New South Wales Consolidated Acts

CO-OPERATIVES ACT 1992 - SECT 268

268 Compulsory loan by member to co-operative

(cf Vic Act s 267)

(1) If the rules of the co-operative so provide, the co-operative may require its members to lend money, with or without security, to the co-operative, in accordance with a proposal approved by special resolution of the co-operative.

(2) The proposal must not require a loan to be for a term exceeding 7 years or such other term as is prescribed by the regulations.

(3) The proposal must:

(a) be accompanied by a disclosure statement, approved by the Registrar, that explains the purpose for which the money raised by the co-operative pursuant to the proposal is to be used and includes any other information that the Registrar directs, and

(b) clearly show the total amount of the loan to be raised by the co-operative and the basis on which the money required to be lent by each member is to be calculated, and

(c) be accompanied by a statement informing the member that the member may inform the board by notice on or before the date specified in the statement (being a date before the passing of the special resolution) that the member resigns on the passing of the special resolution.

(4) If the proposal so allows, the board of the co-operative may, in accordance with the terms of the proposal, deduct the money required to be lent by a member to the co-operative from money due from the co-operative to the member in respect of his or her dealings with the co-operative.

(5) A proposal to deduct money referred to in subsection (4) must, in addition, clearly show:

(a) the basis on which the money is to be deducted, and

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

(6) When approved, the proposal is binding on:

(a) all members of the co-operative at the date of passing of the special resolution other than a member who has given a notice of resignation in accordance with subsection (3) (c), and

(b) all persons who become members of the co-operative after that date and before the total amount of the loan to be raised pursuant to the proposal has been raised.

(7) Sections 17 (except subsections (2), (4) and (11)) and 28A apply to the approval of a disclosure statement under this section with any necessary modifications and in particular as if any reference in section 17 to a formation meeting were a reference to the special resolution.