section 157) in respect of
particular shares (the relevant
shares) but on registration of the transfer the transferee holds
some or all of the relevant shares beneficially, notice of that fact must be
given to the co-operative. (2) The notice must:(a) set out the name and address of the transferee,
and
(b) contain a statement to the effect that, as from registration of
the transfer, the transferee holds the relevant shares beneficially,
and
(c) set out particulars of the relevant shares,
and
(d) be signed by or on behalf of the
transferee.
(3) The notice must be given within 14 days after the registration of
the transfer (even if before the end of that 14 days the transferee begins to
hold any of the relevant shares non-beneficially). (4) The transferee is guilty of an offence if this section is not
complied with.Maximum penalty: 10 penalty units or imprisonment for 3 months, or
both.
160 Notification of change in nature of
shareholding (cf Vic Act s 162) (1) A person must notify the co-operative in accordance with this
section of the change in the person’s shareholding in the co-operative
if the person:(a) commences to hold any shares beneficially that the person
currently holds non-beneficially, or
(b) commences to hold any shares non-beneficially that the person
currently holds beneficially.
Maximum penalty: 10 penalty units or imprisonment for 3 months, or
both. (2) The notice must:(a) set out the name and address of the person,
and
(b) contain a statement to the effect that, as from the time of the
change, the person holds the shares beneficially or non-beneficially (as
appropriate), and
(c) specify the time of the change and set out particulars of the
shares affected, and
(d) be signed by or on behalf of the
person.
(3) The notice must be given within 14 days after the change (even if
before the end of that 14 days another such change affecting any of the shares
occurs).
161 Presumption of awareness For the purposes of this Division, a person is, unless the
contrary is established, to be presumed to have been aware at a particular
time of a circumstance of which an employee or agent of the person was aware
at that time, but only if the employee or agent has duties or acts in relation
to the transfer to, or ownership by, the person of a share or shares in the
co-operative concerned. 162 Presumption that shares held non-beneficially (1) A person is to be taken to hold particular shares non-beneficially
whenever the person:(a) holds the shares in a capacity other than that of sole beneficial
owner, or
(b) without limiting paragraph (a), holds the shares as trustee for,
as nominee for, or otherwise on behalf of or on account of, another
person.
(2) A person is to be considered to hold shares beneficially at a
particular time unless the person holds the shares non-beneficially at that
time.
163 Noting of beneficial and non-beneficial interests in
register of members (1) The register of members kept by a co-operative must contain a
statement of the shares that each member holds beneficially and of the shares
that each member holds non-beneficially. (2) In determining for the purposes of an entry in the register
whether a member of a co-operative holds shares beneficially or
non-beneficially, regard is to be had only to the following
information:(a) information contained in a non-beneficial ownership notice under
section 157 included in an instrument of transfer registered by the
co-operative,
(b) information contained in a notice given to the co-operative under
any other provision of this Division.
164 Registration as trustee etc on death of owner of
shares (1) A trustee, executor or administrator of the estate of a dead
person who was the registered holder of a share in a co-operative may be
registered as the holder of that share as trustee, executor or administrator
of that estate. (2) A trustee, executor or administrator of the estate of a dead
person who was entitled in equity to a share in a co-operative may, with the
consent of the co-operative and of the registered holder of that share, be
registered as the holder of that share as trustee, executor or administrator
of that estate.
165 Registration as administrator of estate on incapacity of
shareholder (1) This section applies to a person (the appointed
person) who is appointed under a law of a State or Territory
relating to the administration of the estates of persons who, through mental
or physical infirmity, are incapable of managing their affairs, to administer
the estate of another person (the incapable
person). (2) If the incapable person is the registered holder of a share in a
co-operative, the appointed person may be registered as the holder of that
share as administrator of the estate of the incapable
person. (3) If the incapable person is entitled in equity to a share in a
co-operative, the appointed person may, with the consent of the co-operative
and of the registered holder of that share, be registered as the holder of the
share as administrator of the estate of the incapable
person.
166 Registration as Official Trustee in Bankruptcy (1) This section applies when a share in a co-operative that is the
property of a bankrupt vests by force of the Bankruptcy Act 1966 of the Commonwealth in
the Official Trustee in Bankruptcy. (2) If the bankrupt is the registered holder of the share, the
Official Trustee may be registered as the holder of that share as the Official
Trustee in Bankruptcy. (3) If the bankrupt is entitled in equity to the share, the Official
Trustee may, with the consent of the co-operative and of the registered holder
of the share, be registered as the holder of that share as the Official
Trustee in Bankruptcy.
167 Liabilities of person registered as trustee or
administrator (1) A person registered under section 164, 165 or 166 is, while so
registered, subject to the same liabilities in respect of the share as those
to which he, she or it would have been subject if the share had remained, or
had been, registered in the name of the dead person, the incapable person or
the bankrupt. (2) The person registered is subject to no other liabilities in
respect of the share.
168 Notification of trusts in register of members Shares held by a trustee in respect of a particular trust may,
with the consent of the co-operative, be marked in the register of members in
such a way as to identify the shares as being held in respect of the
trust. 169 No notice of trust except as provided by this
Division Except as provided in this Division:(a) no notice of a trust, whether express, implied or constructive, is
to be entered on a register or be receivable by the Registrar,
and
(b) no liabilities are affected by anything done under a provision of
this Division, and
(c) nothing done under a provision of this Division affects a
co-operative with notice of a trust.
Division 4 Sale etc of shares 170 Sale or transfer of shares (cf Vic Act s 172) (1) A share in a co-operative cannot be sold or transferred
except:(a) in accordance with Division 3 of Part 4 and section 170A on the
death of a member,
(b) to a person appointed to administer the estate of a shareholder
under a law relating to the administration of the estates of persons who,
through mental or physical infirmity, are incapable of managing their affairs,
or
(c) with the consent of the board, to any person if there are
reasonable grounds for believing that the person will be an active member of
the co-operative.
(2) A share in a co-operative cannot be sold or transferred except in
accordance with the rules of the co-operative.
170A Transfer on death of member (cf Vic Act s 173) (1) On the death of a member, the member’s share in the
co-operative cannot be transferred to a person other than an administrator or
executor except with the consent of the board of the
co-operative. (2) The board may only give its consent under subsection (1) if there
are reasonable grounds for believing that the person will be an active member
of the co-operative.
170B Restriction on total shareholding (cf Vic Act s 174) The board of a co-operative must not consent under section 170 or
170A to the sale or transfer of a share if as a result of the sale or transfer
the nominal value of the shares held by the purchaser or transferee would
exceed:(a) 20% of the nominal value of the share capital of the co-operative,
or
(b) if a lower percentage is specified in the rules of the
co-operative, that lower percentage of the nominal value of the share capital
of the co-operative.
171 Transfer not effective until registered A transferor of a share remains the holder of the share until the
transfer is registered and the name of the transferee is entered in the
register of members in respect of the share. Division 5 Repurchase etc of shares 172 Purchase and repayment of shares (cf Vic Act s 176) (1) The rules of a co-operative may authorise the co-operative
to:(a) purchase any share of a member in the co-operative at the request
of the member, and
(b) repay to a member, with the member’s consent, the whole or
any part of the amount paid up on any share held by the member when the sum
repaid is not required for the activities of the
co-operative.
(2) The amount paid by a co-operative under this section in purchasing
shares or repaying any amount paid up on shares, or both, in any financial
year of the co-operative must not exceed the sum of:(a) 5% of the nominal value of the issued share capital of the
co-operative immediately before the commencement of that financial year,
and
(b) the amount of any additional share capital of the co-operative
subscribed for during that year.
(3) The Council may by order in writing exempt a co-operative from the
operation of subsection (2) in respect of a particular financial year, either
unconditionally or subject to conditions. (4) The amount paid for a share when it is repurchased may be an
amount determined by the board that is less than the nominal value of the
share but only:(a) if the books of the co-operative disclose that the amount paid is
the net shareholder’s equity per share in the undertaking of the
co-operative, or
(b) in accordance with the rules of the
co-operative.
(5) This section does not apply if the member has been expelled from
the co-operative or the member’s membership has been otherwise cancelled
under Part 6. (6) A co-operative must not repurchase shares or repay amounts paid up
on shares if:(a) the co-operative is likely to become insolvent because of the
repurchase of the shares or because of the repayment of amounts paid up on the
shares, or
(b) the co-operative is insolvent.
173 Deposits, debentures or CCUs in lieu of payment when
share repurchased (cf Vic Act s 177) (1) If a co-operative repurchases a share of a member, the
co-operative may instead of paying the purchase price to the member:(a) in the case of a deposit-taking co-operative, apply the amount as
an interest bearing deposit by the member with the co-operative,
or
(b) allot or issue debentures or CCUs of the co-operative to the
member in satisfaction of the amount.
(2) Subsection (1) applies only:(a) if the board is of the opinion that payment of the repurchase
price would adversely affect the financial position of the co-operative,
or
(b) if the board and the member so agree.
(3) The deposit, debenture or CCU bears interest during any
period:(a) in the case of a co-operative with share capital:(i) at the rate (or, if there is more than one rate, at the higher or
highest rate) of dividend payable in respect of that period on the share
capital of the co-operative, or
(ii) if the rate of dividend payable in respect of that period has not
been determined, at the rate (or the higher or highest rate) payable in
respect of the immediately preceding period for which a rate has been
determined, or
(iii) if a rate of dividend has never been determined in respect of the
share capital of the co-operative, at the rate that the board of the
co-operative considers reasonable, or
(b) in the case of a co-operative without share capital, at the rate
that the board of the co-operative considers reasonable,
or
(c) if the rules provide for a rate to be payable that is higher than
the rate applicable under paragraph (a) or (b), at that higher
rate.
(4) The deposit, debenture or CCU must be repaid to the member as soon
as repayment would not, in the opinion of the board, adversely affect the
financial position of the co-operative. (5) The deposit, debenture or CCU must in any case be repaid within 10
years (or within any shorter period that the rules of the co-operative may
require) after the repurchase of the shares
concerned.
174 Cancellation of shares A co-operative is to cancel any share purchased by or forfeited to
the co-operative in accordance with this Act or the rules of the
co-operative. Part 8 Voting Division 1 Voting entitlements 175 Voting to which this Part applies This Part applies to all voting, whether at meetings, in ballots
(including postal ballots) or by circulated
resolution. 176 Voting (cf Vic Act s 180) (1) The right to vote attaches to membership and not share
holding. (2) Except as provided in subsections (3) and (4), each member has
only one vote at a meeting of the co-operative. (3) Except as specifically authorised by this Act, the rules of a
co-operative must not contain a provision that restricts the voting rights of
members. (4) If the rules so provide, the chairperson has a second vote at a
board meeting or general meeting. (5) In the case of joint membership:(a) the joint members have only one vote between them,
and
(b) that vote may be exercised (subject to the grant of a proxy or
power of attorney) only by the joint member determined in accordance with the
rules.
(6) If shares are held jointly, each member (other than a joint
member) holding the share is entitled to vote at a general
meeting.
177 Rules of certain co-operatives formed to carry on club
may restrict voting rights (1) The rules of a co-operative which has as a primary activity the
operation, maintenance or carrying on of a club may provide for different
classes of membership and restrict the voting rights attaching to membership
of those different classes, but only if:(a) the Council approves of the provisions concerned,
and
(b) the membership of the class or classes entitled to full voting
rights constitutes at least 40% of the total membership of the
co-operative.
(2) Any such provision in the rules of a co-operative must not be
amended except with the approval of the Council. (3) This section applies only to the following co-operatives:(a) any co-operative registered under the Registered Clubs Act 1976
(regardless of when it was registered under this Act),
(b) any co-operative that was registered under this Act before the
date of assent to the Statute Law (Miscellaneous Provisions) Act
(No 2) 1997,
(c) any co-operative that does not trade outside this State
(regardless of when it was registered under this
Act).
178 Effect of relevant share and voting interests on voting
rights (1) Subject to section 176 (5) and (6), a member of a co-operative is
not entitled to vote if another person (whether or not a member of the
co-operative) has a relevant interest in any share held by the member or in
the right to vote of the member. (2) A member who is not entitled to vote because of this section may
apply to the Council for a review of the matter. (3) The Council may order that the member is entitled to vote if it is
satisfied in the circumstances of the case that loss of the right to vote
would be unjust or unreasonable, and any such order of the Council has effect
accordingly.
179 Voting by proxy (cf Vic Act s 181) (1) If the rules so provide, voting may be by proxy at a general
meeting. (2) The instrument of proxy may specify the manner in which a proxy is
to vote in respect of a particular resolution. (3) The proxy must vote in the manner authorised by an instrument of
proxy referred to in subsection (2). (4) A person must not act as a proxy unless he or she:(a) is an active member of the co-operative, or
(b) in the case of an association or a federation, is entitled to
represent a component co-operative or association of the association or
federation on the association or federation.
(5) A person must not act as proxy for more than 10 persons (or any
lesser number of persons specified in the rules of the co-operative) on any
one occasion. (6) Subsection (5) does not apply if the proxy acts under an
instrument of proxy referred to in subsection (2).
180 Effect of unpaid borrowings A member who has borrowed from a co-operative any money which is
still unpaid is not entitled to vote on any question in respect of which the
member’s right to vote is excluded by the rules of the co-operative as
in force immediately before the date of assent to the Statute
Law (Miscellaneous Provisions) Act (No 2)
1997. 181 Inactive members not entitled to vote A member is not entitled to vote if the member is not an active
member of the co-operative. 181A Control of the right to vote (cf Vic Act s 185) (1) A person must not directly or indirectly control the exercise of
the right to vote of a member.Maximum penalty: 60 penalty units or imprisonment for 6 months, or
both. (2) If a person controls the exercise of the right to vote of a member
at a meeting of a co-operative:(a) the vote of that member, and
(b) the vote of that person, if that person is a
member,
are invalid. (3) Nothing in this section prevents the exercise of a vote by means
of a proxy or power of attorney.
182 Effect of sale etc of shares A member of a co-operative who has sold or transferred, or
disposed of the beneficial interest in, the member’s shares, or agreed
to do any of those things, is not entitled to vote. 183 Restriction on voting entitlement under power of
attorney A person is not entitled to exercise, under a power of attorney,
the power of a member of a co-operative to vote if the person has that power
in respect of another member of the co-operative under another power of
attorney. 183A Restriction on voting by representatives of bodies
corporate (cf Vic Act s 183) A person is not entitled to exercise, as the representative of a
body corporate, the power of a body corporate member of the co-operative to
vote if the person has that power as the representative of another body
corporate member of the co-operative.
184 Rights of representatives to vote etc A person appointed as provided by this Act to represent a member
of a co-operative, association or federation:(a) is entitled to receive notice of all meetings in the same manner
as the member represented, and
(b) is entitled to exercise the same rights to vote as the member
represented, and
(c) is eligible to be elected to the board of directors if the member
represented holds such qualifications as may be required for holding office as
a director (other than any relating to age).
185 Other entitlements etc of members unaffected by
ineligibility to vote A provision of this Act which disentitles a member of a
co-operative to vote (either generally or in relation to a particular matter)
does not affect any other right, entitlement, obligation or duty of the member
as a member. 186 Vote of disentitled member to be disregarded Any vote cast by or on behalf of a member of a co-operative when
not entitled to vote is to be disregarded. Division 2 Resolutions 187 Decisions of co-operative usually to be by ordinary
resolution Except as otherwise provided in this Act or by the rules of the
co-operative, every question for decision by a co-operative is to be
determined by ordinary resolution. 188 Ordinary resolutions An ordinary resolution is a resolution of a co-operative which is
passed by a simple majority at a general meeting of the co-operative or in a
postal ballot of members. 189 Special resolutions (cf Vic Act s 192) (1) A special resolution is a resolution of a co-operative which is
passed:(a) by a two-thirds majority at a general meeting of members,
or
(b) by a two-thirds majority in a postal ballot (other than a special
postal ballot) of members, or
(c) by a three-quarters majority in a special postal ballot of
members.
(2) A special resolution may be passed by a postal ballot only if the
rules of the co-operative so permit or this Act requires the special
resolution to be passed by postal ballot (including a special postal
ballot). (3) A resolution is not to be considered to have been passed as a
special resolution unless not less than 21 days’ notice has been given
to the members of the co-operative specifying:(a) the intention to propose the special resolution,
and
(b) the reasons for the making of the special resolution,
and
(c) the effect of the special resolution being
passed.
(4) (Repealed)
190 How majority obtained is ascertained (cf Vic Act s 193) (1) A resolution is passed by a particular majority at a meeting if
that majority of the members of the co-operative who, being entitled to do so,
vote in person or (if proxies are allowed) by proxy at the meeting vote in
favour of the resolution. (2) A resolution is passed by a particular majority in a postal ballot
if that majority of the members of the co-operative who, being entitled to do
so, cast formal votes in the postal ballot vote in favour of the
resolution. (3) (Repealed)
190A Disallowance by Registrar (cf Vic Act s 194) The Registrar may disallow a proposed special resolution before it
is passed by written notice to the co-operative if the Registrar is of the
opinion that the effect of the special resolution if passed would be in
contravention of this Act or the regulations or any other
law.
190B Effect of special resolution (cf Vic Act s 196) (1) Subject to subsection (2), a special resolution has effect from
the date that it is passed. (2) A special resolution relating to any of the following has no
effect until it is registered:(a) the removal of an auditor,
(b) the expulsion of a member,
(c) any matter for which a special resolution is required to be passed
by special postal ballot (other than a special postal ballot in favour of a
voluntary winding up).
191 Declaration of passing of special resolution (1) At any meeting for the purpose of passing a resolution as a
special resolution, unless a poll is demanded, a declaration by the
chairperson of the meeting that the resolution has been carried as a special
resolution is conclusive evidence of the fact. (2) A declaration by the returning officer for a postal ballot to pass
a resolution as a special resolution that the resolution has been carried as a
special resolution is conclusive evidence of the
fact.
192 Lodgment of special resolution (cf Vic Act s 197) (1) A co-operative must lodge 2 copies of each special resolution
passed by the co-operative with the Registrar in accordance with this section
for registration. (2) The copies must:(a) be lodged within 28 days after the passing of a special resolution
or such further period as the Registrar allows, and
(b) be signed by a director and the secretary of the co-operative,
and
(c) be accompanied by the lodgment fee prescribed by the
regulations.
(3) A co-operative and any officer of the co-operative that knowingly
fails to lodge the required copies in accordance with this section is guilty
of an offence.Maximum penalty: 20 penalty
units. (4) This section and section 192A do not apply to a special resolution
altering the rules of a co-operative.
192A Decision of Registrar on application to register special
resolution (cf Vic Act s 198) (1) If the Registrar is satisfied that the co-operative has complied
with the provisions of this Act and the regulations, and that the resolution
is not contrary to this Act or the regulations, the Registrar must register
the resolution. (2) If the Registrar is of the opinion that the effect of a special
resolution lodged for registration would be in contravention of this Act or
the regulations or any other law, the Registrar may:(a) refuse to register the special resolution, and
(b) give written notice to the co-operative that the special
resolution:(i) has no effect, in the case of a special resolution referred to in
section 190B (2), and
(ii) has no effect as from the date that it was passed, in any other
case.
(3) A certificate of registration of a special resolution given by the
Registrar is, in favour of any person giving financial accommodation to the
co-operative on the faith of the certificate or in favour of any guarantor of
that advance, conclusive evidence that the resolution was duly
passed.
193 Postal ballots (1) A postal ballot may be held as provided by the rules of a
co-operative and is to be conducted in accordance with the
regulations. (2) On the declaration by the returning officer of the result of the
ballot, the secretary of the co-operative is to make an entry in the minute
book of the co-operative showing:(a) the number of formal votes cast in favour of the proposal
concerned, and
(b) the number of formal votes cast against the proposal,
and
(c) the number of informal votes cast.
194 Special postal ballots (cf Vic Act s 200) (1) A special postal ballot is a postal ballot that is conducted as
required by this section. (2) The ballot must not be held less than 21 days after notice of the
ballot is given to members so as to enable sufficient time for a meeting to
discuss the proposal that is the subject of the ballot to be convened and held
(whether by the board or on the requisition of
members). (3) The co-operative must send to each member (along with any other
material required to be sent in connection with the postal ballot) a
disclosure statement approved by the Registrar and containing information
concerning:(a) the financial position of the co-operative,
(b) the interests of the directors of the co-operative in the proposal
with which the ballot is concerned, including any interests of the directors
in another organisation concerned in the proposal,
(c) any compensation or consideration to be paid to officers or
members of the co-operative in connection with the proposal,
and
(d) such other matters as the Registrar
directs.
(4) If the Registrar so requires, the statement is to be accompanied
by a report made by an independent person approved by the Registrar concerning
such matters as the Registrar directs. (5) Sections 17 (except subsections (2), (4) and (11)) and 28A apply
to the approval of a disclosure statement under this section with any
necessary modifications and in particular as if any reference in section 17 to
a formation meeting were a reference to the notice of the special postal
ballot.
194A When is a special postal ballot required? (cf Vic Act s 201) In addition to any requirement of this Act, the rules of a
co-operative must require a special postal ballot to be conducted for the
purpose of passing a special resolution in relation to any of the following
matters relating to a co-operative:(a) a conversion of a trading co-operative to a non-trading
co-operative,
(b) transfer of incorporation,
(c) an acquisition or disposal of assets referred to in section
285,
(d) the maximum permissible level of share interest in the
co-operative,
(e) takeover,
(f) merger,
(g) transfer of engagements,
(h) members’ voluntary winding up.
195 Holding of postal ballot on requisition (cf Vic Act s 202) (1) The board of a co-operative must conduct a postal ballot
(including a special postal ballot) for the passing of a special resolution on
the written requisition of such number of members who together are able to
cast at least 20% (or any lesser percentage specified in the rules of the
co-operative) of the total number of votes able to be cast at a meeting of the
co-operative. (2) A member is not entitled to be a requisitioning member unless the
member is an active member. (3) The following provisions apply to a requisition for a postal
ballot:(a) it must specify:(i) the proposed special resolution to be voted on,
and
(ii) the reasons for the making of the special resolution,
and
(iii) the effect of the special resolution being
passed,
(b) it must be signed by the requisitioning members (and may consist
of several documents in like form each signed by one or more requisitioning
members),
(c) it must be served on the co-operative by being lodged at the
registered office of the co-operative.
(4) The postal ballot must be conducted as soon as practicable and in
any case must be conducted within 2 months after the requisition is
served. (5) If the special resolution for which the requisitioned postal
ballot is conducted is not passed, the co-operative may recover the expenses
of the postal ballot from the members who requisitioned the postal ballot as a
debt due to the co-operative.
195A Expenses involved in postal ballots on
requisition (cf Vic Act s 203) (1) All reasonable expenses incurred by a co-operative in and in
connection with preparing for and holding a special postal ballot are to be
considered to constitute the expenses of the
postal ballot for the purposes of section
195. (2) Those expenses include (but are not limited to) the following
expenses:(a) the cost of obtaining expert advice (including legal and financial
advice) and of commissioning expert reports,
(b) costs attributable to the use of staff of the co-operative in
connection with preparing for and holding the ballot,
(c) the cost of producing, printing and posting the ballot papers and
other material associated with the ballot.
196 Resolution by circulation of document—fewer than 50
members (1) This section applies to a resolution that is required or permitted
by this Act or the rules of the co-operative to be passed at a general meeting
of a co-operative and includes a resolution appointing an officer or auditor
or approving of or agreeing to any act, matter or thing but does not include a
resolution of which special notice is required or that is required to be
passed by a majority other than a simple majority. (2) If all the members of a co-operative that has fewer than 50
members have signed a document containing a statement that they are in favour
of a resolution to which this section applies in terms set out in the
document, a resolution in those terms is to be considered to have been passed
at a general meeting of the co-operative held on the day on which the document
was signed and at the time at which the document was last signed by a member
or, if the members signed the document on different days, on the day on which,
and at the time at which, the document was last signed by a
member. (3) The co-operative is to be considered to have held a general
meeting at that time on that day and the document is to be considered to
constitute a minute of that meeting. (4) This section does not apply in relation to a document unless the
document has been signed by each person who was a member of the co-operative
at the time the document was last signed. (5) For the purposes of this section, 2 or more separate documents
containing statements in identical terms each of which is signed by 1 or more
members are together to be taken to constitute 1 document containing a
statement in those terms signed by those members on the respective days on
which they signed the separate documents. (6) Any document that is attached to a document signed as mentioned in
subsection (2) and is signed by the member or members who signed the
last-mentioned document is, for the purposes of this Act, to be considered to
have been laid before the co-operative at the general meeting referred to in
that subsection. (7) Nothing in this section affects or limits any rule of law relating
to the effectiveness of the assent of members of a co-operative given to a
document, or to any act, matter or thing, otherwise than at a general meeting
of the co-operative.
197 Circulation of members resolutions etc (1) A co-operative must, on the requisition in writing of at least 10
members or of members who together are able to cast at least 5% of the total
number of votes able to be cast at a meeting of the co-operative:(a) give to members of the co-operative entitled to have notice of the
next annual general meeting sent to them notice of any resolution that may
properly be moved and is intended to be moved at that meeting,
and
(b) circulate to members of the co-operative entitled to have notice
of any general meeting sent to them any statement of not more than 1,000 words
with respect to the matter referred to in any proposed resolution or the
business to be dealt with at that meeting.
(2) Unless the co-operative otherwise resolves, the cost of doing so
is to be paid by the requisitioning members. (3) Notice of such a resolution is to be given to each member of the
co-operative:(a) in the case of a member entitled to be sent notice of the
meeting—by serving a copy of the resolution on the member in any manner
permitted for service on the member of notice of the meeting,
and
(b) in the case of any other member—by giving notice of the
general effect of the resolution in any manner permitted for giving the member
notice of meetings of the co-operative.
(4) A statement referred to in subsection (1) is to be circulated, to
each member of the co-operative entitled to be sent notice of the meeting, by
serving a copy of the statement on the member in any manner permitted for
service on the member of notice of the meeting. (5) A copy or notice that subsection (3) or (4) requires to be served
or given is to be served or given in the same manner and, so far as
practicable, at the same time as notice of the meeting and, if it is not
practicable for it to be served or given at that time, it is to be served or
given as soon as practicable after that time. (6) A co-operative is not bound under this section to give notice of
any resolution or to circulate any statement unless:(a) a copy of the requisition signed by the requisitioning member or
members (or, if there are 2 or more requisitioning members, 2 or more copies
that between them contain the signatures of all the requisitioning members) is
deposited at the registered office of the co-operative:(i) in the case of a requisition requiring notice of a
resolution—not less than 6 weeks before the meeting,
and
(ii) in the case of any other requisition—not less than 1 week
before the meeting, and
(b) there is deposited or tendered with the requisition a sum
reasonably sufficient to meet the co-operative’s expenses in giving
effect to the requisition.
(7) If, after a copy of a requisition requiring notice of a resolution
has been deposited at the registered office of the co-operative, an annual
general meeting is called for a date 6 weeks or less after the copy has been
deposited, the copy though not deposited within the time required by this
subsection is to be considered to have been properly deposited for the
purposes of this section. (8) A co-operative is not bound under this section to circulate any
statement if, on the application either of the co-operative or of any other
person who claims to be aggrieved, the Court is satisfied that the rights
conferred by this section are being abused to secure needless publicity for
defamatory matter. (9) The Court may order the costs of the co-operative or of the other
person on an application under subsection (8) to be paid in whole or in part
by the requisitioning member or members, even though they are not parties to
the application. (10) Despite anything in the co-operative’s rules, the business
that may be dealt with at an annual general meeting includes any resolution of
which notice is given in accordance with this section, and, for the purposes
of this subsection, notice is to be considered to have been so given despite
the accidental failure to give notice to a member or
members. (11) If this section is contravened, the co-operative and any officer
of the co-operative who is involved in the contravention are each guilty of an
offence.Maximum penalty: 10 penalty
units. (12) A member is not entitled to be a requisitioning member unless the
member is an active member.
Division 3 Meetings 198 Annual general meetings (cf Vic Act s 204) (1) The first annual general meeting of a co-operative must be held at
any time within 18 months after the incorporation of the
co-operative. (2) The second or any subsequent annual general meeting of a
co-operative must be held within:(a) 5 months after the close of the financial year of the
co-operative, or
(b) any further time that may be allowed by the Registrar or is
prescribed by the regulations.
199 Special general meetings (cf Vic Act s 205) A special general meeting of a co-operative may be convened at any
time by the board of directors.
199A Notice of meetings (cf Vic Act s 206) The board must give each member at least 14 days notice of each
general meeting.
199B Quorum at meetings (cf Vic Act s 207) (1) The quorum for a meeting of a co-operative must be specified in
the rules. (2) An item of business must not be transacted at a meeting of a
co-operative unless a quorum of members entitled to vote is present during the
transaction of that item.
200 No entitlement to be present at meetings where membership
required to be cancelled At any meeting of a co-operative, a member whose membership is
required to be cancelled under Part 6 (Active membership requirements) is not
entitled to be present. 201 Decision at meetings (1) Every question for decision by a meeting of a co-operative is to
be determined by a majority of members present in person at the meeting and
voting, but this is subject to the other provisions of this Act and to the
rules of the co-operative. (2) Unless a poll is demanded by at least 5 members, the question is
to be determined by a show of hands. (3) In the case of an equality of votes, whether on a show of hands or
on a poll, the chairperson of the meeting at which the show of hands takes
place or at which the poll is demanded is entitled to a casting vote, if the
rules of the co-operative so provide.
202 Convening of general meeting on requisition (cf Vic Act s 209) (1) The board of a co-operative must convene a general meeting of the
co-operative on the written requisition of such number of members who together
are able to cast at least 20% (or any lesser percentage specified in the rules
of the co-operative) of the total number of votes able to be cast at a meeting
of the co-operative. (2) A member is not entitled to be a requisitioning member unless the
member is an active member. (3) The following provisions apply to a requisition for a general
meeting:(a) it must state the objects of the meeting,
(b) it must be signed by the requisitioning members (and may consist
of several documents in like form each signed by one or more of the
requisitioning members),
(c) it must be served on the co-operative by being lodged at the
registered office of the co-operative.
(4) The meeting must be convened and held as soon as practicable and
in any case must be held within 2 months after the requisition is
served. (5) If the board does not convene the meeting within 21 days after the
requisition is served, the following provisions apply:(a) the requisitioning members (or any of them representing at least
half their aggregate voting rights) may convene the meeting in the same manner
as nearly as possible as meetings are convened by the
board,
(b) for that purpose they may request the co-operative to supply a
written statement setting out the names and addresses of the persons entitled
when the requisition was served to receive notice of general meetings of the
co-operative,
(c) the board must send the requested statement to the requisitioning
members within 7 days after the request for the statement is
made,
(d) the meeting convened by the requisitioning members must be held
not later than 3 months after the requisition is served,
(e) any reasonable expenses incurred by the requisitioning members
because of the board’s failure to convene the meeting must be paid by
the co-operative,
(f) any such amount required to be paid by the co-operative is to be
retained by the co-operative out of any money due from the co-operative by way
of fees or other remuneration in respect of their services to such of the
directors as were in default.
203 Minutes (cf Vic Act s 210) (1) Minutes of each general meeting, board meeting and sub-committee
meeting must be entered in the appropriate records within 28 days after the
meeting and confirmed at and signed by the chairperson of the next succeeding
meeting. (2) The minutes of each general meeting must be available for
inspection by members. (3) The rules may provide that the minutes of board meetings and
sub-committee meetings be available for inspection by
members. (4) Minutes must be kept in the English
language.
Part 9 Management and administration of
co-operatives Division 1 The Board 204 Board of directors (cf Vic Act s 211) (1) Subject to this Act and the rules of a co-operative, the business
of a co-operative is to be managed by a board of
directors. (2) The board of directors may exercise all the powers of the
co-operative that are not, by this Act or the rules of the co-operative,
required to be exercised by the co-operative in general
meeting. (3) The acts of a director are valid despite any defect that may
afterwards be discovered in his or her appointment or
qualification. (4) If a person who vacates office as director purports to do an act
as director, that act is valid, in relation to a person dealing with the
co-operative in good faith and for value and without actual knowledge of the
circumstance because of which the vacation of office occurred, as if that
office had not been vacated. (5) This section does not affect the operation of Division 3 (Persons
having dealings with co-operatives) of Part 3.
205 Election of directors (cf Vic Act s 212) (1) Except as provided in subsections (2), (3) and (4), the directors
of a co-operative are to be elected in the manner specified in the rules of
the co-operative. (2) The first directors of:(a) a co-operative formed under this Act are to be elected at its
formation meeting, and
(b) a co-operative which was a body corporate incorporated under
another Act are to be the directors in office at the date of registration
under this Act.
(3) If so authorised by the rules of the co-operative, a board of
directors may appoint a person to fill a casual vacancy in the office of a
director until the next annual general meeting. (4) A motion approving or nominating for election 2 or more persons as
directors by a single resolution must not be made at a meeting of a
co-operative unless a resolution that it be so made has first been agreed to
by the meeting without any vote being given against
it. (5) If a resolution is passed following a motion in contravention of
subsection (4):(a) the resolution is void, and
(b) there is no provision for the automatic re-election of retiring
directors in default of another election.
(6) This section does not apply to a resolution altering the rules to
prevent the election of 2 or more directors by
ballot. (7) A nomination for election or appointment to the office of a
director must provide details of the qualifications and experience of the
person nominated. (8) Except as specified in this Act or in the rules of a co-operative,
a director is eligible for re-election at the expiration of his or her term of
office. (9) The Registrar is not to register a rule that specifies the manner
of election of directors or any alteration of such a rule unless the Registrar
approves of the manner of electing directors that will result from the rule or
alteration.
206 Qualification of directors (cf Vic Act s 213) (1) A person is not qualified to be a director of a co-operative
unless he or she is:(a) an active member of the co-operative or a representative of a body
corporate which is an active member of the co-operative (active member
director), or
(b) an employee of the co-operative or a person qualified as provided
by the rules (independent
director).
(2) (Repealed) (3) A simple majority of directors must be active member directors.
However, this subsection does not prevent the rules of a co-operative from
requiring that a greater number of directors than a simple majority be active
member directors. (4) A director who is an active member director of the co-operative is
to be counted as an active member director for the purposes of determining how
many directors are active member directors of the co-operative even though he
or she was elected as provided by section 216 (Election of employees as
directors). (5) (Repealed)
206A (Repealed) 207 Qualifications for directors of associations and
federations (1) A person is not eligible to be elected as a director of an
association unless the person is a member of a component co-operative of the
association or is otherwise qualified under the rules of the association to be
a director. (2) A person is not eligible to be elected as a director of a
federation unless the person is a member of a component co-operative of an
association which is a member of the federation or is otherwise qualified
under the rules of the federation to be a director.
208 Disqualified persons (cf Vic Act s 214) (1) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative if the
person:(a) is the auditor of the co-operative or a partner, employee or
employer of the auditor, or
(b) has been convicted, whether before or after the commencement of
this section, within or outside New South Wales:(i) on indictment of an offence in connection with the promotion,
formation or management of a body corporate, or
(ii) of an offence involving fraud or dishonesty punishable on
conviction by imprisonment for a period of not less than 3 months,
or
(iii) of any offence under section 184, 344, 590, 592, 670A or 728 of
the Corporations Act, or
(iv) of any offence under any provision of a previous law of New South
Wales or of another State or Territory, with which any of the provisions
referred to in subparagraph (iii) corresponds,
within a period of 5 years after the conviction or, if sentenced to
imprisonment, after his or her release from prison, except with the leave of
the Court.
Maximum penalty: 240 penalty units or imprisonment for 2 years, or
both. (2) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative if the
person:(a) has been convicted of any offence under this Act, within a period
of 5 years after the conviction, except with the leave of the Court,
or
(b) is prohibited from being a director of a company under Part 2D.6
(Disqualification from managing corporations) of the Corporations Act,
or
(c) is an insolvent under administration (as defined in the
Corporations Act), or
(d) has been convicted of a contravention of section 181, 182 or 183
of the Corporations Act (as applied under this
Act).
Maximum penalty: 240 penalty units or imprisonment for 2 years, or
both. (3) In any proceeding for an offence against subsection (1), a
certificate by an authority prescribed by the regulations stating that a
person was released from prison on a specified date, is in the absence of
evidence to the contrary, proof that that person was released from prison on
that date. (4) A person who intends to apply for leave of the Court must give the
Registrar at least 21 days notice of his or her
intention. (5) The Court may grant leave subject to any condition or limitation
it considers appropriate. (6) A person must comply with any condition or limitation subject to
which leave is granted.Maximum penalty: 240 penalty units or imprisonment for 2 years, or
both. (7) On the application of the Registrar, the Court may revoke its
leave. (8) Subject to this section, a co-operative is declared to be an
applied Corporations legislation matter for the purposes of Part 3 of the
Corporations (Ancillary Provisions) Act
2001 in relation to the provisions of Part 2D.6 of the
Corporations Act, subject to the following modifications:(a) a reference in those provisions to corporations is to be read as a
reference to co-operatives,
(b) such other modifications (within the meaning of Part 3 of the
Corporations (Ancillary Provisions) Act
2001) as may be prescribed by the
regulations.
Note. See the note to section 10 (1).
209 Meeting of the board of directors (cf Vic Act s 215) (1) Meetings of the board of directors must be held at least once
every 3 months and may be held as often as may be
necessary. (2) A meeting of the board of directors may be called by a director
giving notice individually to every other director. (3) A meeting of the board of directors may be called or held using
any technology consented to by the board. The consent may be a standing
one. (4) A quorum of a meeting of the board of directors is 50 per cent of
the number of directors or such greater number of the directors as is
specified in the rules. (4A) However, for a quorum to exist the number of active member
directors present must exceed the number of independent directors present by
at least one or by any greater number specified in the rules of the
co-operative. (5) The chairperson of the board may be elected either by the board or
at a general meeting of the co-operative, and is to be elected, hold office,
and retire, and may be removed from office, as provided by the rules of the
co-operative.
210 Transaction of business outside meetings (cf Vic Act s 216) (1) The board of a co-operative may, if it thinks fit, transact any of
its business by the circulation of papers among all of the directors of the
board. (2) A resolution in writing approved in writing by a majority of the
directors of the board is to be taken to be a decision of the
board. (3) Separate copies of a resolution may be distributed for signing by
the directors if the wording of the resolution and approval is identical in
each copy. (4) For the purpose of the approval of a resolution under this
section, the chairperson of the board and each director of the board have the
same voting rights as they have at an ordinary meeting of the
board. (5) The resolution is approved when the last director required for the
majority signs. (6) A resolution approved under this section must be recorded in the
minutes of the meetings of the board within 28 days after the resolution is
approved. (7) Papers may be circulated among directors of the board for the
purposes of this section by facsimile or other transmission of the information
in the papers concerned.
211 Deputy directors (1) In the absence of a director from a meeting of the board, a person
appointed by the board in accordance with the rules of the co-operative,
association or federation concerned to act as a deputy for that director may
act in the place of that director. (2) The rules of the co-operative, association or federation may
include provisions regulating the term of office, vacation of or removal from
office, and remuneration of a deputy.
212 Filling of vacancies on board (1) A casual vacancy on the board of a co-operative (being a vacancy
under section 218) is to be filled:(a) by election by the members held:(i) at a meeting of the co-operative, or
(ii) by means of a postal ballot, or
(iii) in the manner specified in the rules of the co-operative for the
ordinary election of directors, or
(b) as provided for by section 205 (3), or
(c) in such other manner as the Registrar may approve in a particular
case.
(2) If at any time the number of directors of a co-operative is the
same as or less than the number of directors required to constitute a quorum
of the board:(a) the board may appoint sufficient directors so that the number of
directors is 1 more than a quorum, and
(b) for the purpose only of enabling the board to make such an
appointment, the number of directors required to constitute a quorum is the
number of directors at that time.
(3) Subsection (2) does not affect the requirement that a casual
vacancy on the board be filled. (4) The term of office of a director appointed by the board to fill a
vacancy under this section is until the next annual general meeting of the
co-operative.
213 Delegation by board (cf Vic Act s 218) (1) If the rules of a co-operative so provide, the board may, by
resolution, delegate the exercise of such of the board’s functions
(other than this power of delegation) as are specified in the
resolution:(a) to a director, or
(b) to a committee of 2 or more directors, or
(c) to a committee of members of the co-operative,
or
(d) to a committee of members of the co-operative and other persons if
members comprise the majority of persons on the
committee.
(2) The co-operative or the board may, by resolution, revoke wholly or
in part any such delegation. (3) A function, the exercise of which has been delegated under this
section, may be exercised from time to time in accordance with the terms of
the delegation while the delegation remains
unrevoked. (4) A delegation under this section may be made subject to conditions
or limitations as to the exercise of any of the powers delegated, or as to
time or circumstance. (5) Despite any delegation under this section, the board may continue
to exercise all or any of the functions delegated.
214 Exercise of functions on behalf of board (1) If a function is exercised by a director either alone or with
another director or other directors and the exercise of the function is
evidenced in writing, signed by the director in the name of the board or in
his or her own name on behalf of the board, the function is to be considered
to have been exercised by the board. (2) This applies whether or not a resolution delegating the exercise
of the function to the director was, when the power was exercised, in force
and whether or not any conditions or limitations on the delegation were
observed by the director exercising the function. (3) An instrument purporting to be signed by a director as referred to
in subsection (1) is in all courts and before all persons acting judicially to
be received in evidence as if it were an instrument executed by the
co-operative under seal. (4) Until the contrary is proved, the instrument is to be taken to be
an instrument signed by a delegate of the board under this
section.
215 Minister may appoint director (1) The Minister may, from time to time, by notification published in
the Gazette, appoint a person to be a director of any co-operative which is
indebted to the Crown in respect of a loan or grant of
money. (2) The provisions of this Act (other than this section) and of the
rules of the co-operative relating to the qualification, disqualification,
remuneration, removal from office and term of office of directors and to the
vacation of office by directors do not apply to or in respect of a director
appointed under this section. (3) A director appointed under this section holds office as an
additional director and is not to be counted in ascertaining the number of
directors for the election of whom provision is made in the rules of the
co-operative or in ascertaining whether a quorum is present at any meeting of
the board. (4) A director appointed under this section has all the powers,
rights, authorities, functions, privileges, immunities, duties, obligations
and liabilities of a director elected in accordance with the rules of the
co-operative, except as provided by subsection (2). (5) A director appointed under this section is, unless he or she is an
officer of the Public Service or a member of the Legislative Council or of the
Legislative Assembly of New South Wales, to be paid such fees, allowances and
expenses as the Governor may, either generally or in any particular case,
approve. (6) Those fees, allowances and expenses are to be paid by the
co-operative unless the Minister otherwise directs in a particular
case.
216 Election of employees as directors (1) An employee of a co-operative may be elected as a director of the
co-operative as provided by this section even if he or she is not a member of
the co-operative. (2) The rules of a co-operative may provide for 1 employee of the
co-operative to be nominated by the directors of the co-operative for election
by the members of the co-operative as a director of the co-operative and, if
so nominated, to be so elected. (3) The rules of:(a) a co-operative the primary activity of which is or includes the
provision of employment for its members within any business, trade or industry
carried on by the co-operative, or
(b) a co-operative approved by the Council,
may provide that all directors of the co-operative or such number of
those directors as may be specified in or determined in accordance with the
rules are to be or, as may be determined by the rules, may be employees of the
co-operative. (4) The rules of a co-operative to which subsection (3) applies may
make provision as referred to in subsection (3) or as referred to in
subsection (2), or both. (5) If the rules of a co-operative to which subsection (3) (a) applies
provide for the election of employees of the co-operative as directors of the
co-operative, any member of the co-operative may, in accordance with the
rules, nominate an employee of the co-operative for election as a director of
the co-operative. (6) An employee of a co-operative approved by the Council as referred
to in subsection (3) (b) is not to be elected as a director of the
co-operative except in such manner, if any, and in accordance with such
conditions, if any, as may be determined from time to time by the Council and
of which notice in writing has been served on the
co-operative. (7) In this section, employee, in relation to
a co-operative, includes a person, or the employee of a person, who provides
the co-operative with secretarial and administrative
services. (8) The removal of a director elected as provided by this section does
not operate to terminate or otherwise affect the person’s employment on
which qualification for election was based, unless the conditions of the
person’s employment otherwise provide.
217 Revocation of approval etc (1) If the Registrar is of the opinion that a co-operative has ceased
to have as a primary activity the provision of employment for its members
within any business, trade or industry carried on by the co-operative, the
Registrar is to serve notice in writing on the co-operative
accordingly. (2) The Registrar’s notice is to specify the date on which each
director of the co-operative who is an employee of the co-operative elected
otherwise than in accordance with the rules of the co-operative referred to in
section 216 (2) is to vacate office as a director. (3) The Council may revoke an approval under section 216 (3) at any
time by notice in writing served on the co-operative and if the Council does
so an employee of the co-operative must not (except in accordance with rules
of the co-operative referred to in section 216 (2)) be elected as a director
of the co-operative. (4) The office of a director of a co-operative on which a notice under
subsection (1) or (3) has been served is, if the director is an employee of
the co-operative elected otherwise than in accordance with rules of the
co-operative referred to in section 216 (2), vacated on the date specified in
the notice unless (before that date) the Council has approved the co-operative
under section 216 (3). (5) The office of a director of a co-operative elected in accordance
with section 216 (2) is vacated if the director ceases to hold the
qualification by virtue of which the director was
elected. (6) In this section, employee, in relation to
a co-operative, has the same meaning as in section
216.
218 Removal from and vacation of office (1) The directors hold office and must retire, and may be removed from
office, as provided by the rules of the
co-operative. (2) A director vacates office in such circumstances (if any) as are
provided in the rules of the co-operative and in any of the following
cases:(a) if the director is disqualified from being a director as provided
by section 208,
(b) if the director absents himself or herself from 3 consecutive
ordinary meetings of the board without its leave,
(c) if the director resigns the office of director by notice in
writing given by the director to the co-operative,
(d) if the director is removed from office by ordinary resolution of
the co-operative,
(e) if the person ceases to hold the qualification by reason of which
the person was qualified to be a director,
(f) if the director becomes an employee of the co-operative (unless
elected under section 216),
(g) if an administrator of the co-operative’s affairs is
appointed under Division 6 of Part 12,
(h) as provided by section 217.
Division 1A Secretary of a co-operative 219 Secretary (1) A co-operative must have a secretary, who is to be appointed by
the board. (2) The board may appoint a person to act as the secretary during the
absence or incapacity of the secretary. (3) A person is not qualified to be appointed as, or to act as, a
secretary unless the person is an adult who is ordinarily resident in
Australia. (4) A person who was acting as a secretary of a co-operative
immediately before the commencement of this section is taken to have been
appointed, and to be qualified, in accordance with this
section.
Division 2 Duties and liabilities of directors, officers and
employees 220 Meaning of “officer” In this Division:officer, in
relation to a co-operative, means: (a) a director or secretary of the co-operative,
or
(b) a person who is concerned, or takes part, in the management of the
co-operative, whether or not as a director, or
(c) a receiver, or receiver and manager, of property of the
co-operative, or any other authorised person who enters into possession or
assumes control of property of the co-operative for the purpose of enforcing
any charge, or
(d) an administrator of a deed of arrangement executed by the
co-operative, or
(e) a liquidator or provisional liquidator appointed in a voluntary
winding up of the co-operative, or
(f) an administrator of the co-operative appointed under Part 5.3A of
the Corporations Act as applying under this Act, or
(g) a trustee or other person administering a compromise or
arrangement made between the co-operative and another person or other
persons.
221 Officers must act honestly (cf Vic Act s 221) (1) An officer of a co-operative must at all times act honestly in the
exercise of his or her powers and the discharge of the duties of his or her
office, both in the State and elsewhere. (2) The penalty applicable to a contravention of this section
is:(a) if the contravention was committed with intent to deceive or
defraud the co-operative, members or creditors of the co-operative or
creditors of any other person or for any other fraudulent purpose—240
penalty units or imprisonment for 5 years, or both, or
(b) otherwise—60 penalty units.
222 Standard of care and diligence required (cf Vic Act s 222) (1) In the exercise of his or her powers and the discharge of his or
her duties, an officer of a co-operative must exercise the degree of care and
diligence that a reasonable person in a like position in a co-operative would
exercise in the co-operative’s circumstances.Maximum penalty: 20 penalty
units. (2) An officer is not liable to be convicted for a contravention of
this section if the co-operative has resolved by ordinary resolution to
forgive the contravention.
223 Improper use of information or position (cf Vic Act s 223) (1) An officer or employee or former officer or former employee of a
co-operative or a member of a committee referred to in section 213 (1) must
not make improper use of information acquired by reason of his or her position
as such an officer or employee or member to gain, directly or indirectly, an
advantage for himself or herself or for any other person or to cause detriment
to the co-operative. (2) An officer or employee of a co-operative or a member of a
committee referred to in section 213 (1) must not make improper use of his or
her position as an officer or employee or member, to gain, directly or
indirectly, an advantage for himself or herself or for any other person or to
cause detriment to the co-operative. (3) The penalty applicable to a contravention of this section
is:(a) if the contravention was committed with intent to deceive or
defraud the co-operative, members or creditors of the co-operative or
creditors of any other person or for any other fraudulent purpose—a
penalty not exceeding 240 penalty units or imprisonment for 2 years, or both,
or
(b) in any other case—a penalty not exceeding 60 penalty
units.
224 Court may order payment of compensation (1) If the court that convicts a person for a contravention of a
provision of this Division is satisfied that a co-operative has suffered loss
or damage as a result of the act or omission that constituted the offence, the
court may (in addition to imposing a penalty) order the convicted person to
pay a specified amount of compensation to the
co-operative. (2) Any such order may be enforced as if it were a judgment of that
court.
225 Recovery of damages by co-operative (1) If a person contravenes a provision of this Division in relation
to a co-operative, the co-operative may, whether or not the person has been
convicted of an offence in respect of that contravention, recover an amount
from the person as a debt due to the co-operative. (2) The amount that the co-operative is entitled to recover from the
person is:(a) if the person or any other person made a profit as a result of the
contravention—an amount equal to that profit, and
(b) if the co-operative has suffered loss or damage as a result of the
contravention—an amount equal to that loss or
damage.
226 Other duties and liabilities not affected This Division has effect in addition to, and not in derogation of,
any rule of law relating to the duty or liability of a person by reason of the
person’s office or employment in relation to a co-operative and does not
prevent the institution of any civil proceedings in respect of a breach of
such a duty or in respect of such a liability. 227 (Repealed) 228 Indemnification of officers and auditors (1) Any provision, whether contained in the rules or in a contract
with a co-operative or elsewhere, for exempting any officer or auditor of the
co-operative from, or indemnifying the officer or auditor against, any
liability that by law would otherwise attach to the officer or auditor in
respect of any negligence, default, breach of duty or breach of trust of which
the officer or auditor may be guilty in relation to the co-operative is
void. (2) Subsection (1) does not apply in relation to a contract of
insurance. (3) Despite subsection (1), a co-operative may, pursuant to its rules
or otherwise, indemnify an officer or auditor against any liability incurred
by the officer or auditor in defending any proceedings, whether civil or
criminal, in which judgment is given in the officer’s or auditor’s
favour or in which the officer or auditor is acquitted or in connection with
any application in relation to any such proceedings in which relief is under
this section granted to the officer or auditor by the
court. (4) If in proceedings for negligence, default or breach of duty
against an officer or auditor of a co-operative it appears to the court that
the person is or may be liable in respect of the negligence, default or breach
of duty but acted honestly and reasonably and that, having regard to all the
circumstances of the case (including those connected with the person’s
appointment), the person ought fairly to be excused for the negligence,
default or breach of duty, the court may relieve the person, either wholly or
partly, from the person’s liability on such terms as the court thinks
fit. (5) If an officer or auditor of a co-operative has reason to believe
that any claim will or might be made against him or her in respect of any
negligence, default or breach of duty in relation to the co-operative, the
person may apply to the Court for relief, and the Court then has the same
power to relieve the person as it would have under this section if it had been
a court before which proceedings against the officer or auditor for
negligence, default or breach of duty had been
brought. (6) If any case to which subsection (4) applies is being tried by a
judge with a jury, the judge, after hearing the evidence, may, if satisfied
that the defendant should in pursuance of that subsection be relieved either
wholly or partly from the liability sought to be enforced against him or her,
withdraw the case in whole or in part from the jury and direct judgment to be
entered for the defendant on such terms as to costs or otherwise as the judge
thinks proper. (7) In this section, officer includes an
employee of a co-operative and any other person empowered under the rules of
the co-operative to give directions in regard to the business of the
co-operative.
229 Application of Corporations Act provisions concerning
officers of co-operatives (cf Vic Act s 228) A co-operative is declared to be an applied Corporations
legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act
2001 in relation to sections 589–598 and 1307 of the
Corporations Act, subject to the following modifications:(a) a reference in those sections to a company is to be read as a
reference to a co-operative,
(b) a reference in those sections to ASIC is to be read as a reference
to the Registrar,
(c) section 592 (1) (a) is to be read as if the reference to 23 June
1993 were a reference to 15 December 1995,
(d) such other modifications (within the meaning of Part 3 of the
Corporations (Ancillary Provisions) Act
2001) as may be prescribed by the
regulations.
Note. See the note to section 10 (1).
Division 3 Restrictions on directors and officers 230 Directors’ remuneration (cf Vic Act s 229) A director of a co-operative must not be paid any remuneration for
services as a director other than fees, concessions and other benefits that
are approved at a general meeting of the co-operative.
231 (Repealed) 232 Financial accommodation to directors and
associates (cf Vic Act s 231) (1) In this section:associate of a director
means: (a) the director’s spouse, or
(b) a person when acting in the capacity of trustee of a trust under
which:(i) the director or director’s spouse has a beneficial interest,
or
(ii) a body corporate mentioned in paragraph (c) has a beneficial
interest, or
(c) a body corporate if:(i) the director or director’s spouse has a material interest in
shares in the body corporate, and
(ii) the nominal value of the shares is not less than 10% of the
nominal value of the issued share capital of the body
corporate.
(2) For the purposes of this section, a person has a material
interest in a share in a body corporate if:(a) the person has power to withdraw the share capital subscribed for
the share or to exercise control over the withdrawal of that share capital,
or
(b) the person has power to dispose of or to exercise control over the
disposal of the share, or
(c) the person has power to exercise or to control the exercise of any
right to vote conferred on the holder of the share.
(3) A co-operative must not provide financial accommodation to a
director, or to a person the co-operative knows or should reasonably know is
an associate of a director, unless:(a) the accommodation is:(i) approved under subsection (4), or
(ii) given under a scheme approved under subsection (4),
or
(iii) provided on terms no more favourable to the director or associate
than the terms on which it is reasonable to expect the co-operative would give
if dealing with the director or associate at arm’s length in the same
circumstances, and
(b) the directors have approved the accommodation, at a meeting of the
board at which a quorum was present, by a majority of at least two-thirds of
the directors present and voting on the matter.
Maximum penalty: 500 penalty
units. (4) For the purposes of subsection (3) (a) (i) and (ii), financial
accommodation or a scheme is approved if:(a) it is approved by a resolution passed at a general
meeting,
(b) the full details of the accommodation or scheme were made
available to members at least 21 days before the
meeting.
(5) A director or an associate of a director who obtains financial
accommodation given in contravention of subsection (3) is guilty of an
offence.Maximum penalty: 240 penalty units or 2 years imprisonment, or
both. (6) For the purposes of this section, a concessional rate of interest
for a borrower from a co-operative is a normal term only if the borrower is
entitled to the concession by being a member of a class of borrowers from the
co-operative specified in its rules as being entitled to the
concession. (7) If a director of a co-operative or an associate of a director
accepts in payment of a debt owed by a member of the co-operative to the
director or associate, any proceeds of financial accommodation provided to the
member by the co-operative, this section has effect as if the financial
accommodation has been provided to the director or
associate. (8) In this section, a reference to:(a) the provision of financial accommodation to a director or an
associate of a director, or
(b) the obtaining of financial accommodation by a director or an
associate of a director, or
(c) a debt owed to a director or an associate of a
director,
includes a reference to a provision of financial accommodation to, or an
obtaining of financial accommodation by, the director or associate, or a debt
owed to the director or associate, jointly with another
person.
233 Restriction on directors of certain co-operatives selling
land to co-operative A director of a co-operative the primary activity of which is or
includes the acquisition of land in order to settle or retain people on the
land and of providing any community service or benefit must not sell land to
the co-operative except pursuant to and in accordance with a special
resolution of the co-operative. 233A Management contracts (cf Vic Act s 233) (1) In this section, management
contract means a contract or other arrangement under which:(a) a person who is not an officer of the co-operative agrees to
perform the whole, or a substantial part, of the functions of the
co-operative, whether under the control of the co-operative or not,
or
(b) a co-operative agrees to perform the whole or a substantial part
of its functions:(i) in a particular way, or
(ii) in accordance with the directions of any person,
or
(iii) subject to specified restrictions or
conditions.
(2) A co-operative must not enter into a management contract unless
that contract has first been approved by special
resolution. (3) A management contract entered into in contravention of subsection
(2) is void.
Division 4 Directors’ interests in contracts
etc 234 Declaration of interest (cf Vic Act s 234) (1) A director of a co-operative who is or becomes in any way (whether
directly or indirectly) interested in a contract, or proposed contract with
the co-operative must declare the nature and extent of the interest to the
board of directors under this section.Maximum penalty: 240 penalty units or imprisonment for 2 years, or
both. (2) In the case of a proposed contract, the declaration must be
made:(a) at the meeting of the board at which the question of entering into
the contract is first considered, or
(b) if the director was not at that time interested in the proposed
contract, at the next meeting of the board held after the director becomes
interested in the proposed contract.
(3) If a director becomes interested in a contract with the
co-operative after it is made, the declaration must be made at the next
meeting of the board held after the director becomes interested in the
contract. (4) For the purposes of this section, a general written notice given
to the board by a director to the effect that the director:(a) is a member of a specified entity, and
(b) is to be regarded as interested in any contract which may, after
the giving of the notice, be made with the entity,
is a sufficient declaration. (5) A director of a co-operative who holds an office or has an
interest in property whereby, whether directly or indirectly, duties or
interests might be created that could conflict with the director’s
duties or interests as director must, under subsection (6), declare at a
meeting of the board of directors the fact and the nature, character and
extent of the conflict.Maximum penalty: 240 penalty units or imprisonment for 2 years, or
both. (6) A declaration required by subsection (5) in relation to holding an
office or having an interest must be made by a person:(a) if the person holds the office or has the interest when he or she
becomes a director, at the first meeting of the board held after:(i) the person becomes a director, or
(ii) the relevant facts as to holding the office or having the interest
come to the person’s knowledge,
whichever is the later, or
(b) if the person starts to hold the office or acquires the interest
after the person becomes a director, at the first meeting of the board held
after the relevant facts as to holding the office or having the interest come
to the person’s knowledge.
(7) If a director has made a declaration under this section, then
unless the board otherwise determines, the director must not:(a) be present during any deliberation of the board in relation to the
matter, or
(b) take part in any decision of the board in relation to the
matter.
(8) For the purposes of the making of a determination of the board
under subsection (7) in relation to a director who has made a declaration
under this section, the director must not:(a) be present during any deliberation of the board for the purpose of
making the determination, or
(b) take part in the making by the board of the
determination.
(9) This section does not extend to or in respect of a vote relating
to a transaction referred to in section 241. (10) Any vote cast in contravention of this section is not to be
counted.
235–237 (Repealed) 238 Declarations to be recorded in minutes Every declaration under this Division is to be recorded in the
minutes of the meeting at which it was made. 239 Division does not affect other laws or rules Except as provided in section 241, this Division is in addition
to, and not in derogation of, the operation of any rule of law or any
provision in the rules of the co-operative restricting a director from having
any interest in contracts with the co-operative or from holding offices or
possessing properties involving duties or interests in conflict with his or
her duties or interests as a director. 240 (Repealed) 241 Certain interests need not be declared (cf Vic Act s 237) The interest in a contract or proposed contract that a director is
required by this Division to declare does not include an interest in:(a) a contract or proposed contract for the purchase of goods by the
director from the co-operative, or
(a1) a lease of land to the director by the co-operative,
or
(b) a contract or proposed contract for the sale of agricultural
products or live stock by the director to the co-operative,
or
(c) a contract or proposed contract that, pursuant to the rules of the
co-operative, may be made between the co-operative and a member,
or
(d) a contract or proposed contract of a class of contracts prescribed
for the purposes of this section,
but only if the contract is made in good faith, in the ordinary course of
the business of the co-operative, and on such terms as are usual and proper in
similar dealings between the co-operative and its
members.
242 (Repealed) Division 5 Financial statements, reports and
audits 243 Requirements for financial records, statements and
reports (1) A co-operative must:(a) keep financial records and prepare financial statements and
financial reports as required by the regulations, and
(b) ensure that those financial statements and financial reports are
audited in accordance with the regulations.
Maximum penalty: 20 penalty
units. (2) Without limiting the matters for which regulations under this
section may make provision, the regulations may make provision for or with
respect to the following:(a) any matter for which provision is made by or under Part 2F.3,
sections 249K and 249V and Chapter 2M of the Corporations Act (including the
conferring of jurisdiction on a court of this State),
(b) requiring financial statements to be prepared in accordance with
any accounting standards in force for the purposes of Chapter 2M of the
Corporations Act (with or without modifications specified in the
regulations),
(c) requiring the submission of financial statements and financial
reports to the Australian Accounting Standards Board,
(d) requiring the adoption by a co-operative of the same financial
year for each entity that the co-operative controls,
(e) prescribing the qualifications and the functions of auditors of
the financial statements and financial reports of a co-operative and providing
for the appointment, the holding of office by, the remuneration of and the
removal of auditors,
(f) the duties of directors of a co-operative in relation to the
preparation, the auditing and the laying before meetings of members of
financial statements and financial reports, including the reports to be
prepared by directors in relation to those financial statements and financial
reports,
(g) the sending of copies of financial statements and financial
reports to members.
(3) (Repealed)
244 Power of Registrar to grant exemptions (1) The Registrar may, by order in writing, exempt a co-operative or
any class of co-operatives, any person or firm appointed or proposed to be
appointed as an auditor or any other person from compliance with all or
specified provisions of the regulations made for the purposes of this
Part. (2) Any such exemption:(a) may be given subject to conditions, and
(b) may be limited as to time, and
(c) may be varied, suspended or revoked by the Registrar by a further
order in writing.
(3) An order under this section takes effect:(a) if it applies to a particular co-operative—when the order is
served on the co-operative, or
(b) if it applies to a class of co-operatives—when the order is
published in the Gazette, or
(c) if it applies to a person or firm—when the order is served
on the person or firm.
245 Meaning of “entity” and
“control” In this Division, the terms entity and control have the same meanings
in relation to a co-operative as they have under the Corporations Act in
relation to a corporation. 246 Disclosure by directors The directors of a co-operative must make such disclosures in
relation to the affairs of the co-operative and of any entity that the
co-operative controls as may be required by the regulations.Maximum penalty: 20 penalty
units. 247 Protection of auditors etc (1) An auditor of a co-operative has qualified privilege in
proceedings for defamation in respect of:(a) any statement that the auditor makes, orally or in writing, in the
course of his or her duties as auditor, or
(b) the giving of any notice, or the sending of any copy of financial
statements, financial reports or a report, to the Registrar under this
Act.
(2) A person has qualified privilege in proceedings for
defamation:(a) in respect of the publishing of any document prepared by an
auditor in the course of the auditor’s duties and required by or under
this Act to be lodged with the Registrar, whether or not the document has been
so lodged, or
(b) in respect of the publishing of any statement made by an auditor
as mentioned in subsection (1).
(3) This section does not limit or affect any right, privilege or
immunity that an auditor or other person has, apart from this section, as
defendant in proceedings for defamation.
248 Financial year (1) The financial year of a co-operative is to end on such day in each
calendar year as is provided for by the rules of the
co-operative. (2) The first financial year of a co-operative may extend from the
date of its registration to a date not later than 18 months from the date of
its registration. (3) On an alteration of the rules of a co-operative altering its
financial year, the alteration may provide either that the financial year
current at the date of alteration is to be extended for a period not exceeding
6 months or that the financial year next following the financial year that is
so current is to be a period exceeding 12 months but not exceeding 18
months.
Division 6 Registers, records and returns 249 Registers to be kept by co-operatives (cf Vic Act s 244) (1) A co-operative must keep the following registers in the English
language:(a) a register of members, directors and shares (if
any),
(b) a register of any loans to, securities given by, debentures issued
by and deposits received by the co-operative,
(c) a register of any loans made by or guaranteed by the co-operative,
and of any securities taken by the co-operative,
(d) a register of CCUs issued by the co-operative,
(e) a register of memberships cancelled under Part 6 (Active
membership requirements),
(f) a register of fixed assets of the
co-operative,
(f1) a register of notifiable interests in accordance with section
294,
(g) such other registers as the regulations may
require.
(2) The registers must be kept in such manner and contain such
particulars as may be prescribed. Maximum penalty: 20 penalty
units.
250 Location of registers (cf Vic Act s 245) (1) A register kept under this Division must be kept at:(a) the co-operative’s registered office, or
(b) an office at the co-operative’s principal place of business,
or
(c) an office (whether of the co-operative or of someone else) where
the work involved in maintaining the register is done, or
(d) another office approved by the
Registrar.
(2) The office must be in New South Wales. (3) The co-operative must lodge with the Registrar a notice of the
address at which the register is kept within 28 days after the register
is:(a) established at an office that is not the co-operative’s
registered office, or
(b) moved from one office to another.
Maximum penalty: 10 penalty units or imprisonment for 3 months, or
both.
251 Inspection of registers etc (cf Vic Act s 246) (1) A co-operative must have at the office where the registers are
kept and available during all reasonable hours for inspection by any member
free of charge the following:(a) a copy of this Act and the regulations,
(b) a copy of the rules of the co-operative,
(c) a copy of the minutes of each general meeting of the
co-operative,
(d) a copy of the last annual report of the co-operative under section
252,
(e) the register of directors, members and shares,
(f) the register of names of persons who have given loans or deposits
to or hold securities or debentures given or issued by the
co-operative,
(g) such other registers as the regulations provide are to be open for
inspection under this section.
Maximum penalty: 20 penalty
units. (2) If a register is not kept on a computer, the person inspects the
register itself. (3) If the register is kept on a computer, the person inspects a hard
copy of the information on the register unless the person and the co-operative
agree that the person can access the information by
computer. (4) A member is entitled to make a copy of entries in a register
specified in subsection (1) and to do so free of charge unless the rules of
the co-operative require a fee to be paid, in which case on payment of the
required fee. (5) The fee required by the rules must not exceed the fee prescribed
by the regulations for a copy of any entry in the
Register. (6) A co-operative must:(a) permit a member to inspect a document or make a copy of a document
that the member is entitled to inspect or make under this section,
and
(b) give the member all reasonable assistance to inspect the document
or make the copy.
Maximum penalty: 20 penalty
units. (7) A co-operative must have at the place where the registers are kept
and available during all reasonable hours for inspection by any person such
documents in relation to the co-operative as are prescribed by the
regulations.Maximum penalty: 20 penalty
units.
251A Use of information on registers (cf Vic Act s 247) (1) A person must not:(a) use information about a person obtained from a register kept under
this Division to contact or send material to the person,
or
(b) disclose information of that kind knowing that the information is
likely to be used to contact or send material to the
person,
unless the requirements of subsection (2) are met.Maximum penalty: 50 penalty units or imprisonment for one year, or
both. (2) The requirements of this section for use or disclosure of the
information are that the use or disclosure of the information is:(a) relevant to the holding of the directorship, membership, shares,
loans, securities, debentures or deposits concerned or the exercise of the
rights attaching to them, or
(b) approved by the board, or
(c) necessary to comply with a requirement of this
Act.
(3) A person who contravenes subsection (1) is liable to compensate
anyone else who suffers loss or damage because of the
contravention. (4) A person who makes a profit from a contravention of subsection (1)
owes a debt to the co-operative. The amount of the debt is the amount of the
profit.
251B Notice of appointment etc of directors and
officers (cf Vic Act s 248) (1) A co-operative must give notice to the Registrar in accordance
with this section of the appointment of a person as a director, principal
executive officer or secretary of the co-operative or any subsidiary of the
co-operative, and of the cessation of any such
appointment. (2) The notice must:(a) be in the form approved by the Registrar, and
(b) be given within 28 days after the appointment or cessation of
appointment, and
(c) specify the particulars prescribed by the regulations of the
appointment or cessation of appointment.
Maximum penalty: 20 penalty
units.
252 Annual report (cf Vic Act s 249) (1) A co-operative must send to the Registrar within the required
period in each year an annual report containing each of the following:(a) a list in the form approved by the Registrar specifying the
secretary, directors and the principal executive officers of the co-operative
and of each of its subsidiaries, as at the date the annual report is filed
with the Registrar,
(b) if the co-operative is required under section 243 to prepare a
financial report of the co-operative for its most recently ended financial
year—a copy of the financial report,
(c) a copy of the financial report of each subsidiary of the
co-operative for the most recently ended financial year of the subsidiary
(unless the legislation under which the subsidiary is incorporated does not
require an annual report to be prepared by that
subsidiary),
(d) a copy of any report by the auditor or the directors of the
co-operative or subsidiary:(i) prepared under section 243, or
(ii) on a financial report mentioned in paragraph (b) or
(c),
(e) a return in the form prescribed by the regulations containing such
other particulars as may be so prescribed.
Maximum penalty: 20 penalty
units. (2) For the purposes of subsection (1) the required
period is:(a) 28 days after the annual general meeting of the co-operative,
or
(b) if the annual general meeting of the co-operative is not held
within the period specified in section 198 (2) (a), 28 days after the end of
that period.
253 List of members to be furnished at request of
Registrar A co-operative must at the request in writing of the Registrar
send to the Registrar within such time and in such manner as the Registrar
specifies a full list of the members of the co-operative and of each
subsidiary of the co-operative, together with such particulars with regard to
those members as the Registrar specifies in the request.Maximum penalty: 20 penalty
units. 254 Special return to be furnished at request of
Registrar The Registrar may by direction in writing require a co-operative
to furnish to the Registrar a special return in the form, within the time, and
relating to the subject-matter, specified by the Registrar, and the
co-operative must comply with the direction.Maximum penalty: 20 penalty
units. Division 7 Name and registered office 255 Name to include certain matter (cf Vic Act s 252) (1) The name of a co-operative may consist of words, numbers or a
combination of both. (2) The name of a co-operative must include the word
“Co-operative” or the abbreviation
“Co-op.”. (3) The word “Limited” or the abbreviation
“Ltd.” must be the last word of the
name. (4) A body corporate which is formed or incorporated under any Act
other than this Act must not register under that other Act by any name which
includes the word “Co-operative” or the abbreviation
“Co-op.” or any word or words importing a similar
meaning.Maximum penalty: 20 penalty
units. (5) Subsection (4) does not apply to:(a) a co-operative housing society within the meaning of the
Co-operation Act 1923, or
(b) a credit union or foreign society within the meaning of the
Financial Institutions (NSW) Code,
or
(c) a company or society formed or incorporated under any other Act
before the commencement of the Co-operation Act
1923, or
(d) the Farmers and Settlers Co-operative Insurance Company of
Australia Limited, or
(e) a foreign co-operative registered under Part 13A,
or
(f) a co-operative exempted by the regulations from the operation of
that subsection and that complies with any conditions to which the exemption
is made subject, or
(g) a co-operative exempted by the Registrar in writing from the
operation of that subsection and that complies with any conditions to which
the exemption is made subject, or
(h) a corporation that is allowed under another Act to use the word
“co-operative” or the abbreviation “co-op” in its
name.
(6) The Registrar is not to grant an exemption under this section
unless satisfied that the body or organisation concerned is trading or
carrying on business for the purpose of promoting the economic interests of
its members in accordance with co-operative principles or for any charitable
purpose. The expression charitable
purpose includes any benevolent, philanthropic or patriotic
purpose. (7) An exemption granted by the Registrar may be limited as to
time. (8) The Registrar may vary the conditions of an exemption or revoke an
exemption by giving notice in writing of the variation or revocation to the
body or any member of the controlling body of the
organisation.
256 Approval for omission of “Limited” (1) In the case of a co-operative the rules of which prohibit the
payment of dividends or the distribution of assets to members, the Registrar
may by order in writing, approve of the omission from the name of the word
“Limited”. (2) Such an approval may be granted subject to conditions and the
conditions to which an approval is subject may be varied from time to time by
the Registrar by notice in writing to the
co-operative. (3) Any conditions to which the Registrar’s approval is subject
are binding on the co-operative and must, if the Registrar so directs, be
inserted in the rules of the co-operative. (4) The rules of the co-operative may be altered by special resolution
to give effect to any such direction. (5) The Registrar may at any time by notice in writing to the
co-operative revoke an approval under this section but only after giving the
co-operative an opportunity to make submissions to the Registrar on the
matter. (6) An approval under this section operates to exempt the co-operative
from the requirement that the word “Limited” form part of its
name.
257 Use of abbreviations A description of a co-operative is not inadequate or incorrect
merely because of one or more of the following:(a) the use of the abbreviation “Co-op.” instead of the
word “Co-operative” in the co-operative’s
name,
(b) the use of the abbreviation “Ltd.” instead of the word
“Limited” in the co-operative’s name,
(c) the use of the symbol “&” instead of the word
“and” in the co-operative’s name,
(d) the use of any of those words instead of the corresponding
abbreviation or symbol in the co-operative’s name,
(e) the use of any abbreviation or elaboration of the name of the
co-operative that is approved in a particular case or for a particular purpose
by the Registrar in writing.
258 Name to appear on business documents etc (cf Vic Act s 254) (1) The name of a co-operative must appear in legible
characters:(a) on its seal, and
(b) in all notices, advertisements and other official publications of
the co-operative, and
(c) in all its business documents.
(2) If subsection (1) is contravened, the co-operative is guilty of an
offence.Maximum penalty: 20 penalty
units. (3) If an officer of a co-operative or a person on its behalf:(a) uses any seal of the co-operative, or
(b) issues or authorises the issue of any notice, advertisement or
other official publication of the co-operative, or
(c) signs or authorises to be signed on behalf of the co-operative any
business document of the co-operative,
in or on which the co-operative’s name does not appear in legible
characters is guilty of an offence.Maximum penalty: 20 penalty
units. (4) Any officer or person who so signs or authorises to be signed any
such business document that is a bill of exchange, cheque, promissory note or
order for money or goods is also to be personally liable for the amount to the
holder thereof, unless the amount is duly paid by the
co-operative. (5) A director of a co-operative who knowingly authorises or permits a
contravention of this section is guilty of an offence.Maximum penalty: 20 penalty
units. (6) In this section:business
document, in relation to a co-operative, means a document that is
issued, signed or endorsed by or on behalf of the co-operative and is: (a) a business letter, statement of account, invoice or order for
goods or services, or
(b) a bill of exchange, promissory note, cheque or other negotiable
instrument, or
(c) a receipt or letter of credit issued by the co-operative,
or
(d) a document of a class prescribed by the regulations as a class of
business documents.
259 Change of name of co-operative (cf Vic Act s 255) (1) A co-operative may by special resolution change its name to a name
approved by the Registrar. A change of name must be advertised as
prescribed. (2) A change of name does not take effect until:(a) the Registrar has noted the change on the certificate of
incorporation of the co-operative, or
(b) the certificate of incorporation is surrendered to the Registrar
and a replacement certificate of incorporation is issued in the new
name.
(3) A change of name by a co-operative does not affect:(a) the identity of the co-operative, or
(b) the exercise of any rights, or the enforcement of any obligations,
by or against the co-operative or any person, or
(c) the continuation of any legal proceedings by or against the
co-operative.
(4) Any legal proceedings that might have been continued or commenced
by or against the co-operative in its former name may be continued or
commenced by or against the co-operative in its new
name. (5) The Registrar may refuse to approve a change of name if the
Registrar thinks the new name is undesirable. (6) The Registrar may direct a co-operative to change its name if the
Registrar is of the opinion that the name is such as is likely to be confused
with the name of a body corporate or a registered business
name.
260 Restriction on use of word “co-operative” or
similar words (1) A person, other than a co-operative, must not trade, or carry on
business, under a name or title containing the word
“co-operative”, the abbreviation “co-op” or words
importing a similar meaning. (2) Subsection (1) does not apply to:(a) an entity mentioned in section 255 (5), or
(b) a person or body exempted by the Registrar under this
section.
(3) A person or body may apply to the Registrar for exemption from
subsection (1). (4) The Registrar may, by written notice given to the person or body,
grant an exemption for such time and on such terms and conditions as the
Registrar determines. An exemption can provide that specified provisions of
this Act apply to the person or body as if the person or body were a
co-operative, and the specified provisions then apply accordingly (as if a
reference in those provisions to a co-operative included a reference to the
person or body). (5) The Registrar may, at any time:(a) revoke an exemption, or
(b) vary or revoke the terms or conditions of an
exemption.
(6) A person who contravenes this section or a condition of an
exemption under this section, and every director or other person having the
control and management of a body contravening this section or the condition,
is guilty of an offence.Maximum penalty: 20 penalty
units.
261 Registered office of co-operative (cf Vic Act s 256) (1) A co-operative must have a registered
office. (2) A co-operative must, at the premises of its registered office,
publicly and conspicuously display a notice stating the name of the
co-operative and identifying the premises as its registered
office. (3) Not later than 28 days after changing the address of its
registered office, a co-operative must give the Registrar written notice of
the new address. Maximum penalty: 20 penalty
units.
Part 10 Funds, property etc Division 1 Power to raise money etc 262 Meaning of obtaining financial accommodation (cf Vic Act s 257) A reference in this Division to the obtaining of financial
accommodation includes a reference to the obtaining of credit and the
borrowing or raising of money by any means.
263 Fund raising to be in accordance with Act and
regulations (cf Vic Act s 258) (1) The regulations may impose requirements and restrictions on the
obtaining of financial accommodation and the giving of security in connection
with the obtaining of financial accommodation by a
co-operative. (2), (3) (Repealed)
263A Limits on deposit taking (cf Vic Act s 259) A co-operative must not accept money on deposit unless:(a) the co-operative was authorised by its rules (in whatever terms
made or adopted) immediately before 1 December 1997 to accept money on
deposit, or
(b) the co-operative was a deposit-taking body corporate immediately
before it became a co-operative and it is authorised by its rules to accept
money on deposit, or
(c) in the case of a merged co-operative, one or more of the
co-operatives involved in the merger was a deposit-taking co-operative
immediately before the registration of the merged co-operative and the merged
co-operative is authorised by its rules to accept money on
deposit.
263B Members etc not required to see to application of
money (cf Vic Act s 260) A member or other person from whom a co-operative obtains
financial accommodation is not required to see to its application and is not
affected or prejudiced by the fact that in doing so the co-operative
contravened any provision of this Act or the regulations or the rules of the
co-operative.
264 Registrar’s directions concerning fund
raising (1) The Registrar may by written notice served on a co-operative give
a direction to the co-operative as to the manner in which it is to exercise
its functions in connection with the activities of the co-operative in
obtaining financial accommodation. (2) Such a direction may make provision for any one or more of the
following matters:(a) requiring the co-operative to cease obtaining financial
accommodation or to cease obtaining financial accommodation in a particular
way,
(b) requiring the co-operative to repay in accordance with the
direction all or part of financial accommodation obtained,
(c) requiring the co-operative to re-finance in a specified manner
financial accommodation repaid in accordance with the Registrar’s
direction,
(d) the manner in which the co-operative is permitted to invest or
utilise the proceeds of financial accommodation it
obtains.
265 Subordinated debt (1) A co-operative has power to incur subordinated
debt. (2) Subordinated debt is debt incurred under an agreement whereby, in
the event of the winding up of the co-operative, any claim of the creditor
against the co-operative in respect of the debt is to rank in priority:(a) equally with the claim of any other creditor who is a party to a
similar agreement, and
(b) except as provided by paragraph (a), after the claims of any other
creditor of the co-operative and before the claims of members to repayment of
any share capital in the co-operative.
(3) Any such agreement has effect despite the provisions of Division 6
(Proof and ranking of claims) of Part 5.6 of the Corporations Act (as applying
under Division 4 of Part 12 of this Act).
266 Application of Corporations Act to issues of
debentures (cf Vic Act s 263) (1) Subject to subsection (2), the debentures of a co-operative are
declared to be applied Corporations legislation matters for the purposes of
Part 3 of the Corporations (Ancillary
Provisions) Act 2001 in relation to the provisions of Part
1.2A (Disclosing entities), Chapter 2L (Debentures), Chapter 6D (Fundraising)
and Part 7.10 (Market misconduct and other prohibited conduct relating to
financial products and financial services) of the Corporations Act, subject to
the following modifications:(a) the provisions apply as if a co-operative were a
company,
(b) a reference in those provisions to a corporation includes a
reference to a co-operative,
(c) a reference in those provisions to ASIC is a reference to the
Registrar.
Note. See the note to section 10 (1). (2) The provisions of the Corporations Act made applicable to the
debentures of a co-operative by this section do not apply to the
following:(a) a loan to which section 268 of this Act
applies,
(b) an issue of debentures of a co-operative that is made:(i) solely to members, or
(ii) solely to members and employees of the co-operative,
or
(iii) to a person who on becoming an inactive member of the co-operative
has had his or her share capital converted to debt.
(3) Expressions used in this section that are not defined in this Act
have the same meaning as in the Corporations Act. (4) The Registrar may exempt a co-operative from any of the
requirements of the Corporations Act applied by this
section. (5) An exemption may be granted unconditionally or subject to
conditions. A co-operative that contravenes a condition of an exemption is
taken not to be exempt from the requirements of the Corporations Act applied
by this section.
266A Disclosure statement (cf Vic Act s 264) (1) This section applies to the issue of debentures of a co-operative
where the issue is made:(a) solely to members, or
(b) solely to members and employees of the
co-operative.
(2) Before issuing to the person debentures to which this section
applies, a co-operative must provide a person with a disclosure statement,
approved by the Registrar, and containing such information as is reasonably
necessary to enable a person to make an informed assessment of the financial
prospects of the co-operative, including:(a) the purpose for which the money raised by the co-operative by the
issue of debentures is to be used, and
(b) the rights and liabilities attaching to the debentures,
and
(c) the financial position of the co-operative,
and
(d) the interests of the directors of the co-operative in the issue of
the debentures, and
(e) any compensation or consideration to be paid to officers or
members of the co-operative in connection with the issue of debentures,
and
(f) such other matters as the Registrar
directs.
(3) Sections 17 (except subsections (2), (4) and (11)) and 28A apply
to the approval of a disclosure statement under this section with any
necessary modifications and in particular as if any reference in section 17 to
a formation meeting were a reference to the issue of
debentures.
266B Approval of board for transfer of debentures (cf Vic Act s 265) A debenture of a co-operative cannot be sold or transferred except
with the consent of the board and in accordance with the rules of the
co-operative.
267 Application of Corporations Act—re-issue of
redeemed debentures Debentures issued by a co-operative to any of its members are
declared to be applied Corporations legislation matters for the purposes of
Part 3 of the Corporations (Ancillary
Provisions) Act 2001 in relation to section 563AAA of the
Corporations Act as if a co-operative were a company. 268 Compulsory loan by member to co-operative (cf Vic Act s 267) (1) If the rules of the co-operative so provide, the co-operative may
require its members to lend money, with or without security, to the
co-operative, in accordance with a proposal approved by special resolution of
the co-operative. (2) The proposal must not require a loan to be for a term exceeding 7
years or such other term as is prescribed by the
regulations. (3) The proposal must:(a) be accompanied by a disclosure statement, approved by the
Registrar, that explains the purpose for which the money raised by the
co-operative pursuant to the proposal is to be used and includes any other
information that the Registrar directs, and
(b) clearly show the total amount of the loan to be raised by the
co-operative and the basis on which the money required to be lent by each
member is to be calculated, and
(c) be accompanied by a statement informing the member that the member
may inform the board by notice on or before the date specified in the
statement (being a date before the passing of the special resolution) that the
member resigns on the passing of the special
resolution.
(4) If the proposal so allows, the board of the co-operative may, in
accordance with the terms of the proposal, deduct the money required to be
lent by a member to the co-operative from money due from the co-operative to
the member in respect of his or her dealings with the
co-operative. (5) A proposal to deduct money referred to in subsection (4) must, in
addition, clearly show:(a) the basis on which the money is to be deducted,
and
(b) the time and manner of making the
deductions.
(6) When approved, the proposal is binding on:(a) all members of the co-operative at the date of passing of the
special resolution other than a member who has given a notice of resignation
in accordance with subsection (3) (c), and
(b) all persons who become members of the co-operative after that date
and before the total amount of the loan to be raised pursuant to the proposal
has been raised.
(7) Sections 17 (except subsections (2), (4) and (11)) and 28A apply
to the approval of a disclosure statement under this section with any
necessary modifications and in particular as if any reference in section 17 to
a formation meeting were a reference to the special
resolution.
268A Interest payable on compulsory loan (cf Vic Act s 268) (1) The rate of interest payable by a co-operative in respect of a
loan under section 268 during any period is:(a) in the case of a co-operative with share capital:(i) the rate (or, if there is more than one rate, at the higher or
highest rate) of dividend payable in respect of that period on the share
capital of the co-operative, or
(ii) if the rate of dividend payable in respect of that period has not
been determined, at the rate (or the higher or highest rate) payable in
respect of the immediately preceding period for which a rate has been
determined, or
(iii) if a rate of dividend has never been determined in respect of the
share capital of the co-operative, at the rate that the board of the
co-operative considers reasonable, or
(b) in the case of a co-operative without share capital, at the rate
that the board of the co-operative considers reasonable,
or
(c) if the rules provide for a rate to be payable that is higher than
the rate applicable under paragraph (a) or (b), at that higher
rate.
(2) A member may agree to the rate of interest being less than that
which would otherwise be payable under this section and may agree to no
interest being paid.
Division 2 Co-operative capital units (CCUs) 269 General nature of CCU (1) A co-operative capital unit is an interest issued by a
co-operative conferring an interest in the capital (but not the share capital)
of the co-operative. (2) A CCU:(a) is personal property,
(b) is transferable or transmissible as provided by this Act and the
rules of the co-operative, subject to the terms of issue of the
CCU,
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
(3) Subject to subsection (2):(a) the laws applicable to ownership of and dealing with personal
property apply to a CCU as they apply to other property,
and
(b) equitable interests in respect of a CCU may be created, dealt with
and enforced as in the case of other personal
property.
(4) A transferor of a CCU remains the holder of the CCU until the
transfer is registered and the name of the transferee is entered in the
register of CCU holders in respect of the CCU. (5) Despite any rule of law or equity to the contrary, a condition
subject to which a CCU is issued, whether the CCU is issued before or after
the commencement of this subsection, is not invalid merely because the CCU is,
by the condition, made irredeemable or redeemable only on the happening of a
contingency however remote or at the end of a period however
long.
269A Priority of CCUs on winding up (1) On a winding up of a co-operative, a debt owed to a person as the
holder or former holder of a CCU issued by the co-operative is to rank for
priority of payment in accordance with the terms of issue of the
CCU. (2) Such a debt may rank as a secured debt if it is secured but if it
is unsecured may not rank in priority to other unsecured debts. It may rank
equally with or behind unsecured debts and (if the debt ranks behind unsecured
debts) may rank in priority to, equally with or behind debts due to
contributories.
270 Division 1 applies to issue of CCUs (1) The issuing of CCUs is to be considered to be the obtaining of
financial accommodation and accordingly Division 1 applies to the issue of
CCUs. (2) For the purpose of Division 1, a CCU is to be considered to be a
debenture.
271 CCUs can be issued to non-members CCUs may be issued to persons whether or not they are members of
the co-operative. 272 Minimum requirements for rules concerning CCUs The rules of a co-operative that permit the co-operative to issue
CCUs must contain provision to the effect of the following provisions and must
not contain provisions that are inconsistent with the following
provisions:• each holder of a CCU is entitled to one vote only at a meeting of
the holders of CCUs,
• the rights of the holders of CCUs may be varied only in the manner
and to the extent provided by their terms of issue and only with the consent
of at least 75% of the holders of CCUs given in writing or at a
meeting,
• the holder of a CCU has, in the person’s capacity as such a
holder, none of the rights or entitlements of a member of the
co-operative,
• the holder of a CCU is entitled to receive notice of all meetings
of the co-operative and all other documents in the same manner as the holder
of a debenture of the co-operative.
273 CCUs not to be issued unless terms of issue approved by
Registrar (1) A co-operative is not to issue CCUs unless:(a) the terms of issue have been approved by a special resolution of
the co-operative, and
(b) the issue is made pursuant to an offer accompanied by a copy of a
statement approved by the Registrar for the purposes of the issue,
and
(c) the Registrar approves of the terms of the
issue.
(2) The terms of issue must specify the following (but this subsection
does not limit the contents of the terms of issue):(a) details of entitlement to repayment of
capital,
(b) details of entitlement to participate in surplus assets and
profits,
(c) details of entitlement to interest on capital (whether cumulative
or non-cumulative interest),
(d) details of how capital and interest on capital are to rank for
priority of payment on a winding up.
(3) The statement approved by the Registrar for the purposes of the
issue is to set out the terms of the issue, the rights of the holders of CCUs,
the terms of redemption and the manner of transferability of
CCUs. (4) The Registrar is not to approve of the terms of issue unless
satisfied that they will not result in a failure to comply with co-operative
principles and are not contrary to the rules of the co-operative or this
Act.
274 Directors’ duties concerning CCUs In discharging their duties, it is proper for the directors of a
co-operative to take into account that the holders of CCUs have none of the
rights and entitlements of, and are not entitled to be regarded as, members of
the co-operative. 275 Redemption of CCUs (1) The redemption of CCUs is not to be considered to be a reduction
in the share capital of the co-operative. (2) A co-operative may redeem CCUs but only on such terms and in such
manner as is provided by the terms of their issue and only if they are fully
paid up. (3) CCUs may not be redeemed except out of profits that would
otherwise be available for dividends or out of the proceeds of a fresh issue
of shares, or an approved issue of CCUs, made for the purpose of the
redemption. (4) An issue of CCUs is an “approved issue” for the
purposes of subsection (3) if there is the same entitlement to priority of
payment of capital and dividend in relation to shares in the co-operative as
there was for the redeemed CCUs. (5) Any premium payable on redemption is to be provided for out of
profits or out of the CCU premium account or share premium
account.
276 Capital redemption reserve (1) This section applies if CCUs are redeemed otherwise than out of
proceeds of a fresh issue of shares. (2) Out of profits that would otherwise have been available for
dividends there is to be transferred to a reserve called the capital
redemption reserve a sum equal to the nominal amount of the CCUs redeemed and
the provisions of this Act relating to the reduction of share capital of a
co-operative apply as if the capital redemption reserve were paid-up share
capital of the co-operative. (3) The capital redemption reserve may be applied in paying up
unissued shares of the co-operative to be issued to members of the
co-operative as fully-paid bonus shares.
277 Issue of shares in substitution for redemption (1) If a co-operative has redeemed or is about to redeem CCUs held by
an active member of the co-operative, it may:(a) issue shares to the member up to the sum of the nominal value of
the CCUs redeemed or to be redeemed, as if those CCUs had never been issued,
or
(b) pay up amounts unpaid on shares held by the member up to the sum
of the nominal value of the CCUs redeemed or to be redeemed, as if those CCUs
had never been issued.
(2) This section applies only if the terms of issue of the CCUs
provide for the conversion of CCUs held by an active member of the
co-operative into shares of the co-operative.
Division 3 Charges 278 Registration of charges Schedule 3 has effect but does not apply to:(a) a mortgage, charge or encumbrance that is over specific land and
is registered under the Real Property Act
1900 or Division 1 of Part 23 of the Conveyancing Act 1919,
or
(b) a mortgage, charge or encumbrance over a specific lease, claim or
tenement under the laws relating to mining.
279 Receivers and managers Schedule 4 has effect. Division 4 Disposal of surplus from activities 280 Retention of surplus for benefit of
co-operative (cf Vic Act s 271) The board of a co-operative may resolve to retain all or any part
of the surplus arising in any year from the business of the co-operative to be
applied for the benefit of the co-operative.
281 Application for charitable purposes or members’
purposes (cf Vic Act s 272) (1) The rules of a co-operative may authorise the co-operative to
apply a part of the surplus arising in any year from the business of the
co-operative for any charitable purpose. The expression charitable
purpose includes any benevolent, philanthropic or patriotic
purpose. (2) The rules of a trading co-operative may authorise the co-operative
to apply a part of the surplus arising in any year from the business of the
co-operative for supporting any activity approved by the
co-operative. (3) The rules must limit the amount that may be applied under
subsection (1) or (2) to a specified proportion of the
surplus. (4) A co-operative may apply part of the surplus for a purpose and to
the extent authorised by rules under subsection (1) or
(2).
282 Distribution of surplus or reserves to members (cf Vic Act s 273) (1) The rules of a trading co-operative may authorise the co-operative
to apply a part of the surplus arising in any year from the business of the
co-operative or a part of the reserves of the co-operative by:(a) distribution to members as a rebate on the basis of business done
with the co-operative, or
(b) the issue of bonus shares to members on the basis of the
members’ dealings with the co-operative or on the basis of shares held
by the members, or
(c) the issue to members of a limited dividend for shares held by the
members.
(2) The amount of any rebate or dividend payable to a member under
subsection (1) may, with the consent of the member, be applied:(a) in payment for the issue to the member of bonus shares,
or
(b) as a loan to the co-operative.
(3) In this section limited dividend
means a dividend that does not exceed the amount prescribed by the regulations
or such other amount or rate as the Registrar may approve in any particular
case.
283 Application of surplus to other persons (cf Vic Act s 274) (1) If authorised by its rules, any part of the surplus arising in any
year from the business of a trading co-operative may be credited to any person
who is not a member, but is qualified to be a member, by way of rebate in
proportion to the business done by him or her with the co-operative,
if:(a) the person was a member at the time the business was done and the
membership has lapsed, or
(b) the person has applied for membership after the business was
done.
(2) Nothing in this section precludes the payment of a bonus to an
employee in accordance with the terms of his or her
employment.
Division 5 Prudential standards etc 284 Prudential standards may be prescribed (1) Regulations may be made for or with respect to the following
matters:(a) the value of unencumbered assets, or values of specified classes
of unencumbered assets, that a co-operative is required to
have,
(b) the value of liabilities, or values of specified classes of
liabilities, that a co-operative is permitted to have,
(c) the ratio of assets to capital and reserves that a co-operative is
required to maintain,
(d) requiring assets of a co-operative to be held as liquid
assets,
(e) the value or kind of assets of a co-operative that are required to
be held as liquid assets,
(f) other matters relating to liquid assets of a
co-operative,
(g) the imposition of other prudential requirements on co-operatives
for the protection of members or creditors of
co-operatives.
(2) Without affecting the generality of subsection (1), regulations
under this section may be made by reference to any of the following:(a) different classes of assets or liabilities,
(b) proportions of assets or liabilities,
(c) when a liability falls due,
(d) the activities of the co-operative,
(e) any other relevant factors.
(3) Regulations for the purposes of this section may provide for the
following:(a) the classification of assets of a co-operative as unencumbered
assets or liquid assets, or otherwise,
(b) the determination of the value of the assets and liabilities of a
co-operative,
(c) the adjustment of the value of assets of a co-operative in order
to determine their value at a later time,
(d) weightings to be given to assets for the purpose of calculating
the ratio of assets to capital and reserves.
(4) A co-operative must:(a) comply with regulations made under this section,
and
(b) take all reasonable steps to remedy any contravention of those
regulations by the co-operative.
Maximum penalty: 100 penalty
units. (5) If a co-operative contravenes subsection (4), a director of the
co-operative who:(a) failed to take all reasonable steps to prevent the contravention,
or
(b) by a wilful act or omission caused the
contravention,
is guilty of an offence.Maximum penalty: 50 penalty
units.
285 Acquisition and disposal of assets (cf Vic Act s 275) (1) A co-operative must not do any of the following things except as
approved by special resolution by means of a special postal ballot:(a) sell or lease as a going concern, the undertaking of the
co-operative or a part of the undertaking that relates to its primary
activities the value of which represents 5% or more of the total value of the
undertaking,
(b) acquire from or d
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