CO-OPERATIVES ACT 1997

South Australian Consolidated Acts

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CO-OPERATIVES ACT 1997

TABLE OF PROVISIONS

Long Title

PART 1--Preliminary

Division 1--Introductory

1. Short title
3. Objects of this Act

Division 2--Interpretation

4. Definitions
5. Qualified privilege

Division 3--The co-operative principles

6. Co-operative principles
7. Interpretation to promote co-operative principles

Division 4--Application of Corporations Act to co-operatives

8. Definitions
9. Exclusion of operation of Corporations Act
10. Application of excluded Corporations legislation provisions by the regulations
11. Modifications to applied provisions

PART 2--Formation

Division 1--Types of co-operatives

13. Types of co-operatives
14. Trading co-operatives
15. Non-trading co-operatives

Division 2--Formation meeting

16. Formation meeting

Division 3--Approval of disclosure statement and rules

17. Approval of disclosure statement
18. Approval of rules

Division 4--Registration of proposed co-operative

19. Application for registration of proposed co-operative
20. Registration of co-operative
21. Incorporation and certificate of registration

Division 5--Registration of an existing body corporate

22. Existing body corporate can be registered
23. Formation meeting
24. Application for registration
25. Requirements for registration
26. Certificate of registration
27. Effect of registration

Division 6--Conversion of co-operative

28. Conversion of co-operative

Division 7--Appeals

29. Appeal against refusal to approve disclosure statement
30. Appeal against refusal to approve draft rules
31. Appeal against refusal to register
32. Commission to comply with Court determination

Division 8--General

33. Stamp duty exemption for certain co-operatives
34. Acceptance of money by proposed co-operative
35. Issue of duplicate certificate

PART 3--Legal capacity and powers

Division 1--General powers

36. Effect of incorporation
37. Power to form companies and enter into joint ventures

Division 2--Doctrine of ultra vires abolished

38. Interpretation
39. Doctrine of ultra vires abolished
40. Legal capacity
41. Restrictions on co-operatives in rules
42. Results of contravention of restriction in rules

Division 3--Persons having dealings with co-operatives

43. Assumptions entitled to be made
44. Assumptions
45. Person who knows or ought to know is not entitled to make assumptions
46. Lodgment of documents not to constitute constructive knowledge
47. Effect of fraud

Division 4--Authentication and execution of documents and confirmation of contracts

48. Common seal
49. Official seal
50. Authentication need not be under seal
51. Co-operative may authorise person to execute deed
52. Execution under seal
53. Contractual formalities
54. Other requirements as to consent or sanction not affected
55. Transitional

Division 5--Pre-registration contracts

56. Contracts before registration
57. Persons may be released from liability but is not entitled to indemnity
58. This Division replaces other rights and liabilities

PART 4--Membership

Division 1--General

59. Becoming a member
60. Members of associations
61. Members of federations
62. Qualifications for membership
63. Membership may be joint
64. Members under 18 years of age
65. Representatives of bodies corporate
66. Notification of shareholders and shareholdings
67. Circumstances in which membership ceases--all co-operatives
68. Additional circumstances in which membership ceases--co-operatives with share capital
69. Carrying on business with too few members

Division 2--Rights and liabilities of members

70. Rights of membership not exercisable until registered etc
71. Liability of members to co-operative
72. Co-operative to provide information to person intending to become a member
73. Entry fees and regular subscriptions
74. Members etc may be required to deal with co-operative
75. Fines payable by members
76. Charge and set-off of co-operative
77. Repayment of shares on expulsion

Division 3--Death of member

78. Meaning of interest
79. Transfer of share or interest on death of member
80. Transfer of small shareholdings and interests on death
81. Value of shares and interests
82. Co-operative protected

Division 4--Disputes involving members

83. Grievance procedure
84. Application to Supreme Court

Division 5--Oppressive conduct of affairs

85. Interpretation
86. Application of Division
87. Who may apply for court order?
88. Orders that the Supreme Court may make
89. Basis on which Supreme Court makes orders
90. Winding up need not be ordered if oppressed members prejudiced
91. Application of winding up provisions
92. Changes to rules
93. Copy of order to be lodged with Commission

Division 6--Proceedings on behalf of a co-operative by members and others

94. Bringing, or intervening in, proceedings on behalf of a co-operative
95. Applying for and granting permission
96. Substitution of another person for the person granted permission
97. Effect of ratification by members
98. Permission to continue, compromise or settle proceedings brought, or intervened in, with permission
99. General powers of Supreme Court
100. Power of Supreme Court to make costs order

PART 5--Rules

101. Effect of rules
102. Content of rules
103. Purchase and inspection of copy of rules
104. False copies of rules
105. Model rules
106. Rules can only be altered in accordance with this Act
107. Approval of alteration of rules
108. Alteration by special resolution
109. Alteration by resolution of board
110. Alteration does not take effect until registered
111. Appeal against refusal to approve alteration
112. Appeal against refusal to register alteration
113. Commission to comply with Court determination

PART 6--Active membership

Division 1--Definitions

114. Primary activity--meaning
115. What is active membership?
116. What are active membership provisions and resolutions?

Division 2--Rules to contain active membership provisions

117. Number of primary activities required
118. Rules to contain active membership provisions
119. Factors and considerations for determining primary activities
120. Active membership provisions--trading co-operatives
121. Regular subscription--active membership of non-trading co-operative

Division 3--Active membership resolutions

122. Notice of meeting
123. Eligibility to vote on active membership resolution
124. Eligibility of directors to vote on proposal at board meeting
125. Other entitlements of members not affected

Division 4--Cancellation of membership of inactive members

126. Cancellation of membership of inactive member
127. Share to be forfeited if membership cancelled
128. Failure to cancel membership--offence by director
129. Deferral of forfeiture by board
130. Cancellation of membership prohibited in certain circumstances
131. Notice of intention to cancel membership
132. Order of Supreme Court against cancellation
133. Repayment of amounts due in respect of cancelled membership
134. Interest on deposits and debentures
135. Repayment of deposits and debentures
136. Register of cancelled memberships

Division 5--Entitlements of former members of trading co-operatives

137. Application of Division
138. Former shareholders to be regarded as shareholders for certain purposes
139. Entitlements of former shareholders on mergers etc
140. Set-off of amounts repaid etc on forfeited shares
141. Entitlement to distribution from reserves
142. Commission may exempt co-operatives from provisions

PART 7--Shares

Division 1--Nature of shares

143. Nature of shares in co-operative

Division 2--Disclosure

144. Disclosure to intending shareholders in trading co-operative
144A. Content of disclosure statement to intending shareholders
144B. Exemptions for disclosure statements

Division 3--Issue of shares

145. Shares--general
145A. Application of Corporations Act to shares
146. Minimum paid-up amount
147. Shares not to be issued at a discount
148. Issue of shares at a premium
149. Joint ownership of shares
150. Members may be required to take up additional shares
151. Bonus share issues
152. Restrictions on bonus shares
153. Notice in respect of bonus shares

Division 4--Beneficial and non-beneficial interests in shares

154. Notice of non-beneficial ownership at time of transfer
155. Notice of non-beneficial ownership not notified at time of transfer
156. Registration as beneficial owner of shares notified as non-beneficially transferred
157. Notification of change in nature of shareholding
158. Presumption of awareness
159. Presumption that shares held non-beneficially
160. Noting of beneficial and non-beneficial interests in registers of members
161. Registration as trustee etc on death of owner of shares
162. Registration as administrator of estate on incapacity of shareholder
163. Registration as Official Trustee in Bankruptcy
164. Liabilities of persons registered as trustee or administrator
165. Notice of trusts in register of members
166. No notice of trust as provided by this Division

Division 5--Sale or transfer of shares

167. Sale or transfer of shares
168. Transfer on death of member
169. Restriction on total shareholding
170. Transfer not effective until registered

Division 6--Re-purchase of shares

171. Purchase and repayment of shares
172. Deposit or debentures in lieu of payment when share repurchased
173. Cancellation of shares

PART 8--Voting and meetings

Division 1--Voting entitlements

174. Application of Part
175. Voting
176. Voting by proxy
177. Restriction on voting entitlement under power of attorney
178. Restriction on voting by representatives of bodies corporate
179. Inactive members not entitled to vote
180. Control of the right to vote
180A. Effect of disposal of shares on voting rights
181. Effect of relevant share and voting interests on voting rights
182. Rights of representatives to vote
183. Other rights and duties of members not affected by ineligibility to vote
184. Vote of disentitled member to be disregarded

Division 2--Resolutions

185. Decisions to be by ordinary resolution
186. Ordinary resolutions
187. Special resolutions
188. How majority obtained is ascertained
189. Disallowance by Commission
190. Declaration of passing of special resolution
191. Effect of special resolution
192. Lodgment of special resolution
193. Decision of Commission on application to register special resolution

Division 2A--Resolution by circulated document

193A. Application of Division
193B. Resolution by circulation of document--fewer than 50 members

Division 3--Postal ballots

194. Postal ballots
195. Special postal ballots
196. When is a special postal ballot required?
197. Holding of postal ballot on requisition
198. Expenses involved in postal ballots on requisition

Division 4--Meetings

199. Annual general meetings
200. Special general meetings
201. Notice of meetings
202. Quorum of meetings
203. Decision at meetings
204. Convening of general meeting on requisition
205. Minutes

PART 9--Management and administration of co-operatives

Division 1--The board

206. Board of directors
207. Election of directors
208. Qualification of directors
209. Disqualified persons
210. Meeting of the board of directors
211. Transaction of business outside meetings
212. Deputy directors
213. Delegation by board
214. Removal from and vacation of office

Division 1A--Secretary

214A. Secretary

Division 2--Duties and liabilities of directors, officers and employees

215. Meaning of officer
216. Officers must act honestly
217. Standard of care and diligence required
218. Improper use of information or position
219. Court may order payment of compensation
220. Recovery of damages by co-operative
221. Other duties and liabilities not affected
222. Indemnification of officers and auditors
223. Application of Corporations Act concerning officers of co-operatives

Division 2A--Employee entitlements

223A. Employee entitlements

Division 3--Restrictions on directors and officers

224. Directors' remuneration
225. Certain financial accommodation to officers prohibited
226. Financial accommodation to directors and associates
227. Restriction on directors of certain co-operatives selling land to co-operative
228. Management contracts

Division 4--Declaration of interests

229. Declaration of interest
230. Declarations to be recorded in minutes
231. Division does not affect other laws or rules
232. Certain interests need not be declared

Division 5--Financial records, reports and audit

233. Requirements for financial records, statements and reports
234. Power of Commission to grant exemptions
236. Disclosure by directors
237. Protection of auditors etc
238. Financial year

Division 6--Registers, records and returns

239. Registers to be kept by co-operatives
240. Location of registers
241. Inspection of registers etc
242. Use of information on registers
243. Notice of appointment etc of directors
244. Annual report
245. List of members to be furnished at request of Commission
246. Special return to be furnished at request of Commission

Division 7--Name and registered office

247. Name to include certain matter
248. Use of abbreviations
249. Name to appear on business documents etc
250. Change of name of co-operative
250A. Restriction on use of word "co-operative" or similar words
251. Registered office of co-operative

PART 10--Funds and property

Division 1--Power to raise money

252. Meaning of obtaining financial accommodation
253. Funds to be raised in accordance with Act and regulations
254. Limits on deposit taking
255. Members etc not required to see to application of money
256. Commission's directions re fundraising
257. Subordinated debt
258. Application of Corporations Act to issues of debentures
258A. Application of certain other Corporations Act provisions
259. Disclosure statement
260. Approval of board for transfer of debentures
261. Application of Corporations Act--debentures (additional issues)
262. Compulsory loan by member to co-operative
263. Interest payable on compulsory loan

Division 2--Charges

264. Registration of charges

Division 3--Receivers and other controllers of property of co-operatives

265. Receivers and other controllers of property of co-operatives

Division 4--Disposal of surplus from activities

266. Retention of surplus for benefit of co-operative
267. Application for charitable purposes or members' purposes
268. Distribution of surplus or reserves to members
269. Application of surplus to other persons

Division 5--Acquisition and disposal of assets

270. Acquisition and disposal of assets

PART 11--Restrictions on the acquisition of interests in co-operatives

Division 1--Restrictions on share and voting interests

271. Application of Part
272. Notice required to be given of voting interest
273. Notice required to be given of substantial share interest
274. Requirements for notices
275. Maximum permissible level of share interest
276. Shares to be forfeited to remedy contravention
277. Powers of board in response to suspected contravention
278. Powers of Supreme Court with respect to contravention
279. Co-operative to inform Commission of interest over 20 per cent
280. Co-operative to keep register
281. Unlisted companies to provide list of shareholders
282. Excess share interest not to affect loan liability
283. Extent of operation of Division
284. Commission may grant exemption from Division

Division 2--Restrictions on certain share offers

285. Share offers to which this Division applies
286. Requirements to be satisfied before offer can be made
287. Some offers totally prohibited if they discriminate
288. Offers to be submitted to board first
289. Announcement of proposed takeovers concerning proposed company
290. Additional disclosure requirements for offers involving conversion to company
291. Consequences of prohibited offer
292. Commission may grant exemptions

PART 12--Merger, transfer of engagements, winding up

Division 1--Mergers and transfers of engagements

293. Application of Division
294. Mergers and transfers of engagements of local co-operatives
295. Requirements before application can be made
296. Disclosure statement required
297. Making an application
298. Approval of merger
299. Approval of transfer of engagements
300. Transfer of engagements by direction of Commission

Division 2--Transfer of incorporation

301. Application for transfer
302. Requirements before application can be made
303. Meaning of new body and transfer
304. New body ceases to be registered as co-operative
305. Transfer not to impose greater liability etc
306. Effect of new certificate of registration
306A. New body must give copy of certificate to Commission
307. New body is a continuation of the co-operative
308. Stamp duty

Division 3--Winding up

309. Methods of winding up
310. Winding up on Commission's certificate
310A. Method of deregistration
311. Application of Corporations Act to winding up
312. Restrictions on voluntary winding up
313. Commencement of members' voluntary winding up
314. Distribution of surplus--non-trading co-operatives
315. Liquidator vacancy may be filled by Commission
316. Review of liquidator's remuneration
317. Liability of member to contribute in a winding up where shares are forfeited etc

Division 4--Administration of co-operative--application of Corporations Act

318. Application ofPART 5.3A of Corporations Act

Division 5--Appointment of administrator

319. Appointment of administrator
320. Effect of appointment of administrator
321. Revocation of appointment
322. Expenses of administration
323. Liabilities arising from administration
324. Additional powers of Commission
325. Stay of proceedings
326. Administrator to report to Commission

Division 6--Effect of merger etc on property, liabilities etc

327. How this Division applies to a merger
328. How this Division applies to a transfer of engagements
329. How this Division applies to a transfer of incorporation
330. Effect of merger etc on property, liabilities etc

Division 7--Miscellaneous

331. Grounds for winding up, transfer of engagements, appointment of administrator
333. Application of Corporations Act with respect to insolvent co-operatives

PART 13--Arrangements and reconstructions

Division 1--General requirements

334. Requirements for binding compromise or arrangement
335. Supreme Court ordered meeting of creditors
336. Commission to be given notice and opportunity to make submissions
337. Results of 2 or more meetings
338. Persons disqualified from administering compromise
339. Application of Corporations Act to person appointed
340. Copy of order to be attached to rules
341. Directors to arrange for reports
342. Power of Supreme Court to restrain further proceedings
343. Supreme Court need not approve compromise or arrangement takeovers

Division 2--Explanatory statements

344. Explanatory statement required to accompany notice of meeting etc
345. Requirements for explanatory statement
346. Contravention of Division--offence by co-operative
347. Provisions for facilitating reconstructions and mergers

Division 3--Acquisition of shares of dissenting shareholders

348. Definitions
349. Schemes and contracts to which Division applies
350. Acquisition of shares pursuant to notice to dissenting shareholder
351. Restrictions when excluded shares exceed 10 per cent
352. Remaining shareholders may require acquisition
353. Transfer of shares pursuant to compulsory acquisition
354. Disposal of consideration for shares compulsorily acquired

Division 4--Miscellaneous

355. Notification of appointment of scheme manager
356. Power of Supreme Court to require reports
357. Effect of out-of-jurisdiction compromise or arrangement
358. Jurisdiction to be exercised in harmony with Corporations Act jurisdiction
359. Commission may appear etc

PART 14--Foreign co-operatives

Division 1--Introductory

360. Definitions
361. Co-operatives law

Division 2--Registration of foreign co-operatives

362. Operation of foreign co-operative in South Australia
363. What constitutes carrying on business
364. Application for registration of participating co-operative
365. Application for registration of non-participating co-operative
366. Commission to approve rules of non-participating co-operative
367. Name of foreign co-operative
368. Registration of foreign co-operative
369. Application of Act and regulations to foreign co-operatives
370. Commission to be notified of certain changes
371. Balance sheets
372. Cessation of business
373. Co-operative proposing to register as a foreign co-operative

Division 3--Mergers and transfers of engagements

374. Who is the appropriate Registrar?
375. Authority for merger or transfer of engagements
376. Requirements before application can be made
377. Disclosure statement required
378. Making an application
379. Approval of merger
380. Approval of transfer of engagements
381. Effect of merger or transfer of engagements
382. Division applies instead of certain other provisions of this Act

PART 15--Supervision and protection of co-operatives

Division 1--Supervision and inspection

383. Definitions
384. Co-operative includes subsidiaries, foreign co-operatives and co-operative ventures
385. Appointment of inspectors
386. Commission and investigators have functions of inspectors
387. Inspector's identity card
388. Inspectors may require certain persons to appear, answer questions and produce documents
389. Inspectors' powers of entry
390. Powers of inspectors on premises entered
391. Functions of inspectors in relation to relevant documents
392. Offence--failing to comply with requirements of inspector
393. Protection from incrimination
394. Search warrants
395. Copies or extracts of records to be admitted in evidence
396. Privilege
397. Police aid for inspectors

Division 2--Inquiries

398. Definitions
399. Appointment of investigators
400. Powers of investigators
401. Examination of involved person
402. Privilege
403. Offences by involved person
404. Offences relating to documents
405. Record of examination
406. Report of investigator
407. Proceedings following inquiry
408. Admission of investigator's report as evidence
409. Costs of inquiry

Division 3--Prevention of fraud etc

410. Falsification of records
411. Fraud or misappropriation
412. Offering or paying commission
413. Accepting commission
414. False statements in loan application etc

Division 4--Miscellaneous powers of the Commission

415. Application for special meeting or inquiry
416. Holding of special meeting
417. Expenses of special meeting or inquiry
418. Power to hold special inquiry into co-operative
419. Special meeting following inquiry
420. Information and evidence
421. Extension or abridgment of time
422. Power of Commission to intervene in proceedings

PART 16--Administration of this Act

Division 1--The Commission

423. Interpretation
424. Commission responsible for administration of this Act
425. Keeping of registers
426. Disposal of records by Commission
427. Inspection of register
428. Approvals by Commission
429. Lodgment of documents
430. Method of lodgment
431. Power of Commission to refuse to register or reject documents

Division 2--Evidence

432. Certificate of registration
433. Certificate evidence
434. Orders published in the Gazette
435. Records kept by co-operatives
436. Minutes
437. Official certificates
438. The Commission and proceedings
439. Rules
440. Registers

PART 17--Offences and proceedings

441. Offences by officers of co-operatives
442. Notice to be given of conviction for offence
443. Secrecy
444. False or misleading statements
445. Further offence for continuing failure to do required act
446. Civil remedies
447. Injunctions

PART 18--General

448. Exemption from stamp duty
449. Co-operatives ceasing to exist
450. Service of documents on co-operatives
451. Service on member of co-operative
452. Reciprocal arrangements
453. Translation of documents
454. Regulations
SCHEDULE 1--Matters for which rules must make provision
SCHEDULE 2--Relevant interests, associates, related bodies
SCHEDULE 3--Registration etc of charges
SCHEDULE 4--Receivers, and other controllers, of property of co-operatives
SCHEDULE 5--Savings and transitional
Legislative history

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