New South Wales Consolidated Acts

CO-OPERATIVES ACT 1992 - SECT 172

172 Purchase and repayment of shares

(cf Vic Act s 176)

(1) The rules of a co-operative may authorise the co-operative to:

(a) purchase any share of a member in the co-operative at the request of the member, and

(b) repay to a member, with the member’s consent, the whole or any part of the amount paid up on any share held by the member when the sum repaid is not required for the activities of the co-operative.

(2) The amount paid by a co-operative under this section in purchasing shares or repaying any amount paid up on shares, or both, in any financial year of the co-operative must not exceed the sum of:

(a) 5% of the nominal value of the issued share capital of the co-operative immediately before the commencement of that financial year, and

(b) the amount of any additional share capital of the co-operative subscribed for during that year.

(3) The Council may by order in writing exempt a co-operative from the operation of subsection (2) in respect of a particular financial year, either unconditionally or subject to conditions.

(4) The amount paid for a share when it is repurchased may be an amount determined by the board that is less than the nominal value of the share but only:

(a) if the books of the co-operative disclose that the amount paid is the net shareholder’s equity per share in the undertaking of the co-operative, or

(b) in accordance with the rules of the co-operative.

(5) This section does not apply if the member has been expelled from the co-operative or the member’s membership has been otherwise cancelled under Part 6.

(6) A co-operative must not repurchase shares or repay amounts paid up on shares if:

(a) the co-operative is likely to become insolvent because of the repurchase of the shares or because of the repayment of amounts paid up on the shares, or

(b) the co-operative is insolvent.