2002

THE LEGISLATIVE ASSEMBLY

FOR THE AUSTRALIAN CAPITAL TERRITORY

(As presented)

(Attorney-General)

2002

THE LEGISLATIVE ASSEMBLY

FOR THE AUSTRALIAN CAPITAL TERRITORY

(As presented)

(Attorney-General)

An Act to make provision in relation to cooperatives, and for other purposes

The Legislative Assembly for the Australian Capital Territory enacts as follows:

This Act is the Cooperatives Act 2002.

This Act commences on a day fixed by the Minister by written notice.

Note 1 The naming and commencement provisions automatically commence on the notification day (see Legislation Act 2001, s 75).

Note 2 A single day or time may be fixed, or different days or times may be fixed, for the commencement of different provisions (see Legislation Act 2001, s 77 (1)).

Note 3 If a provision has not commenced within 6 months beginning on the notification day, it automatically commences on the first day after that period (see Legislation Act 2001, s 79).

The objects of this Act are to—

(a) enable the formation, registration and operation of cooperatives; and

(b) promote cooperative philosophy, principles, practices and objectives; and

(c) protect the interests of cooperatives, their members and the public in the operations and activities of cooperatives; and

(d) ensure that the directors of cooperatives are accountable for their actions and decisions to the members of cooperatives; and

(e) encourage and facilitate self-management by cooperatives at all levels; and

(f) encourage the development, integration and strengthening of cooperatives at local, regional, national and international levels by supporting and fostering Territory, State and national peak organisations and cooperative instrumentalities.

The dictionary at the end of this Act is part of this Act.

Note 1 The dictionary at the end of this Act defines certain words and expressions used in this Act, and includes references (signpost definitions) to other words and expressions defined elsewhere in this Act or in other legislation.

For example, the signpost definition ‘company—see the Corporations Act, section 9.’ means that the word ‘company’ is defined in that section and the definition applies to this Act.

Note 2 A definition in the dictionary (including a signpost definition) applies to the entire Act unless the definition, or another provision of the Act, provides otherwise or the contrary intention otherwise appears (see Legislation Act 2001, s 155 and 156 (1)).

A note included in this Act is explanatory and is not part of this Act.

Note See Legislation Act 2001, s 127 (1), (4) and (5) for the legal status of notes.

(1) A provision of this Act that provides to the effect that a person has qualified privilege in relation to something means that the person, in relation to the thing—

(a) has qualified privilege in a proceeding for defamation; or

(b) is not, in the absence of malice on the person’s part, liable to an action for defamation.

(2) In subsection (1):

malice includes—

(a) ill will towards the person concerned; and

(b) any other improper motive.

(3) Nothing in this section or in a provision of a kind 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 an action, or other proceeding, for defamation.

In the interpretation of a provision of this Act, a construction that would promote the cooperative principles is to be preferred to a construction that would not promote the cooperative principles.

The cooperative principles are the following principles:

1 Voluntary and open membership

Cooperatives are voluntary organisations, open to all people able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

2 Democratic member control

Cooperatives 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 cooperatives, members have equal voting rights (1 member, 1 vote) and cooperatives at other levels are organised in a democratic manner.

3 Member economic participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. 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:

(a) developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible;

(b) benefiting members in proportion to their transactions with the cooperative;

(c) supporting other activities approved by the membership.

4 Autonomy and independence

Cooperatives 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 cooperative autonomy.

5 Education, training and information

Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.

6 Cooperation among cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

7 Concern for the community

While focusing on members’ needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

The regulations may apply, with any prescribed changes, a provision of the Corporations Act to cooperatives if the provision does not apply to cooperatives of its own force or by operation of this Act.

(1) A provision of the Corporations Act applied by this Act in relation to cooperatives is taken to be part of this Act.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act 2001, s 104).

(2) If—

(a) a provision of this Act (the application provision) applies provisions of the Corporations Act (the applied provisions) to cooperatives; and

(b) some parts of the applied provisions apply to cooperatives of their own force; and

(c) other parts of the applied provisions do not apply to cooperatives of their own force;

the application provision applies only the parts mentioned in paragraph (c).

(3) If a provision of the Corporations Act is applied by any provision of this Act, neither the applied provision nor the applying provision gives power to the Australian Securities and Investments Commission to administer the applied provision for this Act.

(1) A provision of the Corporations Act applied by this Act is taken to apply with—

(a) any changes provided by this Act; and

(b) any other changes that may be necessary or desirable for the effective application of the Act.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act 2001, s 104).

(2) In particular—

(a) a reference to—

(i) articles or memorandum of association; or

(ii) constitution; or

(iii) replaceable rules;

is a reference to rules; and

(b) a reference to a company is a reference to a cooperative; and

(c) a reference to ASIC is a reference to the registrar; and

(d) a cross-reference to another provision of the Corporations Act is, if the cross-reference is not appropriate (because, for example, the provision cross-referred to is not among the provisions applied)—

(i) if there is a corresponding provision of this Act—a cross-reference to that provision; or

(ii) in any other case—to be disregarded; and

(e) a reference to notification (however described) in the Gazette is a reference to notification under the Legislation Act 2001; and

(f) a reference to the Commonwealth is a reference to the Territory; and

(g) any provision of the Corporations Act applied by this Act that is not relevant to cooperatives, or that cannot be applied to cooperatives, is to be ignored.

(3) In applying subsection (2) (e) to an instrument, the instrument is taken to be a notifiable instrument.

Note A notifiable instrument must be notified under the Legislation Act 2001.

(4) The regulations may make changes that are necessary or desirable for the effective operation of the applied provisions of the Corporations Act, and the changes take effect accordingly (except to the extent of any inconsistency with this Act).

(5) The definitions of words and expressions and other interpretative provisions contained in the Corporations Act apply in relation to provisions of the Corporations Act applied by this Act.

(6) This section has effect subject to any specific requirements of provisions of this Act that apply provisions of the Corporations Act.

(1) If a provision of this Act applies a provision (the applied provision) of the Corporations Act to cooperatives, the following provisions are also applied by force of this section and are taken to be part of this Act:

(a) the provisions of any regulation (an applied regulation) from time to time in force under the applied provision;

(b) any provision of the Corporations Act that creates an offence in relation to a contravention of the applied provision;

(c) the provisions of the Corporations Act, part 9.4B (Civil consequences of contravening civil penalty provisions) for a provision of the Corporations Act applied by this Act that is a civil penalty provision within the meaning of that part.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act 2001, s 104).

(2) The regulations may prescribe changes to any of the provisions applied by subsection (1) for their application under this section, and the provisions apply subject to the prescribed changes.

(3) If a provision of the Corporations Act or the regulations under that Act applied by this Act (including under this section) creates an offence and the penalty for that offence is provided in another provision (the penalty provision) of the Corporations Act or those regulations, the penalty provision is taken to be part of this Act for the purpose of deciding the maximum penalty applying to the offence.

(1) A provision of the Corporations Act applied by this Act applies as in force from time to time.

(2) If a group of provisions of the Corporations Act is applied by this Act (whether by the application of a chapter, part, division or otherwise), and the Corporations Act is amended to insert a new provision into the group of provisions, the new provision forms part of the group of provisions applied by this Act.

(3) Subsection (2) is subject to any changes prescribed under the regulations.

For this Act, a provision of the Corporations Act applied by a provision of this Act (the application provision) is taken to be adopted by the application provision.

(1) A cooperative is declared to be an excluded matter for the purposes of the Corporations Act, section 5F in relation to the whole of the Corporations legislation to which the Corporations Act, part 1.1A (Interaction between Corporations Legislation and State and Territory laws) applies, other than to the extent specified in subsections (3) to (5).

Note This section ensures that neither the Corporations Act nor the ASIC Act, pt 3 will apply in relation to a cooperative, other than to the extent specified in this section. The Corporations Act, s 5F provides that, if a State or Territory law declares a matter to be an excluded matter in relation to all or part of the Corporations legislation to which the Corporations Act, pt 1.1A applies (see s 5D), that legislation does not apply, except to the extent specified, in relation to that matter in the State or Territory. However, other provisions of this Act apply certain provisions of the Corporations Act to cooperatives as ACT laws.

(2) Without limiting subsection (1) and to remove any doubt, an act or omission by an entity in relation to a cooperative is declared to be an excluded matter for the purposes of the Corporations Act, section 5F in relation to the whole of the Corporations legislation to which the Corporations Act, part 1.1A applies, other than to the extent specified in subsections (3) to (5).

(3) Subsections (1) and (2) do not exclude the application of the following provisions of the Corporations legislation to cooperatives to the extent that those provisions would otherwise apply to them:

(a) provisions that relate to anything that the regulations provide is not to be excluded from the operation of the Corporations legislation;

(b) provisions that relate to the role of a cooperative in the formation of a company;

(c) provisions that relate to substantial shareholdings, by or involving a cooperative, in a company;

(d) provisions that give functions to a cooperative as a member, or former member, of a corporation;

(e) provisions relating to dealings by a cooperative in securities of a body corporate, other than securities of the cooperative itself;

(f) provisions that give functions to a cooperative in its dealings with a corporation, other than dealings in securities of the cooperative;

(g) provisions that relate to securities of a cooperative, other than shares in, debentures of or deposits with a cooperative;

(h) provisions relating to derivatives;

(i) provisions relating to—

(i) financial services licensees (within the meaning of the Corporations Act, section 761A) whose licence covers dealing in, or providing advice about, securities; or

(ii) regulated principals (within the meaning of the Corporations Act, section 1430) when dealing in, or providing advice about, securities as authorised by that Act, part 10.2 (Transitional provisions relating to the Financial Services Reform Act 2001), division 1, subdivision D;

(j) provisions relating to the carrying on of a financial services business (within the meaning of the Corporations Act, section 761A) relating to securities;

(k) provisions relating to financial statements and audits of financial statements, of—

(i) financial services licensees (within the meaning of the Corporations Act, section 761A) whose licence covers dealing in, or providing advice about, securities; or

(ii) regulated principals (within the meaning of the Corporations Act, section 1430) when dealing in, or providing advice about, securities as authorised by that Act, part 10.2 (Transitional provisions relating to the Financial Services Reform Act 2001), division 1, subdivision D;

(l) provisions relating to money and scrip of clients of—

(i) financial services licensees (within the meaning of the Corporations Act, section 761A) whose licence covers dealing in, or providing advice about, securities; or

(ii) regulated principals (within the meaning of the Corporations Act, section 1430) when dealing in, or providing advice about, securities as authorised by that Act, part 10.2 (Transitional provisions relating to the Financial Services Reform Act 2001), division 1, subdivision D;

(m) provisions relating to registers of interests in securities.

(4) To remove any doubt, subsections (1) and (2) do not exclude the operation of the following provisions of the Corporations Act, except in relation to shares in, debentures of or deposits with a cooperative:

(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).

(5) If a cooperative is directed by an order of the Supreme Court under section 88 (i) (Orders that Supreme Court may make) to become registered as a company under the Corporations Act, subsections (1) and (2) do not exclude the application of that Act to the cooperative to the extent necessary for the cooperative to be registered as a company under that Act, chapter 5B (Bodies corporate registered as companies, and registrable bodies).

(1) A body may be registered under this Act as a cooperative.

(2) A cooperative may be—

(a) a trading cooperative; or

(b) a non-trading cooperative.

(1) A trading cooperative must have a share capital.

(2) A trading cooperative is a cooperative with rules that allow it to give returns or distributions on surplus or share capital.

(3) A trading cooperative must have a membership of—

(a) for an association—2 or more cooperatives; and

(b) for a federation—2 or more associations; and

(c) for any other trading cooperative—

(i) if a number of active members less than 5 is prescribed under the regulations for this paragraph—at least that number of active members; or

(ii) in any other case—5 or more active members.

(1) A non-trading cooperative is a cooperative with rules that prohibit it from giving 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 cooperative may have a share capital.

(3) A non-trading cooperative must have a membership of—

(a) for an association—2 or more cooperatives; and

(b) for a federation—2 or more associations; and

(c) for any other non-trading cooperative—

(i) if a number of active members less than 5 is prescribed under the regulations for this paragraph—at least that number of active members; or

(ii) in any other case—5 or more active members.

(1) Before a proposed cooperative (other than an existing corporation) can be registered, a formation meeting must be held in accordance with this section.

(2) At the formation meeting—

(a) subject to section 20 (8), a disclosure statement approved under section 20 must be presented to the meeting; and

(b) the proposed rules of the cooperative approved under section 21 in relation to the proposed cooperative, and including active membership provisions in accordance with part 6, must be passed by ²/3 of the proposed members of the proposed cooperative attending the meeting; and

(c) the proposed members of the proposed cooperative must sign the application for membership; and

(d) the proposed members must elect the first directors of the proposed cooperative 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 cooperative; and

(ii) to do anything necessary to have the proposed cooperative registered.

Note If a form is approved under s 468 (Approved forms) for an application for membership, the form must be used.

(3) The formation meeting must be held—

(a) for an association—by not fewer than 2 suitably qualified cooperatives; and

(b) for a federation—by not fewer than 2 suitably qualified associations; and

(c) for any other organisation—by not fewer than 5 people (or, if a lesser number is prescribed under the regulations, not fewer than that number of people), each of whom is suitably qualified to be a member of the proposed cooperative.

(4) For 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 cooperative; and

(b) for an individual—the person is at least 18 years old; and

(c) the person satisfies the requirements for membership under the proposed rules.

(5) Each cooperative forming a proposed association and each association forming a proposed federation may be represented at the formation meeting by a single person.

(1) A draft disclosure statement of a proposed cooperative (the draft statement) must be submitted to the registrar at least 28 days (or, if the registrar allows a shorter period, that period) before the formation meeting of the proposed cooperative is proposed to be held.

(2) For a proposed trading cooperative, the draft statement 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 cooperative, including, so far as applicable—

(a) the estimated costs of formation; and

(b) the nature of the proposed membership of the cooperative; and

(c) the rights and liabilities attaching to shares in the proposed cooperative (including the capital required for the cooperative); and

(d) the projected income and expenditure of the cooperative for its first year of operation; and

(e) information about any contracts required to be entered into by the cooperative; and

(f) any other information that the registrar, by notice, requires.

(3) For a proposed trading cooperative, the draft statement 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 draft statement with the statement included in the form and context in which it is included; and

(b) there appears in the draft statement a statement that, at the time of preparation of the statement, the expert has given, and has not withdrawn, the expert’s consent.

(4) For a proposed non-trading cooperative, the draft statement must contain the information that the registrar, by written notice, requires.

Note If a form is approved under s 468 (Approved forms) for a draft statement, the form must be used.

(5) The registrar may, by notice—

(a) approve the draft statement as submitted; or

(b) amend the draft statement, or require a stated amendment of the draft statement and then approve the amended draft statement; or

(c) approve a statement different from the draft statement as submitted; or

(d) refuse to approve the draft statement; or

(e) require the person submitting the draft statement to give the registrar any additional information that the registrar reasonably requires and then act under paragraph (a), (b), (c) or (d).

(6) Approval under subsection (5) (a), (b) or (c) may be given—

(a) at any time before the formation meeting is held; and

(b) subject to the conditions (if any) the registrar states in the notice of approval.

(7) The registrar is taken to have approved the draft statement as submitted to the registrar unless, at least 5 days before the formation meeting is proposed to be held, the registrar gives—

(a) a notice under subsection (5); or

(b) notice that the registrar is still considering the matter.

(8) For a particular proposed non-trading cooperative, the registrar may, by notice, and subject to the conditions (if any) that the registrar states in the notice, dispense with the requirement to present a disclosure statement to the formation meeting.

(9) Notice by the registrar under this section must be given to the person who submitted the draft statement (the applicant), or to someone else nominated in writing to the registrar by the applicant for the purpose of receiving the notice.

(1) A draft of the rules proposed for the cooperative (including active membership provisions in accordance with part 6) must be submitted to the registrar at least 28 days (or, if the registrar allows a shorter period, that period) before the formation meeting is proposed to be held.

(2) The proposed rules must—

(a) comply with sections 102 (Content of rules—generally) and section 103 (Other requirements about contents of rules etc); and

(b) 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.

Note 1 If a form is approved under s 468 (Approved forms) for proposed rules, the form must be used.

Note 2 If the rules do not provide for a matter included in the model rules, the provision of the model rules is taken to be included in the rules (see s 106 (3))

(3) The registrar may—

(a) approve the rules as submitted; or

(b) approve rules different from the rules as submitted; or

(c) refuse to approve the rules.

(4) The registrar approves the rules by giving notice of the approval of the rules to the person who submitted them to the registrar.

(5) The registrar must give notice of the refusal to approve the rules to the person who submitted the rules to the registrar.

(1) An application for registration of a proposed cooperative (other than an existing corporation) must—

(a) be signed by—

(i) for an association or federation—at least 2 directors; and

(ii) for any other organisation—at least 5 suitably qualified members (including 2 directors elected at the formation meeting); and

(b) be accompanied by—

(i) 2 copies of the proposed rules signed and certified by the people who acted as chairperson and secretary at the formation meeting; and

(ii) for a proposed trading cooperative—a copy of the disclosure statement presented to the formation meeting signed and certified by the people 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.

Note 1 A fee may be determined under s 467 (Determination of fees) for this subsection.

Note 2 If a form is approved under s 468 (Approved forms) for an application, the form must be used.

(2) The application must be filed with the registrar within—

(a) 2 months after closure of the formation meeting for the proposed cooperative; or

(b) if the registrar, in writing, allows a longer period—that longer period.

(1) The registrar must register a proposed cooperative as a cooperative, and register its rules, if—

(a) an application is made under this division for registration of the proposed cooperative; and

(b) the registrar is satisfied it meets the requirements for registration mentioned in subsection (2).

(2) The requirements for registration of the proposed cooperative under this division are as follows:

(a) the proposed rules of the proposed cooperative must be the rules approved by the registrar under section 21;

(b) the requirements of this Act must have been complied with in relation to the proposed cooperative and compliance must be likely to continue;

(c) the proposed cooperative must be designed to function in accordance with the cooperative principles or, if it is not designed to function entirely in accordance with the cooperative principles, the registrar must be satisfied that there are special reasons why the cooperative should be registered under this Act;

(d) there must be no reasonable cause for refusing registration of the proposed cooperative.

(3) If the registrar is not satisfied that the requirements for registration of the proposed cooperative as a cooperative have been met, the registrar must—

(a) refuse to register the proposed cooperative and its rules; and

(b) give to the applicant notice setting out the reasons for the refusal.

(1) The incorporation of the cooperative takes effect on the registration of the cooperative.

(2) On the registration of the cooperative, the registrar must issue a certificate of registration.

A corporation (other than a cooperative taken to be registered under this Act) may apply to the registrar to be registered as a cooperative under this Act if the corporation is—

(a) incorporated or registered, or taken to be registered, under the Corporations Act; or

(b) incorporated or registered under any other law relating to the incorporation or registration of corporations.

(1) Before applying for registration as a cooperative, the corporation 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 allow the corporation to comply with this Act.

(2) At the meeting to pass the special resolution—

(a) the proposed rules of the proposed cooperative approved under section 21, and including active membership provisions in accordance with part 6, must also be passed by special resolution; and

(b) for a proposed trading cooperative—a disclosure statement approved under section 20 must be presented to the meeting.

An application for registration must be accompanied by—

(a) a written declaration signed by the directors or the committee of management of the corporation stating that at a meeting of the directors or committee they formed the opinion that the corporation will be able to pay its debts as they fall due; and

(b) a report about the affairs of the corporation that shows its assets and liabilities, made up to the latest practicable date before the application; and

(c) a copy of the memorandum and articles of association or rules of the corporation in force at the date of the application; and

(d) 2 copies of the proposed rules of the cooperative, as provided for by the special resolution; and

(e) for a proposed trading cooperative—a copy of the disclosure statement presented to the formation meeting held under section 26, signed and certified by the directors or committee of management of the corporation; and

(f) a list containing the name, address, occupation and place and date of birth of each director; and

(g) evidence to the satisfaction of the registrar of the incorporation of the corporation; and

(h) any other particulars that the registrar may require in a particular case.

Note 1 A fee may be determined under s 467 (Determination of fees) for this subsection.

Note 2 If a form is approved under s 468 (Approved forms) for an application or report, the form must be used.

(1) The registrar must register a corporation as a cooperative, and register its rules, if—

(a) an application is made under this division for registration of the cooperative; and

(b) the registrar is satisfied it meets the requirements for registration mentioned in subsection (2).

(2) The requirements for registration of a cooperative under this division are as follows:

(a) the proposed rules of the proposed cooperative must be the rules approved by the registrar under section 21;

(b) the requirements of this Act must have been complied with in relation to the proposed cooperative and compliance must be likely to continue;

(c) there must be no reasonable cause for refusing registration of the proposed cooperative.

(3) If the registrar is not satisfied that the requirements for registration of the cooperative have been met, the registrar must refuse to register the cooperative and its rules.

(4) If the registrar has decided under this section to register a corporation under this Act, the corporation must tell the authority responsible for registering the corporation under the law under which it was previously registered of that decision.

(5) Despite anything to the contrary in this division, the registration of a corporation as a cooperative does not take effect until the corporation ceases to be registered under the law under which it was previously registered as a corporation.

(6) The corporation must notify the registrar in writing within 7 days after the day it ceases to be registered under the other law.

(1) On the registration of the corporation as a cooperative the registrar must—

(a) issue a certificate of registration; and

(b) prepare a written notice about the issue of the certificate.

(2) A notice is a notifiable instrument.

Note A notifiable instrument must be notified under the Legislation Act 2001.

The corporate name of a corporation registered as a cooperative is the name stated in the certificate of registration issued by the registrar.

(1) The corporation is taken to be incorporated under this Act on its registration as a cooperative.

(2) Except as expressly provided in this Act, the registration and incorporation of the corporation as a cooperative does not prejudice any right of a member in relation to any shares held at the time of registration and incorporation.

(3) The change of registration and incorporation does not affect the identity of the corporation (and, in particular, the corporation is taken to be the same body after registration as it was before).

(1) A cooperative may, by alteration of its rules, convert from—

(a) a cooperative with share capital to a cooperative without share capital or vice versa; or

(b) a trading cooperative to a non-trading cooperative or vice versa.

(2) An alteration of the rules for the conversion of a cooperative must be approved by special resolution passed by a special postal ballot.

(1) This section applies to a cooperative 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 financial profit of its members.

(2) An instrument transferring to a cooperative to which this section applies any property that was, immediately before the cooperative was incorporated, held by or on behalf of the unincorporated club, association or body is not chargeable with stamp duty.

(1) A proposed cooperative or anyone on its behalf or otherwise that accepts any money for the proposed cooperative before the proposed cooperative is registered must hold the money on trust until the cooperative is registered.

Maximum penalty: 50 penalty units.

(2) If a cooperative is not registered within 3 months after the acceptance of any money under subsection (1), the proposed cooperative or the person who accepted the money on its behalf must refund the money to the person who paid it.

Maximum penalty: 50 penalty units.

If the registrar is satisfied that the original certificate of registration issued under section 24 (Incorporation of proposed cooperative and certificate of registration) or section 29 (Certificate of registration etc on registration of corporation), or a duplicate certificate issued under this section, for a cooperative is lost, stolen or destroyed, the registrar must issue a duplicate certificate.

Note A fee may be determined under s 467 (Determination of fees) for this section.

A cooperative—

(a) is a corporation; and

(b) has perpetual succession; and

(c) has a common seal; and

(d) may sue and be sued in its corporate name; and

(e) may take, buy, lease, hold, sell and dispose of real and personal property.

Without limiting any other provision of this Act, a cooperative has power—

(a) to form or take part in the formation of a corporation or unit trust; and

(b) to acquire interests in and sell or otherwise dispose of interests in corporations, unit trusts and joint ventures; and

(c) to form or enter into a partnership, joint venture or other association with other entities.

In this division:

doing, an act by a cooperative, includes the following:

(a) the making of an agreement by the cooperative;

(b) a transfer of property to or by the cooperative.

legal capacity includes powers.

The objects of this division are—

(a) to provide that the doctrine of ultra vires does not apply to cooperatives; and

(b) without affecting the validity of a cooperative’s dealings with others, to ensure that the cooperative’s officers and members give effect to the provisions of the cooperative’s rules relating to the primary activities or powers of the cooperative.

(1) A cooperative has, both within and outside the ACT and Australia, the legal capacity of an individual.

(2) Without limiting subsection (1), a cooperative has, both within and outside the ACT and Australia, power—

(a) to issue and allot fully or partly paid shares in the cooperative; and

(b) to issue debentures of the cooperative; and

(c) to distribute any of the property of the cooperative 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 cooperative; and

(f) to procure the cooperative to be registered or recognised as a corporation in any place outside the ACT and Australia; 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 ACT or Australia).

(3) Subsections (1) and (2) apply in relation to a cooperative—

(a) subject to this Act, but despite section 41 (2); and

(b) if the cooperative’s rules contain an express or implied restriction on, or an express or implied prohibition of, the exercise by the cooperative of any of its powers—despite that restriction or prohibition; and

(c) if the rules of the cooperative contain a provision stating the objects of the cooperative—despite that fact.

(4) The fact that the doing of an act by a cooperative would not be, or is not, in its best interests does not affect its legal capacity to do the act.

(1) A cooperative’s rules may contain an express restriction on, or an express prohibition of, the exercise by the cooperative of a power of the cooperative.

(2) A cooperative contravenes this section if—

(a) it exercises a power contrary to an express restriction in the cooperative’s rules on, or an express prohibition in the cooperative’s rules of, the exercise of the power; or

(b) the rules of the cooperative contain a provision stating the objects of the cooperative and the cooperative does an act otherwise than in pursuance of the objects.

(3) An officer of a cooperative who is involved in a contravention by the cooperative of this section also contravenes this section.

(4) Contravention of this section is not an offence.

(1) The exercise of a power or the doing of an act in contravention of section 41 is not invalid only because of the contravention.

(2) An act of an officer of a cooperative is not invalid only because, by doing the act, the officer contravenes section 41.

(3) The fact that the exercise of a power or the doing of an act contravenes or would contravene section 41 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 4.5 (Oppressive conduct of affairs); or

(c) an application for an injunction under section 456 to restrain the cooperative from entering into an agreement; or

(d) a proceeding (other than an application for an injunction) by the cooperative, or by a member of the cooperative, against the present or former officers of the cooperative; or

(e) an application by the registrar or by a member of the cooperative for the winding-up of the cooperative.

(4) If, apart from subsection (3), the Supreme Court would have power under section 456 to grant, on the application of a person, an injunction restraining a cooperative or an officer of a cooperative from engaging in particular conduct in contravention of section 41, the court may, on the application of the person, order the cooperative or the officer to pay damages to the person or anyone else.

(1) Subject to section 45, a person is entitled to make the assumptions mentioned in section 44 in relation to—

(a) dealings with a cooperative; and

(b) dealings with a person who has, or purports to have, directly or indirectly acquired title to property from a cooperative.

(2) If a person is entitled to assume a matter, the cooperative or anyone mentioned in subsection (1) (b) is not entitled to assert in a proceeding in relation to the dealings that the matter is incorrect.

(1) The assumptions that a person may make are as follows:

(a) that the cooperative’s rules have been complied with;

(b) that anyone who appears, from information provided by the cooperative that is available to the public from the registrar, to be a director or officer of the cooperative—

(i) has been properly appointed; and

(ii) has authority to exercise the functions customarily exercised by a director or officer of a similar cooperative;

(c) that anyone who is held out by the cooperative to be an officer or agent of the cooperative—

(i) has been properly appointed; and

(ii) has authority to exercise the functions customarily exercised by that kind of officer or agent of a similar cooperative;

(d) that anyone who is, or may be assumed to be, an officer or agent of the cooperative who has 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;

(e) that a document has been properly executed by the cooperative if it is signed by 2 people, 1 of whom is, or may be assumed to be, a director of the cooperative, and the other a director or officer of the cooperative;

(f) that a document has been properly sealed by the cooperative if it bears what appears to be an impression of the cooperative’s seal and the sealing of the document appears to be witnessed by 2 people, 1 of whom is, or may be assumed to be, a director of the cooperative, and the other a director or officer of the cooperative;

(g) that the officers and agents of the cooperative properly exercise their duties to the cooperative.

A person is not entitled under section 43 to make an assumption if, at the material time—

(a) the person has actual knowledge that the assumption is not correct; or

(b) the person’s connection or relationship with the cooperative is such that the person ought to know that the assumption is not correct.

(1) A person is not taken to have knowledge of a cooperative’s rules, any of the contents of a cooperative’s rules, a document, the contents of a document, or any particulars, only because of either or both of the following:

(a) the rules, the document or the particulars have been filed with the registrar;

(b) the rules, the document or the particulars are mentioned in any other document that has been filed with the registrar.

(2) Subsection (1) does not apply in relation to a document, or in relation to the contents of a document, that has been filed under schedule 3 to the extent that the document relates to a charge that is registrable under that schedule.

(3) Despite subsection (1), a member of a cooperative is taken to have knowledge of the rules of the cooperative.

(4) A reference in this section to rules, a document or particulars filed with the registrar is taken to include rules, a document or particulars filed or lodged with a person under a provision of the Co-operative Societies Act 1939 corresponding to a provision of this Act.

(5) Subsection (4) and this subsection expire 2 years after the commencement of this section.

(1) A person’s entitlement under this division to make an assumption is not affected only by the fact that anyone—

(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 to which the assumption relates that appears to have been sealed on behalf of a cooperative.

(2) A person is not entitled to make the assumption if the person has actual knowledge of such fraudulent action or forgery.

A document or proceeding requiring authentication by a cooperative may be authenticated under the common seal of the cooperative.

(1) A cooperative may, if authorised by its rules, have, for use outside the ACT in place of its common seal, 1 or more official seals, each of which is a facsimile of the common seal of the cooperative with the addition on its face of the name of every place where it is to be used.

(2) The person attaching an official seal must, by writing signed by the person, certify on the instrument to which it is attached the date when and the place where it is attached.

(3) A document sealed with an official seal is taken to be sealed with the common seal of the cooperative.

A document or proceeding requiring authentication by a cooperative may be authenticated, whether or not under the seal of the cooperative, by the signature of 2 people—

(a) both of whom are directors of the cooperative; or

(b) 1 of whom is a director, and the other of whom is an officer, of the cooperative.

(1) A cooperative may, by writing under its common seal, authorise a person, either generally or in relation to a particular matter, as its agent or attorney to execute deeds on its behalf.

(2) A deed signed by the agent or attorney on behalf of the cooperative and under the seal of the agent or attorney, or under the appropriate official seal of the cooperative, binds the cooperative and has effect as if it were under the common seal of the cooperative.

(3) The authority of the agent or attorney, as between the cooperative and a person dealing with the agent or attorney, continues during—

(a) if the instrument giving the authority specifies the period during which the authority continues—that period; or

(b) in any other case—until notice of the revocation or termination of the authority of the agent or attorney has been given to the person dealing with the agent or attorney.

A contract or other document executed, or purporting to have been executed, under the seal of a cooperative is not invalid only because a person attesting the attaching of the seal was in any way, whether directly or indirectly, interested in that contract or other document or in the matter to which the contract or other document relates.

(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 cooperative may make, vary or discharge a contract in the name of, or on behalf of, the cooperative as if that contract were made, varied or discharged by an individual.

(2) The making, varying or discharging of a contract in accordance with subsection (1) is effective in law and binds the cooperative and other parties to the contract.

(3) This section does not prevent a cooperative from making, varying or discharging a contract under its seal.

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.

(1) 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 cooperative whether it gives its authority before, on or after that commencement.

(2) This section expires 2 years after it commences.

(1) If a person enters into, or purports to enter into, a contract (the pre-registration contract) on behalf of, or for the benefit of, a proposed cooperative, the cooperative becomes bound by the contract and entitled to its benefit if the cooperative, or a cooperative 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 cooperative 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) Subject to section 57 (3), the person who entered into, or purported to enter into, the pre-registration contract is liable to pay damages to each other party to the contract if a cooperative is not registered, or a cooperative 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) if a period agreed to by the parties to the contract—within that period.

(4) The maximum amount of damages the person is liable to pay to a party is the amount the cooperative would be liable to pay to the party if the cooperative had been registered and had ratified the contract and then completely failed to perform it.

(5) If a proceeding is brought to recover damages under subsection (3) because the cooperative is registered but does not ratify the pre-registration contract or enter into a substitute for it, the court may do anything that it considers just in the circumstances, including ordering the cooperative—

(a) to pay all or part of the damages that the person is liable to pay; and

(b) to transfer property that the cooperative received because of the contract to a party to the contract; and

(c) to pay an amount to a party to the contract.

(6) If the cooperative 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 cooperative is ordered to pay.

(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 that contract.

(2) The release must be in writing.

(3) The party giving the release is not entitled to recover damages under section 56 from the person.

(4) Despite any rule of law or equity, the person does not have any right of indemnity against the cooperative in relation to the person’s liability under this division.

(5) Subsection (4) applies even if the person was acting, or purporting to act, as trustee for the cooperative.

This division replaces any rights or liabilities anyone would otherwise have in relation to the pre-registration contract.

(1) On the registration of a cooperative, the people who signed the application for registration become members of the cooperative.

(2) Other people may be admitted as members of the cooperative as provided by its rules.

(3) A person under 18 years old may be admitted as a member of the cooperative unless the rules of the cooperative otherwise provide.

(4) A corporation is not disqualified, because of being a corporation, from being a member of a cooperative unless the cooperative’s rules otherwise provide.

(5) If 2 or more cooperatives merge, the members of the merged cooperative are—

(a) the members of the merging cooperatives; and

(b) other people admitted as members of the merged cooperative in accordance with its rules.

(1) The members of an association are—

(a) the component cooperatives by which the association is formed; and

(b) any other cooperative admitted to membership in accordance with the rules of the association; and

(c) any other corporation or other body admitted to membership under subsection (2).

(2) A corporation or other body (other than a cooperative) may be admitted to membership of the association as a component cooperative if—

(a) it is incorporated or registered under any other law, whether or not a Territory law; and

(b) in the opinion of the board of the association, it is designed to function in accordance with cooperative principles; and

(c) it is eligible to be admitted to membership in accordance with the rules of the association.

(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 corporations admitted to membership under subsection (2).

(2) If the registrar certifies that there is no association to which a particular corporation could conveniently or appropriately be admitted to membership, the corporation may be admitted to membership of a federation.

(1) A person is qualified to be admitted to membership of a cooperative only if—

(a) there are reasonable grounds for believing that the person will be an active member of the cooperative; and

(b) the person is eligible under the rules of the cooperative.

(2) The rules of a cooperative must contain provisions that—

(a) impose a duty on everyone who becomes a member to be an active member; and

(b) explain the consequences of failing to be or ceasing to be an active member.

Membership of a cooperative may be individual or, unless the rules of the cooperative provide otherwise, may be joint.

(1) A member of a cooperative 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 18 years old may not hold an office in a cooperative.

(3) A member of a cooperative who is under 18 years old may not vote.

(4) This section applies only to individuals.

(1) If a corporation is a member of a cooperative, it may by notice served on the cooperative appoint a person to represent it in relation to its membership.

(2) The power to appoint a representative is subject to any restriction imposed by the rules of the cooperative about the entitlement of a person to represent a corporation.

(3) If the corporation is a company that is not a listed corporation, a person is not qualified to be appointed the representative of the company unless the person is an officer (within the meaning of the Corporations Act), member or employee of the company.

On the request of the board of a cooperative, a corporation that is a member of the cooperative must make available for inspection by the board—

(a) a list of the names of all the shareholders of the corporation and the number of shares held by each shareholder; or

(b) for a corporation without share capital—a list of the members of the corporation.

Maximum penalty: 20 penalty units.

(1) A person ceases to be a member of a cooperative in each of the following circumstances:

(a) the person’s membership is cancelled under part 6 (Active membership);

(b) the person is expelled or resigns in accordance with the rules of the cooperative;

(c) the person becomes bankrupt, or the person’s property becomes subject to control under the law relating to bankruptcy, unless the rules of the cooperative otherwise provide;

(d) the person dies;

(e) the contract of membership is rescinded on the ground of misrepresentation or mistake;

(f) for a corporation—the corporation 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 someone else is registered in the member’s place.

If a cooperative has a share capital, a person also ceases to be a member in each of the following circumstances:

(a) the person’s share is transferred to someone else in accordance with the rules of the cooperative, and the transferee is registered as holder in the person’s place;

(b) the person’s share is forfeited under this Act or the rules of the cooperative;

(c) the person’s share is sold by the cooperative under a power given by the rules of the cooperative, and the purchaser is registered as holder in the person’s place;

(d) the person’s share is purchased by the cooperative under this Act;

(e) the amount paid up on the person’s shares is repaid to the person in accordance with the rules of the cooperative.

(1) If a cooperative continues to carry on business for more than 28 days after the day the number of members is reduced below the minimum number of members allowed, every person who is a director of the cooperative while it so continues to carry on business, and who knows it is carrying on business with fewer than the minimum number of members allowed, commits an offence.

Maximum penalty: 20 penalty units.

(2) Each person who commits an offence against subsection (1) is also liable to satisfy all obligations of the cooperative incurred after the 28 days mentioned in that subsection, 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; or

(b) for any other cooperative—5 or, if a lesser number is prescribed under the regulations, that number.

(4) The registrar may, by notice, extend and further extend in a particular case the period of 28 days mentioned in subsection (1).

(5) An application for an extension must be made before the period to be extended ends.

Note If a form is approved under s 468 (Approved forms) for an application, the form must be used.

A member of a cooperative 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 any payment to the cooperative in relation to membership or acquired any share or interest provided under the rules of the cooperative.

The board of a cooperative must ensure that the name of a person admitted to membership is recorded in the register of members within 28 days after the day the person is admitted to membership.

Maximum penalty: 20 penalty units.

(1) A member of a cooperative is not, as a member, under any personal liability to the cooperative, except as provided by this section.

(2) A member of a cooperative with a share capital is liable to the cooperative for the amount (if any) unpaid on the shares held by the member together with any charges payable by the member to the cooperative as required by the rules of the cooperative.

(3) A member of a cooperative without a share capital is liable to the cooperative for any charges payable by the member to the cooperative as required by the rules of the cooperative.

(1) The board of a cooperative must provide each person intending to become a member of the cooperative with—

(a) a consolidated copy of the rules of the cooperative; and

(b) a copy of all special resolutions passed by the members of the cooperative that will apply to the person as a member, except special resolutions providing for an alteration of the rules of the cooperative; and

(c) a copy of the last annual report (if any) of the cooperative.

(2) The board of a cooperative may comply with subsection (1) by—

(a) giving the person intending to become a member notice that the documents mentioned in that subsection may be inspected by the person at—

(i) the registered office of the cooperative; and

(ii) at any other office of the cooperative (whether the office is in the ACT, elsewhere in Australia or outside Australia); and

(b) making those documents available for inspection at the registered office and any offices to which paragraph (a) (ii) applies.

(1) The rules of a cooperative may—

(a) require the payment by members of entry fees and regular subscriptions; and

(b) authorise the amount of entry fees and regular subscriptions, based on the business done by shareholders with the cooperative; and

(c) provide for the repayment of the fees and subscriptions on a person ceasing to be a member.

(2) The amount of a particular member’s regular subscription may be worked out by reference to the amount of business the member does with the cooperative.

(3) A cooperative must give to anyone intending to become a member notice of any entry fees or regular subscriptions payable by a member to the cooperative.

(4) A person who becomes a member of the cooperative is not liable to pay any entry fees or regular subscriptions except—

(a) fees or subscriptions of which the person was given notice before becoming a member; and

(b) any regular subscriptions that may be imposed by any subsequent alteration of the rules and of which the member has been given notice.

(1) A cooperative may impose a fine on a member for any infringement of the rules of the cooperative if the rules of the cooperative so provide.

(2) A fine imposed under subsection (1) must not exceed the maximum fine (if any) specified by the cooperative’s rules.

(3) A fine may be imposed only if—

(a) notice of intention to impose a 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 cooperative may set off the fine against any amount owing to the member in relation to any produce delivered by the member to the cooperative, but the fine must not be set off against any advance owing to the member from the cooperative in accordance with the rules against produce so delivered.

(1) A cooperative has, in relation to any debt owing by a member or former member to the cooperative, 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 former member;

(b) any rebate, bonus, dividend or interest payable to the member or former 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 cooperative may set off any amount paid on account of the share or other thing, or any amount credited or payable to the member or former member, in or towards payment of the debt.

(3) The charge created by this section may be enforced by the appropriation by the cooperative of the share or other thing subject to the charge, but only after at least 7 days notice has been given to the member or former member.

(4) Any share in relation to which capital has been appropriated must be cancelled.

(1) If a member is expelled from a cooperative in accordance with its rules, the cooperative must, within 1 year after the day of the expulsion—

(a) repay to the former member an amount (the repayable amount) equal to the amount paid up on the shares held by the former member at the expulsion, less any amount owed by the former member to the cooperative at the expulsion under the rules of the cooperative or any contract or otherwise; or

(b) apply, in accordance with subsection (2), the repayable amount if—

(i) the board is of the opinion that repayment would adversely affect the financial position of the cooperative; or

(ii) the board and the former member agree.

(2) The repayable amount may be applied in 1 of the following ways:

(a) the cooperative may appropriate the amount owing as a donation to the cooperative, but only if the former member agrees in writing to the donation;

(b) if the cooperative is a deposit-taking cooperative—the cooperative may apply the amount as a deposit by the former member with the cooperative;

(c) the cooperative may allot or issue debentures of the cooperative to the former member in satisfaction of the amount.

(3) However, the deposit or debenture must be repaid at the time required under section 135 (2).

(4) Payment of any amount payable under this section must be made at the time decided by the board of the cooperative, but not later than 1 year after the day of the expulsion.

(5) Shares in relation to which capital has been repaid must be cancelled.

In this division:

interest, in relation to a dead member of a cooperative, includes—

(a) the member’s membership; and

(b) any credit balance owing to the member; and

(c) any loan from or to the member, or deposit by the member with the cooperative; and

(d) any surplus arising on the sale by the cooperative as mortgagee of any property mortgaged by the member to the cooperative.

Subject to section 170 (Transfer on death of member), on the death of a member, the board must transfer the member’s share or interest in the cooperative to—

(a) the personal representative of the member; or

(b) to the person that the member’s personal representative specifies in an application made to the cooperative within 3 months after the death of the member.

(1) If the total value of a dead member’s shares or interest in a cooperative is less than $10 000 (or, if another amount is prescribed under the regulations, that amount), the board may, on the basis of the evidence it considers sufficient, transfer the shares or interest to—

(a) if the member died leaving a valid will—the person who appears to the board to be entitled to the shares or interest under the will of the member; or

(b) if the member died without leaving a valid will—anyone who appears to the board to be entitled to obtain a grant of administration of the estate of the member.

(2) A person to whom shares or an interest of a dead member is transferred under subsection (1) (b) holds the shares or interest on the trusts that the person would have held the shares or interest on if the person had obtained a grant of administration of the estate of the member.

(3) A transfer must not be made under this section after evidence has been produced to the cooperative of the grant of letters of administration of the estate, or probate of the will, of the dead member.

(4) In this section:

transfer, of an interest, includes the payment of money.

The value of the shares or interest of a dead member must be decided for this division in accordance with the rules of the cooperative.

Any transfer of property made by the board of a cooperative to a person in accordance with this division is effective against any demand made on the cooperative by anyone else.

(1) The rules of a cooperative 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 cooperative.

(2) A member may appoint anyone to act on behalf of the member in the grievance procedure.

(3) The grievance procedure must require natural justice to be applied.

(4) In this section:

member includes anyone who was a member at any time during the 6 months that ended on the day when the dispute happened.

(1) The Supreme Court may, on the application of a cooperative or a member of a cooperative, make an order declaring and enforcing—

(a) the rights or liabilities of members of the cooperative between themselves; or

(b) the rights or liabilities of the cooperative 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 cooperative.

(3) The Supreme 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 cooperative, any other available way 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 proceeding.

(4) In this section:

member includes anyone who was a member at any time during the 6 months that ended on the day when the dispute happened.

In this division:

member, of a cooperative that has a share capital, includes a person to whom a share in the cooperative has been transmitted by will or by operation of law.

This division does not apply in relation to anything done under part 6 (Active membership).

The following people may apply to the Supreme Court for an order under this division:

(a) the registrar;

(b) a member who believes that the affairs of the cooperative are being conducted in a way that is—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii) 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 cooperative, or a resolution, or a proposed resolution, of a class of members, was or would be—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii) contrary to the interests of the members as a whole.

(1) On application under this division, the Supreme Court may make any order it considers appropriate.

(2) The orders that may be made include (but are not limited to) the following:

(a) an order that the registrar appoint an administrator of the cooperative;

(b) an order that the cooperative be wound up;

(c) an order for regulating the conduct of affairs of the cooperative in the future;

(d) an order for the repayment under this Act of the member’s shares;

(e) an order for the purchase of the shares of any member by the cooperative and for the reduction accordingly of the cooperative’s capital;

(f) an order directing the cooperative to bring, continue, defend or discontinue a proceeding, or authorising a member of the cooperative to bring, continue, defend or discontinue a proceeding in the name and on behalf of the cooperative;

(g) an order appointing a receiver or a receiver and manager of property of the cooperative;

(h) an order restraining a person from engaging in conduct or doing anything;

(i) an order directing a cooperative to take steps necessary for it to become registered as a company under the Corporations Act;

(j) an order requiring a person to do anything;

(k) an order about costs.

The Supreme Court may make an order under this division if it is of the opinion—

(a) that the affairs of a cooperative are being conducted in a way that is—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member, whether or not in the capacity of a member; or

(ii) 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 cooperative, or a resolution, or a proposed resolution, of a class of members of a cooperative, was or would be—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member, whether or not in the capacity of a member; or

(ii) contrary to the interests of the members as a whole.

(1) The Supreme Court need not make an order under this division for the winding-up of a cooperative if it is of the opinion that the winding-up of the cooperative would unfairly prejudice an oppressed member.

(2) In this section:

oppressed member means a member mentioned in section 89 (a) (i) or (b) (i).

If an order that a cooperative be wound up is made under this division, the provisions of this Act relating to the winding-up of cooperatives apply, with any necessary changes, as if the order had been made on an application filed in the Supreme Court by the cooperative.

If an order under this division makes any alteration to the rules of a cooperative—

(a) the alteration has effect as if it had been made by special resolution of the cooperative; and

(b) the cooperative must not (despite any other provisions of this Act) without the leave of the Supreme Court make any further alteration to the rules inconsistent with the provisions of the order.

An applicant for an order under this division must file an office copy of the order with the registrar within 14 days after the day it is made.

Maximum penalty: 10 penalty units.

(1) A person may bring a proceeding on behalf of a cooperative, or intervene in a proceeding to which a cooperative is a party for the purpose of taking responsibility on behalf of the cooperative for the proceeding or a step in the proceeding (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 cooperative or of a related corporation; or

(ii) an officer or former officer of the cooperative; or

(iii) the registrar; and

(b) the person is acting with leave granted under section 95.

(2) A proceeding brought on behalf of a cooperative may be brought in the cooperative’s name.

(1) For section 94 (1), a person mentioned in section 94 (1) (a) may apply to the Supreme Court for leave to bring, or to intervene in, a proceeding.

(2) The Supreme Court may grant the leave if satisfied that—

(a) the cooperative is unlikely to bring the proceeding, or properly take responsibility for the proceeding or the step in the proceeding; and

(b) the applicant is acting honestly; and

(c) it is in the best interests of the cooperative that the applicant be granted leave; and

(d) if the applicant is applying for leave to bring the proceeding—there is a serious question to be tried; and

(e) either—

(i) at least 14 days before making the application, the applicant gave notice to the cooperative of the applicant’s intention to apply for leave and of the reasons for applying; or

(ii) it is otherwise appropriate to grant leave.

(1) Any of the following people may apply to the Supreme Court for an order that they be substituted for a person to whom leave has been granted under section 95:

(a) a member, former member, or person entitled to be registered as a member, of the cooperative or a related corporation;

(b) an officer, or former officer, of the cooperative;

(c) the registrar.

(2) The application may be made whether or not the other person has already brought the proceeding or made the intervention.

(3) The Supreme Court may make the order if it is satisfied that—

(a) the applicant is acting honestly; and

(b) it is appropriate to make the order.

(4) An order substituting a person for someone else 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 proceeding or intervened—the substituted person is taken to have brought the proceeding or to have made the intervention.

(1) A ratification or approval of conduct by members of a cooperative—

(a) does not prevent a person from bringing or intervening in a proceeding with leave under section 95 or from applying for leave under that section; and

(b) does not have the effect that a proceeding brought or intervened in with leave under section 95 must be decided in favour of the defendant or that an application for leave under that section must be refused.

(2) The Supreme Court may take into account a ratification or an approval of the conduct by members of a cooperative in deciding what order or judgment (including about damages) to make in a proceeding brought or intervened in with leave under section 95 or in relation to an application for leave under that section.

(3) In taking a ratification or approval into account under subsection (2), the Supreme 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.

A proceeding brought, or intervened in, with leave under section 95 may be discontinued, compromised or settled only with the leave of the Supreme Court.

(1) The Supreme Court may make any orders, and give any directions, it considers just in relation to a proceeding brought or intervened in with leave under section 95, or in relation to an application under this division for leave, including—

(a) interim orders; and

(b) directions about the conduct of the proceeding (including requiring mediation); and

(c) an order directing the cooperative, or an officer of the cooperative, to do or not to do anything; and

(d) an order appointing an independent person to investigate, and report to the Supreme Court, on—

(i) the financial affairs of the cooperative; or

(ii) the facts or circumstances that gave rise to the cause of action the subject of the proceeding; or

(iii) the costs incurred in the proceeding and the person granted leave.

(2) A person appointed by the Supreme Court under subsection (1) (d) is entitled, on giving reasonable notice (whether oral or in writing) to the cooperative, to inspect and make copies of any books of the cooperative for any purpose related to their appointment.

The Supreme Court may, in relation to a proceeding brought or intervened in with leave under section 95 or an application for leave under that section, make any orders it considers just about the costs of the person who applied for or was granted leave, of the cooperative or of any other party to the proceeding or application (including an order requiring indemnification for costs).

(1) The rules of a cooperative have the effect of a contract under seal—

(a) between the cooperative and each member; and

(b) between the cooperative and each director, the principal executive officer and the secretary of the cooperative; and

(c) between a member and each other member.

(2) Under the contract, each of those people agrees to observe and perform the provisions of the rules as in force from time to time so far as the provisions apply to the person.

The rules of the cooperative must comply with the requirements mentioned in schedule 2, and prescribed under the regulations, that apply to that cooperative.

(1) The rules must be divided into paragraphs numbered consecutively.

(2) The rules may state the objects of the cooperative.

(3) The rules may incorporate any provision of the model rules approved under section 106.

(4) The rules may provide for the imposition of a fine on a member for any infringement of the rules.

(5) If the rules provide for the imposition of a fine, the rules must specify the maximum fine that may be imposed on a member.

(6) The maximum fine provided under the rules must not exceed any amount prescribed under the regulations as the maximum fine.

(7) The rules may contain other provisions not inconsistent with this Act or another Territory law.

(1) A member is entitled to obtain from a cooperative a copy of its rules on payment of the amount required by the rules of the cooperative or, if the rules do not require an amount, on payment of $5 (plus any GST payable in relation to the supply).

(2) The amount required by the rules must not exceed the fee (if any) determined under section 467 (Determination of fees) for obtaining a copy of the rules from the registrar.

(3) A person is entitled to obtain a copy of the rules of a cooperative from the registrar.

Note A fee may be determined under s 467 (Determination of fees) for this subsection.

(1) A person who gives to a member of a cooperative, or to a person intending or applying to become a member of a cooperative, a copy of any rules or alterations of rules, other than rules or alterations that have been properly registered, must not represent that they are binding on the members of the cooperative.

Maximum penalty: 10 penalty units.

(2) A person who alters any of the rules of a cooperative after they have been registered, and circulates them representing that they have been properly registered if they have not been, commits an offence.

Maximum penalty: 10 penalty units.

(1) The registrar may, in writing, approve model rules for cooperatives.

Note Power given under an Act to make an instrument (including model rules) includes power to amend or repeal the instrument (see Legislation Act 2001, s 46 (1)).

(2) The model rules may make provision for anything for which the rules of a cooperative may make provision.

(3) If the model rules provide for a matter and the rules of a cooperative to which the model rules apply do not provide for the matter, the provision of the model rules relating to the matter is taken to be included in the rules of the cooperative.

(4) Model rules approved under this section are a notifiable instrument.

Note 1 A notifiable instrument must be notified under the Legislation Act 2001.

Note 2 An amendment or repeal of the model rules is also a notifiable instrument (see Legislation Act 2001, s 46 (2)).

The rules of a cooperative may only be altered in accordance with this Act.

A resolution altering the rules may be passed by a cooperative or the board of a cooperative only if the proposed alteration of the rules has been approved in writing by the registrar.

(1) A draft of the proposed alteration of the rules of a cooperative must be given to the registrar at least 28 days (or, if the registrar allows a shorter period, that period) before the day—

(a) notice of the proposed special resolution altering the rules is given to the members by the cooperative; or

(b) the resolution is passed by the board of the cooperative.

(2) The proposed alteration must—

(a) comply with section 102 (Content of rules—generally) and section 103 (Other requirements about contents of rules etc); and

(b) be accompanied by a statement setting out the reasons for the alteration.

Note If a form is approved under s 468 (Approved forms) for a proposed alteration, the form must be used.

(3) The registrar may—

(a) approve the proposed alteration as submitted; or

(b) approve a different alteration to the proposed alteration as submitted; or

(c) refuse to approve the proposed alteration.

(4) If the registrar approves the proposed alteration, the registrar must give notice of the approval to the person who submitted the alteration to the registrar.

(5) If the registrar refuses to approve the proposed alteration, the registrar must give notice of the refusal to the person who submitted the alteration to the registrar.

An alteration of rules of a cooperative must be made by special resolution unless otherwise provided by this Act.

(1) The rules of a cooperative may be altered by a resolution passed by the board if the alteration does no more than give effect to a requirement, restriction or prohibition made under this Act.

(2) If the rules of a cooperative are altered under this section, the cooperative must tell its members in writing about the alteration—

(a) as soon as practicable after the alteration takes effect; and

(b) not later than the day when notice is given to the members of the next annual general meeting of the cooperative after the alteration takes effect.

(1) An application for registration of an alteration must—

(a) be made within 28 days after the day the alteration is made or, if another period is prescribed under the regulations, that period; and

(b) be accompanied by a consolidated copy of the rules of the cooperative (including the alteration).

Note If a form is approved under s 468 (Approved forms) for an application, the form must be used.

(2) The registrar must register the alteration unless the registrar refuses to register it under subsection (3).

(3) The registrar must refuse to register the alteration if—

(a) the registrar is satisfied that the alteration is contrary to this Act; or

(b) the registrar has other reasonable cause to refuse to register the alteration.

(4) The registrar must give notice of the decision to the person who applied for registration of the alteration.

(5) A certificate of registration of any alteration of the rules of a cooperative given by the registrar is, in favour of anyone advancing money to the cooperative on the faith of the certificate or in favour of any guarantor of that advance, conclusive evidence that the alteration was properly made.

An alteration of the rules of a cooperative takes effect only if it is registered by the registrar.

A primary activity of a cooperative is an activity that the rules of the cooperative provide is a primary activity of the cooperative.

For this Act, a member of a cooperative is an active member of the cooperative if the member—

(a) uses or supports an activity of, or maintains a relationship or an arrangement with, the cooperative, in relation to the carrying on of a primary activity of the cooperative, in the way and to the extent that the rules of the cooperative provide is sufficient to establish active membership; or

(b) maintains any other relationship or arrangement with the cooperative in relation to the carrying on of a primary activity of the cooperative that the regulations provide is sufficient to establish active membership.

(1) The active membership provisions of the rules of a cooperative are the provisions of the rules that specify—

(a) the activities of the cooperative that are its primary activities; and

(b) how, and to what extent, a member of the cooperative is required to use or support an activity of, or maintain a relationship or an arrangement with, the cooperative, in relation to the carrying on of a primary activity of the cooperative, to establish active membership of the cooperative.

(2) An active membership resolution is a resolution that would, if given effect to, make or amend active membership provisions in the rules of a cooperative.

A cooperative must have at least 1 primary activity.

The board of a cooperative must ensure that the rules of the cooperative contain active membership provisions in accordance with this part.

(1) The board of a cooperative must ensure that the relevant factors and considerations are taken into account in deciding—

(a) which of the activities of a cooperative are its primary activities; and

(b) how, and to what extent, a member is required to use or support an activity of, or maintain a relationship or an arrangement with, a cooperative, in relation to the carrying on of a primary activity of the cooperative, to establish active membership of the cooperative.

(2) The relevant factors and considerations are—

(a) the primary activity (or, if there are 2 or more primary activities, the primary activities taken together) must constitute the basic purpose for which the cooperative exists and make a significant contribution to the business of the cooperative; and

(b) the requirements decided under subsection (1) (b) must be reasonable, when considered in relation to the activities of the cooperative as a whole; and

(c) any other factors and considerations prescribed under the regulations.

(3) The regulations may—

(a) provide for the matters to be taken into account in deciding whether an activity makes (or activities make) a significant contribution to the business of the cooperative; and

(b) specify minimum percentages of turnover, minimum amounts of income or minimum amounts of business necessary to constitute that significant contribution.

(4) This section does not limit the right of active members, other than the board of the cooperative, to propose an active membership resolution.

The only active membership provisions that may be contained in the rules of a trading cooperative are—

(a) provisions specifying activities associated with the cooperative’s primary activities that are available for members of the cooperative to use or support if they wish to establish active membership; and

(b) any other active membership provisions that the registrar may approve.

(1) Active membership provisions for a non-trading cooperative may include provision that the payment of a regular subscription by a member of the cooperative, to be applied in relation to a primary activity of the cooperative, is sufficient to establish active membership of the cooperative.

(2) A member of a cooperative who would, on payment of such a subscription, be an active member of a cooperative is taken to be an active member until the subscription is owing.

(1) At least 21 days notice must be given to members of a cooperative 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) state whether the member is eligible to vote on the resolution; and

(b) state the full text of the proposed resolution; and

(c) contain a copy of section 126 (Cancellation of membership of inactive members).

(3) If the notice to a member states that the member is not eligible to vote on a resolution, the member may, after trying to settle the matter with the cooperative, apply to the registrar for a decision about the member’s eligibility.

(4) The registrar may decide the matter, on the information available to the registrar, by written direction to the cooperative and the member.

(5) The registrar’s decision about eligibility has effect but only if given before the meeting is proposed to be held.

The only members of a cooperative who are eligible to vote on an active membership resolution if the rules do not contain active membership provisions are the members who would be active members if the resolution had already taken effect.

If the board is meeting to consider a proposal to submit an active membership resolution to a meeting of the cooperative—

(a) subject to paragraph (b), a director is only eligible to vote on that proposal if the director would be eligible to vote on the resolution at the meeting of the cooperative; or

(b) if fewer than 2 directors (whether or not they are present at the meeting of the board) would be eligible to vote on the resolution at the meeting of the cooperative—all the directors are eligible to vote on that proposal at the meeting of the board.

A provision of this division that renders a member of a cooperative ineligible to vote on a resolution does not affect any other right, entitlement, liability or duty of the member as a member.

(1) The board of a cooperative must declare the membership of a member cancelled if—

(a) the whereabouts of the member are not known to the cooperative and have not been known to the cooperative for at least the required period; or

(b) the member is not an active member of the cooperative and has not been an active member of the cooperative at any time during the required period.

(2) This section applies to a member only if the member was a member of the cooperative throughout the required period.

(3) The question whether a member was an active member at a particular time in the past must be decided as if the active membership provisions concerned had been in force at that time.

(4) The board’s declaration under this section in relation to a member has the effect of cancelling the membership of the member.

(5) A person may apply to the Supreme Court for an order under section 132 against the cancellation of the person’s membership under this section.

(6) In this section:

required period, for a cooperative, means—

(a) the last 3 years; or

(b) if a shorter period is provided in the rules of the cooperative—that shorter period.

(1) If a cooperative has a share capital, the board of the cooperative must declare the shares of a member to be forfeited at the same time as the member’s membership is cancelled under section 126.

(2) The board’s declaration has the effect of forfeiting the shares.

(3) This section does not affect the operation of section 133 (Repayment of amounts owing in relation to cancelled membership).

If the board of a cooperative fails to cancel the membership of a member as required by this part, a director of the cooperative who did not use all due diligence to prevent that failure commits an offence.

Maximum penalty: 20 penalty units.

(1) The board of a cooperative may, by resolution, defer cancellation of a member’s membership for up to 1 year—

(a) if the board has reasonable grounds to believe that a member has ceased to be an active member because of unusual circumstances that prevent the member fulfilling the member’s active membership obligations; or

(b) if—

(i) the board considers that during that period an active membership resolution may be put to the members of the cooperative; and

(ii) the effect of the resolution would be relevant to the question whether the member is an active member.

(2) The board of the cooperative must review the resolution to defer before the end of the deferral period to decide if a further resolution should be made under subsection (1).

Unless the regulations otherwise provide, the board of a cooperative must not declare the membership of a member to be cancelled under this part—

(a) if the cooperative is insolvent; or

(b) if the cooperative is under administration under the Corporations Act, part 5.3A (Administration of a company’s affairs with a view to executing a deed of company arrangement) as applied by this Act; or

(c) if a compromise or an arrangement is being administered in relation to the cooperative; or

(d) if the cooperative is in the course of being wound up; or

(e) if an appointment of a receiver (whether or not a receiver and manager) of any property of the cooperative is in force; or

(f) if the cooperative 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 cooperative under section 199 (Postal ballots); or

(g) in any other circumstances prescribed under the regulations.

(1) The board of a cooperative must ensure that a member is given not less than 28 days notice of its intention to declare the membership of the member cancelled.

(2) Notice is not required to be given under this section if—

(a) the member’s whereabouts are unknown to the cooperative; and

(b) the amount required to be repaid to the member in relation to the cancelled membership (whether because of the cancellation of shares or otherwise) does not exceed $50.

(1) If the Supreme Court is satisfied that the cancellation of a member’s membership under section 126 was or would be unreasonable, the court may order that the membership should not have been cancelled or should not be cancelled.

(2) While an order is in force under this section—

(a) if the membership was cancelled—the person whose membership was cancelled must be reinstated as a member of the cooperative with all the rights and entitlements (including any shareholding) attaching to or arising from the former membership; and

(b) if the membership is proposed to be cancelled—the membership must not be cancelled and any shareholding of the member must not be forfeited.

(3) Subsection (2) applies subject to any directions of the Supreme Court.

(1) If the membership of a member of a cooperative is cancelled under this part, the cooperative must, within 1 year after the day of the cancellation—

(a) repay to the former member the amount owing to the member in relation to the cancellation; or

(b) apply the amount in accordance with subsection (2) if—

(i) the board is of the opinion that repayment would adversely affect the financial position of the cooperative; or

(ii) the board and the former member so agree.

(2) The amount owing may be applied as follows:

(a) if the cooperative is a deposit-taking cooperative—the cooperative may apply the amount as a deposit by the former member with the cooperative (subject to the requirements of section 134 about interest on the deposit);

(b) the cooperative may allot or issue debentures of the cooperative to the former member in satisfaction of the amount;

(c) the cooperative may appropriate the amount owing as a donation to the cooperative, but only if the former member agrees in writing to the donation.

(3) The amount owing to a former member in relation to the cancellation of membership includes any amount paid up in relation to shares forfeited because of the cancellation of membership.

(4) If the former member is subsequently readmitted to membership, any amount held by the cooperative under this section must, if the member asks, be applied towards the cost of admission to membership (including any subscription for share capital).

(1) This section applies if the amount owing to a former member under section 77 (Repayment of shares on expulsion) or section 133 is applied as a deposit with the cooperative or the cooperative allots or issues debentures to the former member in satisfaction of the amount.

(2) The deposit or debenture bears interest during any period—

(a) for a cooperative with share capital—

(i) at the rate (or, if there is more than 1 rate, at the higher or highest rate) of dividend payable in relation to that period on the share capital of the cooperative; or

(ii) if the rate of dividend payable in relation to that period has not been decided—at the rate (or the higher or highest rate) payable in relation to the last period for which a rate has been decided; or

(iii) if a rate of dividend has never been decided in relation to the share capital of the cooperative—at the rate that the board of the cooperative considers reasonable; or

(b) for a cooperative without share capital—at the rate that the board of the cooperative considers reasonable; or

(c) if the rules provide for a rate to be payable that is higher than the rate applying under paragraph (a) or (b)—at the 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 provision of the Corporations Act (as applied by section 264 (Application of Corporations Act—issue of debentures)) do not apply to an allotment or issue of debentures under this section:

• chapter 2L (Debentures)

• chapter 6D (Fundraising).

(1) If an amount is owing to a former member under this division or section 77 (Repayment of shares on expulsion) in relation to a deposit or debenture, the amount must 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 cooperative.

(2) The deposit or debenture must, in any case, be repaid within 10 years (or, if the cooperative’s rules require a shorter period, that period) after cancellation of the member’s membership.

(1) A cooperative must keep a register of people whose membership has been cancelled under this division.

(2) The register must contain the particulars prescribed under the regulations.

This division applies only to trading cooperatives.

(1) Even though a person’s shares in a cooperative have been forfeited under this part, the person is taken to be the holder of shares in the cooperative (the same in all respects as the shares that were forfeited) for the following purposes:

(a) the entitlements of a shareholder in relation to the purchase of shares in the cooperative in accordance with an offer mentioned in section 290 (1) (a), (b) or (c) or the purchase of all the shares in the cooperative, if the offer or purchase happens within 5 years after the day the person’s shares were forfeited;

(b) the entitlement of a shareholder when the cooperative becomes registered as a company if the relevant special resolution under section 308 is passed within 5 years after the day the person’s shares were forfeited;

(c) the entitlement of a shareholder to a distribution of surplus in a winding-up of the cooperative that begins within 5 years after the day the person’s shares were forfeited.

(2) Subsection (1) (a) does not apply in relation to—

(a) an offer mentioned in section 290 (1) (a) or (c) that is made by another cooperative; or

(b) the purchase of all the shares in the cooperative by another cooperative.

(3) Subsection (1) (c) does not apply if the winding-up is for a merger under division 12.1.

(4) To remove any doubt, the entitlement under subsection (1) (a) of a person whose shares have been forfeited does not include an entitlement to vote on anything.

(5) This section does not apply to a forfeited shareholding in a cooperative if the forfeited shareholding is taken under section 139 to be a forfeited shareholding in another cooperative.

(1) This section applies if a person’s shares in a cooperative (the original cooperative) are forfeited under this part and within 5 years after the day of the forfeiture—

(a) the original cooperative becomes a subsidiary of another cooperative (the new cooperative); or

(b) another cooperative (the new cooperative) is created because of a merger under division 12.1 involving the original cooperative; or

(c) the engagements of the original cooperative are transferred to another cooperative (the new cooperative) under division 12.1.

(2) The person is, for the operation of section 138 (and the further operation of this section), taken to have held shares in the new cooperative and as having had the shares in the new cooperative forfeited under this part when the person’s shares in the original cooperative were forfeited.

(3) The extent of the forfeited shareholding in the new cooperative must be decided as follows:

(a) if the entitlement of active members of the original cooperative is solely an entitlement to be allotted shares in the new cooperative—the forfeited shareholding in the new cooperative is the shareholding to which the person would have been entitled had the person’s shares in the original cooperative not been forfeited;

(b) in any other case—the forfeited shareholding in the new cooperative is the shareholding that is the same in all respects as the forfeited shareholding in the original cooperative.

(4) A decision under subsection (3) (a) about the person’s shareholding in the new cooperative must be made—

(a) solely on the basis of the person’s shareholding in the original cooperative when the shares were forfeited or (in a further operation of this section in relation to the person) when the person was first taken to have a forfeited shareholding in the original cooperative; and

(b) without regard to any additional shareholding in the original cooperative to which the person would have become entitled had the shares not been forfeited (whether because of any bonus share issue or otherwise).

(1) If a person has an entitlement because of section 139, the entitlement operates to extinguish any liability of the cooperative—

(a) to repay to the person under section 133 (Repayment of amounts owing in relation to cancelled membership) any amount in relation to the person’s forfeited shares in the cooperative; or

(b) in relation to a deposit held by the cooperative, or debentures allotted or issued to the person, under section 133 in relation to the person’s forfeited shares in the cooperative (except a liability to pay any interest owing).

(2) If an amount has been repaid to a person under section 133 or 135 (Repayment of deposits and debentures), the amount repaid must be set off against any entitlement of the person under section 138 in relation to the forfeited shares.

(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 cooperative the amount repaid to the person and does so within the period required under subsection (4).

(4) If the circumstances mentioned in subsection (3) arise, the cooperative must—

(a) give notice of the matter by prepaid post to the person at the person’s address last known to the cooperative, stating a period of not less than 28 days after the notice is given during which any amount repaid must be paid to the cooperative; and

(b) publish a general notice to that effect in a newspaper circulating generally in the district where the registered office of the cooperative is located.

A person whose membership of a cooperative has been cancelled under this part is taken to still be a member for any distribution from reserves of the cooperative that takes place within 5 years after the day the person’s membership was cancelled.

The registrar may, in writing, exempt a cooperative from this division or a provision of this division.

(1) A share or other interest in a cooperative—

(a) is personal property; and

(b) is transferable or transmissible as provided under this Act and the rules of the cooperative; and

(c) is, subject to the rules of the cooperative, capable of devolution by will or by operation of law.

(2) Subject to subsection (1)—

(a) the laws applying to ownership of and dealing with personal property apply to a share or other interest of a member in a cooperative as they apply to other property; and

(b) equitable interests in relation to a share or other interest of a member in a cooperative may be created, dealt with and enforced as in the case of other personal property.

(1) The board of a trading cooperative must give to a person who intends to acquire shares in the cooperative and is not already a shareholder in the cooperative a current disclosure statement that—

(a) has been approved by the registrar under section 20; or

(b) contains the particulars required by subsection (6) and has been filed by the cooperative 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 the first happening, after it is prepared, of 1 of the following:

(a) a change in the rights or liabilities attaching to any class of shares in the cooperative;

(b) a significant change in the financial position or prospects of the cooperative;

(c) any of the next financial records, financial statements or auditor’s reports required to be prepared under section 240 becomes available.

(5) If a disclosure statement stops being a current disclosure statement because of the happening of a change mentioned in subsection (4) (a) or (b), the cooperative must, within 14 days after the day of the change—

(a) give the registrar written notice that the disclosure statement is no longer current because of a change mentioned in subsection (4) (a) or (b); or

(b) file with the registrar a current disclosure statement that complies with this Act.

(6) For subsection (1) (b), the following particulars are required:

(a) a statement of the rights and liabilities attaching to shares in the cooperative;

(b) if there has been a significant change in the financial position or prospects of the cooperative since the date of the last annual report—any information about the financial position and prospects of the cooperative;

(c) any other information that the registrar orders.

A disclosure statement given to a person under section 144 (1) must have with it a copy of the last annual report of the cooperative, unless a copy of the report—

(a) has already been given to the person under this Act; or

(b) has been made available for inspection by notice to the person given under section 73 (2) (Cooperative to provide information to person intending to become a member).

(1) The registrar may, in writing, exempt the board of a trading cooperative from this division or a provision of this division.

(2) The registrar may give the exemption only if the registrar is satisfied that compliance would be inappropriate in the circumstances or would impose an unreasonable burden.

(1) The share capital of a cooperative varies in amount according to the nominal value of shares from time to time subscribed.

(2) Shares must be of a fixed amount that is specified in the rules of the cooperative.

(3) A cooperative may have more than 1 class of shares provided the shareholding and the rights of shareholders comply with the cooperative principles.

(4) Subject to this part and part 4 (Membership), shares must not be issued to a nonmember.

(1) A share may be allotted only if at least 10% of the nominal value of the share has been paid.

(2) Any balance unpaid in relation to shares at the time of allotment must be paid in a way provided under the cooperative’s rules or this Act.

(3) This section does not apply to a bonus share issued under section 153 (Bonus share issues to members) or section 274 (Distribution of surplus or reserves to members).

A cooperative must not issue shares at a discount.

(1) A trading cooperative may issue shares at a premium.

(2) A premium may be in the form of cash or other valuable consideration.

(3) If a trading cooperative issues shares for which it receives a premium, an amount equal to the aggregate amount or value of the premiums on the shares must be transferred to a share premium account.

(4) The share premium account is taken to be paid-up share capital of the trading cooperative and may be applied in any 1 or more of the following ways:

(a) in paying up unissued shares to be issued to members of the cooperative as fully-paid bonus shares;

(b) in paying up in whole or part the balance unpaid on shares previously issued to members of the cooperative;

(c) in the payment of dividends, if those dividends are satisfied by the issue of shares to members of the cooperative;

(d) in writing off the preliminary expenses of the cooperative;

(e) in providing for the premium payable on redemption of shares or debentures.

A share may be held by 2 or more people jointly unless the rules of the cooperative provide otherwise.

(1) If authorised by the rules of the cooperative, the board of a trading cooperative may require a member to take up or subscribe for additional shares in accordance with a proposal approved by a special resolution of the cooperative.

(2) The board of a trading cooperative may deduct amounts, in payment for additional shares from amounts owing to members in relation to dealings with the cooperative, in accordance with a proposal approved by a special resolution of the cooperative.

(3) Any proposal to require a member to take up or subscribe for additional shares must—

(a) be accompanied by a disclosure statement, approved in writing 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 among members; and

(c) be accompanied by a statement telling the member that the member may tell the board, by notice given to the board on or before the date stated in the statement, that the member resigns on the passing of the special resolution.

(4) The date stated in the statement must be a date before the passing of the special resolution.

(5) Any proposal to deduct amounts in payment for additional shares from amounts owing to members in relation to their dealings with the trading cooperative must clearly show—

(a) the basis on which the deductions are to be made; and

(b) the time and way of making the deductions.

(6) A proposal approved under this section is binding on—

(a) every member of the trading cooperative on 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) everyone who becomes a member of the trading cooperative after that date and before the total number of shares to be issued in accordance with the proposal has been issued.

(7) Section 20 (except subsections (2), (4) and (9)) applies to the approval of a disclosure statement under this section with any necessary changes and, in particular, as if a reference in the section to a formation meeting were a reference to the special resolution.

(8) In this section:

share does not include a bonus share if it is issued, or proposed to be issued, under a rule of the cooperative authorised by section 274 (1) (Distribution of surplus or reserves to members).

(1) The rules of a trading cooperative may authorise the issue of bonus shares to members of the cooperative if assets of the cooperative—

(a) have been sold at a profit; or

(b) have been revalued at a greater value than that disclosed before the revaluation in the books of the cooperative.

(2) This section does not—

(a) apply if the assets were acquired for resale at a profit; or

(b) affect the operation of section 274 (Distribution of surplus or reserves to members).

Bonus shares under section 153 may be issued in accordance with the rules of the cooperative subject to the following restrictions:

(a) each issue must have been approved by a special resolution of the cooperative;

(b) they are to be issued as fully paid-up shares with no payment required to be made by a member of the cooperative to whom they are issued;

(c) they are to be issued only in relation to shares of the same class 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 cooperative during any 1 year period must not exceed 20% (or, if another percentage is prescribed under the regulations, that percentage) of the nominal value of the issued share capital of the cooperative immediately before the date of issue of the bonus shares.

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 cooperative 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 that is provided for a valuation made not more than 1 year before the date of the notice by a person prescribed under the regulations; and

(d) particulars of acquisitions of shares in the cooperative made during the 3 years immediately before 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 director and spouse; and

(e) a certificate signed by 2 directors of the cooperative 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 about why the issue should not take place.

(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) states particulars of the shares; and

(c) is signed by or on behalf of the transferee.

(3) If an instrument of transfer is given, by or on behalf of the transferee, to the cooperative for registration, the transferee must ensure that this section is complied with.

Maximum penalty: 10 penalty units.

(4) An offence against this section does not affect the validity of the registration of a transfer of shares.

(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 cooperative.

(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 the 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 of the shares must ensure that this section is complied with.

Maximum penalty: 10 penalty units.

(5) This section does not apply in relation to any shares for which particulars were set out in a non-beneficial ownership notice under section 156 included in the instrument of transfer.

(1) If an instrument of transfer of shares given to a cooperative includes a non-beneficial ownership notice under section 156 in relation to particular shares but on registration of the transfer the transferee holds some or all of those shares beneficially, notice of that fact must be given to the cooperative.

(2) The notice must—

(a) state 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) state particulars of the shares held beneficially; and

(d) be signed by or on behalf of the transferee.

(3) The notice must be given within 14 days after the day of 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 of the shares must ensure that this section is complied with.

Maximum penalty (subsection (4)): 10 penalty units.

(1) A person must notify the cooperative in accordance with this section of the change in the person’s shareholding in the cooperative if the person—

(a) begins to hold any shares beneficially that the person currently holds non-beneficially; or

(b) begins to hold any shares non-beneficially that the person currently holds beneficially.

Maximum penalty: 10 penalty units.

(2) The notice must—

(a) state 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) state the time of the change and 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 day the change happens (even if before the end of that 14 days another such change affecting any of the shares happens).

(1) For this division, a person is, unless the contrary is established, 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.

(2) Subsection (1) only applies if the employee or agent has duties or acts in relation to the transfer to, or ownership by, the person of shares in the cooperative concerned.

(1) A person who holds particular shares is taken to hold the shares non-beneficially if 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, someone else.

(2) A person who holds particular shares is taken to hold the shares beneficially at a particular time unless the person holds the shares non-beneficially at that time.

(1) The register of members kept by a cooperative must contain a statement of the shares that each member holds beneficially and of the shares that each member holds non-beneficially.

(2) In deciding, for an entry in the register, whether a member of a cooperative 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 cooperative;

(b) information contained in a notice given to the cooperative under any other provision of this division.

(1) A trustee, executor or administrator of the estate of a dead person who was the registered holder of a share in a cooperative may be registered as the holder of that share as trustee, executor or administrator of the estate.

(2) A trustee, executor or administrator of the estate of a dead person who was entitled in equity to a share in a cooperative may, with the agreement of the cooperative and of the registered holder of the share, be registered as the holder of the share as trustee, executor or administrator of that estate.

(1) This section applies to a person (the appointed person) who is appointed under a guardianship law to administer the estate of someone (the incapable person).

(2) If the incapable person is the registered holder of a share in a cooperative, 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 cooperative, the appointed person may, with the agreement of the cooperative 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.

(4) In this section:

guardianship law means a law of a State or Territory relating to the administration of the estates of people who, through mental or physical infirmity, cannot manage their affairs.

(1) This section applies if a share in a cooperative that is the property of a bankrupt vests under the Bankruptcy Act 1966 (Cwlth) in the Official Trustee in Bankruptcy (the official trustee).

(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 agreement of the cooperative and of the registered holder of the share, be registered as the holder of that share as the Official Trustee in Bankruptcy.

(1) A person registered under section 163, 164 or 165 is, while so registered, subject to the same liabilities in relation to the share as those to which the person 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 relation to the share.

Shares held by a trustee in relation to a particular trust may, with the agreement of the cooperative, be marked in the register of members in a way that identifies the shares as being held in relation to the trust.

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 this division; and

(c) nothing done under this division affects a cooperative with notice of a trust.

(1) A share in a cooperative may be sold or transferred only—

(a) in accordance with division 4.3 and section 170, on the death of a member; or

(b) to a person appointed to administer the estate of a shareholder under a law of a State or Territory relating to the administration of the estates of people who, through mental or physical infirmity, cannot manage their affairs; or

(c) with the board’s agreement, to any person if there are reasonable grounds for believing that the person will be an active member of the cooperative.

(2) A share in a cooperative may be sold or transferred only in accordance with the rules of the cooperative.

(1) On the death of a member, the member’s share in the cooperative may be transferred to a person other than an administrator or executor only with the agreement of the board of the cooperative.

(2) The board may only give its agreement under subsection (1) if there are reasonable grounds for believing that the person will be an active member of the cooperative.

The board of a cooperative must not agree under section 169 or 170 to the sale or transfer of a share if, because 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 cooperative; or

(b) if a lower percentage is provided under the rules of the cooperative—the lower percentage of the nominal value of the share capital of the cooperative.

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 relation to the share.

(1) The rules of a cooperative may authorise the cooperative to—

(a) buy any share of a member in the cooperative at the request of the member; and

(b) repay to a member, with the member’s agreement, all or any part of the amount paid up on any share held by the member if the amount repaid is not required for the activities of the cooperative.

(2) The amount paid by a cooperative under this section in buying shares or repaying any amount paid up on shares, or both, in any financial year of the cooperative must not exceed the total of—

(a) 5% of the nominal value of the issued share capital of the cooperative immediately before the beginning of the financial year; and

(b) the amount of any additional share capital of the cooperative subscribed for during the financial year.

(3) The members of a cooperative may by special resolution exempt a cooperative from the operation of subsection (2) in relation to 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 decided by the board that is less than the nominal value of the share but only—

(a) if the books of the cooperative disclose that the amount paid is the net shareholder’s equity per share in the undertaking of the cooperative; or

(b) in accordance with the rules of the cooperative.

(5) This section does not apply if the member has resigned or has been expelled from the cooperative or the member’s membership has been otherwise cancelled.

(6) A cooperative must not repurchase shares, or repay amounts paid up on shares, if—

(a) the cooperative would be likely to become insolvent because of the repurchase or repayment; or

(b) the cooperative is insolvent.

(1) If a cooperative repurchases a share of a member, the cooperative may instead of paying the purchase price to the member—

(a) for a deposit-taking cooperative—apply the amount as an interest-bearing deposit by the member with the cooperative; or

(b) allot or issue debentures of the cooperative to the member in satisfaction of the amount.

(2) Subsection (1) applies only if—

(a) the board is of the opinion that payment of the repurchase price would adversely affect the financial position of the cooperative; or

(b) the board and the member agree.

(3) The deposit or debenture bears interest during any period—

(a) for a cooperative with share capital—

(i) at the rate (or, if there is more than 1 rate, at the higher or highest rate) of dividend payable in relation to the period on the share capital of the cooperative; or

(ii) if the rate of dividend payable in relation to the period has not been decided—at the rate (or the higher or highest rate) payable in relation to the last period for which a rate has been decided; or

(iii) if a rate of dividend has never been decided in relation to the share capital of the cooperative—at the rate that the board of the cooperative considers reasonable; or

(b) for a cooperative without share capital—at the rate that the board of the cooperative considers reasonable; or

(c) if the rules provide for a rate to be payable that is higher than the rate applying under paragraph (a) or (b)—at the higher rate.

(4) The deposit or debenture must be repaid to the member as soon as repayment would not, in the board’s opinion, adversely affect the financial position of the cooperative.

(5) The deposit or debenture must in any case be repaid within 10 years (or, if the rules of the cooperative provided for a shorter period, the shorter period) after the repurchase of the shares.

A cooperative must cancel any share purchased by or forfeited to the cooperative in accordance with this Act or the rules of the cooperative.

The provisions of this part apply to voting on all resolutions.

(1) The right to vote attaches to membership and not shareholding.

(2) Each member of a cooperative has only 1 vote at a meeting of the cooperative.

(3) However, if its rules so provide, a member of an association or federation may have the number of votes at a general meeting (up to 5) provided in the rules.

(4) Also, 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 1 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 decided 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.

(1) If the rules so provide, voting may be by proxy at a general meeting.

(2) The instrument of proxy may state how a proxy must vote in relation to a particular resolution.

(3) The proxy must vote in the way authorised by an instrument of proxy mentioned in subsection (2).

(4) A person may act as a proxy only if the person—

(a) is an active member of the cooperative; or

(b) for an association or a federation—is entitled to represent a component cooperative or association of the association or federation on the association or federation.

(5) A person must not act as proxy for more than 10 people (or, if the rules of the cooperative provide for a lesser number, that number of people) on any single occasion.

(6) Subsection (5) does not apply if the proxy acts under an instrument of proxy mentioned in subsection (2).

A person is not entitled to exercise, under a power of attorney, the power of a member of the cooperative to vote if the person has the power in relation to another member of the cooperative under another power of attorney.

A person is not entitled to exercise, as the representative of a corporation, the power of a corporation member of the cooperative to vote if the person has the power as the representative of another corporation member of the cooperative.

A member is not entitled to vote if the member is not an active member of the cooperative.

(1) A person must not directly or indirectly control the exercise of the right to vote of a member.

Maximum penalty: 50 penalty units, 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 cooperative the following votes are invalid:

(a) the vote of the member;

(b) the vote of the person, if the person is a member.

(3) This section does not prevent the exercise of a vote by proxy or power of attorney.

A member of a cooperative cannot vote if the member has sold or transferred, or disposed of the beneficial interest in, the member’s shares, or has agreed to do so.

(1) A member of a cooperative is not entitled to vote if someone else (whether or not a member of the cooperative) 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 registrar to review the matter.

(3) The registrar may order that the member is entitled to vote if the registrar is satisfied in the circumstances of the case that loss of the right to vote would be unjust or unreasonable.

A person appointed as provided by this Act to represent a member of a cooperative, association or federation—

(a) is entitled to receive notice of all meetings in the same way 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 if the member represented holds the qualifications required for holding office as a director (other than any relating to age).

A provision of this Act that disentitles a member of a cooperative 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.

Any vote cast by or on behalf of a member of a cooperative who is not entitled to vote must be disregarded.

Except as otherwise provided under this Act or the rules of the cooperative, every question for decision by a cooperative must be decided by ordinary resolution.

An ordinary resolution is a resolution of a cooperative passed by a simple majority at a general meeting of the cooperative or in a postal ballot of members.

(1) A special resolution is a resolution of a cooperative passed—

(a) by a ²/3 majority at a general meeting of members; or

(b) by a ²/3 majority in a postal ballot (other than a special postal ballot) of members; or

(c) by a ³/4 majority in a special postal ballot of members.

(2) A special resolution may be passed by a postal ballot only if—

(a) the rules of the cooperative allow the resolution to be passed by a postal ballot; or

(b) this Act requires the resolution to be passed by postal ballot (including a special postal ballot).

(3) A resolution is passed as a special resolution only if not less than 21 days notice has been given to the members of the cooperative stating—

(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) A cooperative must give at least 28 days notice to the registrar of a proposed special resolution before giving notice to the members of the proposed special resolution.

Maximum penalty: 20 penalty units.

(5) A failure to give notice to the registrar under subsection (4) does not affect the validity of the resolution.

(1) A resolution is passed by a particular majority at a meeting if that majority of the members of the cooperative who are entitled to vote at the meeting vote in favour of the resolution (in person or, if proxies are allowed, by proxy).

(2) A resolution is passed by a particular majority in a postal ballot if that majority of the members of the cooperative who are entitled to vote in the postal ballot cast formal votes in favour of the resolution.

The registrar may, by notice to the cooperative, disallow a proposed special resolution before it is passed if the registrar is of the opinion that the effect of the special resolution if passed would be in contravention of this Act or any other law.

(1) At a meeting of a cooperative, a declaration by the chairperson of the meeting that a resolution has been passed as a special resolution is conclusive evidence of the fact.

(2) A declaration by the returning officer for a postal ballot for a special resolution that the resolution has been passed as a special resolution is conclusive evidence of that fact.

(3) Subsection (1) does not apply if a poll is taken at the meeting of the cooperative.

(1) A special resolution takes effect on the day it is passed.

(2) However, a special resolution does not take effect until it is registered if it relates to any of the following matters:

(a) the removal of an auditor;

(b) the expulsion of a member;

(c) anything for which a special resolution is required to be passed by special postal ballot.

(1) A cooperative must apply to the registrar for registration of each special resolution passed by the cooperative.

Note A fee may be determined under s 467 (Determination of fees) for this section.

(2) The application is made by filing 2 copies of the special resolution with the registrar in accordance with this section.

(3) The copies must—

(a) be filed within 28 days after the day the special resolution is passed or, if the registrar allows a further period, the further period; and

(b) be signed by a director and the secretary of the cooperative.

(4) A cooperative that, and any officer of the cooperative who, knowingly fails to file the required copies in accordance with this section commit an offence.

Maximum penalty: 20 penalty units.

(5) This section and section 196 do not apply to a special resolution altering the rules of a cooperative.

(1) If the registrar is satisfied that the cooperative has complied with this Act in relation to a resolution, and that the resolution is not contrary to this Act, the registrar must register the resolution.

(2) If the registrar is of the opinion that the effect of a special resolution filed for registration would be in contravention of this Act or any other law, the registrar may—

(a) refuse to register the special resolution; and

(b) give notice to the cooperative that the special resolution—

(i) for a special resolution mentioned in section 194 (2) (a), (b) or (c)—has no effect; and

(ii) for any other special resolution—has no effect as from the day it was passed.

(3) A certificate of registration of a special resolution given by the registrar is, in favour of any person advancing money to the cooperative on the faith of the certificate or in favour of any guarantor of that advance, conclusive evidence that the resolution was properly passed.

(1) This division applies to a resolution of a cooperative (including a resolution appointing an officer or auditor or approving, or agreeing to, anything) if—

(a) the cooperative has fewer than 50 members; and

(b) the resolution is required or permitted under this Act or the rules of the cooperative to be passed at a general meeting of the cooperative.

(2) However, this division does not apply to a resolution if—

(a) more than 14 days notice of the resolution is required under this Act to be given; or

(b) the resolution is required to be passed by a majority other than a simple majority.

(1) If all the members of a cooperative have signed a document that sets out the terms of the resolution and contains a statement that they are in favour of the resolution, the resolution is taken to have been passed at a general meeting of the cooperative.

(2) The document need not exist as a single document, but may exist in the form of 2 or more documents in identical terms.

(3) The document is taken to constitute a minute of the general meeting.

(4) Anything attached to the document and signed by the members signing the document is taken to have been presented to the cooperative at the general meeting.

(5) The document is taken to have been signed by all the members when the last member signs the document.

(6) The meeting mentioned in subsection (1) is taken to have been held on the day, and at the time, when the last member to sign the document does so.

(7) This section does not affect any rule of law about the effectiveness of the assent of members of a cooperative given to a document, or to anything else, otherwise than at a general meeting of a cooperative.

(1) A postal ballot may be held as provided by the rules of a cooperative and must 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 cooperative must make an entry in the minute book of the cooperative showing—

(a) the number of formal votes cast in favour of the proposal; and

(b) the number of formal votes cast against the proposal; and

(c) the number of informal votes cast.

(1) A special postal ballot is a postal ballot conducted as required by this section.

(2) The ballot must be held not earlier than 21 days after notice of the ballot is given to members.

(3) The cooperative must send to each member (along with any other material required to be sent in relation to the postal ballot) a disclosure statement that is approved in writing by the registrar and contains information about—

(a) the financial position of the cooperative; and

(b) the interests of the directors of the cooperative in the proposal with which the ballot is concerned (including any interests of the directors in another organisation concerned in the proposal); and

(c) any compensation or consideration to be paid to officers or members of the cooperative in relation to the proposal; and

(d) anything else the registrar directs.

(4) If the registrar requires, the statement must be accompanied by a report made by an independent person approved in writing by the registrar about anything that the registrar directs.

(5) Section 20 (except subsections (2), (4) and (9)) applies to the approval of a disclosure statement under this section with any necessary changes and, in particular, as if any reference in the section to a formation meeting were a reference to the notice of the special postal ballot.

In addition to any requirement of this Act, the rules of a cooperative 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 cooperative:

(a) conversion of—

(i) a share capital cooperative to a non-share capital cooperative or vice versa; or

(ii) a trading cooperative to a non-trading cooperative or vice versa;

(b) transfer of incorporation;

(c) an acquisition or disposal of assets mentioned in section 276;

(d) the maximum permissible level of share interest in the cooperative;

(e) takeover;

(f) merger;

(g) transfer of engagements;

(h) members’ voluntary winding-up.

(1) The board of a cooperative must conduct a postal ballot (including a special postal ballot) for a special resolution on the written requisition of the number of members who together can cast at least 20% (or, if a lesser percentage is provided under the rules of the cooperative, the lesser percentage) of the total number of votes that can be cast at a meeting of the cooperative.

(2) A member is entitled to be a requisitioning member only if the member is an active member.

(3) A requisition for a postal ballot must—

(a) state—

(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; and

(b) be signed by the requisitioning members (and may consist of several documents in like form each signed by 1 or more of the requisitioning members); and

(c) be served on the cooperative by being lodged at the registered office of the cooperative.

(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 cooperative may recover the expenses of the postal ballot from the members who requisitioned the postal ballot as a debt owing to the cooperative.

(1) For section 202, the expenses of the postal ballot are all reasonable expenses incurred by a cooperative in relation to preparing for and holding a special postal ballot.

(2) The 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 cooperative in relation to preparing for and holding the ballot;

(c) the cost of producing, printing and posting the ballot papers and other material associated with the ballot.

(1) A cooperative must hold an annual general meeting within—

(a) 5 months after the end of each financial year of the cooperative; or

(b) if further time is allowed by the registrar or prescribed under the regulations—that further time.

(2) However, the first annual general meeting of a cooperative must be held within—

(a) 18 months after the cooperative’s incorporation; or

(b) if a longer time applies under subsection (1)—that longer time.

A special general meeting of a cooperative may be called at any time by the board.

The board must give each member at least 14 days notice of each general meeting.

(1) The quorum for a meeting of a cooperative must be specified in the rules.

(2) An item of business may be transacted at a meeting of a cooperative only if a quorum of members entitled to vote is present during the transaction of that item.

(1) A question for decision at a general meeting must be decided by a majority of members present in person at the meeting and voting, but this is subject to any other provision of this Act and the rules of the cooperative.

(2) A poll must be held if required by at least 5 members.

(3) Unless a poll is held, a question for decision at a general meeting must be decided by a show of hands.

(4) If the votes are equal, whether on a show of hands or on a poll, the chairperson of the meeting may exercise a second or casting vote if the rules so provide.

(1) The board of a cooperative must call a general meeting of the cooperative on the written requisition of the number of members who together can cast at least 20% (or, if a lesser percentage is provided under the rules of the cooperative, the lesser percentage) of the total number of votes that can be cast at a meeting of the cooperative.

(2) A member is entitled to be a requisitioning member only if the member is an active member.

(3) A requisition for a general meeting must—

(a) state the objects of the meeting; and

(b) be signed by the requisitioning members (and may consist of several documents in like form each signed by 1 or more of the requisitioning members); and

(c) be served on the cooperative by being lodged at the registered office of the cooperative.

(4) The meeting must be called and held as soon as practicable and in any case must be held within 2 months after the day the requisition is served.

(5) If the board does not call 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 call the meeting in the same way as nearly as possible as meetings are called by the board;

(b) for that purpose they may ask the cooperative to supply a written statement setting out the names and addresses of the people entitled when the requisition was served to receive notice of general meetings of the cooperative;

(c) the board must send the requested statement to the requisitioning members within 7 days after the day the request for the statement is received;

(d) the meeting called 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 call the meeting must be paid by the cooperative;

(f) any amount required to be paid by the cooperative under paragraph (e) must be deducted by the cooperative from any amount owing by the cooperative, by way of fees or other remuneration, to the directors who were in default.

(1) Minutes of each general meeting, board meeting and subcommittee meeting must be—

(a) entered in the appropriate records within 28 days after the meeting or before the next meeting, whichever is sooner; and

(b) confirmed at the next meeting; and

(c) signed by the chairperson of that 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 subcommittee meetings be available for inspection by members.

(4) The minutes must be written in English.

(1) Subject to this Act and the rules of the cooperative, the business of a cooperative must be managed by a board of directors.

(2) The board of directors may exercise all the functions of the cooperative that are not, by this Act or the rules of the cooperative, required to be exercised by the cooperative in general meeting.

(3) The acts of a director are valid despite any defect that may afterwards be discovered in the director’s appointment or qualification.

(1) Except as provided in subsections (2), (3) and (4), the directors of a cooperative are to be elected in the way provided under the rules of the cooperative.

(2) The first directors of—

(a) a cooperative formed under this Act are to be elected at its formation meeting; and

(b) a cooperative that was a corporation incorporated under another law are to be the directors in office on the day of registration under this Act.

(3) If so authorised by the rules of the cooperative, 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 2 or more people for election as directors may be made by a single resolution at a meeting of a cooperative only if a resolution that it be made by a single resolution has first been agreed to by the meeting without any vote being made 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) Subsections (4) and (5) do 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 provided under this Act or the rules of a cooperative, a director is eligible for re-election at the end of the director’s term of office.

(1) A person is qualified to be a director of a cooperative only if the person is—

(a) a member of the cooperative or a representative of a corporation that is a member of the cooperative (a member director); or

(b) an employee of the cooperative or a person qualified as provided under the rules.

(2) The majority of directors must be member directors.

(3) The rules may require a greater number of directors than a majority to be member directors.

(4) A cooperative must have at least 3 directors.

(5) At least 2 of the directors must be Australian residents.

(1) A person must not act as a director of a cooperative, or directly or indirectly take part in or be concerned with the management of a cooperative, if the person is the auditor of the cooperative or a partner, employee or employer of the auditor.

Maximum penalty: 50 penalty units, imprisonment for 6 months or both.

(2) A person must not, except with the Supreme Court’s leave, act as a director of a cooperative, or indirectly take part in or be concerned with the management of a cooperative, within 5 years after the day of the person’s conviction for a disqualifying offence or, if the person was sentenced to imprisonment for the offence, after the day of the person’s release from prison.

Maximum penalty: 50 penalty units, imprisonment for 6 months or both.

(3) For subsection (2), a disqualifying offence is any of the following offences, whether committed before or after the commencement of this Act, and whether in or outside the ACT or Australia:

(a) an offence, of which the person has been convicted on indictment, in relation to the promotion, formation or management of a corporation;

(b) an offence involving fraud or dishonesty punishable by imprisonment for at least 3 months;

(c) an offence against any of the following sections of the Corporations Act:

• section 184 (Good faith, use of position and use of information—criminal offences)

• section 344 (Contravention of part 2M.2 or 2M.3)

• section 590 (Offences by officers of certain companies)

• section 592 (Incurring of certain debts; fraudulent conduct)

• section 670A (Misstatements in, or omissions from, takeover and compulsory acquisition and buy-out documents)

• section 728 (Misstatement in, or omission from, disclosure document);

(d) an offence against a provision of a previous law of the Commonwealth or a State that corresponds to a section mentioned in paragraph (c).

(4) A person must not act as a director of a cooperative, or directly or indirectly take part in or be concerned with the management of a cooperative, if the person—

(a) has been convicted of an offence against this Act within the last 5 years, except with the Supreme Court’s leave; or

(b) is disqualified from managing corporations under the Corporations Act, part 2D.6 (Disqualification from managing corporations); or

(c) is an insolvent under administration (within the meaning of the Corporations Act).

Maximum penalty: 50 penalty units, imprisonment for 6 months or both.

(5) In a proceeding for an offence against subsection (2), a certificate by an entity prescribed under the regulations stating that a person was released from prison on a stated date is, in the absence of evidence to the contrary, proof that the person was released from prison on that date.

(6) A person who intends to apply for leave of the Supreme Court under this section must give the registrar at least 21 days notice of the person’s intention.

(7) The Supreme Court may grant leave subject to any condition or limitation it considers appropriate.

(8) A person must comply with any condition or limitation subject to which leave is granted.

Maximum penalty: 50 penalty units, imprisonment for 6 months or both.

(9) On the application of the registrar, the Supreme Court may revoke its leave.

(1) Meetings of the board of directors are to be held at least once every 3 months and may be held as often as may be necessary.

(2) A meeting of the board may be called by a director giving notice individually to every other director.

(3) A meeting of the board may be called or held using any technology consented to by the board.

(4) The consent may be a standing consent.

(5) A quorum of a meeting of the board is 50% of the number of directors or, if a higher number is provided under the rules of the cooperative, the higher number.

(6) However, for a quorum the member directors must be greater than the other directors by at least 1 or, if a higher number is specified by the rules of the cooperative, the higher number.

(7) The chairperson of the board may be elected either by the board or at a general meeting of the cooperative, and must be elected, hold office, and retire, and may be removed from office, as provided by the rules of the cooperative.

(1) The board of a cooperative may 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 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 day the resolution is approved.

(7) Papers may be circulated among directors of the board for this section by fax or other transmission of the information in the papers.

(1) The rules of a cooperative may authorise the board of the cooperative to appoint deputies of directors.

(2) The deputy of a director may attend, and speak and vote at, any meeting of the board from which the director is absent.

(3) The rules of the cooperative may also include provisions regulating, or authorising the board to regulate, the term of office, vacation of or removal from office, and remuneration, of a deputy.

If the rules of a cooperative so provide, the board may by resolution delegate its functions to—

(a) a director; or

(b) a committee of 2 or more directors; or

(c) a committee of members of the cooperative; or

(d) a committee of members of the cooperative and other people if members are the majority of the committee members.

Note For the making of delegations and the exercise of delegated functions, see Legislation Act 2001, pt 19.4.

(1) The directors hold office and must retire, and may be removed from office, as provided by the rules of the cooperative.

(2) A director vacates office in the circumstances (if any) provided under the rules of the cooperative and in any of the following cases:

(a) if the director is disqualified under section 214 from being a director;

(b) if the director is absent from 3 consecutive ordinary meetings of the board without its leave;

(c) if the director resigns the office of director by notice given by the director to the cooperative;

(d) if the director is removed from office by ordinary resolution of the cooperative;

(e) if the person ceases to hold the qualification because of which the person was qualified to be a director;

(f) if an administrator of the cooperative’s affairs is appointed under division 12.5.

(1) A cooperative must have a secretary.

(2) The board of the cooperative must appoint the secretary.

Note For the making of appointments (including acting appointments), see Legislation Act 2001, div 19.3.

(3) A secretary (including an acting secretary) must be an individual at least 18 years old and resident in Australia.

In this division:

officer, of a cooperative, means—

(a) a director or secretary of the cooperative; or

(b) a person who is concerned, or takes part, in the management of the cooperative, whether or not as a director; or

(c) a receiver, or receiver and manager, of property of the cooperative, or any other authorised person who enters into possession or assumes control of property of the cooperative for the purpose of enforcing any charge; or

(d) an administrator of a deed of arrangement executed by the cooperative; or

(e) a liquidator or provisional liquidator appointed in a voluntary winding-up of the cooperative; or

(a) an administrator of the cooperative appointed under the Corporations Act, part 5.3A (Administration of a company’s affairs with a view to executing a deed of company arrangement) as applied by this Act; or

(f) a trustee or anyone else administering a compromise or arrangement made between the cooperative and someone else.

(1) An officer of a cooperative must at all times act honestly, in the ACT and elsewhere (whether in or outside Australia), in the exercise of the officer’s functions.

(2) A person who intentionally or recklessly contravenes subsection (1) commits an offence.

Maximum penalty: 50 penalty units.

(3) A person who contravenes subsection (1) with intent to deceive or defraud the cooperative, members or creditors of the cooperative or creditors of anyone else or for any other fraudulent purpose commits an offence.

Maximum penalty: 200 penalty units, imprisonment for 2 years or both.

(1) An officer of a cooperative must, in the exercise of the officer’s functions, exercise the degree of care and diligence that a reasonable person in a like position in a cooperative would exercise in the cooperative’s circumstances.

(2) A person who intentionally or recklessly contravenes subsection (1) commits an offence.

Maximum penalty: 20 penalty units.

(3) An officer is not liable to be convicted of a contravention of subsection (1) if the cooperative has resolved by ordinary resolution to excuse the contravention.

(1) An officer or employee, or former officer or employee, of a cooperative, or a member of a committee mentioned in section 218, must not make improper use of information acquired because 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 anyone else or to cause detriment to the cooperative.

Maximum penalty:

(a) if the contravention was committed with intent to deceive or defraud the cooperative, members or creditors of the cooperative or creditors of anyone else or for any other fraudulent purpose—200 penalty units, imprisonment for 2 years or both; and

(b) in any other case—50 penalty units.

(2) An officer or employee of a cooperative, or a member of a committee mentioned in section 218, 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 anyone else or to cause detriment to the cooperative.

Maximum penalty:

(a) if the contravention was committed with intent to deceive or defraud the cooperative, members or creditors of the cooperative or creditors of anyone else or for any other fraudulent purpose—200 penalty units, imprisonment for 2 years or both; and

(b) in any other case—50 penalty units.

(1) If the court that convicts a person for a contravention of a provision of this division is satisfied that a cooperative has suffered loss or damage because of the contravention, the court may (in addition to imposing a penalty) order the convicted person to pay compensation to the cooperative.

(2) An order under subsection (1) takes effect, and may be enforced, as a judgment of the court.

(1) If a person contravenes a provision of this division in relation to a cooperative, the cooperative may, whether or not the person has been convicted of an offence in relation to the contravention, recover an amount from the person as a debt owing to the cooperative.

(2) The amount that the cooperative is entitled to recover from the person is—

(a) if the person or anyone else made a profit because of the contravention—an amount equal to the profit; and

(b) if the cooperative has suffered loss or damage because of the contravention—an amount equal to the loss or damage.

This division is additional to any rule of law relating to the duty or liability of a person because of the person’s office or employment in relation to a cooperative and does not prevent the bringing of a civil proceeding in relation to a breach of the duty or in relation to the liability.

(1) A provision exempting an officer or auditor of a cooperative from, or indemnifying the officer or auditor against, any liability that by law would otherwise attach to the person in relation to any negligence, default, breach of duty or breach of trust of which the person may be guilty in relation to the cooperative is void.

Note For the meaning of provision, see s (6).

(2) However, a cooperative may, under its rules or otherwise, indemnify an officer or auditor of the cooperative against any liability incurred by the person in defending any proceeding, whether civil or criminal—

(a) in which judgment is given in the person’s favour or the person is acquitted; or

(b) in relation to a liability for which relief is granted under this section to the person.

(3) A court may relieve an officer or auditor of a cooperative, either completely or partly, from a relevant liability in relation to a matter relating to the cooperative, if—

(a) the matter is before the court; and

(b) the court is satisfied that the person—

(i) acted honestly and reasonably; and

(ii) having regard to all the circumstances of the case (including circumstances in relation to the person’s appointment), the person ought fairly to be relieved in relation to the relevant liability

Note For the meaning of relevant liability, see s (6).

(4) The court may make an order under subsection (3) on any conditions (including conditions about costs) the court considers appropriate.

(5) The Supreme Court may exercise the powers mentioned in subsections (3) and (4) in relation to an officer or auditor of a cooperative who applies to the court for relief because—

(a) a claim in a matter relating to the cooperative has been made against the person; or

(b) the person has reason to believe that a claim of that kind will be made against the person.

(6) In this section:

officer, of a cooperative, includes an employee of the cooperative and anyone else authorised under the rules of the cooperative to give directions in relation to the business of the cooperative.

provision, in relation to cooperative, includes a provision of the rules of the cooperative, a contract with the cooperative or any other instrument to which the cooperative is a party (other than a contract of insurance).

relevant liability means liability for negligence, default or breach of duty.

(1) The following provisions of the Corporations Act apply in relation to a cooperative and its officers:

• part 5.8 (Offences)

• part 5.9 (Miscellaneous), division 1 (Examining a person about a corporation) and division 2 (Orders against a person in relation to a corporation)

• section 1307 (Falsification of books).

(2) The provisions apply subject to the change mentioned in subsection (3).

(3) The Corporations Act, section 592 (1) (a) (Incurring of certain debts; fraudulent conduct) is taken to be amended by omitting the words ‘before 23 June 1993’.

The Corporations Act, part 5.8A (Employee entitlements) applies to a cooperative and its employees.

(1) A director of a cooperative must not be paid any remuneration for the director’s services as a director other than fees, concessions and other benefits approved at a general meeting of the cooperative.

(2) An officer of a cooperative who is not a director of the cooperative must not obtain financial accommodation from the cooperative other than—

(a) with the approval of a majority of the directors; or

(b) under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors.

Maximum penalty: 200 penalty units, imprisonment for 2 years or both.

(3) For subsection (2), financial accommodation is taken to be obtained by an officer of a cooperative if it is obtained by—

(a) a proprietary company in which the officer is a shareholder or director; or

(b) a trust of which the officer is a trustee or beneficiary; or

(c) a trust of which a corporation is trustee if the officer is a director or other officer of the corporation.

(4) A cooperative must not give financial accommodation to an officer of the cooperative if—

(a) by giving the financial accommodation, the officer would contravene subsection (2); and

(b) the cooperative knows or should reasonably know of the contravention.

Maximum penalty: 500 penalty units.

(1) In this section:

associate, of a director, means a person, other than a director, who is—

(a) the spouse of the director; or

(b) acting in the capacity of a trustee of a trust under which—

(i) the director or the spouse of the director has a beneficial interest; or

(ii) a corporation mentioned in paragraph (c) has a beneficial interest; or

(c) a corporation if—

(i) the director or the spouse of the director has a material interest in shares in the corporation; and

(ii) the nominal value of the shares is not less than 10% of the nominal value of the issued share capital of the corporation.

(2) For the definition of associate in subsection (1), a person has a material interest in a share in a corporation if—

(a) the person has power to withdraw the share capital subscribed for the share or to exercise control over the withdrawal of the 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 given to the holder of the share.

(3) A cooperative must not provide financial accommodation to a director, or to a person the cooperative 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 conditions no more favourable to the director or the associate of a director than the conditions on which it is reasonable to expect the cooperative 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 ²/3 of the directors present and voting on the matter.

Maximum penalty: 500 penalty units.

(4) For 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; and

(b) the full details of the accommodation or scheme were made available to members at least 21 days before the day of the meeting.

(5) A director, or an associate of a director, must not obtain financial accommodation given in contravention of subsection (3).

Maximum penalty: 200 penalty units, imprisonment for 2 years or both.

(6) For this section, a concessional rate of interest for a borrower from a cooperative is a normal condition only if the borrower is entitled to the concession by being a member of a class of borrowers from the cooperative specified in its rules as being entitled to the concession.

(7) If a director, or an associate of a director, of a cooperative accepts, in payment of a debt owed by a member of the cooperative to the director or associate, any proceeds of financial accommodation provided to the member by the cooperative, this section has effect as if the financial accommodation has been provided to the director or associate.

(8) In this section—

(a) a reference to providing financial accommodation to, or the obtaining of financial accommodation by, a director or an associate of a director includes a reference to providing financial accommodation to, or the obtaining of financial accommodation by, the director or associate jointly with someone else; or

(b) a reference to a debt owed to a director or an associate of a director includes a reference to a debt owed to the director or associate jointly with someone else.

A director of a cooperative the primary activity of which is or includes the acquisition of land to settle or keep people on the land, and of providing any community service or benefit, must not sell land to the cooperative except in accordance with a special resolution of the cooperative.

(1) In this section:

management contract means a contract or other arrangement under which—

(a) a person who is not an officer of the cooperative agrees to exercise all, or a substantial part, of the functions of the cooperative, whether or not under the control of the cooperative; or

(b) a cooperative agrees to exercise all, or a substantial part, of its functions—

(i) in a particular way; or

(ii) in accordance with the directions of anyone; or

(iii) subject to restrictions or conditions.

(2) A cooperative may enter into a management contract only if the contract has first been approved by special resolution.

(3) A management contract entered into in contravention of subsection (2) is void.

(1) A director of a cooperative who is or becomes in any way (whether directly or indirectly) interested in a contract, or proposed contract, with the cooperative must declare the nature and extent of the interest to the board under this section.

Maximum penalty: 200 penalty units, imprisonment for 2 years or both.

(2) For a proposed contract, the declaration must be made—

(a) at the meeting of the board when 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 cooperative 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 this section, a general notice given to the board by a director is a sufficient declaration if it is to the effect that the director—

(a) is a member of an entity stated in the notice; and

(b) is taken to be interested in any contract that may be made with the entity after the giving of the notice.

(5) A director of a cooperative who holds an office or has an interest in property under which, whether directly or indirectly, duties or interests might be created that could conflict with the director’s duties or interests as director must, in accordance with subsection (6), declare at a meeting of the board the fact and the nature, character and extent of the conflict.

Maximum penalty: 200 penalty units, 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 the person becomes a director—at the first meeting of the board held after the later of the following happens:

(i) the person becomes a director;

(ii) the relevant facts about holding the office or having the interest come to the person’s knowledge; and

(b) if the person begins 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 about 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 decides, 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 making of a decision 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 decision; or

(b) take part in the making by the board of the decision.

Every declaration under this division must be recorded in the minutes of the meeting at which it was made.

This division is additional to any rule of law or any provision of the rules of the cooperative restricting a director from having any interest in contracts with the cooperative or from holding offices or having properties involving duties or interests in conflict with the director’s duties or interests as director.

(1) A director of a cooperative is not required to declare, under this division or the rules of the cooperative, an interest in—

(a) a contract or proposed contract for a purchase of goods and services by the director from the cooperative; or

(b) a lease of land to the director by the cooperative; or

(c) a contract or proposed contract for the sale of agricultural products or livestock by the director to the cooperative; or

(d) a contract or proposed contract that, under the rules of the cooperative, may be made between the cooperative and a member; or

(e) a contract or proposed contract of a class of contracts prescribed under the regulations.

(2) This section applies only if the contract is made honestly, in the ordinary course of the business of the cooperative, and on the conditions that are usual and proper in similar dealings between the cooperative and its members.

(1) In this division:

control has the same meaning in relation to a cooperative as it has under the Corporations Act in relation to a corporation.

Note Control is defined in the Corporations Act, s 50AA.

entity has the same meaning in relation to a cooperative as it has under the Corporations Act in relation to a corporation.

Note Entity is defined in the Corporations Act , s 9.

(1) The following provisions of the Corporations Act apply in relation to a cooperative:

• part 2F.3 (Inspection of books)

• section 249K (Auditor entitled to notice and other communications)

• section 249V (Auditor’s right to be heard at general meetings)

• chapter 2M (Financial reports and audit).

(2) The provisions apply subject to the following changes:

(a) a reference in the provisions to a company or public company is taken to be a reference to a cooperative;

(b) a reference in the provisions to the Court is taken to be a reference to the Supreme Court;

(c) a reference in the provisions to ‘prescribed’ is taken to be a reference to ‘approved by the registrar’;

(d) a reference in the provisions to securities is taken to be a reference to debentures;

(e) any offence created in relation to the provisions is taken to be the offence set out in subsection (3);

(f) any penalty for an offence mentioned in paragraph (e) is taken to be the penalty set out in subsection (3);

(g) the provisions apply as if the following provisions were omitted:

• section 293 (Small proprietary company—shareholder direction)

• section 294 (Small proprietary company—ASIC direction)

• section 300 (8) and (9) (Annual directors’ report—specific information)

• section 301 (2) (Audit of annual financial report)

• section 340 (ASIC’s power to make specific exemption orders)

• section 341 (ASIC’s power to make class orders)

• section 342 (Criteria for specific exemption orders and class orders).

(3) A cooperative must—

(a) keep financial records and prepare financial statements and financial reports as required by this Act (including the Corporations Act as applied by this Act); and

(b) ensure that the financial statements and financial reports are audited in accordance with this Act (including the Corporations Act as applied by this Act).

Maximum penalty: 20 penalty units.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act 2001, s 104)

(4) The regulations may make provision in relation to the following:

(a) requiring the submission of financial statements and financial reports to the Australian Accounting Standards Board;

(b) requiring the adoption by a cooperative of the same financial year for each entity that the cooperative controls.

(1) The registrar may, in writing, exempt a cooperative, a person or firm proposed to be appointed as an auditor of a cooperative, or a director or auditor of a cooperative, from this part or a provision of this part.

Note 1 A reference to a provision of an Act includes a reference to the statutory instruments made or in force under the provision, including regulations (see Legislation Act 2001, s 104).

Note 2 Power given under an Act to make a statutory instrument (including an exemption) includes power to amend or revoke the instrument (see Legislation Act 2001, s 46 (1)).

(2) An exemption may be—

(a) unconditional or subject to conditions; and

(b) limited in time.

(3) An exemption may be suspended by the registrar.

(4) An exemption under this section that applies in relation to a class of cooperatives is a notifiable instrument.

Note 1 A notifiable instrument must be notified under the Legislation Act 2001.

Note 2 The Legislation Act 2001, s 73 deals with the commencement of notifiable instruments.

(5) An exemption under this section that applies only in relation to a particular cooperative takes effect when a copy of the order is served on the cooperative.

(1) The directors of a cooperative must make the disclosures in relation to the affairs of the cooperative, and of any entity that the cooperative controls, that are prescribed under the regulations.

(2) If this section is not complied with, each director of the cooperative commits an offence.

Maximum penalty (subsection (2)): 20 penalty units.

(1) An auditor of a cooperative has qualified privilege in relation to—

(a) any statement that the auditor makes, orally or in writing, in the course of the auditor’s duties as auditor; or

(b) the giving of any notice, or the sending of any copy of financial statements, financial reports or another report, to the registrar under this Act.

(2) A person has qualified privilege—

(a) in relation to the publishing of any document prepared by an auditor in the course of the auditor’s duties and required by this Act to be filed with the registrar, whether or not the document has been filed; or

(b) in relation to 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 anyone else has, apart from this section, as defendant in a proceeding for defamation.

(1) The financial year of a cooperative ends on the day in each calendar year provided under the rules of the cooperative.

(2) The first financial year of a cooperative may extend from the date of its registration to a date not later than 18 months after the date of registration.

(3) If the rules of a cooperative are altered to change its financial year, the alteration may provide either—

(a) that the financial year current when the alteration takes effect is extended for not longer than 6 months; or

(b) that the next financial year is to be a period longer than 1 year but not longer than 18 months.

(1) A cooperative must keep the following registers in accordance with this section:

(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 cooperative;

(c) a register of names of people who have given loans or deposits to or hold securities or debentures given or issued by the cooperative;

(d) a register of any loans made by or guaranteed by the cooperative and of any securities taken by the cooperative;

(e) a register of memberships cancelled under part 6 (Active membership);

(f) a register of notifiable interests under section 285;

(g) any other registers that the regulations require.

Maximum penalty: 20 penalty units.

(2) The registers must be kept in the way, and contain the particulars, required under this Act.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act 2001, s 104).

(1) A register kept under this division must be kept, in accordance with subsection (2), at—

(a) the cooperative’s registered office; or

(b) an office at the cooperative’s principal place of business; or

(c) an office (whether of the cooperative or of someone else) where the work involved in maintaining the register is done; or

(d) another office approved in writing by the registrar.

(2) The office where the register is kept must be in the ACT.

(3) The cooperative must file with the registrar a notice of the address where the register is kept within 28 days after the day the register is—

(a) established at an office that is not the cooperative’s registered office; or

(b) moved from an office to another office.

(4) For this section, a document kept on a computer is taken to be kept at an office if—

(a) the document can be accessed using a computer kept at the office; and

(b) a hard copy of the document can be printed out at the office.

(1) A cooperative must have the following documents available for inspection during all reasonable hours by any member free of charge at the office where the registers are kept:

(a) a copy of this Act and the regulations;

(b) a copy of the rules of the cooperative;

(c) a copy of the minutes of each general meeting of the cooperative;

(d) a copy of the last annual report (if any) of the cooperative filed under section 250;

(e) the register of directors, members and shares;

(f) the register of names of people who have given loans or deposits to or hold securities or debentures given or issued by the cooperative;

(g) any other register that the regulations provide must be open for inspection under this section.

(2) If a register is not kept on a computer, the person may inspect the register itself.

(3) If the register is kept on a computer, the person may inspect a hard copy of the information on the register unless the person and the cooperative agree that the person may access the information by computer.

(4) A member is entitled to make a copy of entries in a register mentioned in subsection (1), and to do so free of charge, unless the rules of the cooperative 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 amount (if any) prescribed under the regulations.

(6) A cooperative must—

(a) allow 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 reasonable assistance to inspect the document or make the copy.

Maximum penalty: 20 penalty units.

(7) A cooperative must have the documents prescribed under the regulations available for inspection by anyone, at the office where its registers are kept, during all reasonable hours.

Maximum penalty: 20 penalty units.

(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.

(2) However, subsection (1) does not apply to the use or disclosure of information—

(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 this section is liable to compensate anyone who suffers loss or damage because of the contravention.

(4) A person who makes a profit from a contravention of this section owes a debt to the cooperative equal to the amount of the profit.

(1) A cooperative 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 cooperative or any subsidiary of the cooperative, and of the cessation of the appointment.

Maximum penalty: 20 penalty units.

(2) The notice must—

(a) be given within 28 days after the day of the appointment or cessation of appointment; and

(b) state the particulars prescribed under the regulations of the appointment or cessation of appointment.

Note If a form is approved under s 468 (Approved forms) for a notice, the form must be used.

(1) A cooperative must file with the registrar within the required period in each year an annual report containing each of the following:

(a) a list stating the secretary, directors and the principal executive officers of the cooperative and each of its subsidiaries, as at the date the annual report is filed with the registrar;

(b) if the cooperative is required under the provisions of the Corporations Act applied by section 240 (the applied provisions) to prepare financial statements for its most recently ended financial year—a copy of the financial statements;

(c) a copy of the financial statements of each subsidiary of the cooperative for the most recently ended financial year;

(d) a copy of any report by the auditor of the cooperative or subsidiary—

(i) prepared under the applied provisions in relation to the cooperative or subsidiary; or

(ii) on any financial statements mentioned in paragraph (b) or (c);

(e) any particulars prescribed under the regulations.

Maximum penalty: 20 penalty units.

Note If a form is approved under s 468 (Approved forms) for a list, the form must be used.

(2) In subsection (1):

required period, for a year, means—

(a) if the annual general meeting of the cooperative is not held within 5 months after the relevant financial year of the cooperative—28 days after the end of that period; or

(b) in any other case—28 days after the day of the annual general meeting of the cooperative.

A cooperative must, at the written request of the registrar, send to the registrar, within the time and in the way that the registrar requires, a full list of the members of the cooperative and of each subsidiary of the cooperative, together with the particulars in relation to those members that the registrar requires.

Maximum penalty: 20 penalty units.

(1) The registrar may, in writing, require a cooperative to provide to the registrar a special return in the form, within the time, and relating to the subject matter, stated by the registrar.

(2) The cooperative must comply with a requirement under subsection (1).

Maximum penalty: 20 penalty units.

(1) The name of a cooperative may consist of words, numbers or a combination of both.

(2) The name of the cooperative must include the word ‘Cooperative’ or ‘Co-operative’ or the abbreviation ‘Co-op’ or ‘Co-op.’.

(3) The word ‘Limited’ or the abbreviation ‘Ltd’ must be the last word of the name.

(4) A corporation formed or incorporated under a law other than this Act must not register under the other law by any name that includes the word ‘Cooperative’ or ‘Co-operative’ or the abbreviation ‘Co-op’ or ‘Co-op.’.

Maximum penalty: 20 penalty units.

(5) Subsection (4) does not apply to a credit union.

(6) Subsection (4) also does not apply to a body corporate, corporation, society or other entity that was, immediately before the repeal of the Co-operative Societies Act 1939, an exempt body within the meaning of that Act, section 32.

(7) Subsection (6) and this subsection expire 2 years after the commencement of this section.

A description of a cooperative is not inadequate or incorrect only because it uses 1 or more of the following:

(a) the abbreviation ‘Co-op’ or ‘Co-op.’ instead of the word ‘Cooperative’ or ‘Co-operative’ in the cooperative’s name;

(b) the abbreviation ‘Ltd’ instead of the word ‘Limited’ in the cooperative’s name;

(c) an ampersand (the symbol ‘&’) instead of the word ‘and’ in the cooperative’s name;

(d) any of those words instead of the corresponding abbreviation or symbol in the cooperative’s name;

(e) any abbreviation or elaboration of the name of the cooperative approved, in writing, by the registrar in a particular case or for a particular purpose.

(1) A cooperative must ensure that the name of the cooperative appears in legible characters—

(a) on its seal; and

(b) in all notices, advertisements and other official publications of the cooperative; and

(c) in all its business documents.

Maximum penalty: 20 penalty units.

(2) An officer of a cooperative, or a person acting on its behalf, must not—

(a) use a seal of the cooperative; or

(b) issue, or authorise the issue of, any notice, advertisement or other official publication of the cooperative; or

(c) sign, or authorise to be signed, on behalf of the cooperative any business document of the cooperative;

in or on which the cooperative’s name does not appear in legible characters.

Maximum penalty: 20 penalty units.

(3) A director of a cooperative must not knowingly authorise or permit a contravention of subsection (1) or (2).

Maximum penalty: 20 penalty units.

(4) In this section:

business document, of a cooperative, means a document issued, signed or endorsed by or on behalf of the cooperative that 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 cooperative; or

(d) a document prescribed under the regulations.

(1) A cooperative may by special resolution change its name to a name approved in writing by the registrar.

(2) A change of name must be advertised in the way prescribed under the regulations.

(3) A change of name does not take effect until—

(a) the registrar has noted the change on the certificate of registration of the cooperative; or

(b) the certificate of registration is surrendered to the registrar and a replacement certificate of registration is issued in the new name.

(4) A change of name by a cooperative does not affect—

(a) the identity of the cooperative; or

(b) the exercise of any rights, or the enforcement of any obligations, by or against the cooperative or anyone else; or

(c) the continuation of a legal proceeding by or against the cooperative.

(5) A legal proceeding that might have been continued or begun by or against the cooperative in its former name may be continued or begun by or against the cooperative in its new name.

(6) The registrar must refuse to approve a change of name if the registrar considers that the new name contravenes this Act or is undesirable.

(7) The registrar may order a cooperative to change its name if the registrar is of the opinion that the name is likely to be confused with the name of a corporation or a registered business name.

(1) A cooperative must have a registered office.

Maximum penalty: 20 penalty units.

(2) A cooperative must, at the premises of its registered office, publicly and conspicuously display a notice stating the name of the cooperative and identifying the premises as its registered office.

Maximum penalty: 20 penalty units.

(3) A cooperative must give the registrar notice of its registered office not later than 28 days after the day it is registered.

Maximum penalty: 20 penalty units.

(4) If the address of a cooperative’s registered office changes, the cooperative must give the registrar notice of the new address not later than 28 days after the day the change happens.

Maximum penalty: 20 penalty units.

In this division:

obtaining, in relation to financial accommodation, includes obtaining credit and borrowing or raising money by any means.

The regulations may impose requirements and restrictions on the obtaining of financial accommodation and the giving of security in relation to the obtaining of financial accommodation by a cooperative.

(1) A cooperative may accept money on deposit only as permitted by subsection (2).

(2) A cooperative may accept money on deposit if—

(a) the cooperative—

(i) was authorised by its rules immediately before the commencement of this Act to accept money on deposit; and

(ii) remains so authorised; or

(b) the cooperative was a deposit-taking corporation immediately before it became a cooperative and it is authorised by its rules to accept money on deposit; or

(c) for a merged cooperative—1 or more of the cooperatives involved in the merger was a deposit-taking cooperative immediately before the registration of the merged cooperative and the merged cooperative is authorised by its rules to accept money on deposit.

A member or anyone else from whom a cooperative obtains financial accommodation is not required to see how it is applied and is not affected if the cooperative applies it in a way that contravenes this Act or the rules of the cooperative.

(1) The registrar may, by notice served on a cooperative, give a direction to the cooperative about how it must exercise its functions in relation to the activities of the cooperative in obtaining financial accommodation.

(2) A direction under subsection (1) may make provision for any 1 or more of the following matters:

(a) requiring the cooperative to cease obtaining financial accommodation or to cease obtaining financial accommodation in a particular way;

(b) requiring the cooperative to repay in accordance with the direction all or part of financial accommodation obtained;

(c) requiring the cooperative to refinance in a stated way financial accommodation repaid in accordance with the registrar’s direction;

(d) how the cooperative is permitted to invest or use the proceeds of financial accommodation it obtains.

(1) A cooperative may incur subordinated debt.

(2) A subordinated debt is a debt incurred under an agreement under which, in the event of the winding-up of the cooperative, any claim of the creditor against the cooperative in relation to 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 under paragraph (a), after the claims of any other creditor of the cooperative and before the claims of members to repayment of any share capital in the cooperative.

(3) An agreement mentioned in subsection (2) has effect despite the provisions of the Corporations Act, part 5.6 (Winding up generally), division 6 (Proof and ranking of claims) that are applied by division 12.3 (Winding-up and deregistration).

(1) The following provisions of the Corporations Act apply to debentures of a cooperative:

• part 1.2A (Disclosing entities)

• chapter 2L (Debentures)

• chapter 6D (Fundraising)

• part 7.10 (Market misconduct and other prohibited conduct relating to financial products and financial services).

(2) The provisions of the Corporations Act applied by this section do not apply to a loan to which section 268 (Compulsory loan by member to cooperative) applies.

(3) The provisions of the Corporations Act applied by this section do not apply to an issue of debentures of a cooperative made—

(a) solely to members; or

(b) solely to members and employees of the cooperative; or

(c) to a person who has had the person’s share capital converted to debt on becoming an inactive member of the cooperative.

(4) The registrar may, in writing, exempt a cooperative from the provisions of the Corporations Act applied by this section or any of them.

(1) This section applies to the issue of debentures of a cooperative where the issue is made—

(a) solely to members; or

(b) solely to members and employees of the cooperative.

(2) Before issuing to the person debentures to which this section applies, a cooperative must provide a person with a disclosure statement, approved in writing by the registrar, and containing the information that is reasonably necessary to allow a person to make an informed assessment of the financial prospects of the cooperative, including—

(a) the purpose for which the money raised by the cooperative 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 cooperative; and

(d) the interests of the directors of the cooperative in the issue of the debentures; and

(e) any compensation or consideration to be paid to officers or members of the cooperative in relation to the issue of debentures; and

(f) anything else that the registrar directs.

(3) Section 20 (except subsections (2), (4) and (9)) applies to the approval of a disclosure statement under this section with any necessary changes and, in particular, as if any reference in the section to a formation meeting were a reference to the issue of debentures.

A debenture of a cooperative may be sold or transferred only with the approval of the board and in accordance with the rules of the cooperative.

The Corporations Act, section 124 (1) (b) (Legal capacity and powers of a company) and section 563AAA (Redemption of debentures) apply to debentures issued by a cooperative to any of its members or employees.

(1) A cooperative may, if authorised by its rules, require its members to lend, with or without security, to the cooperative in accordance with a proposal approved by special resolution of the cooperative.

(2) The proposal must not require a loan to be for longer than 7 years or, if another term is prescribed under the regulations, that term.

(3) The proposal must—

(a) be accompanied by a disclosure statement, approved in writing by the registrar, that explains the purpose for which the loan raised by the cooperative in accordance with 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 cooperative and the basis on which the amount required to be lent by each member is to be worked out; and

(c) be accompanied by a statement telling the member that the member may tell the board, by notice given to the board on or before the date stated in the statement, that the member resigns on the passing of the special resolution.

(4) The date stated in the statement must be a date before the passing of the special resolution.

(5) If the proposal allows, the board of the cooperative may, in accordance with the terms of the proposal, deduct the amount required to be lent by a member to the cooperative from any amount owing by the cooperative to the member in relation to the member’s dealings with the cooperative.

(6) A proposal to deduct an amount mentioned in subsection (5) must, in addition, clearly show—

(a) the basis on which the amount is to be deducted; and

(b) when and how the deduction is to be made.

(7) If the proposal is approved, it is binding on—

(a) all members of the cooperative on the day 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) everyone who becomes a member of the cooperative after that day and before the total amount of the loan to be raised in accordance with the proposal has been raised.

(8) Section 20 (except subsections (2), (4) and (9)) applies to the approval of a disclosure statement under this section with any necessary changes and, in particular, as if any reference in the section to a formation meeting were a reference to the special resolution.

(1) The rate of interest payable by a cooperative in relation to a loan under section 268 during any period is—

(a) for a cooperative with share capital—