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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Co-operatives Bill 2007
CONTENTS
Part 1 -- Preliminary
Division 1 -- Introductory
1. Short title 2
2. Commencement 2
3. Objects of this Act 2
4. Terms used in this Act 3
Division 2 -- Qualified privilege
5. Qualified privilege 8
Division 3 -- The co-operative principles
6. Co-operative principles 8
7. Interpretation to promote co-operative principles 10
Division 4 -- Application of Corporations Act
to co-operatives
8. Definitions 10
9. Excluded matter 11
10. Applying the Corporations legislation to
co-operatives 12
11. Modifications to applied provisions 14
Part 2 -- Formation
Division 1 -- Types of co-operatives
12. Types of co-operatives 15
13. Distributing co-operatives 15
14. Non-distributing co-operatives 15
Division 2 -- Formation meeting
15. Formation meeting 16
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Co-operatives Bill 2007
Contents
Division 3 -- Approval of disclosure statement
and rules
16. Approval of disclosure statement 17
17. Approval of rules 19
Division 4 -- Registration of proposed
co-operative
18. Application for registration of proposed
co-operative 20
19. Registration of co-operative 21
20. Incorporation and certificate of registration 22
Division 5 -- Registration of an existing
corporation
21. Existing corporation can be registered 23
22. Formation meeting and transitional provision 23
23. Application for registration 24
24. Requirements for registration 25
25. Transitional provision 26
26. Certificate of registration 26
27. Effect of registration 26
Division 6 -- Conversion of co-operative
28. Conversion of co-operative 27
Division 7 -- Reviews
29. Appeal against refusal to approve disclosure
statement 27
30. Appeal against refusal to approve draft rules 27
31. Appeal against refusal to register 28
32. Supreme Court's powers on appeal 28
Division 8 -- General
33. Acceptance of money by proposed co-operative 28
34. Issue of duplicate certificate 28
Part 3 -- Legal capacity and powers
Division 1 -- General powers
35. Effect of incorporation 29
36. Power to form companies and enter into joint
ventures 29
Division 2 -- Doctrine of ultra vires abolished
37. Interpretation 29
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Co-operatives Bill 2007
Contents
38. Doctrine of ultra vires abolished 30
39. Legal capacity 30
40. Restrictions on co-operatives in rules 31
Division 3 -- Persons having dealings with
co-operatives
41. Assumptions entitled to be made 31
42. Assumptions 32
43. Person who knows or ought to know is not entitled
to make assumptions 33
44. Lodgment of documents not to constitute
constructive knowledge 33
45. Effect of fraud 34
Division 4 -- Authentication and execution of
documents and confirmation of contracts
46. Common seal 34
47. Official seal 34
48. Authentication need not be under seal 35
49. Co-operative may authorise person to execute deed 35
50. Execution under seal 36
51. Contractual formalities 36
52. Other requirements as to consent or sanction not
affected 36
Division 5 -- Pre-registration contracts
53. Contracts before registration 36
54. Person may be released from liability but is not
entitled to indemnity 38
55. This Division replaces other rights and liabilities 38
Part 4 -- Membership
Division 1 -- General
56. Becoming a member 39
57. Members of co-operative group 39
58. Qualification for membership and transitional
provision 40
59. Membership may be joint 40
60. Members under 18 years of age 41
61. Representatives of corporations 41
62. Notification of shareholders and shareholdings 41
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Co-operatives Bill 2007
Contents
63. Circumstances in which membership ceases -- all
co-operatives 42
64. Additional circumstances in which membership
ceases -- co-operatives with share capital 43
65. Carrying on business with too few members 43
Division 2 -- Rights and liabilities of members
66. Rights of membership not exercisable until
registered etc. 44
67. Liability of members to co-operative 44
68. Co-operative to make information available to
person intending to become a member 45
69. Entry fees and regular subscriptions 45
70. Members etc. may be required to deal with
co-operative 46
71. Fines payable by members 47
72. Charge and set off of co-operative 47
73. Repayment of shares on resignation or expulsion 48
Division 3 -- Death of member
74. Meaning of "interest" 50
75. Transfer of share or interest on death of member 50
76. Transfer of small shareholdings and interests on
death 50
77. Value of shares and interests 51
78. Co-operative protected 51
Division 4 -- Disputes involving members
79. Grievance procedure 51
80. Application to Supreme Court 52
Division 5 -- Oppressive conduct of affairs
81. Interpretation 53
82. Application of Division 53
83. Who may apply for court order 53
84. Orders that the Supreme Court may make 54
85. Basis on which Supreme Court makes orders 55
86. Winding-up need not be ordered if oppressed
members prejudiced 55
87. Application of winding-up provisions 55
88. Changes to rules 56
89. Copy of order to be lodged with Registrar 56
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Co-operatives Bill 2007
Contents
Division 6 -- Proceedings on behalf of a
co-operative by members and others
90. Bringing, or intervening in, proceedings on behalf
of a co-operative 56
91. Applying for and granting leave 57
92. Substitution of another person for the person
granted leave 58
93. Effect of ratification by members 58
94. Leave to discontinue, compromise or settle
proceedings brought, or intervened in, with leave 59
95. General powers of the Supreme Court 59
96. Power of Supreme Court to make costs order 60
Part 5 -- Rules
97. Effect of rules 61
98. Content of rules 61
99. Purchase and inspection of copy of rules 62
100. False copies of rules 62
101. Model rules 62
102. Rules can only be altered in accordance with this
Act 63
103. Approval of alteration of rules 63
104. Alteration by special resolution 64
105. Alteration by resolution of board 64
106. Alteration does not take effect until registered 64
107. Appeal against refusal to approve alteration 65
108. Appeal against refusal to register 65
109. Supreme Court's powers on appeal 65
Part 6 -- Active membership
Division 1 -- Definitions
110. Meaning of "active membership resolution" 66
111. What is active membership 66
112. What are active membership provisions and
resolutions 66
Division 2 -- Rules to contain active
membership provisions
113. Number of primary activities required 67
114. Rules to contain active membership provisions 67
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Co-operatives Bill 2007
Contents
115. Factors and considerations for determining primary
activities etc. 67
116. Active membership provisions -- distributing
co-operatives 68
117. Regular subscription -- active membership of
non-distributing co-operative 68
Division 3 -- Active membership resolutions
118. Notice of meeting 69
119. Eligibility of directors to vote on proposal at board
meeting 69
Division 4 -- Cancellation of membership of
inactive or missing members
120. Cancellation of membership of inactive or missing
member 69
121. Share to be forfeited if membership cancelled 70
122. Failure to cancel membership -- offence by
director 70
123. Deferral of forfeiture by board 71
124. Cancellation of membership prohibited in certain
circumstances 71
125. Notice of intention to cancel membership 72
126. Order of Supreme Court against cancellation 72
127. Repayment of amounts due because of cancelled
membership 73
128. Interest on deposits, debentures and co-operative
capital units 75
129. Repayment of deposits, and redemption of
debentures and co-operative capital units 76
130. Register of cancelled memberships 76
Division 5 -- Entitlements of former members
of distributing co-operatives
131. Application of Division 77
132. Former shareholders to be taken to be shareholders
for certain purposes 77
133. Entitlements of former shareholders on mergers
etc. 78
134. Set off of amounts repaid etc. on forfeited shares 79
135. Regulations may exempt co-operatives from
provisions 80
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Co-operatives Bill 2007
Contents
Part 7 -- Shares
Division 1 -- Nature of share
136. Nature of share in co-operative 81
Division 2 -- Disclosure
137. Disclosure to intending shareholders in distributing
co-operative 81
138. Content of disclosure statement to intending
shareholders 82
139. Exemptions for disclosure statements 82
Division 3 -- Issues of shares
140. Shares -- general 83
141. Application of Corporations Act for particular
share subscriptions 83
142. Minimum paid up amount 84
143. Shares not to be issued at a discount 84
144. Issue of shares at a premium 84
145. Joint ownership of shares 85
146. Members may be required to take up additional
shares 85
147. Bonus share issues 86
148. Restrictions on bonus shares 87
149. Notice about bonus shares 87
Division 4 -- Beneficial and non-beneficial
interest in shares
150. Direction to disclose 88
151. Disclosure by member of relevant interests and
instructions 88
152. Registration as trustee etc. on death of owner of
shares 90
153. Registration as administrator of estate on
incapacity of shareholder 90
154. Registration as Official Trustee in Bankruptcy 90
155. Liabilities of person registered as trustee or
administrator 91
156. Notice of trusts in register of members 91
157. No notice of trust except as provided by this
Division 91
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Co-operatives Bill 2007
Contents
Division 5 -- Sale or transfer of shares
158. Sale or transfer of shares 92
159. Transfer on death of member 92
160. Restriction on total shareholding 92
161. Transfer not effective until registered 93
162. Non-members become members on registration 93
Division 6 -- Repurchase of shares
163. Purchase and repayment of shares 93
164. Deposit, debentures or co-operative capital units
instead of payment when share repurchased 94
165. Cancellation of shares 96
Part 8 -- Voting and meetings
Division 1 -- Voting entitlements
166. Application of Part to voting 97
167. Voting 97
168. Voting by proxy 97
169. Control of the right to vote 98
170. Effect of disposal of shares on voting rights 98
171. Effect of relevant share and voting interests on
voting rights 98
172. Rights of representatives 99
173. Other rights and duties of members not affected by
ineligibility to vote 99
174. Vote of disentitled member to be disregarded 99
Division 2 -- Resolutions
175. Decisions to be by ordinary resolution 99
176. Ordinary resolutions 100
177. Special resolutions 100
178. How majority obtained is ascertained 100
179. Declaration of passing of special resolution 101
180. Effect of special resolution 101
181. Lodgment of special resolution 101
182. Decision of Registrar on application to register
special resolution 102
Division 3 -- Resolution by circulated document
183. Application of Division 3 103
184. Resolution by circulation of document -- fewer
than 50 members 103
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Co-operatives Bill 2007
Contents
Division 4 -- Postal ballots
185. Postal ballots 104
186. Special postal ballots 104
187. When a special postal ballot required 105
188. Holding of postal ballot on requisition 106
189. Expenses involved in postal ballots on requisition 107
Division 5 -- Meetings
190. Annual general meetings 107
191. Special general meetings 108
192. Notice of meetings 108
193. Quorum at meetings 108
194. Decision at meetings 108
195. Calling of general meeting on requisition 109
196. Minutes 110
Part 9 -- Management and
administration of co-operatives
Division 1 -- The Board
197. Board of directors 112
198. Election of directors 112
199. Qualification of directors 113
200. Disqualified persons 114
201. Meeting of the board of directors 116
202. Transaction of business outside meetings 117
203. Alternate directors 117
204. Delegation by board 117
205. Removal from and vacation of office 118
Division 2 -- Secretary
206. Secretary 119
Division 3 -- Duties and liabilities of directors,
officers and employees
207. Meaning of "officer" 119
208. Officers must act honestly 120
209. Standard of care and diligence required 120
210. Improper use of information or position 121
211. Recovery of damages by co-operative 122
212. Other duties and liabilities not affected 122
213. Application of Corporations Act concerning
indemnities and insurance for officers and auditors 122
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Co-operatives Bill 2007
Contents
214. Application of Corporations Act provisions
concerning officers of co-operatives 123
Division 4 -- Restrictions on directors and
officers
215. Directors' remuneration 124
216. Certain financial accommodation to officers
prohibited 124
217. Financial accommodation to directors and
associates 125
218. Restriction on directors of certain co-operatives
selling land to co-operative 127
219. Management contracts 127
Division 5 -- Declaration of interests
220. Declaration of interest 128
221. Declarations to be recorded in minutes 130
222. Division does not affect other laws or rules 130
223. Certain interests need not be declared 130
Division 6 -- Financial reports and audit
224. Meaning of "control" and "entity" 131
225. Requirements for financial records and financial
reports 131
226. Power of Registrar to grant exemptions 132
227. Disclosure by directors 133
228. Protection of auditors etc. 133
229. Financial year 134
Division 7 -- Registers, records and returns
230. Registers to be kept by co-operatives 134
231. Location of registers 135
232. Inspection of registers etc. 136
233. Use of information on registers 137
234. Notice of appointment etc. of directors and officers 138
235. Annual report to be lodged with Registrar 138
236. List of members to be provided at request of
Registrar 139
237. Special return to be given at request of Registrar 139
Division 8 -- Name and registered office
238. Name to include certain matter 140
239. Use of abbreviations 141
240. Name to appear on business documents etc. 142
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Co-operatives Bill 2007
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241. Change of name of co-operative 142
242. Restriction on use of word "co-operative" or
similar words 143
243. Registered office of co-operative 143
Part 10 -- Funds and property
Division 1 -- Power to raise money
244. Meaning of obtaining financial accommodation 145
245. Fund raising to be in accordance with Act and
regulations 145
246. Limits on deposit taking 145
247. Members etc. not required to see to application of
money 145
248. Registrar's directions about fundraising 146
249. Subordinated debt 146
250. Application of Corporations Act to issues of
debentures 147
251. Application of Corporations Act to particular
issues of debentures 148
252. Disclosure statement 149
253. Approval of board for transfer of debentures 150
254. Application of Corporations Act -- reissue of
redeemed debentures 150
255. Compulsory loan by member to co-operative 150
256. Interest payable on compulsory loan 151
Division 2 -- Co-operative capital units
257. General nature of co-operative capital units 152
258. Priority of CCU's on winding-up 153
259. Financial accommodation provisions apply to issue
of CCUs 153
260. CCUs to be issued to non-members 154
261. Minimum requirements for rules concerning CCUs 154
262. CCUs not to be issued unless terms of issue
approved by Registrar 154
263. Directors' duties concerning CCUs 155
264. Redemption of CCUs 156
265. Capital redemption reserve 156
266. Issue of shares in substitution for redemption 157
Division 3 -- Charges
267. Registration of charges 157
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Co-operatives Bill 2007
Contents
Division 4 -- Receivers and other controllers of
property of co-operatives
268. Receivers and other controllers of property of
co-operatives 157
Division 5 -- Disposal of surplus from activities
269. Retention of surplus for benefit of co-operative 158
270. Application for charitable purposes or members'
purposes 158
271. Distribution of surplus or reserves to members 158
272. Application of surplus to other persons 159
Division 6 -- Acquisition and disposal of assets
273. Acquisition and disposal of assets 159
Part 11 -- Restrictions on the
acquisition of interests
in co-operatives
Division 1 -- Restrictions on share and voting
interests
274. Application of Part 162
275. Notice required to be given of voting interest 162
276. Notice required to be given of substantial share
interest 162
277. Requirements for notices 163
278. Maximum permissible level of share interest 163
279. Transitional provision 164
280. Shares to be forfeited to remedy contravention 164
281. Powers of board in response to suspected
contravention 165
282. Powers of Supreme Court in relation to
contravention 166
283. Co-operative to notify Registrar of interest over
20% 166
284. Co-operative to keep register 167
285. Unlisted companies to provide list of shareholders
etc. 167
286. Excess share interest not to affect loan liability 168
287. Extent of operation of Division 168
288. Registrar may grant exemption from Division 169
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Co-operatives Bill 2007
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Division 2 -- Restrictions on certain share
offers
289. Share offers to which Division applies 169
290. Offer to be approved by special resolution using
special postal ballot 169
291. Some offers totally prohibited if they discriminate 169
292. Offers to be submitted to board first 170
293. Announcements of proposed takeovers concerning
proposed company 170
294. Additional disclosure requirements for offers
involving conversion to company 172
295. Consequences of prohibited offer 172
296. Registrar may grant exemptions 173
Part 12 -- Merger, transfer of
engagements, winding-up
Division 1 -- Mergers and transfers of
engagements
297. Application of Division 174
298. Mergers and transfers of engagements of local
co-operatives 174
299. Requirements before application can be made 174
300. Disclosure statement required 174
301. Making an application 176
302. Approval of merger 176
303. Approval of transfer of engagements 177
304. Transfer of engagements by direction of Registrar 177
Division 2 -- Transfer of incorporation
305. Application for transfer 178
306. Requirements before application can be made 179
307. Meaning of "new body" and "transfer" 179
308. New body ceases to be registered as co-operative 180
309. Transfer not to impose greater liability etc. 180
310. Effect of new certificate of registration 180
311. New body must give copy of new certificate of
registration or incorporation to Registrar 181
312. New body is a continuation of the co-operative 181
Division 3 -- Winding-up and deregistration
313. Methods of winding-up 181
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Co-operatives Bill 2007
Contents
314. Winding-up on Registrar's certificate 181
315. Method of deregistration 182
316. Application of Corporations Act to winding-up and
deregistration 182
317. Restrictions on voluntary winding-up 184
318. Start of members' voluntary winding-up 184
319. Distribution of surplus -- non-distributing
co-operatives 184
320. Liquidator -- vacancy may be filled by Registrar 185
321. Review of liquidator's remuneration 185
322. Liability of member to contribute in a winding-up
where shares forfeited etc. 185
Division 4 -- Administration of co-operative --
application of Corporations Act
323. Application of Corporations Act to administration
of co-operative 186
Division 5 -- Appointment of administrator
324. Appointment of administrator 186
325. Effect of appointment of administrator 187
326. Revocation of appointment 187
327. Expenses of administration 189
328. Liabilities arising from administration 189
329. Additional powers of Registrar 190
330. Stay of proceedings 190
331. Administrator to report to Registrar 191
Division 6 -- Effect of merger etc. on property,
liabilities etc.
332. How this Division applies to a merger 191
333. How this Division applies to a transfer of
engagements 191
334. How this Division applies to a transfer of
incorporation 192
335. Effect of merger etc. on property, liabilities etc. 192
Division 7 -- Miscellaneous
336. Grounds for winding-up, transfer of engagements,
appointment of administrator 194
337. Application of Corporations Act for insolvent
co-operatives 195
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Co-operatives Bill 2007
Contents
Part 13 -- Arrangements and
reconstructions
Division 1 -- General requirements
338. Requirements for binding compromise or
arrangement 196
339. Supreme Court ordered meeting of creditors 197
340. Registrar to be given notice and opportunity to
make submissions 197
341. Results of 2 or more meetings 198
342. Persons disqualified from administering
compromise etc. 198
343. Application of Schedule 4 to person appointed 199
344. Application of Corporations Act to person
appointed 199
345. Copy of order to be attached to rules 199
346. Directors to arrange for reports 200
347. Power of Supreme Court to restrain further
proceedings 200
348. Supreme Court need not approve compromise or
arrangement takeovers 201
Division 2 -- Explanatory statements
349. Explanatory statement required to accompany
notice of meeting etc. 201
350. Requirements for explanatory statement 203
351. Contravention of Division -- offence by
co-operative 203
Division 3 -- Facilitating reconstructions and
mergers
352. Provisions for facilitating reconstructions and
mergers 204
Division 4 -- Acquisition of shares of dissenting
shareholders
353. Definitions 206
354. Schemes and contracts to which Division applies 206
355. Acquisition of shares pursuant to notice to
dissenting shareholder 206
356. Restrictions when excluded shares exceed 10% 207
357. Remaining shareholders may require acquisition 208
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Co-operatives Bill 2007
Contents
358. Transfer of shares pursuant to compulsory
acquisition 209
359. Disposal of consideration for shares compulsorily
acquired 210
Division 5 -- Miscellaneous
360. Notification of appointment of scheme manager 211
361. Power of Supreme Court to require reports 211
362. Effect of out-of-jurisdiction compromise or
arrangement 212
363. Jurisdiction to be exercised in harmony with
Corporations Act jurisdiction 212
364. Registrar may appear etc. 212
Part 14 -- Mutual recognition
Division 1 -- Introductory
365. Definitions 213
366. What constitutes carrying on business 213
367. Co-operatives law 214
368. Excluded matter 215
Division 2 -- Mutual recognition of foreign
co-operatives
369. Operation of foreign co-operatives in this State 216
370. Authorisation to carry on business 217
371. Registration under Companies (Co-operative)
Act 1943 217
372. Notification to Registrar 217
373. Authorisation notices for participating
co-operatives 219
374. Authorisation notices for non-participating
co-operatives 219
375. Name of foreign co-operative 220
376. When foreign co-operative not authorised to carry
on business 220
377. Withdrawal of authority to carry on business 220
378. Appeals 221
379. Application of Act and regulations to foreign
co-operatives 222
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Co-operatives Bill 2007
Contents
Division 3 -- General
380. Name and place of origin to appear on business
and other documents 222
381. Supply of information to participating Registrars 223
382. Registrar to be notified of changes 223
383. Cessation of business 223
384. Functions conferred on Registrar under
co-operatives law 224
Division 4 -- Winding-up of foreign
co-operatives in this State
385. Winding-up to relate to State activities 224
386. Supreme Court may order winding-up 224
387. Application of Corporations Act to winding-up of
foreign co-operatives 225
388. Outstanding property of foreign co-operative 226
Division 5 -- Mergers and transfers of
engagements
389. Definitions 226
390. Authority for merger or transfer of engagements 227
391. Requirements before application can be made 227
392. Disclosure statement required 228
393. Making an application 230
394. Approval of merger 230
395. Approval of transfer of engagements 231
396. Effect of merger or transfer of engagements 232
397. Division applies instead of certain other provisions
of this Act 234
Part 15 -- Supervision and protection
of co-operatives
Division 1 -- Supervision and protection
398. Definitions 235
399. "Co-operative" includes subsidiaries, foreign
co-operatives and co-operative ventures 235
400. Appointment of inspectors 236
401. Registrar and investigators have functions of
inspectors 236
402. Inspector's identity card 236
403. Production or display of inspector's identity card 237
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Co-operatives Bill 2007
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404. Powers of inspector 237
405. Inspector's appointment conditions 237
406. Entry of place 238
407. Consent to entry 238
408. Inspectors may require certain persons to appear,
answer questions and produce documents 239
409. Powers of inspectors on place entered 240
410. Functions of inspectors in relation to relevant
documents 240
411. Protection from incrimination 241
412. Warrants 242
413. Warrants -- applications made other than in
person 243
414. Entry with warrant 244
415. General powers after entering places 245
416. Power to seize evidence 246
417. Receipt for seized things 246
418. Return of seized things 246
419. Power to require name and address 247
420. False or misleading statements 248
421. Power to require production of documents 248
422. False or misleading documents 248
423. Obstruction of inspectors 249
424. Copies or extracts of records to be admitted in
evidence 249
425. Privilege 250
Division 2 -- Inquiries
426. Definitions 251
427. Appointment of investigators 252
428. Powers of investigators 253
429. Examination of involved person 253
430. Privilege 254
431. Offences by involved person 255
432. Offences relating to documents 255
433. Record of examination 256
434. Report of investigator 256
435. Proceedings following inquiry 258
436. Admission of investigator's report as evidence 258
437. Costs of inquiry 258
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Co-operatives Bill 2007
Contents
Division 3 -- Prevention of fraud etc.
438. Falsification of records 259
439. Fraud or misappropriation 260
440. Offering or paying commission 260
441. Accepting commission 260
442. False statements in loan application etc. 261
Division 4 -- Miscellaneous powers of the
Registrar
443. Application for special meeting or inquiry 261
444. Holding of special meeting 262
445. Expenses of special meeting or inquiry 262
446. Power to hold special inquiry into co-operative 263
447. Special meeting following inquiry 263
448. Information and evidence 263
449. Extension or abridgment of time 263
450. Power of Registrar to intervene in proceedings 264
Part 16 -- Administration of this Act
Division 1 -- The Registrar
451. Registrar of Co-operatives 265
452. Deputy Registrar and other staff 265
453. Delegation by Registrar 266
454. Registers to be kept by Registrar 266
455. Keeping of registers 267
456. Disposal of records by Registrar 267
457. Inspection of registers 268
458. Approvals by Registrar 268
459. Lodgment of documents 269
460. Way of lodging 269
461. Power of Registrar to refuse to register or reject
documents 269
Division 2 -- Protection from liability
462. Particular persons protected from liability 270
Division 3 -- Evidence
463. Certificate of registration 271
464. Certificate evidence 271
465. Records kept by co-operatives 272
466. Minutes 272
467. Official certificates 272
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Co-operatives Bill 2007
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468. The Registrar and proceedings 273
469. Rules 273
470. Registers 273
Division 4 -- Enforceable undertakings
471. Undertakings following contravention of, or failure
to comply with, this Act 273
472. Register of undertakings 274
473. Enforcement orders 274
Part 17 -- Offences and proceedings
474. Offences by officers of co-operatives 277
475. Notice to be given of conviction for offence 277
476. Secrecy 277
477. False or misleading statements 280
478. Further offence for continuing failure to do
required act 280
479. Civil remedies 281
480. Injunctions 282
481. Proceedings for offences etc. 283
Part 18 -- General
482. Co-operative ceasing to exist 285
483. Service of documents on co-operative 285
484. Service on member of co-operative 286
485. Reciprocal arrangements 287
486. Translations of documents 287
487. Exemptions may be on conditions 287
488. Approval of forms 287
489. Regulation making power 288
490. Companies (Co-operative) Act 1943 repealed 288
491. Co-operative and Provident Societies Act 1903
repealed 288
492. Transitional and savings provisions 288
493. Consequential amendments 288
Schedule 1 -- Matters for which rules
must make provision
1. Requirements for all co-operatives 289
2. Additional matters -- co-operatives with share
capital 290
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Co-operatives Bill 2007
Contents
3. Additional matters -- non-distributing
co-operatives 291
Schedule 2 -- Relevant interests,
associates, related bodies
Division 1 -- Relevant interests
1. Terminology used in this Schedule 292
2. Basic rules -- relevant interests 292
3. Control of corporation having power in relation to
a share 292
4. Control of 20% of voting power in corporation
having power in relation to a share 293
5. Deemed relevant interest in advance of
performance of agreement that will give rise to a
relevant interest 293
6. Control of corporation having a relevant interest by
virtue of clause 5 294
7. Matters not affecting application of Division 294
8. Corporation may have a relevant interest in its own
shares 295
9. Exclusions -- money lenders 295
10. Exclusions -- certain trustees 295
11. Exclusions -- instructions to securities dealer to
dispose of share 296
12. Exclusions -- honorary proxies 296
13. Exclusions -- holders of prescribed offices 296
14. Prescribed exclusions 296
15. Effect of Schedule 296
16. Relevant interest -- corporation other than
co-operative 297
Division 2 -- Associates
17. Effect of Part 297
18. Associates of a corporation 297
19. Matters relating to voting rights 297
20. General 298
21. Exclusions 299
Division 3 -- Related corporations
22. Related corporations 299
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Co-operatives Bill 2007
Contents
Schedule 3 -- Registration etc. of
charges
Division 1 -- Preliminary
1. Interpretation 300
2. Application to charges referred to in clause 17 301
3. Lodgment of documents 301
Division 2 -- Registration
Subdivision 1 -- Charges
4. Charges to which the Schedule applies 301
5. Excluded charges 302
6. Personal chattels 303
7. Book debts 303
8. Crops or stock 304
9. Deposit of documents of title 304
10. Charges on land or fixtures on land 304
11. Where other property is also charged 304
12. Effect of failure to lodge or give notice or
document 304
Subdivision 2 -- Notice of charge
13. Lodgment of notice of charge and copy of
instrument, and transitional provision 305
14. Series of debentures 306
15. Operation of priority provisions in respect of issue
of debentures 306
16. Discounts 307
17. Acquisition of property subject to charge 307
Subdivision 3 -- Registration
18. Register of Co-operative Charges 308
19. Registration of documents relating to charge 308
20. Provisional registration if stamp duty not paid 309
21. Provisional registration if required particulars not
supplied 310
22. Effect of provisional registration 311
23. If 2 or more charges relate to the same property 312
24. Registration of assignment or variation of charge 312
25. Standard time for the purposes of this Subdivision 312
page xxii
Co-operatives Bill 2007
Contents
Subdivision 4 -- Certain charges void against
liquidator or administrator
26. Definitions 313
27. Certain charges void against liquidator or
administrator 313
28. Certain varied charges void against liquidator or
administrator 314
29. Supreme Court may extend required period 315
30. Certain later charges void 315
31. Effect of provisions on purchaser in good faith 316
Subdivision 5 -- Certain charges in favour of
persons void
32. Definitions 317
33. Charges in favour of certain persons void in certain
cases 317
34. Supreme Court may give leave for enforcement of
charge 318
35. Certain transactions excluded 318
Subdivision 6 -- Assignment, variation or
satisfaction of charges
36. Assignment and variation of charges 319
37. Satisfaction of, and release of property from,
charges 320
Subdivision 7 -- General
38. Lodgment of notices 320
39. Lodgment offences 321
40. Co-operative to keep documents relating to charges 321
41. Co-operative to keep register, and transitional
provision 321
42. Certificates 323
43. Power of Supreme Court to rectify register of
charges 324
44. Registrar may exempt from compliance with
certain requirements of Division 324
Division 3 -- Order of priority
Subdivision 1 -- General
45. Definitions 325
46. Priorities of charges 326
page xxiii
Co-operatives Bill 2007
Contents
Subdivision 2 -- Priority rules
47. General priority rules in relation to registered
charges 327
48. General priority rule in relation to unregistered
charges 328
49. Special priority rules 328
Schedule 4 -- Receivers, and other
controllers, of property of
co-operatives
1. Interpretation 330
2. Application of Schedule 331
3. Persons not to act as receivers 331
4. Supreme Court may declare whether controller is
validly acting 332
5. Liability of controller 333
6. Liability of controller under pre-existing
agreement about property used by co-operative 334
7. Powers of receiver 335
8. Controller's duty of care in exercising power of
sale 337
9. Supreme Court may authorise managing controller
to dispose of property despite prior charge 337
10. Receiver's power to carry on co-operative's
business during winding-up 338
11. Controller's duties in relation to financial
institution accounts and financial records 339
12. Managing controller to report within 2 months
about co-operative's affairs 340
13. Reports by receiver 341
14. Supervision of controller 342
15. Controller may apply to Supreme Court 343
16. Power of Supreme Court to fix receiver's
remuneration 343
17. Controller has qualified privilege in certain cases 345
18. Notification of matters relating to controller 345
19. Statement that receiver appointed or other
controller acting 346
20. Officers to report to controller about co-operative's
affairs 347
page xxiv
Co-operatives Bill 2007
Contents
21. Controller may require reports 349
22. Controller may inspect records 350
23. Lodging controller's accounts 350
24. Payment of certain debts, out of property subject to
floating charge, in priority to claims under charge 352
25. Enforcement of controller's duty to make returns 354
26. Supreme Court may remove controller for
misconduct 354
27. Supreme Court may remove redundant controller 354
28. Effect of clauses 26 and 27 355
Schedule 5 -- Applied co-operatives
provisions
1. Provisions applicable to participating co-operatives 356
2. Provisions applicable to non-participating
co-operatives 356
Schedule 6 -- Modifications to
Corporations Act
1. Modifications to winding-up provisions 358
Schedule 7 -- Transitional and
savings provisions
Division 1 -- Preliminary
1. Terms used in this Schedule 360
2. Interpretation Act 1984 not affected 360
3. Transitional regulations 360
Division 2 -- Prohibition on registration under
former Act
4. Prohibition on registration under Companies
(Co-operative) Act 1943 or Co-operative and
Provident Societies Act 1903 361
Division 3 -- Transfer to incorporation under
this Act
5. Co-operative companies and registered societies to
register under this Act 362
6. Decision of Registrar to register co-operative
company or registered society 363
page xxv
Co-operatives Bill 2007
Contents
Division 4 -- General transitional provisions
7. Special resolutions, applications to the Court and
court orders 363
8. Inspections or inquiry 364
9. Acquisition of shares of shareholders dissenting
from scheme or contract approved by majority 364
10. Transitional provisions about active members 365
Division 5 -- Pending incorporation,
reconstruction or winding-up
11. Pending incorporation 365
12. Pending reconstruction 366
13. Pending wind-up 366
Schedule 8 -- Consequential
amendments and repeal
Division 1 -- Consequential amendments
commencing on registration of
Co-operative Bulk Handling Limited
1. Grain Marketing Act 2002 amended 368
2. Local Government Act 1995 amended 368
Division 2 -- Consequential amendments
commencing on commencement of this
Act
3. Civil Judgments Enforcement Act 2004 amended 369
4. Criminal Property Confiscation Act 2000 amended 369
5. Equal Opportunity Act 1984 amended 369
6. Taxi Act 1994 amended 370
7. Western Australian Treasury Corporation
Act 1986 amended 370
Division 3 -- Consequential amendments
commencing on repeal of former Acts
8. Civil Judgments Enforcement Act 2004 amended 370
9. Criminal Property Confiscation Act 2000 amended 371
10. Equal Opportunity Act 1984 amended 371
11. Housing Loan Guarantee Act 1957 amended 371
12. Local Government Act 1995 amended 371
13. Taxi Act 1994 amended 372
14. Western Australian Treasury Corporation
Act 1986 amended 372
page xxvi
Co-operatives Bill 2007
Contents
Defined Terms
page xxvii
Western Australia
LEGISLATIVE ASSEMBLY
(As amended during consideration in detail)
Co-operatives Bill 2007
A Bill for
An Act to provide a legislative framework for the formation,
registration and management of co-operatives and for related
purposes.
The Parliament of Western Australia enacts as follows:
page 1
Co-operatives Bill 2007
Part 1 Preliminary
Division 1 Introductory
s. 1
Part 1 -- Preliminary
Division 1 -- Introductory
1. Short title
This is the Co-operatives Act 2007.
5 2. Commencement
This Act comes into operation as follows:
(a) sections 1 and 2 -- on the day on which this Act
receives the Royal Assent;
(b) the rest of the Act, other than sections 490 and 491, and
10 Schedule 8 Divisions 1 and 3 -- on a day fixed by
proclamation;
(c) sections 490 and 491, and Schedule 8 Division 3 -- on
the last day of the period of 2 years after the day fixed
under paragraph (a);
15 (d) Schedule 8 Division 1 -- on the day that Co-operative
Bulk Handling Limited becomes registered under this
Act.
3. Objects of this Act
The objects of this Act are to --
20 (a) enable the formation, registration and operation of
co-operatives; and
(b) promote co-operative philosophy, principles, practices
and objectives; and
(c) protect the interests of co-operatives, their members and
25 the public in the operations and activities of
co-operatives; and
(d) ensure that the directors of co-operatives are accountable
for their actions and decisions to the members of
co-operatives; and
page 2
Co-operatives Bill 2007
Preliminary Part 1
Introductory Division 1
s. 4
(e) encourage and facilitate self-management by
co-operatives at all levels; and
(f) encourage the development, integration and
strengthening of co-operatives at local, regional,
5 national and international levels by supporting and
fostering State and national peak organisations and
co-operative instrumentalities.
4. Terms used in this Act
(1) In this Act --
10 "active member" has the meaning given to that term in
section 111;
"active membership provision" has the meaning given to that
term in section 112;
"agreement" means an agreement, arrangement or
15 understanding --
(a) whether formal or informal or partly formal and
partly informal; and
(b) whether written or oral or partly written and partly
oral; and
20 (c) whether or not having legal or equitable force and
whether or not based on legal or equitable rights;
"alter", in relation to the rules of a co-operative, includes to add
to, substitute or rescind;
"associate" has the meaning given to that term in Schedule 2
25 Division 2;
"board" means the board of directors of a co-operative and in
circumstances where a person or committee is exercising a
power of the board delegated under the rules of a
co-operative, includes that person or committee;
30 "chief executive officer", of a co-operative or a subsidiary of a
co-operative, means the principal executive officer of the
co-operative or subsidiary for the time being, by whatever
name called, and whether or not that officer is a director or
the secretary;
page 3
Co-operatives Bill 2007
Part 1 Preliminary
Division 1 Introductory
s. 4
"constitution", of a co-operative, includes the articles of
association, memorandum, rules and other constituent
documents;
"co-operative" means a body registered under this Act as a
5 co-operative;
"co-operative capital unit" has the meaning given to that term
in section 257(1);
"co-operative group" means a co-operative that has a
membership as described in section 57;
10 "corporation" has the meaning given to that term in the
Corporations Act;
"Corporations Act" means the Commonwealth Corporations
Act 2001;
"debenture" means a document issued by a co-operative that
15 evidences or acknowledges indebtedness of the
co-operative in respect of money that is or may be
deposited with or lent to the co-operative, whether
constituting a charge on property of the co-operative or not,
and includes a unit of a debenture, except that it does not
20 include --
(a) a cheque, order for the payment of money or bill of
exchange; or
(b) a promissory note having a face value of not less than
$50 000; or
25 (c) any other document of a class that is prescribed by
the regulations as exempt from this definition;
"deed of arrangement" means a deed of company arrangement
in force under the Corporations Act Part 5.3A as that Part
applies under this Act or a deed of that type as varied and
30 in force from time to time;
"deposit taking co-operative" means a co-operative that is
permitted under section 246 to accept money on deposit;
"distributing co-operative" means a co-operative as described
in section 13;
page 4
Co-operatives Bill 2007
Preliminary Part 1
Introductory Division 1
s. 4
"eligible member" means a person considered by the board of
a co-operative to be eligible to become a member of that
co-operative;
"financial records" includes the following --
5 (a) invoices, receipts, orders for the payment of money,
bills of exchange, cheques, promissory notes and
vouchers;
(b) documents of prime entry;
(c) working papers and other documents needed to
10 explain --
(i) the methods by which financial statements are
made up; and
(ii) adjustments to be made in preparing financial
statements;
15 "financial report" means an annual financial report or a
half-year financial report prepared under the Corporations
Act Chapter 2M;
"financial services business" has the meaning given to that
term in the Corporations Act section 761A;
20 "financial services licensee" has the meaning given to that
term in the Corporations Act section 761A;
"financial statements" means annual financial statements
under the Corporations Act section 295 or half-year
financial statements applying under the Corporations Act
25 section 303;
"foreign co-operative" means a corporation that is registered,
incorporated or formed under, or subject to, a law in force
outside this State, including outside Australia, that
regulates co-operatives or organisations having attributes
30 the same as or similar to co-operatives except that it does
not include --
(a) a body incorporated under the Corporations Act or
under another law of the Commonwealth; or
page 5
Co-operatives Bill 2007
Part 1 Preliminary
Division 1 Introductory
s. 4
(b) an authorised deposit-taking institution as defined in
the Commonwealth Banking Act 1959 section 5;
"inspector" means a person appointed as an inspector under
Part 15;
5 "model rules" means the model rules prescribed by the
regulations under section 101;
"mortgage" includes lien, charge or other security over
property;
"non-distributing co-operative" means a co-operative as
10 described in section 14;
"officer", of a co-operative, means --
(a) a director or secretary of the co-operative; or
(b) a person who is concerned, or takes part, in the
management of the co-operative, whether or not as a
15 director; or
(c) a receiver and manager, appointed under a power
contained in an instrument, of property of the
co-operative; or
(d) an administrator of a deed of arrangement executed
20 by the co-operative; or
(e) a liquidator or provisional liquidator appointed in a
voluntary winding-up of the co-operative; or
(f) an administrator of the co-operative appointed
under --
25 (i) the Corporations Act Part 5.3A as applying
under this Act; or
(ii) Part 12 Division 5 of this Act;
or
(g) a trustee or other person administering a compromise
30 or arrangement made between the co-operative and
another person;
page 6
Co-operatives Bill 2007
Preliminary Part 1
Introductory Division 1
s. 4
"primary activity", of a co-operative, means an activity stated
in the rules of the co-operative to be a primary activity of
the co-operative;
"records" includes books, financial records, financial
5 statements, minutes, registers, deeds, writings, documents
and other sources of information compiled, recorded or
stored in written form or on microfilm, or by electronic
process, or in any other manner or by any other means;
"Registrar" means the Registrar of Co-operatives under
10 section 451;
"related corporation" has the meaning given to that term in
Schedule 2 Division 3;
"relevant interest" in --
(a) a right to vote has the meaning given to that term in
15 Schedule 2 Division 1 clause 2(1); and
(b) a share has the meaning given to that term in
Schedule 2 Division 1 clause 2(2);
"rules", of a co-operative, means the rules of the co-operative
for the time being applying under this Act;
20 "seal", of a co-operative, means the common seal or official
seal of the co-operative;
"share" means share in the share capital of a co-operative;
"subsidiary" has the meaning given to that term in the
Corporations Act;
25 "surplus", in relation to a co-operative, means the excess of
income over expenditure after making proper allowance for
taxation expense, for depreciation in value of the property
of the co-operative and for future contingencies;
"transfer day", for a particular transferred co-operative, means
30 the day on which that co-operative became registered under
this Act;
"transferred co-operative" means a co-operative that
immediately before the commencement of this Act was
page 7
Co-operatives Bill 2007
Part 1 Preliminary
Division 2 Qualified privilege
s. 5
registered as a co-operative company under the Companies
(Co-operative) Act 1943 or as a registered society under the
Co-operative and Provident Societies Act 1903.
(2) A reference in this Act to the Corporations Act or a provision of
5 the Corporations Act applying under this Act (or a part of this
Act) is a reference to that Act or provision to the extent that it is
declared to apply to a matter for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 as a law of
this State.
10 Division 2 -- Qualified privilege
5. Qualified privilege
(1) If this Act provides that a person has qualified privilege for an
act, matter or thing, the person, in relation to the act, matter or
thing --
15 (a) has qualified privilege in proceedings for defamation;
and
(b) is not, in the absence of malice on the person's part,
liable to an action for defamation at the suit of a person.
(2) In subsection (1) --
20 "malice" includes ill-will to the person concerned or any other
improper motive.
(3) Neither this section nor a provision of this Act that provides as
mentioned in subsection (1) limits or affects any right, privilege
or immunity that a person has, apart from this section or such a
25 provision, as a defendant in proceedings, or an action, for
defamation.
Division 3 -- The co-operative principles
6. Co-operative principles
The co-operative principles are the principles set out in the
30 following Table.
page 8
Co-operatives Bill 2007
Preliminary Part 1
The co-operative principles Division 3
s. 6
Table of co-operative principles
Principle
1. Voluntary and open membership
A co-operative is a voluntary organisation, open to all
persons able to use its services and willing to accept the
responsibilities of membership, without gender, social,
racial, political or religious discrimination.
2. Democratic member control
A co-operative is a democratic organisation controlled by its
members, who actively participate in setting policies and
making decisions. Members serving as elected
representatives are accountable to the membership. In
co-operatives other than co-operative groups members have
equal voting rights (one member, one vote). Co-operative
groups are organised in a democratic manner.
3. Member economic participation
Members contribute equitably to, and democratically control,
the capital of their co-operative. Usually, at least part of that
capital is the common property of the co-operative. Usually,
members receive limited compensation, if any, for capital
subscribed as a condition of membership. Members of a
co-operative allocate surplus to be used for any or all of the
purposes of --
(a) developing the co-operative, possibly by setting up
reserves, at least part of which are indivisible; and
(b) benefiting members in proportion to their
transactions with the co-operative; and
(c) supporting other activities approved by the
membership.
4. Autonomy and independence
A co-operative is an autonomous, self-help organisation
controlled by its members. If a co-operative enters into
agreements with other organisations, including governments,
or raises capital from external sources, it does so on terms
that ensure democratic control by its members and maintain
its autonomy.
page 9
Co-operatives Bill 2007
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 7
Principle
5. Education, training and information
A co-operative provides education and training for its
members, elected representatives, managers and employees
so they can contribute effectively to the development of the
co-operative. A co-operative informs the general public,
particularly young people and opinion leaders, about the
nature and benefits of co-operatives.
6. Co-operation among co-operatives
Co-operatives serve their members most effectively and
strengthen the co-operative movement by working together
through local, national, regional and international structures.
7. Concern for the community
Co-operatives, while focusing on member needs, work for
the sustainable development of their communities through
policies accepted by their members.
7. Interpretation to promote co-operative principles
In the interpretation of a provision of this Act, a construction
that would promote co-operative principles is to be preferred to
a construction that would not promote co-operative principles.
5 Division 4 -- Application of Corporations Act to co-operatives
8. Definitions
In this Division --
"company" has the meaning given to that term in the
Corporations Act section 9;
10 "Corporations legislation" means the Corporations legislation
to which the Corporations Act Part 1.1A applies;
"excluded Corporations legislation provision" means any
provision of the Corporations legislation that does not
apply to co-operatives as a law of the Commonwealth.
page 10
Co-operatives Bill 2007
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 9
9. Excluded matter
(1) A co-operative 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 other than to the extent
5 specified in subsection (2).
(2) Subsection (1) does not exclude the application of the following
provisions of the Corporations legislation to co-operatives to the
extent that the provisions would otherwise be applicable to
them --
10 (a) provisions relating to a matter that the regulations
provide is not to be excluded from the operation of the
Corporations legislation;
(b) provisions relating to the role of a co-operative in the
formation of a company;
15 (c) provisions relating to the registration of a co-operative
as a company under the Corporations Act Chapter 5B;
(d) provisions relating to substantial shareholdings, by or
involving a co-operative, in a company;
(e) provisions conferring or imposing functions on a
20 co-operative as a member, or former member, of a
corporation;
(f) provisions relating to dealings by a co-operative in
financial products of a corporation, other than financial
products of the co-operative itself;
25 (g) provisions conferring or imposing functions on a
co-operative in its dealings with a corporation, not being
dealings in financial products of the co-operative;
(h) provisions relating to financial products of a
co-operative, other than shares in, co-operative capital
30 units in, debentures of or deposits with a co-operative;
(i) provisions relating to financial markets and participants
in financial markets;
page 11
Co-operatives Bill 2007
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 10
(j) provisions relating to financial services licensees whose
licence covers dealing in, or providing advice about,
financial products;
(k) provisions relating to carrying on a financial services
5 business;
(l) provisions relating to financial statements, and audits of
financial statements, of financial services licensees
whose licence covers dealing in, or providing advice
about, financial products;
10 (m) provisions relating to clients of financial services
licensees whose licence covers dealing in, or providing
advice about, financial products;
(n) provisions relating to registers of interests in financial
products.
15 (3) To remove doubt it is declared that subsection (1) does not
operate to exclude the operation of the following provisions of
the Corporations Act, except in relation to shares in,
co-operative capital units in, debentures of, or deposits with, a
co-operative --
20 (a) Part 1.2A;
(b) Chapter 2L;
(c) Chapter 6CA;
(d) Chapter 6D;
(e) Part 7.10.
25 (4) If a co-operative is directed by an order of the Supreme Court
under section 84(i) to become registered as a company under the
Corporations Act, the provisions referred to in subsection (2)(c)
apply to the extent necessary for the co-operative to be
registered as a company under Chapter 5B of that Act.
30 10. Applying the Corporations legislation to co-operatives
(1) The regulations may declare a matter relating to co-operatives to
be an applied Corporations legislation matter for the purposes of
page 12
Co-operatives Bill 2007
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 10
the Corporations (Ancillary Provisions) Act 2001 Part 3 in
relation to any excluded Corporations legislation provision or
provisions, with any modifications that are specified in the
declaration.
5 (2) Without limiting subsection (1), any such regulations may --
(a) specify modifications to the definitions and other
interpretative provisions of the Corporations legislation
relevant to any excluded Corporations legislation
provision that is the subject of the declaration; and
10 (b) provide for ASIC to exercise a function under any
excluded Corporations legislation provision that is the
subject of the declaration, but only if --
(i) ASIC is to exercise the function under an
agreement referred to in section 11(8) or (9A)(b)
15 of the new ASIC Act; and
(ii) ASIC is authorised to exercise that function
under section 11 of the new ASIC Act;
and
(c) specify that a reference to ASIC in an excluded
20 Corporations legislation provision that is the subject of
the declaration is to be a reference to another person;
and
(d) identify an excluded Corporations legislation provision
to which the declaration relates by reference to the
25 provision as in force at a particular time; and
(e) specify a court (other than the Supreme Court) to
exercise a function conferred on a court or the Court by
an excluded Corporations legislation provision to which
the declaration relates.
30 (3) Words and expressions used in this section and also in the
Corporations (Ancillary Provisions) Act 2001 Part 3 have the
same meanings in this section as they have in that Part.
page 13
Co-operatives Bill 2007
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 11
11. Modifications to applied provisions
(1) If a provision of this Act or the regulations declares a matter to
be an applied Corporations legislation matter for the purposes of
the Corporations (Ancillary Provisions) Act 2001 Part 3 (the
5 "declaratory provision") in relation to any provisions of the
Corporations legislation (the "applied provisions"), the
declaratory provision is taken to specify the following
modifications --
(a) a reference in the applied provisions to articles or a
10 memorandum of association or a constitution or
replaceable rules is to be read as a reference to rules;
(b) a cross-reference in the applied provisions to another
provision of the Corporations Act is, if that
cross-reference is not appropriate (because for example
15 the provision cross-referred to is not among the applied
provisions), to be read as a cross-reference to the
equivalent provision of this Act;
(c) a reference in the applied provisions to the Gazette is to
be read as a reference to the Western Australian
20 Government Gazette;
(d) a reference in the applied provisions to the
Commonwealth is to be read as a reference to this State;
(e) any of the applied provisions that are not relevant to
co-operatives or that are incapable of application to
25 co-operatives are to be ignored;
(f) modifications prescribed under a regulation under
subsection (2).
(2) The regulations may prescribe the modifications that are
necessary or desirable for the effective operation of the applied
30 provisions.
page 14
Co-operatives Bill 2007
Formation Part 2
Types of co-operatives Division 1
s. 12
Part 2 -- Formation
Division 1 -- Types of co-operatives
12. Types of co-operatives
(1) A body may be registered under this Act as a co-operative.
5 (2) A co-operative may be either --
(a) a distributing co-operative; or
(b) a non-distributing co-operative.
13. Distributing co-operatives
(1) A distributing co-operative must have a share capital.
10 (2) A distributing co-operative is a co-operative whose rules allow
it to give returns or distributions on surplus or share capital.
(3) A distributing co-operative must have a membership of --
(a) for a co-operative group, 2 or more co-operatives; and
(b) for any other distributing co-operative --
15 (i) if a lesser number than 5 is prescribed by the
regulations, at least that number of active
members; or
(ii) otherwise, 5 or more active members.
14. Non-distributing co-operatives
20 (1) A non-distributing co-operative is a co-operative whose rules
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-distributing co-operative may or may not have a share
25 capital.
(3) A non-distributing co-operative must have a membership of --
(a) for a co-operative group, 2 or more co-operatives; and
page 15
Co-operatives Bill 2007
Part 2 Formation
Division 2 Formation meeting
s. 15
(b) for any other non-distributing co-operative --
(i) if a lesser number than 5 is prescribed by the
regulations, at least that number of active
members; or
5 (ii) otherwise, 5 or more active members.
Division 2 -- Formation meeting
15. Formation meeting
(1) Before a proposed co-operative, other than an existing
corporation, can be registered, a formation meeting must be held
10 in accordance with this section.
(2) At the formation meeting --
(a) a person must act as chairman, and a person must be
specified to act as secretary; and
(b) in the case of a proposed distributing co-operative, a
15 disclosure statement approved under section 16 must be
presented to the meeting; and
(c) the proposed rules of the co-operative approved under
section 17 in respect of the proposed co-operative, must
be agreed to by two-thirds of the eligible members
20 attending the meeting; and
(d) the eligible members attending the meeting must sign
the application for membership; and
(e) the eligible members attending the meeting must elect
the first directors of the proposed co-operative in
25 accordance with the proposed rules; and
(f) the eligible members attending the meeting must
authorise a person --
(i) to apply to the Registrar for registration of the
proposed co-operative; and
30 (ii) to do anything necessary to have the proposed
co-operative registered.
page 16
Co-operatives Bill 2007
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 16
(3) The formation meeting must be held by --
(a) for a co-operative group, not less than 2 suitably
qualified co-operatives; and
(b) for any other co-operative, not less than 5 persons, or if
5 a lesser number than 5 is prescribed by the regulations,
not less than the prescribed number of persons, suitably
qualified to be members of the proposed co-operative.
(4) For the purposes of subsection (3), a person or a co-operative is
suitably qualified to be a member if --
10 (a) there are reasonable grounds to believe the person or
co-operative will be an active member of the proposed
co-operative; and
(b) for an individual, the person has attained the age of 18;
and
15 (c) the person satisfies any other requirements for
membership set out in the proposed rules.
(5) Each co-operative forming a proposed co-operative group may
be represented at the formation meeting by one person.
Division 3 -- Approval of disclosure statement and rules
20 16. Approval of disclosure statement
(1) A draft disclosure statement of a proposed distributing
co-operative must be submitted to the Registrar at least 35 days
(or a shorter period the Registrar may allow in a particular case)
before the formation meeting is due to be held.
25 (2) The draft disclosure statement submitted under subsection (1)
must be accompanied by a written statement specifying the date
on which the formation meeting is due to be held.
(3) The disclosure statement must contain the information
necessary to ensure that eligible members are adequately
30 informed of the nature and extent of a person's financial
page 17
Co-operatives Bill 2007
Part 2 Formation
Division 3 Approval of disclosure statement and rules
s. 16
involvement or liability as a member of the co-operative
including so far as applicable --
(a) the estimated costs of formation; and
(b) the active membership provisions of the proposed
5 co-operative; and
(c) the rights and liabilities attaching to shares in the
proposed co-operative; and
(d) the capital required for the co-operative at the time of
formation; and
10 (e) the projected income and expenditure of the
co-operative for its first year of operation; and
(f) information about any pre-registration contractual
obligations of the co-operative under Part 3 Division 5;
and
15 (g) any other information that the Registrar directs.
(4) The disclosure statement cannot 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
20 expert's written consent to the submission of the
disclosure statement with the statement included in the
form and context in which it is included; and
(b) there appears in the disclosure statement a statement that
the expert has given, and has not withdrawn, the
25 expert's consent.
(5) The Registrar may --
(a) approve the draft statement as submitted; or
(b) amend the draft statement, or require a stated
amendment of the draft, and then approve the amended
30 statement; or
(c) approve a different statement to that submitted; or
(d) refuse to approve the statement; or
page 18
Co-operatives Bill 2007
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 17
(e) require the person submitting the disclosure statement to
give the Registrar any additional information the
Registrar reasonably requires, and then act under
paragraph (a), (b), (c) or (d).
5 (6) The Registrar may approve a disclosure statement with or
without conditions.
(7) Subject to subsection (8), the Registrar approves of a disclosure
statement by giving written notice of the approval of the
statement to the person who submitted the draft statement to the
10 Registrar.
(8) The Registrar is taken to have approved the disclosure statement
as submitted to the Registrar unless at least 5 days before the
date specified in the written statement submitted under
subsection (2), the Registrar gives written notice to the person
15 who submitted the draft statement that the Registrar --
(a) has approved an amended or different disclosure
statement; or
(b) is still considering the matter; or
(c) refuses to approve the disclosure statement.
20 17. Approval of rules
(1) A draft of the rules proposed for the co-operative (including
active membership provisions in accordance with Part 6) must
be submitted to the Registrar at least 35 days (or a shorter
period the Registrar may allow in a particular case) before the
25 formation meeting is due to be held.
(2) The draft rules submitted under subsection (1) must be
accompanied by a written statement specifying the date on
which the formation meeting is due to be held.
(3) The proposed rules must --
30 (a) be in accordance with section 98; and
(b) be in a form that may reasonably be approved.
page 19
Co-operatives Bill 2007
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 18
(4) The Registrar may --
(a) approve the proposed rules as submitted; or
(b) approve different proposed rules to those submitted; or
(c) refuse to approve the proposed rules.
5 (5) Subject to subsection (6), the Registrar approves proposed rules
by giving written notice of that approval to the person who
submitted the proposed rules to the Registrar.
(6) The Registrar is taken to have approved the proposed rules as
submitted to the Registrar unless at least 5 days before the date
10 specified in the written statement submitted under
subsection (2), the Registrar gives written notice to the person
who submitted the proposed rules that the Registrar --
(a) has approved different proposed rules to those
submitted; or
15 (b) is still considering the matter; or
(c) refuses to approve the proposed rules.
Division 4 -- Registration of proposed co-operative
18. Application for registration of proposed co-operative
(1) An application for registration as a co-operative, other than an
20 application by a corporation under Division 5, must --
(a) be made in the form approved by the Registrar; and
(b) be accompanied by the fee prescribed by the regulations;
and
(c) be signed by --
25 (i) for a co-operative group, at least 2 directors
elected at the formation meeting; and
(ii) for any other proposed co-operative, at least 5, or
if a lesser number than 5 is prescribed under a
regulation, at least the prescribed number of,
page 20
Co-operatives Bill 2007
Formation Part 2
Registration of proposed co-operative Division 4
s. 19
suitably qualified members, including 2 directors
elected at the formation meeting;
and
(d) be accompanied by --
5 (i) a copy of the proposed rules, certified in writing
by the chairman and secretary for the formation
meeting to have been agreed to at the formation
meeting in accordance with section 15(2)(c); and
(ii) in the case of a proposed distributing
10 co-operative, a copy of the disclosure statement,
certified in writing by the chairman and secretary
for the formation meeting to have been presented
to that meeting as required by section 15(2)(b);
and
15 (iii) a statement listing the name, address, occupation
and place and date of birth of each person elected
at the formation meeting in accordance with
section 15(2)(e) to be a director of the proposed
co-operative and containing a certificate signed
20 by the chairman and secretary verifying that
those persons were elected; and
(iv) a certificate signed by the chairman and secretary
verifying that a specified person is the person
authorised under section 15(2)(f); and
25 (v) any other particulars that the Registrar may
require.
(2) The application must be lodged with the Registrar within
2 months after closure of the formation meeting for the
proposed co-operative or within the extended period that the
30 Registrar may allow.
19. Registration of co-operative
(1) When an application is made under this Division for registration
of a proposed co-operative, the Registrar must register the
page 21
Co-operatives Bill 2007
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 20
co-operative and its rules if satisfied that the requirements
referred to in subsection (2) have been met.
(2) The requirements for registration of a co-operative under this
Division are that --
5 (a) the proposed rules of the proposed co-operative must be
those approved by the Registrar under section 17; and
(b) the requirements of this Act must have been complied
with in relation to the proposed co-operative and
compliance must be likely to continue; and
10 (c) the proposed co-operative must be designed to function
in accordance with the co-operative principles or, if it is
not designed to function entirely in accordance with the
co-operative principles, the Registrar must be satisfied
that there are special reasons why the co-operative
15 should be registered under this Act; and
(d) there must be no reasonable cause for refusing
registration of the proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met the Registrar may
20 refuse to register the co-operative and its rules.
(4) The Registrar must give to the applicant written notice of the
refusal and the reasons for the refusal.
20. Incorporation and certificate of registration
(1) The incorporation of the co-operative takes effect on the
25 registration of the co-operative.
(2) On the registration of the co-operative, the Registrar must issue
a certificate of registration.
page 22
Co-operatives Bill 2007
Formation Part 2
Registration of an existing corporation Division 5
s. 21
Division 5 -- Registration of an existing corporation
21. Existing corporation can be registered
A corporation may apply to the Registrar to be registered as a
co-operative under this Act, if the corporation is --
5 (a) incorporated or registered or deemed to be registered
under the Corporations Act; or
(b) incorporated or registered under any other Act relating
to the incorporation or registration of bodies corporate.
22. Formation meeting and transitional provision
10 (1) Before applying for registration as a co-operative, a corporation
must pass a special resolution in accordance with its constitution
approving of --
(a) the proposed registration; and
(b) any alterations of its existing constitution necessary to
15 enable the corporation to comply with this Act.
(2) At the meeting to pass the special resolution --
(a) the proposed rules of the proposed co-operative
approved under section 17, and including active
membership provisions in accordance with Part 6, must
20 also be passed by special resolution; and
(b) in the case of a proposed distributing co-operative, a
disclosure statement approved under section 16 must be
presented to the meeting.
(3) For a corporation that on registration under this Division will be
25 a transferred co-operative, the requirement to pass a special
resolution approving the proposed registration and the proposed
rules is satisfied if the resolution complies with
section 177(1)(a) or (b), and (3).
page 23
Co-operatives Bill 2007
Part 2 Formation
Division 5 Registration of an existing corporation
s. 23
23. Application for registration
(1) An application for registration under this Division must be --
(a) in the form approved by the Registrar; and
(b) accompanied by the fee prescribed by the regulations;
5 and
(c) accompanied by --
(i) a written declaration, signed no more than
28 days before the application for registration by
the directors or the committee of management of
10 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
(ii) a report in the form approved by the Registrar as
15 to the affairs of the corporation and showing its
assets and liabilities, made up to the latest
practicable date before the application; and
(iii) a copy of the constitution of the corporation in
force at the date of the application; and
20 (iv) 2 copies of the proposed rules of the
co-operative, certified in writing by the directors
or the committee of management to have been
approved under section 22(2) by special
resolution; and
25 (v) in the case of a proposed distributing
co-operative, a copy of the disclosure statement
presented to the meeting held under section 22,
certified in writing by the directors or committee
of management of the corporation to have been
30 presented to that meeting; and
(vi) a list containing the name, address, occupation
and place and date of birth of each director; and
(vii) evidence to the satisfaction of the Registrar of
the incorporation of the existing corporation; and
page 24
Co-operatives Bill 2007
Formation Part 2
Registration of an existing corporation Division 5
s. 24
(viii) any other particulars that the Registrar may
require.
(2) For a corporation that on registration under this Division will be
a transferred co-operative, an application need only comprise
5 the requirements of subsection (1)(a), (c)(iv) and (viii).
24. Requirements for registration
(1) When an application is made for registration as a co-operative
under this Division, the Registrar must register the corporation
as a co-operative under this Act and register its rules under this
10 Act if the Registrar is satisfied that the requirements for
registration of the co-operative have been met.
(2) The requirements for registration as a co-operative under this
Division are as follows --
(a) the proposed rules of the proposed co-operative must be
15 the proposed rules approved by the Registrar under
section 17;
(b) the requirements of this Act must have been complied
with in relation to the proposed co-operative and
compliance must be likely to continue;
20 (c) there must be no reasonable cause for refusing
registration of the proposed co-operative.
(3) If the Registrar is not satisfied that the requirements for
registration of the co-operative have been met, the Registrar
may refuse to register the co-operative and its rules and must
25 give to the applicant written notice of the refusal and the reasons
for the refusal.
(4) If the Registrar has decided under this section to register a
corporation under this Act, the corporation must notify the
authority responsible for registering the corporation under the
30 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 co-operative does not take effect until the
page 25
Co-operatives Bill 2007
Part 2 Formation
Division 5 Registration of an existing corporation
s. 25
corporation ceases to be registered under the law under which it
was previously registered.
(6) The corporation must notify the Registrar in writing within
7 days after ceasing to be registered under that other law.
5 25. Transitional provision
(1) This section applies to a corporation that, on registration under
this Division, will be a transferred co-operative.
(2) Section 24(4) to (6) does not apply to the corporation.
(3) If the Registrar decides to register the corporation, the Registrar
10 must ensure that the corporation ceases to be registered under
the old Act.
26. Certificate of registration
(1) On the registration of a corporation as a co-operative, the
Registrar must --
15 (a) issue a certificate of registration to the corporation; and
(b) publish notice of the issue of the certificate in the
Gazette.
(2) The corporate name of a corporation registered as a co-operative
is the name approved by the Registrar, as specified in the
20 certificate of registration issued by the Registrar.
27. Effect of registration
(1) The corporation is taken to be incorporated under this Act on its
registration.
(2) Except as expressly provided in this Act, the registration and
25 incorporation of the corporation as a co-operative does not
prejudice any right of a member in respect of any shares held at
the time of registration and incorporation.
(3) The change of registration and incorporation does not affect the
identity of the corporation which is taken to be the same body
page 26
Co-operatives Bill 2007
Formation Part 2
Conversion of co-operative Division 6
s. 28
after registration as a co-operative as it was before and no act,
matter or thing is affected by the change.
Division 6 -- Conversion of co-operative
28. Conversion of co-operative
5 (1) A co-operative may, by alteration of its rules, convert from --
(a) a co-operative with share capital to a co-operative
without share capital or vice versa; or
(b) a distributing co-operative to a non-distributing
co-operative or vice versa.
10 (2) An alteration of the rules for the conversion of a co-operative
with share capital to a co-operative without share capital cannot
be passed until at least 2 weeks after a notice has been published
in a newspaper circulating generally in the district in which the
registered office of the co-operative is situated advising of the
15 proposal to submit the proposed alteration to members of the
co-operative.
(3) An alteration of the rules for the conversion of a co-operative
must be approved by special resolution passed by means of a
special postal ballot.
20 Division 7 -- Reviews
29. Appeal against refusal to approve disclosure statement
The person who submitted a draft disclosure statement to the
Registrar under this Act may appeal to the Supreme Court
against a failure of the Registrar to approve the statement.
25 30. Appeal against refusal to approve draft rules
The person who submitted draft rules to the Registrar under this
Act may appeal to the Supreme Court against a failure of the
Registrar to approve the rules.
page 27
Co-operatives Bill 2007
Part 2 Formation
Division 8 General
s. 31
31. Appeal against refusal to register
The applicant for registration of a proposed co-operative under
this Part may appeal to the Supreme Court against a failure of
the Registrar to register the co-operative.
5 32. Supreme Court's powers on appeal
The Supreme Court may make any order it considers
appropriate to dispose of an appeal under this Division.
Division 8 -- General
33. Acceptance of money by proposed co-operative
10 (1) A proposed co-operative that, or a person on a proposed
co-operative's behalf who, accepts money for the proposed
co-operative before the proposed co-operative is registered must
hold that money on trust until the co-operative is registered.
(2) If a co-operative is not registered within the period of 3 months
15 after the acceptance of money under subsection (1), the
proposed co-operative or the person who accepted the money on
its behalf must refund the money to the person who paid it.
Penalty: a fine of $6 000.
34. Issue of duplicate certificate
20 The Registrar must issue a duplicate certificate of registration
if --
(a) the Registrar is satisfied that the original certificate is
lost or destroyed; and
(b) the fee prescribed by the regulations is paid.
page 28
Co-operatives Bill 2007
Legal capacity and powers Part 3
General powers Division 1
s. 35
Part 3 -- Legal capacity and powers
Division 1 -- General powers
35. Effect of incorporation
As a corporation, a co-operative --
5 (a) has perpetual succession; and
(b) has a common seal; and
(c) may sue and be sued in its corporate name; and
(d) subject to this Act, is capable of taking, purchasing,
leasing, holding, selling and disposing of real and
10 personal property; and
(e) may do and suffer all acts and things that corporations
may by law do and suffer and that are necessary or
expedient.
36. Power to form companies and enter into joint ventures
15 Without limiting any other provision of this Act, a co-operative
has power --
(a) to form or participate in the formation of a corporation
or unit trust; and
(b) to acquire interests in and sell or otherwise dispose of
20 interests in corporations, unit trusts and joint ventures;
and
(c) to form or enter into a partnership, joint venture or other
association with other persons or bodies.
Division 2 -- Doctrine of ultra vires abolished
25 37. Interpretation
In this Division --
(a) a reference to the doing of an act by a co-operative
includes a reference to the making of an agreement by
page 29
Co-operatives Bill 2007
Part 3 Legal capacity and powers
Division 2 Doctrine of ultra vires abolished
s. 38
the co-operative and a reference to a transfer of property
to or by the co-operative; and
(b) a reference to legal capacity includes a reference to
powers.
5 38. Doctrine of ultra vires abolished
(1) The objects of this Division are --
(a) to provide that the doctrine of ultra vires does not apply
to co-operatives; and
(b) without affecting the validity of a co-operative's
10 dealings with others, to ensure that the co-operative's
officers and members give effect to the provisions of the
co-operative's rules relating to the primary activities or
powers of the co-operative.
(2) This Division is to be construed and have effect in accordance
15 with subsection (1).
39. Legal capacity
(1) A co-operative has, both within and outside this State, the legal
capacity of an individual.
(2) Without limiting subsection (1), a co-operative has, both within
20 and outside this State, power --
(a) to issue and allot fully or partly paid shares in the
co-operative; and
(b) to issue debentures of, and co-operative capital units in,
the co-operative; and
25 (c) to distribute any of the property of the co-operative
among the members, in kind or otherwise; and
(d) to give security by charging uncalled capital; and
(e) to grant a charge on property of the co-operative; and
(f) to procure the co-operative to be registered or
30 recognised as a corporation in any place outside this
State; and
page 30
Co-operatives Bill 2007
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 40
(g) to do any other act that it is authorised to do by any
other law, including a law of a place outside this State.
(3) Subsections (1) and (2) have effect in relation to a
co-operative --
5 (a) if the co-operative's rules contain an express or implied
restriction on, or an express or implied prohibition of,
the exercise by the co-operative of any of its powers,
despite that restriction or prohibition; and
(b) if the rules of the co-operative contain a provision
10 stating the objects of the co-operative, despite that fact.
(4) The fact that the doing of an act by a co-operative would not be,
or is not, in its best interests does not affect its legal capacity to
do the act.
40. Restrictions on co-operatives in rules
15 (1) A co-operative's rules may contain an express restriction on, or
an express prohibition of, the exercise by the co-operative of a
power of the co-operative.
(2) The exercise of a power or the doing of an act in contravention
of subsection (1) is not invalid merely because of the
20 contravention.
(3) A co-operative's rules may set out the object of that
co-operative.
(4) The exercise of a power or the doing of an act in contravention
of subsection (3) is not invalid merely because of the
25 contravention.
Division 3 -- Persons having dealings with co-operatives
41. Assumptions entitled to be made
(1) A person is entitled to make the assumptions in section 42 in
relation to --
30 (a) dealings with a co-operative; and
page 31
Co-operatives Bill 2007
Part 3 Legal capacity and powers
Division 3 Persons having dealings with co-operatives
s. 42
(b) dealings with a person who has, or purports to have,
directly or indirectly acquired title to property from a
co-operative.
(2) If a person is entitled to assume a matter, the co-operative or
5 anyone referred to in subsection (1)(b) is not entitled to assert in
proceedings in relation to the dealings that the matter is
incorrect.
42. Assumptions
(1) A person may assume that the co-operative's rules have been
10 complied with.
(2) A person may assume that anyone who appears, from
information provided by the co-operative that is available to the
public from the Registrar, to be a director or officer of the
co-operative --
15 (a) has been properly appointed; and
(b) has authority to exercise the powers and perform the
duties customarily exercised or performed by a director
or officer of a similar co-operative.
(3) A person may assume that anyone who is held out by the
20 co-operative to be an officer or agent of the co-operative --
(a) has been properly appointed; and
(b) has authority to exercise the powers and to perform the
duties customarily exercised or performed by that kind
of officer or agent of a similar co-operative.
25 (4) A person may assume that anyone who is, or may be assumed to
be, an officer or agent of the co-operative 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.
30 (5) A person may assume that a document has been duly executed
by the co-operative if it is signed by 2 people, one of whom is,
or may be assumed to be, a director of the co-operative, and the
page 32
Co-operatives Bill 2007
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 43
other is, or may be assumed to be, a director or the secretary of
the co-operative.
(6) A person may assume that a document has been duly executed
by the co-operative if --
5 (a) the co-operative's seal appears to have been fixed to the
document in accordance with Division 4; and
(b) the fixing of the seal appears to be witnessed by
2 people, one of whom is, or may be assumed to be, a
director of the co-operative, and the other is, or may be
10 assumed to be, a director or the secretary of the
co-operative.
(7) A person may assume that the officers and agents of the
co-operative properly perform their duties to the co-operative.
43. Person who knows or ought to know is not entitled to make
15 assumptions
This Division does not entitle a person to make an assumption,
and does not prevent an assertion being made in relation to an
assumption if --
(a) the person has actual knowledge that the assumption is
20 not correct; or
(b) the person's connection or relationship with the
co-operative is such that the person ought to know that
the assumption is not correct.
44. Lodgment of documents not to constitute constructive
25 knowledge
(1) A person is not considered to have knowledge of a
co-operative's rules, any of the contents of a co-operative's
rules, a document, the contents of a document, or any
particulars, merely because of either or both of the following --
30 (a) the rules, the document or the particulars have been
lodged with the Registrar;
page 33
Co-operatives Bill 2007
Part 3 Legal capacity and powers
Division 4 Authentication and execution of documents and confirmation
of contracts
s. 45
(b) the rules, the document or the particulars are referred to
in any other document that has been lodged with the
Registrar, or lodged with a person under a previous law
corresponding to a provision of this Act.
5 (2) Subsection (1) does not apply in relation to a document, or in
relation to the contents of a document, that has been lodged
under Part 10 Division 3 to the extent that the document relates
to a charge that is registrable under that Division or law.
(3) Despite subsection (1), a member of a co-operative is taken to
10 have knowledge of the rules of the co-operative.
45. Effect of fraud
(1) A person's entitlement under this Division to make an
assumption is not affected merely by the fact that a person --
(a) has acted or is acting fraudulently in relation to the
15 dealing or acquisition or purported acquisition of title to
property to which the assumption relates; or
(b) has forged a document that appears to have been sealed
on behalf of a co-operative.
(2) A person is not entitled to make an assumption if the person has
20 actual knowledge of the fraudulent action or forgery referred to
in subsection (1).
Division 4 -- Authentication and execution of documents and
confirmation of contracts
46. Common seal
25 A document or proceeding requiring authentication by a
co-operative may be authenticated under the common seal of the
co-operative.
47. Official seal
(1) A co-operative may, if authorised by its rules, have, for use in
30 place of its common seal outside the State where its common
page 34
Co-operatives Bill 2007
Legal capacity and powers Part 3
Authentication and execution of documents and confirmation Division 4
of contracts
s. 48
seal is kept, one or more official seals, each of which must be a
facsimile of the common seal of the co-operative with the
addition on its face of the name of every place where it is to be
used.
5 (2) The person affixing an official seal must, in writing signed by
the person, certify on the document to which it is affixed the
date on which and the place at which it is affixed.
(3) A document sealed with an official seal is taken to be sealed
with the common seal of the co-operative.
10 48. Authentication need not be under seal
A document or proceeding requiring authentication by a
co-operative may be authenticated by the signature of two
people, one of whom is a director of the co-operative and one of
whom is a director or the secretary of the co-operative and need
15 not be authenticated under the seal of the co-operative.
49. Co-operative may authorise person to execute deed
(1) A co-operative may, by writing under its common seal,
empower a person, either generally or in relation to a specified
matter, as its agent or attorney ("authorised attorney") to
20 execute deeds on its behalf.
(2) A deed signed by an authorised attorney on behalf of the
co-operative and under the seal of the attorney, or under the
appropriate official seal of the co-operative, binds the
co-operative and has effect as if it were under the common seal
25 of the co-operative.
(3) The authority of an authorised attorney, as between the
co-operative and a person dealing with the attorney, continues
during the period, if any, specified in the instrument conferring
the authority or, if no period is specified, until notice of the
30 revocation or termination of the authority of the attorney has
been given to the person dealing with the attorney.
page 35
Co-operatives Bill 2007
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 50
50. Execution under seal
A contract or other document executed, or purporting to have
been executed, under the seal of a co-operative is not invalid
merely because a person attesting the affixing of the seal was in
5 any way, whether directly or indirectly, interested in the
contract or other document or in the matter to which the contract
or other document relates.
51. Contractual formalities
(1) So far as concerns the formalities of making, varying or
10 discharging a contract, a person acting under the express or
implied authority of a co-operative may make, vary or discharge
a contract in the name of, or on behalf of, the co-operative as if
that contract were made, varied or discharged by an individual.
(2) The making, varying or discharging of a contract under
15 subsection (1) is effectual in law and binds the co-operative and
other parties to the contract.
(3) This section does not prevent a co-operative from making,
varying or discharging a contract under its seal.
52. Other requirements as to consent or sanction not affected
20 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.
Division 5 -- Pre-registration contracts
25 53. Contracts before registration
(1) If a person enters into, or purports to enter into, a contract on
behalf of, or for the benefit of, a proposed co-operative, the
co-operative becomes bound by the contract and entitled to its
benefit if the co-operative, or a co-operative that is reasonably
30 identifiable with it, is registered and ratifies the contract --
(a) within a reasonable period after the contract is entered
into; or
page 36
Co-operatives Bill 2007
Legal capacity and powers Part 3
Pre-registration contracts Division 5
s. 53
(b) within any period agreed to by the parties to the
contract.
(2) The person is released from any liability under the
pre-registration contract if the co-operative enters into another
5 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.
10 (3) The person is liable to pay damages to each other party to the
pre-registration contract if the co-operative is not registered, or
the co-operative is registered but does not ratify the contract or
enter into a substitute for it --
(a) within a reasonable period after the contract is entered
15 into; or
(b) within the period agreed to by the parties to the contract.
(4) The maximum amount of damages the person is liable to pay to
a party is the amount the co-operative would be liable to pay to
the party if the co-operative had been registered and had ratified
20 the contract and then completely failed to perform it.
(5) If proceedings are brought to recover damages under
subsection (3) because the co-operative is registered but does
not ratify the pre-registration contract or enter into a substitute
for it, the court may do anything that it thinks just in the
25 circumstances, including ordering the co-operative --
(a) to pay all or part of the damages that the person is liable
to pay; or
(b) to transfer property that the co-operative received
because of the contract to a party to the contract; or
30 (c) to pay an amount to a party to the contract.
page 37
Co-operatives Bill 2007
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 54
(6) If the co-operative ratifies the pre-registration contract but fails
to perform all or part of it, the court may order the person to pay
all or part of the damages that the co-operative is ordered to pay.
54. Person may be released from liability but is not entitled to
5 indemnity
(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.
10 (3) The party giving the release is not entitled to recover damages
under section 53 from the person.
(4) Despite any rule of law or equity, the person does not have a
right of indemnity against the co-operative in respect of the
person's liability under this Division even if the person was
15 acting, or purporting to act, as trustee for the co-operative.
55. This Division replaces other rights and liabilities
This Division replaces any rights or liabilities anyone would
otherwise have in relation to the pre-registration contract.
page 38
Co-operatives Bill 2007
Membership Part 4
General Division 1
s. 56
Part 4 -- Membership
Division 1 -- General
56. Becoming a member
(1) On the registration of a co-operative, the persons who signed the
5 application for registration become members of the
co-operative.
(2) Other persons may be admitted as members of the co-operative
as provided by its rules.
(3) A person under 18 years of age may be admitted as a member of
10 the co-operative unless the rules of the co-operative provide
otherwise.
(4) A corporation is not, merely because it is a corporation,
disqualified from being a member of a co-operative unless the
co-operative's rules provide that corporations are disqualified
15 from being members.
(5) If 2 or more co-operatives merge, the members of the merged
co-operative are --
(a) the members of the merging co-operatives; and
(b) other persons admitted as members of the merged
20 co-operative in accordance with its rules.
57. Members of co-operative group
(1) The members of a co-operative group are --
(a) the co-operatives by which the co-operative group is
formed; and
25 (b) any other co-operative, admitted to membership in
accordance with the rules of the co-operative group; and
(c) any other corporation or other body admitted to
membership in accordance with subsection (2).
page 39
Co-operatives Bill 2007
Part 4 Membership
Division 1 General
s. 58
(2) A corporation or other body, not being a co-operative, may be
admitted to membership of the co-operative group if --
(a) it is incorporated or registered under any other law,
whether or not a law of this State; and
5 (b) in the opinion of the board of the co-operative group, it
is designed to function in accordance with co-operative
principles; and
(c) it is eligible to be admitted to membership in accordance
with the rules of the co-operative group.
10 58. Qualification for membership and transitional provision
(1) Subject to subsection (3), a person is not qualified to be
admitted to membership of a co-operative unless --
(a) there are reasonable grounds for believing that the
person will be an active member of the co-operative;
15 and
(b) the person is otherwise eligible under the rules of the
co-operative.
(2) The rules of a co-operative must contain provisions that --
(a) impose a duty on all persons who become members to
20 be active members; and
(b) explain the consequences of failing to be or ceasing to
be an active member.
(3) A person who was a member of a co-operative immediately
before that co-operative became a transferred co-operative is
25 qualified to be admitted to membership of the co-operative
despite the absence of reasonable grounds for believing that the
person will be an active member of the co-operative.
59. Membership may be joint
Membership of a co-operative may be individual and, unless the
30 rules of the co-operative provide otherwise, may be joint.
page 40
Co-operatives Bill 2007
Membership Part 4
General Division 1
s. 60
60. Members under 18 years of age
(1) A member of a co-operative is not entitled to avoid any
obligation or liability as a member under any contract, deed or
other document entered into as a member on any ground
5 relating to minority.
(2) A person under 18 years of age is not competent to hold an
office in a co-operative.
(3) A member of a co-operative who is under 18 years of age is
entitled to vote.
10 (4) This section applies only to individuals.
61. Representatives of corporations
(1) If a corporation is a member of a co-operative, it may by
instrument served on the co-operative appoint a person to
represent it in relation to its membership.
15 (2) The power to appoint a representative is subject to any
restriction imposed by the rules of the co-operative as to the
entitlement of a person to represent a corporation.
(3) A person is not qualified to be appointed the representative of a
company that is not a listed corporation (within the meaning of
20 the Corporations Act) unless the person is an officer, member or
employee of the company.
62. Notification of shareholders and shareholdings
On the request of the board of directors of the co-operative, a
corporation that is a corporate member must provide the board
25 of directors of the co-operative with --
(a) a list of the names of all the shareholders of the
corporation and the number of shares held by each
shareholder; or
page 41
Co-operatives Bill 2007
Part 4 Membership
Division 1 General
s. 63
(b) in the case of a corporation without share capital, a list
of the members of the corporation,
within 7 days of the request.
Penalty: a fine of $2 000.
5 63. Circumstances in which membership ceases -- all
co-operatives
(1) A person ceases to be a member of a co-operative in each of
the following circumstances and as otherwise provided by
this Act --
10 (a) if the member's membership is cancelled under Part 6;
(b) if the member is expelled or resigns in accordance with
the rules of the co-operative;
(c) if --
(i) the individual member becomes bankrupt or the
15 corporate member becomes insolvent; or
(ii) the member's property becomes subject to
control under the law relating to bankruptcy,
unless provision is made to the contrary in the rules of
the co-operative;
20 (d) on death;
(e) if the contract of membership is rescinded on the ground
of misrepresentation or mistake;
(f) in the case of a member that is a corporation, if the body
is deregistered.
25 (2) On the death of a member, the member's estate remains liable
under section 67 as the member until the member's personal
representative or some other person is registered in the
member's place.
page 42
Co-operatives Bill 2007
Membership Part 4
General Division 1
s. 64
64. Additional circumstances in which membership
ceases -- co-operatives with share capital
In the case of a co-operative that has a share capital, in addition
to the circumstances in section 63, a member ceases to be a
5 member in each of the following circumstances --
(a) the member's total shareholding is transferred to another
person in accordance with the rules of the co-operative,
and the transferee is registered as holder;
(b) the member's total shareholding is forfeited in
10 accordance with this Act or the rules of the co-operative;
(c) the member's total shareholding is sold by the
co-operative under a power conferred by the rules of the
co-operative, and the purchaser is registered as holder;
(d) the member's total shareholding is purchased by the
15 co-operative in accordance with this Act;
(e) the amount paid up to the stated nominal value on the
member's shares is repaid to the member in accordance
with the rules of the co-operative.
65. Carrying on business with too few members
20 (1) A person who is a director of a co-operative commits an offence
if the person knowingly allows the co-operative to continue to
carry on business with fewer than the minimum number of
members for more than 28 days after the number of members
falls below the minimum number.
25 Penalty: a fine of $2 000.
(2) Each person who is found guilty of an offence under
subsection (1) is also liable to satisfy all obligations of the
co-operative incurred after the 28 days referred to in
subsection (1), and may be sued without any other member
30 being joined in the action.
(3) The minimum number of members allowed is --
(a) for a co-operative group, 2; or
page 43
Co-operatives Bill 2007
Part 4 Membership
Division 2 Rights and liabilities of members
s. 66
(b) for any other co-operative, 5, or if a lesser number is
prescribed by the regulations, the prescribed number.
(4) The Registrar may, by written notice, extend and further extend
in a particular case the period of 28 days referred to in
5 subsection (1).
(5) An application for an extension must be made --
(a) in a form approved by the Registrar; and
(b) before the period to be extended ends.
Division 2 -- Rights and liabilities of members
10 66. Rights of membership not exercisable until registered etc.
(1) A member of a co-operative is not entitled to exercise any rights
of membership until --
(a) the member's name appears as a member in the register
of members, directors and shares referred to in
15 section 230(1)(a); and
(b) the member has made a payment to the co-operative for
membership or acquired a share or interest that is
provided for in the rules of the co-operative.
(2) The board of a co-operative must ensure that the name of a
20 person admitted to membership is recorded as a member in the
register of members, directors and shares within 28 days after
the person is admitted to membership.
Penalty: a fine of $2 000.
67. Liability of members to co-operative
25 (1) A member of a co-operative is not, as a member, under any
personal liability to the co-operative, except as provided by this
Division.
(2) A member of a co-operative with a share capital is liable to the
co-operative for the amount, if any, unpaid on the shares held by
page 44
Co-operatives Bill 2007
Membership Part 4
Rights and liabilities of members Division 2
s. 68
the member together with any charges payable by the member
to the co-operative as required by the rules of the co-operative.
(3) A member of a co-operative without a share capital is liable to
the co-operative for any charges payable by the member to the
5 co-operative as required by the rules of the co-operative.
68. Co-operative to make information available to person
intending to become a member
(1) The board of a co-operative must give written notice to each
person intending to become a member of the co-operative and
10 eligible to do so that the person may request to either inspect at
the co-operative's nearest office, or be sent --
(a) a consolidated copy of the rules of the co-operative; and
(b) a copy of all special resolutions applicable to the
member and passed by the members of the co-operative
15 since its last annual general meeting, except special
resolutions providing for an alteration of the rules of the
co-operative; and
(c) a copy of the last annual report of the co-operative under
section 235.
20 (2) If a person who has received notice under this section makes a
request referred to in subsection (1), the co-operative must
comply with that request.
69. Entry fees and regular subscriptions
(1) The rules of a co-operative may --
25 (a) require the payment by members of entry fees and
regular subscriptions; and
(b) provide for the repayment of those fees and
subscriptions on a person ceasing to be a member.
(2) The calculation of the amount of a particular member's regular
30 subscription may be based on the amount of business the
member does with the co-operative.
page 45
Co-operatives Bill 2007
Part 4 Membership
Division 2 Rights and liabilities of members
s. 70
(3) A co-operative must give a person intending to become a
member written notice of entry fees or regular subscriptions
payable by the member to the co-operative.
(4) A person who becomes a member of a co-operative is not liable
5 to pay entry fees or regular subscriptions except --
(a) those fees or subscriptions of which the person was
given written notice before becoming a member; and
(b) any regular subscriptions that may be imposed in
accordance with the rules and of which the member has
10 been given notice.
70. Members etc. may be required to deal with co-operative
(1) The rules of a co-operative may contain provisions that require
a member to have specified dealings with the co-operative for a
fixed period and to enter into a contract for that purpose.
15 (2) A co-operative may, if authorised by its rules, make a contract
with a member containing provisions that require the member to
have specified dealings with the co-operative for a fixed period.
(3) In particular, the provisions of the rules or a contract may
require a member --
20 (a) to sell products through or to the co-operative; or
(b) to obtain supplies or services through or from the
co-operative; or
(c) to pay to the co-operative a stated amount as liquidated
damages for any failure to comply with a requirement
25 authorised by this section.
(4) An amount required to be paid to the co-operative as liquidated
damages is, for the purposes of section 72, a debt payable by the
member to the co-operative.
(5) A contract authorised by this section is binding on the
30 co-operative and all other parties even though, but for this Act,
the contract would be invalid as being in restraint of trade.
page 46
Co-operatives Bill 2007
Membership Part 4
Rights and liabilities of members Division 2
s. 71
(6) Rules authorised by this section are authorised even though, but
for this section, the rules might be invalid as being in restraint of
trade.
71. Fines payable by members
5 (1) A co-operative may impose a fine on a member for an
infringement of the rules of the co-operative if the rules of the
co-operative so provide.
(2) A fine imposed under subsection (1) cannot exceed the
maximum fine fixed by the rules in accordance with section 98.
10 (3) A fine cannot be imposed unless --
(a) notice of intention to impose the fine and the reason for
it has been given to the member; and
(b) the member has been given a reasonable opportunity to
appear before the board in person (with or without
15 witnesses) or to send to the board a written statement to
show cause why the fine should not be imposed.
(4) The co-operative may set off the whole or any part of the fine
against an amount payable to the member for produce delivered
by the member to the co-operative, but no part of the fine is to
20 be set off against any advance that, in accordance with the rules
of the co-operative, is payable to the member from the
co-operative, for produce so delivered.
72. Charge and set off of co-operative
(1) A co-operative has, in relation to a debt payable by a member or
25 former member to the co-operative, a charge on each of the
following --
(a) the share or interest in the capital and the credit balance
and deposits of the member or former member;
(b) any rebate, bonus, dividend or interest payable to the
30 member or former member;
page 47
Co-operatives Bill 2007
Part 4 Membership
Division 2 Rights and liabilities of members
s. 73
(c) any entry fees and regular subscriptions required to be
repaid to a member when the member ceases to be a
member.
(2) The co-operative may set off any amount paid on account of
5 that 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 co-operative of the thing that is subject to
10 the charge, but only after at least 7 days notice has been given to
the member or former member.
(4) Any share in respect of which capital has been so appropriated
must be cancelled.
73. Repayment of shares on resignation or expulsion
15 (1) When a member resigns from a co-operative or is expelled from
a co-operative under its rules, the co-operative must --
(a) within 12 months after the date of resignation or
expulsion, repay to the former member an amount (the
"repayable amount") made up of the amount paid up
20 to the stated nominal value of the shares held by the
member at the resignation or expulsion date, less any
amount owed by the member to the co-operative at the
resignation or expulsion date under the rules of the
co-operative or any contract or otherwise; or
25 (b) in the case of a transferred co-operative the rules of
which state how to calculate the repayable amount
owing to a former member at the time of resignation or
expulsion, within 3 years after the date of resignation or
expulsion, repay to the former member an amount in
30 accordance with those rules; or
page 48
Co-operatives Bill 2007
Membership Part 4
Rights and liabilities of members Division 2
s. 73
(c) within 12 months after the date of resignation or
expulsion, apply the repayable amount under
subsection (2) if --
(i) the board considers repayment would adversely
5 affect the financial position of the co-operative;
or
(ii) the board and the former member agree.
(2) The repayable amount may be applied in one of the following
ways --
10 (a) the co-operative may appropriate the amount as a
donation to the co-operative, but only if the former
member consents in writing to the donation;
(b) if the co-operative is a deposit taking co-operative, the
co-operative may apply the amount as a deposit by the
15 former member with the co-operative, subject to the
requirements of section 128 as to interest on the deposit;
(c) the co-operative may issue debentures or co-operative
capital units to the former member in satisfaction of the
amount.
20 (3) If the balance sheet of the co-operative last issued before the
resignation or expulsion of a member of the co-operative
disclosed a loss or deficiency or a significant change in the
financial position or prospects of the co-operative is
subsequently reported prior to the resignation or expulsion, the
25 paid up value of the member's shares may, for the purposes of
calculating the repayable amount, be reduced as described in
subsection (4).
(4) The paid up value of the member's shares may be reduced by an
amount that bears to the amount of the loss or deficiency so
30 disclosed the same proportion as the number of shares held by
the member bore to the total number of shares held by all
members of the co-operative as at the date of resignation or
expulsion of the member.
page 49
Co-operatives Bill 2007
Part 4 Membership
Division 3 Death of member
s. 74
(5) Shares for which capital has been repaid under subsection (1)(a)
or applied under subsection (1)(c) must be cancelled.
Division 3 -- Death of member
74. Meaning of "interest"
5 In this Division --
"interest", of a deceased member in a co-operative, includes --
(a) the member's membership; and
(b) any credit balance due to the member; and
(c) any loan from or to or deposit with the co-operative;
10 and
(d) any surplus arising on the sale by the co-operative as
mortgagee of any property mortgaged by the
deceased to the co-operative;
"transfer", of an interest, includes the payment of money.
15 75. Transfer of share or interest on death of member
Subject to sections 76 and 159, on the death of a member, the
board must transfer the deceased member's share or interest in
the co-operative to --
(a) the personal representative of the deceased member; or
20 (b) the person that the deceased's personal representative
specifies in an application made to the co-operative
within 3 months after the death of the member.
76. Transfer of small shareholdings and interests on death
(1) Subject to section 159, if the total value of a deceased member's
25 shares or interest in a co-operative is less than $10 000 (or such
other amount as may be prescribed), the board may, on the basis
of such evidence as it considers sufficient, transfer the shares or
interest in accordance with whichever of the following
paragraphs is appropriate --
30 (a) if the member or person dies testate, to the person who
appears to the board to be entitled to the shares or
page 50
Co-operatives Bill 2007
Membership Part 4
Disputes involving members Division 4
s. 77
interest under the will of the deceased member or
person;
(b) if the member or person dies intestate, to any person
who appears to the board to be entitled to obtain a grant
5 of administration of the estate of the deceased and that
person must then hold the shares or interest on the same
trusts as if he or she had obtained that grant.
(2) A transfer cannot be made under this section after evidence has
been produced to the co-operative of the grant of letters of
10 administration of the estate, or probate of the will, of the
deceased member.
77. Value of shares and interests
The value of the shares or interest of a deceased member must
be determined for the purposes of this Division in accordance
15 with the rules of the co-operative.
78. Co-operative protected
Any transfer of property made by the board of a co-operative in
accordance with this Division is valid and effectual against any
demand made on the co-operative by any other person.
20 Division 4 -- Disputes involving members
79. Grievance procedure
(1) The rules of a co-operative must set out a grievance procedure
for dealing with any dispute under the rules --
(a) between a member and another member; and
25 (b) between a member and the co-operative.
(2) A member may appoint any person to act on behalf of the
member in the grievance procedure.
(3) The grievance procedure must allow for natural justice to be
applied.
page 51
Co-operatives Bill 2007
Part 4 Membership
Division 4 Disputes involving members
s. 80
(4) In this section and section 80 --
"member" includes any person who was a member not more
than 6 months before the dispute occurred.
80. Application to Supreme Court
5 (1) The Supreme Court may, on the application of a member of a
co-operative, or a co-operative, make an order declaring and
enforcing --
(a) the rights or obligations of members of the co-operative
between themselves; or
10 (b) the rights or obligations of the co-operative and any
member between themselves.
(2) An order may be made under this section whether or not a right
of a proprietary nature is involved and whether or not the
applicant has an interest in the property of the co-operative.
15 (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 the Court 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
20 of the co-operative, any other available method of
resolving the issue, the costs involved, lapse of time,
acquiescence or any other relevant circumstance, it was
unreasonable to make the application; or
(c) the unreasonable or improper conduct of a party --
25 (i) has been responsible for the making of the
application; or
(ii) has added to the cost of the proceedings.
page 52
Co-operatives Bill 2007
Membership Part 4
Oppressive conduct of affairs Division 5
s. 81
Division 5 -- Oppressive conduct of affairs
81. Interpretation
In this Division, a reference to a member of a co-operative
includes, in the case of a co-operative that has a share capital, a
5 reference to a person to whom a share in the co-operative has
been transmitted by will or by operation of law.
82. Application of Division
This Division does not apply in respect of anything done under
Part 6.
10 83. Who may apply for court order
The following persons 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
15 co-operative 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;
20 (c) a member who believes that an act or omission, or a
proposed act or omission, by or on behalf of the
co-operative, or a resolution, or a proposed resolution,
of members, was or would be --
(i) oppressive or unfairly prejudicial to, or unfairly
25 discriminatory against, a member; or
(ii) contrary to the interests of the members as a
whole.
page 53
Co-operatives Bill 2007
Part 4 Membership
Division 5 Oppressive conduct of affairs
s. 84
84. Orders that the Supreme Court may make
On application under this Division, the Supreme Court may
make any order that it considers appropriate including (without
being limited to) one or more of the following orders --
5 (a) an order that the Registrar appoint an administrator of
the co-operative;
(b) an order that the co-operative be wound-up;
(c) an order for regulating the conduct of affairs of the
co-operative in the future;
10 (d) an order for the repayment of the member's shares in
accordance with the provisions of this Act for repayment
of share capital;
(e) an order for the purchase of the shares of any member
by the co-operative and for the reduction accordingly of
15 the co-operative's capital;
(f) an order directing the co-operative to institute,
prosecute, defend or discontinue specified proceedings,
or authorising a member or members of the co-operative
to institute, prosecute, defend or discontinue specified
20 proceedings in the name and on behalf of the
co-operative;
(g) an order appointing a receiver or a receiver and manager
of property of the co-operative;
(h) an order restraining a person from engaging in specified
25 conduct or from doing a specified act or thing;
(i) an order directing a co-operative to become registered as
a company under the Corporations Act;
(j) an order requiring a person to do a specified act or thing;
(k) an order as to costs.
page 54
Co-operatives Bill 2007
Membership Part 4
Oppressive conduct of affairs Division 5
s. 85
85. Basis on which Supreme Court makes orders
The Supreme Court may make an order under this Division if it
considers that --
(a) the affairs of a co-operative are being conducted in a
5 way that is --
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member (the
"oppressed member"), whether or not in the
capacity of a member; or
10 (ii) contrary to the interests of the members as a
whole;
or
(b) an act or omission, or a proposed act or omission, by or
on behalf of a co-operative, or a resolution, or a
15 proposed resolution, of members of a co-operative, was
or would be --
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member (the
"oppressed member"), whether or not in the
20 capacity of a member; or
(ii) contrary to the interests of the members as a
whole.
86. Winding-up need not be ordered if oppressed members
prejudiced
25 The Supreme Court need not make an order under this Division
for the winding-up of a co-operative if the Court considers that
the winding-up of the co-operative would unfairly prejudice an
oppressed member.
87. Application of winding-up provisions
30 If an order that a co-operative be wound-up is made under this
Division, the provisions of this Act relating to the winding-up of
co-operatives apply, with any changes that are necessary, as if
page 55
Co-operatives Bill 2007
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 88
the order had been made on an application filed in the Supreme
Court by the co-operative.
88. Changes to rules
(1) If an order under this Division makes an alteration to the rules
5 of a co-operative --
(a) the alteration has effect as if it had been properly made
by special resolution of the co-operative; and
(b) the co-operative cannot (despite any other provisions of
this Act) without the leave of the Supreme Court make
10 any further alteration to the rules inconsistent with the
provisions of the order.
(2) On receiving a copy of an order altering the rules of a
co-operative the Registrar must register the alteration.
89. Copy of order to be lodged with Registrar
15 An applicant for an order under this Division must lodge an
office copy of the order with the Registrar within 14 days after
it is made.
Penalty: a fine of $1 000.
Division 6 -- Proceedings on behalf of a co-operative by
20 members and others
90. Bringing, or intervening in, proceedings on behalf of a
co-operative
(1) A person may bring proceedings on behalf of a co-operative, or
intervene in proceedings to which a co-operative is a party for
25 the purpose of taking responsibility on behalf of the
co-operative for those proceedings, or for a particular step in
those proceedings (for example, compromising or settling
them), if --
(a) the person is --
30 (i) a member, former member, or person entitled to
be registered as a member, of the co-operative or
of a related corporation; or
page 56
Co-operatives Bill 2007
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 91
(ii) an officer or former officer of the co-operative;
or
(iii) the Registrar;
and
5 (b) the person is acting with leave granted under section 91.
(2) Proceedings brought on behalf of a co-operative may be brought
in the co-operative's name.
91. Applying for and granting leave
(1) A person referred to in section 90(1)(a) may apply to the
10 Supreme Court for leave to bring, or to intervene in,
proceedings.
(2) The Supreme Court may grant the application if it is satisfied
that --
(a) it is probable that the co-operative will not itself bring
15 the proceedings, or properly take responsibility for
them, or for a step in them; and
(b) the applicant is acting in good faith; and
(c) it is in the best interests of the co-operative that the
applicant be granted leave; and
20 (d) if the applicant is applying for leave to bring
proceedings, there is a serious question to be tried; and
(e) either --
(i) at least 14 days before making the application,
the applicant gave written notice to the
25 co-operative of the intention to apply for leave
and of the reasons for applying; or
(ii) it is appropriate to grant leave even if
subparagraph (i) is not satisfied.
page 57
Co-operatives Bill 2007
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 92
92. Substitution of another person for the person granted leave
(1) Any of the following persons may apply to the Supreme Court
for an order that they be substituted for a person to whom leave
has been granted under section 91 --
5 (a) a member, former member, or person entitled to be
registered as a member, of the co-operative or a related
corporation;
(b) an officer, or former officer, of the co-operative;
(c) the Registrar.
10 (2) The application may be made whether or not the other person
has already brought the proceedings or made the intervention.
(3) The Supreme Court may make the order if it is satisfied that --
(a) the applicant is acting in good faith; and
(b) in all the circumstances, it is appropriate to make the
15 order.
(4) An order substituting one person for another person has the
effect that --
(a) the grant of leave is taken to have been made in favour
of the substituted person; and
20 (b) if the other person has already brought the proceedings
or intervened, the substituted person is taken to have
brought those proceedings or to have made that
intervention.
93. Effect of ratification by members
25 (1) A ratification or approval of conduct by members of a
co-operative --
(a) does not prevent a person from bringing or intervening
in proceedings with leave under section 91 or from
applying for leave under that section; and
30 (b) does not have the effect that proceedings brought or
intervened in with leave under section 91 must be
page 58
Co-operatives Bill 2007
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 94
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 co-operative in
5 deciding what order or judgment (including as to damages) to
make in proceedings brought or intervened in with leave under
section 91 or in relation to an application for leave under that
section.
(3) In taking a ratification or approval into account under
10 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 that conduct;
and
(b) whether the members who ratified or approved the
15 conduct were acting for proper purposes.
94. Leave to discontinue, compromise or settle proceedings
brought, or intervened in, with leave
Proceedings brought, or intervened in, with leave cannot be
discontinued, compromised or settled without the leave of the
20 Supreme Court.
95. General powers of the Supreme Court
(1) The Supreme Court may make any order, and give any
direction, that it thinks just in relation to proceedings brought or
intervened in with leave, or in relation to an application for
25 leave, including --
(a) interim orders; and
(b) directions about the conduct of the proceedings,
including requiring mediation; and
(c) an order directing the co-operative, or an officer of the
30 co-operative, to do, or not to do, any act; and
page 59
Co-operatives Bill 2007
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 96
(d) an order appointing an independent person to
investigate, and report to the Supreme Court, on --
(i) the financial affairs of the co-operative; or
(ii) the facts or circumstances that gave rise to that
5 cause of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings and the
person granted leave.
(2) A person appointed by the Supreme Court under
subsection (1)(d) is entitled, on giving reasonable notice to the
10 co-operative, to inspect and make copies of any books of the
co-operative for any purpose connected with their appointment.
96. Power of Supreme Court to make costs order
At any time, the Supreme Court may, in relation to proceedings
brought or intervened in with leave under section 91 or an
15 application for leave under that section, make any orders it
thinks just about the costs of the person who applied for or was
granted leave, of the co-operative or of any other party to the
proceedings or application, including an order requiring
indemnification for costs.
page 60
Co-operatives Bill 2007
Rules Part 5
s. 97
Part 5 -- Rules
97. Effect of rules
(1) The rules of a co-operative have the effect of a contract under
seal --
5 (a) between the co-operative and each member; and
(b) between the co-operative and each director, the secretary
and the chief executive officer of the co-operative; and
(c) between a member and each other member.
(2) Under the contract, each of those persons agrees to observe and
10 perform the provisions of the rules as in force for the time being
so far as those provisions apply to that person.
98. Content of rules
(1) The rules of a co-operative must state or otherwise make
provision for the matters specified in Schedule 1.
15 (2) The rules must be divided into paragraphs numbered
consecutively.
(3) The rules may state the objects of the co-operative.
(4) The rules may incorporate any provision of the model rules.
(5) The rules may provide for the co-operative to impose a fine,
20 payable to the co-operative, on a member for an infringement of
the rules.
(6) If the rules provide for the imposition of a fine, the rules must
specify the maximum fine that may be imposed on a member.
(7) The maximum fine fixed by the rules cannot be more than an
25 amount prescribed by the regulations as the maximum fine.
(8) The rules may contain other provisions not inconsistent with
this Act.
page 61
Co-operatives Bill 2007
Part 5 Rules
s. 99
99. Purchase and inspection of copy of rules
(1) A member is entitled to obtain from a co-operative a copy of its
rules on payment of the amount required by the rules of the
co-operative or, if the rules do not prescribe an amount, on
5 payment of $5.
(2) The amount required by the rules cannot be more than the fee
prescribed by the regulations for obtaining a copy of the rules
from the Registrar.
(3) A person is entitled to obtain from the Registrar a copy of the
10 rules of a co-operative on payment of the fee prescribed by the
regulations.
100. False copies of rules
(1) A person who gives to a member of a co-operative or to a
person intending or applying to become a member of a
15 co-operative a copy of any rules or any alterations of rules,
other than those which have been duly registered, representing
that they are binding on the members of the co-operative is
guilty of an offence.
Penalty: a fine of $1 000.
20 (2) A person who alters any of the rules of a co-operative after they
have been registered and circulates them representing that they
have been duly registered when they have not been is guilty of
an offence.
Penalty: a fine of $1 000.
25 101. Model rules
(1) The regulations may prescribe model rules.
(2) The model rules may make provision for any matter for which
the rules of a co-operative may make provision.
page 62
Co-operatives Bill 2007
Rules Part 5
s. 102
102. Rules can only be altered in accordance with this Act
The rules of a co-operative cannot be altered except in
accordance with this Act.
103. Approval of alteration of rules
5 (1) A proposed alteration of the rules of a co-operative must be
approved by the Registrar before the resolution altering the rules
is passed by the co-operative or the board of the co-operative.
(2) A draft of the proposed alteration must be submitted to the
Registrar at least 21 days (or a shorter period the Registrar may
10 allow in a particular case) before --
(a) the notice of the proposed special resolution altering the
rules is due to be given to the members by the
co-operative; or
(b) the resolution is due to be passed by the board of the
15 co-operative.
(3) The proposed alteration submitted under subsection (2) must be
accompanied by a written statement specifying the date on
which the notice is due to be given to members or the resolution
is due to be passed by the board, as the case may be.
20 (4) The proposed alteration must --
(a) be in accordance with section 98; and
(b) be made in a form approved by the Registrar; and
(c) be accompanied by a statement setting out the reasons
for the alteration.
25 (5) The Registrar may --
(a) approve the proposed alteration as submitted; or
(b) approve a different alteration to that submitted; or
(c) refuse to approve the proposed alteration.
page 63
Co-operatives Bill 2007
Part 5 Rules
s. 104
(6) Subject to subsection (7), the Registrar approves a proposed
alteration by giving written notice of the approval to the
co-operative.
(7) The Registrar is taken to have approved a proposed alteration as
5 submitted to the Registrar unless at least 5 days before the date
specified in the written statement submitted under
subsection (3), the Registrar gives written notice to the
co-operative that the Registrar --
(a) has approved a different alteration to that submitted; or
10 (b) has refused to approve the proposed alteration; or
(c) is still considering the matter.
104. Alteration by special resolution
The rules of a co-operative must be altered by special resolution
unless this Act provides otherwise.
15 105. Alteration by resolution of board
(1) The rules of a co-operative 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 imposed under
the authority of this Act.
20 (2) If the rules of a co-operative are altered under this section, the
co-operative must cause the alteration to be notified in writing
to its members as soon as practicable after the alteration takes
effect and in any event not later than the day when notice is
given to the members of the next annual general meeting of the
25 co-operative after the alteration takes effect.
106. Alteration does not take effect until registered
(1) An alteration of the rules of a co-operative does not take effect
unless and until it is registered by the Registrar.
(2) An application for registration of an alteration must --
30 (a) be made in a form approved by the Registrar; and
page 64
Co-operatives Bill 2007
Rules Part 5
s. 107
(b) be made within 28 days, or a shorter or longer period
prescribed by the regulations, after the resolution to alter
the rules is passed; and
(c) be accompanied by a consolidated copy of the rules of
5 the co-operative, including the alteration.
(3) The Registrar must register the alteration unless --
(a) the Registrar is satisfied that the alteration is contrary to
this Act; or
(b) the Registrar has other reasonable cause to refuse to
10 register the alteration.
(4) A certificate of registration of an alteration of the rules of a
co-operative given by the Registrar is, in favour of any person
advancing money to the co-operative on the faith of the
certificate or in favour of any guarantor of that advance,
15 evidence that the alteration in the rules was properly made.
107. Appeal against refusal to approve alteration
A co-operative may appeal to the Supreme Court against a
failure of the Registrar to approve an alteration of its rules.
108. Appeal against refusal to register
20 A co-operative may appeal to the Supreme Court against a
failure of the Registrar to register an alteration of its rules.
109. Supreme Court's powers on appeal
The Supreme Court may make any order it considers
appropriate to dispose of an appeal under section 107 or 108.
page 65
Co-operatives Bill 2007
Part 6 Active membership
Division 1 Definitions
s. 110
Part 6 -- Active membership
Division 1 -- Definitions
110. Meaning of "active membership resolution"
In this Part --
5 "active membership resolution" has the meaning given in
section 112(2).
111. What is active membership
For the purposes of this Act, a member of a co-operative is an
active member of the co-operative if the member --
10 (a) uses or supports an activity of, or maintains a
relationship or an arrangement with, the co-operative,
for carrying on a primary activity of the co-operative, in
the way and to the extent that the rules of the
co-operative provide is sufficient to establish active
15 membership; or
(b) maintains any other relationship or arrangement with the
co-operative for carrying on a primary activity of the
co-operative that the regulations provide is sufficient to
establish active membership.
20 112. What are active membership provisions and resolutions
(1) Active membership provisions in the rules of a co-operative are
provisions in the rules that state --
(a) which of the activities of the co-operative are the
primary activities of the co-operative; and
25 (b) the way in which and the extent to which a member of
the co-operative must use or support an activity of, or
maintain a relationship or an arrangement with, the
co-operative for carrying on a primary activity of the
co-operative, in order to establish active membership of
30 the co-operative.
page 66
Co-operatives Bill 2007
Active membership Part 6
Rules to contain active membership provisions Division 2
s. 113
(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 co-operative.
Division 2 -- Rules to contain active membership provisions
5 113. Number of primary activities required
A co-operative must have at least one primary activity.
114. Rules to contain active membership provisions
The board of a co-operative must ensure that the rules of the
co-operative contain active membership provisions in
10 accordance with this Part.
115. Factors and considerations for determining primary
activities etc.
(1) The board of a co-operative must ensure that the relevant factors
and considerations are taken into account in deciding --
15 (a) which of the activities of a co-operative are its primary
activities; and
(b) the way and extent to which a member is required to use
or support an activity of, or maintain a relationship or an
arrangement with, a co-operative, for carrying on a
20 primary activity of the co-operative, in order to establish
active membership of the co-operative.
(2) The relevant factors and considerations are --
(a) the primary activity or, if more than one, the primary
activities taken together must form the basic purpose for
25 which the co-operative exists and a significant
contribution to the business of the co-operative; and
(b) the way and extent of the required utilisation, support,
relationship or arrangement should be reasonable when
considered in relation to the activities of the
30 co-operative as a whole; and
page 67
Co-operatives Bill 2007
Part 6 Active membership
Division 2 Rules to contain active membership provisions
s. 116
(c) any other factors and considerations that are prescribed
by the regulations.
(3) The regulations may --
(a) provide for the matters to be taken into account in
5 deciding whether an activity makes a significant
contribution to the business of the co-operative; and
(b) specify minimum percentages of turnover, minimum
amounts of income or minimum amounts of business
necessary to constitute that significant contribution.
10 (4) Nothing in this section limits the right of active members other
than the board of the co-operative to propose an active
membership resolution.
116. Active membership provisions -- distributing co-operatives
The only active membership provisions that are permitted to be
15 contained in the rules of a distributing co-operative are --
(a) provisions requiring a member to use an activity of the
co-operative for carrying on a primary activity specified
in the provisions to establish active membership; and
(b) any other active membership provisions that the
20 Registrar may approve.
117. Regular subscription -- active membership of
non-distributing co-operative
(1) Active membership provisions for a non-distributing
co-operative may provide that the payment of a regular
25 subscription by a member of the co-operative, to be applied to a
primary activity of the co-operative, is sufficient to establish
active membership of the co-operative.
(2) A member of a co-operative who would, on payment of the
subscription, be an active member of a co-operative is taken to
30 be an active member until the subscription is payable.
page 68
Co-operatives Bill 2007
Active membership Part 6
Active membership resolutions Division 3
s. 118
Division 3 -- Active membership resolutions
118. Notice of meeting
(1) At least 21 days notice must be given to members of a
co-operative of a meeting at which an active membership
5 resolution is to be proposed.
(2) The notice must, in addition to the other matters required under
this Act to be stated --
(a) contain the full text of the proposed resolution; and
(b) contain a copy of section 120.
10 119. Eligibility of directors to vote on proposal at board meeting
If the board of a co-operative is meeting to consider a proposal
to submit an active membership resolution to a meeting of the
co-operative all the directors are eligible to vote on that
proposal at the meeting of the board.
15 Division 4 -- Cancellation of membership of inactive or
missing members
120. Cancellation of membership of inactive or missing member
(1) In this section --
"required period", in relation to a co-operative, means --
20 (a) 3 years; or
(b) a shorter period if specified in the rules of the
co-operative.
(2) Subject to subsection (3), sections 123 and 124, the board of a
co-operative must declare the membership of a member
25 cancelled if --
(a) the whereabouts of the member are not presently known
to the co-operative and have not been known to the
page 69
Co-operatives Bill 2007
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 121
co-operative for at least the required period before that
time; or
(b) the member is not presently an active member of the
co-operative and has not been an active member of the
5 co-operative at any time during the required period
immediately before that time.
(3) Subsection (2) applies to a member only if he or she was a
member of the co-operative throughout the required period.
(4) Whether a member was an active member at a particular time in
10 the past is to be decided by reference to the active membership
provisions in force at that time.
(5) The board's declaration under this section has the effect of
cancelling the membership concerned.
(6) A person may apply to the Supreme Court for an order under
15 section 126 in relation to the cancellation of the person's
membership under this section.
121. Share to be forfeited if membership cancelled
(1) If a co-operative has a share capital, the board of the
co-operative must declare the shares of a member to be forfeited
20 at the same time as the member's membership is cancelled
under section 120.
(2) The board's declaration has the effect of forfeiting the shares
concerned.
(3) Nothing in this section affects the operation of section 127.
25 122. Failure to cancel membership -- offence by director
If the board of a co-operative fails to cancel the membership of
a member as required by this Part, a director of the co-operative
who did not use all due diligence to prevent the failure commits
an offence.
30 Penalty: a fine of $2 000.
page 70
Co-operatives Bill 2007
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 123
123. Deferral of forfeiture by board
(1) The board of a co-operative may by resolution defer
cancellation of a member's membership for a period of up to
12 months (the "deferral period") --
5 (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 his or her active membership obligations; or
(b) if --
10 (i) the board thinks that during the deferral period
an active membership resolution may be put to
the members of the co-operative; and
(ii) the effect of the resolution would be relevant to
the question of whether the member is an active
15 member.
(2) The board of the co-operative must review the resolution to
defer within the deferral period to determine if a further
resolution should be made under subsection (1).
124. Cancellation of membership prohibited in certain
20 circumstances
Unless the regulations otherwise provide, the board of a
co-operative must not declare the membership of a member to
be cancelled under this Part --
(a) if the co-operative is insolvent; or
25 (b) if the co-operative is under administration under the
Corporations Act Part 5.3A as applying under this Act;
or
(c) if a compromise or an arrangement is being
administered in relation to the co-operative; or
30 (d) if the co-operative is in the course of being wound-up;
or
page 71
Co-operatives Bill 2007
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 125
(e) if an appointment of a receiver, whether or not a receiver
and manager, of any property of the co-operative is in
force; or
(f) if the co-operative has, for the purposes of being
5 registered as a company under the Corporations Act,
lodged with the Registrar a copy of the entry made in
the minute book of the co-operative under section 185;
or
(g) in other circumstances as may be prescribed by the
10 regulations.
125. Notice of intention to cancel membership
(1) Unless subsection (2) applies, the board of a co-operative must
ensure that notice of its intention to declare the membership of a
member to be cancelled is given to the member not less than
15 28 days prior to the day of the cancellation.
(2) Notice is not required to be given under this section if --
(a) the member's whereabouts are unknown to the
co-operative; or
(b) the amount required to be repaid to the member in
20 relation to the cancelled membership, whether because
of the cancellation of shares or otherwise, does not
exceed the amount prescribed by the regulations, or if an
amount is not prescribed, $100.
126. Order of Supreme Court against cancellation
25 (1) If the Supreme Court is satisfied that the cancellation of a
member's membership under section 120 was or would be
unreasonable, the Court may by order direct that the
membership should not have been cancelled or should not be
cancelled.
page 72
Co-operatives Bill 2007
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 127
(2) While an order is in force under this section --
(a) the membership concerned is not required to be
cancelled and any shareholding of the member is not
required to be forfeited; and
5 (b) the person whose membership was cancelled is entitled
to be reinstated as a member of the co-operative with all
the rights and entitlements, including any shareholding,
attaching to or arising from the former membership.
(3) Reinstatement of a member under this section is to be effected
10 in accordance with the directions of the Supreme Court.
127. Repayment of amounts due because of cancelled
membership
(1) If the membership of a member of a co-operative is cancelled
under this Part, the co-operative must --
15 (a) within 12 months after the date of cancellation, repay to
the former member an amount (the "repayable
amount") made up of the amount paid up to the stated
nominal value of the shares forfeited by the member at
the time of cancellation less any amount owed by the
20 member to the co-operative at that time under the rules
of the co-operative or any contract or otherwise; or
(b) in the case of a transferred co-operative the rules of
which state how to calculate the repayable amount
owing to a former member at the time of cancellation of
25 membership, within 3 years after the date of
cancellation, repay to the former member an amount in
accordance with those rules; or
(c) within 12 months after the date of cancellation, apply
the repayable amount under subsection (2) if --
30 (i) the board considers that repayment would
adversely affect the financial position of the
co-operative; or
(ii) the board and the former member agree.
page 73
Co-operatives Bill 2007
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 127
(2) The repayable amount may be applied in one of the following
ways --
(a) if the co-operative is a deposit-taking co-operative, the
co-operative may apply the amount as a deposit by the
5 former member with the co-operative, subject to the
requirements of section 128 as to interest on the deposit;
(b) the co-operative may issue debentures or co-operative
capital units to the former member in satisfaction of the
amount;
10 (c) the co-operative may appropriate the amount as a
donation to the co-operative, but only if the former
member consents in writing to the donation.
(3) If the balance sheet of the co-operative last issued before the
cancellation of a member's membership disclosed a loss or
15 deficiency or a significant change in the financial position or
prospects of the co-operative is subsequently reported prior to
the loss or deficiency, the paid up value of the member's shares
may, for the purposes of calculating the repayable amount, be
reduced as described in subsection (4).
20 (4) The paid up value of the member's shares may be reduced by an
amount that bears to the amount of the loss or deficiency so
disclosed the same proportion as the number of shares held by
the member bore to the total number of shares held by all
members of the co-operative at the time of cancellation.
25 (5) If the former member is subsequently readmitted to
membership, any amount held by the co-operative under this
section must, if the member so requests, be applied towards the
cost of admission to membership, including any subscription for
share capital.
30 (6) Despite subsection (2)(c), if --
(a) the co-operative cannot, after taking all reasonable
action, find the former member; and
page 74
Co-operatives Bill 2007
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 128
(b) the payment due is less than the amount prescribed by
the regulations, or if an amount is not prescribed, $100,
the co-operative may appropriate the payment as a donation to
the co-operative.
5 128. Interest on deposits, debentures and co-operative capital
units
(1) This section applies when --
(a) the amount payable to a former member under
section 73 or 127 is applied as a deposit with the
10 co-operative; or
(b) the co-operative allots or issues debentures or
co-operative capital units to the former member in
satisfaction of that amount.
(2) The deposit, debenture or co-operative capital unit bears interest
15 during any period --
(a) in the case of a co-operative with share capital --
(i) at the rate, or if there is more than one rate, at the
higher or highest rate, of dividend payable for
that period on the share capital of the
20 co-operative; or
(ii) if the rate of dividend payable for that period has
not been determined, at the rate, or the higher or
highest rate, payable for the immediately
preceding period for which a rate has been
25 decided; or
(iii) if a rate of dividend has never been determined
in relation to the share capital of the
co-operative, at the rate that the board of the
co-operative considers reasonable;
30 or
page 75
Co-operatives Bill 2007
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 129
(b) in the case of a co-operative without share capital, at the
rate that the board of the co-operative considers
reasonable; or
(c) if the rules provide for a rate to be payable that is higher
5 than the rate applicable under paragraph (a) or (b), at
that higher rate.
(3) A former member may agree to the rate of interest being less
than that which would otherwise be payable under this section
and may agree to no interest being paid.
10 (4) The following provisions of the Corporations Act, as applied by
section 250 of this Act, do not apply to an allotment or issue of
debentures or co-operative capital units under this section --
(a) Chapter 2L;
(b) Chapter 6D.
15 129. Repayment of deposits, and redemption of debentures and
co-operative capital units
(1) A deposit, debenture or co-operative capital unit to which an
amount payable to a former member is applied under this
Division or section 73(2) is to be repaid or redeemed, as the
20 case may be, as soon as repayment or redemption would not, in
the opinion of the board, adversely affect the financial position
of the co-operative.
(2) The deposit, debenture or co-operative capital unit must in any
case be repaid or redeemed within 10 years, or within any
25 shorter period that the rules of the co-operative may require,
after cancellation of the member's membership.
130. Register of cancelled memberships
A co-operative must keep a register stating the particulars, as
prescribed by the regulations, of persons whose membership has
30 been cancelled under this Part.
page 76
Co-operatives Bill 2007
Active membership Part 6
Entitlements of former members of distributing co-operatives Division 5
s. 131
Division 5 -- Entitlements of former members of
distributing co-operatives
131. Application of Division
(1) This Division only applies to distributing co-operatives.
5 (2) Sections 132, 133 and 134 apply to the extent they are not
inconsistent with the rules of each particular distributing
co-operative.
132. Former shareholders to be taken to be shareholders for
certain purposes
10 (1) Even though a person's shares in a co-operative have been
forfeited under this Part, the person is to be taken to be the
holder of shares in the co-operative (the same in all respects as
those that were forfeited) for the following purposes --
(a) the entitlements of a shareholder in relation to the
15 purchase of shares in the co-operative pursuant to an
offer described in section 289(a), (b) or (c) or the
purchase of all the shares in the co-operative, if the offer
or purchase occurs within 2 years after the person's
shares were forfeited;
20 (b) the entitlement of a shareholder when the co-operative
becomes registered as a company if the relevant special
resolution under section 306 is passed within 2 years
after the person's shares were forfeited;
(c) the entitlement of a shareholder to a distribution of
25 surplus in a winding-up of the co-operative that
commences within 2 years after the person's shares were
forfeited.
(2) Subsection (1)(a) does not apply to --
(a) an offer described in section 289(a) or (c) that is made
30 by another co-operative; or
(b) the purchase of all the shares in the co-operative by
another co-operative.
page 77
Co-operatives Bill 2007
Part 6 Active membership
Division 5 Entitlements of former members of distributing co-operatives
s. 133
(3) Subsection (1)(c) does not apply if the winding-up is for the
purposes of a merger under Part 12 Division 1.
(4) For the removal of doubt, it is declared that the entitlement
under subsection (1)(a) of a person whose shares have been
5 forfeited does not include an entitlement to vote on any matter.
(5) This section does not apply to a forfeited shareholding in a
co-operative if section 133 operates to require that forfeited
shareholding to be regarded as a forfeited shareholding in
another co-operative.
10 133. Entitlements of former shareholders on mergers etc.
(1) This section applies when a person's shares in a co-operative
(the "original co-operative") are forfeited under this Part and
within 2 years after that forfeiture --
(a) the original co-operative becomes a subsidiary of
15 another co-operative (the "new co-operative"); or
(b) another co-operative (the "new co-operative") is
created as a result of a merger under Part 12 Division 1
involving the original co-operative; or
(c) the engagements of the original co-operative are
20 transferred to another co-operative (the "new
co-operative") under Part 12 Division 1.
(2) A person referred to in subsection (1) is, for the purposes of the
operation of section 132, and the further operation of this
section, taken to have held shares in the new co-operative and as
25 having had those shares in the new co-operative forfeited under
this Part when the person's shares in the original co-operative
were forfeited.
(3) The extent of the forfeited shareholding in the new co-operative
is determined as follows --
30 (a) if the entitlement of active members of the original
co-operative in the circumstances concerned is solely an
entitlement to be allotted shares in the new co-operative,
the forfeited shareholding in the new co-operative is the
page 78
Co-operatives Bill 2007
Active membership Part 6
Entitlements of former members of distributing co-operatives Division 5
s. 134
shareholding to which the person would have been
entitled had the person's shares in the original
co-operative not been forfeited;
(b) in any other case, the forfeited shareholding in the new
5 co-operative is the shareholding that is the same in all
respects as the forfeited shareholding in the original
co-operative.
(4) The determination under subsection (3)(a) of the person's
shareholding in the new co-operative must be made --
10 (a) solely on the basis of the person's shareholding in the
original co-operative when the shares were forfeited or,
in a further operation of this section in respect of the
person, when the person was first to be regarded as
having a forfeited shareholding in the original
15 co-operative; and
(b) without regard to any additional shareholding in the
original co-operative to which the person would have
become entitled had the shares not been forfeited,
whether as a result of any bonus share issue or
20 otherwise.
134. Set off of amounts repaid etc. on forfeited shares
(1) If a person has an entitlement because of the operation of
section 133, the entitlement operates to end any liability of the
co-operative --
25 (a) to repay to the person under section 127 any amount for
the forfeited shares concerned; or
(b) in respect of a deposit held by the co-operative, or
debentures allotted or issued to the person, or
co-operative capital units issued under section 127 for
30 the forfeited shares concerned, except a liability to pay
interest that is payable but unpaid.
(2) If an amount has been repaid to a person under section 127
or 129, the amount repaid is to be set off against any entitlement
page 79
Co-operatives Bill 2007
Part 6 Active membership
Division 5 Entitlements of former members of distributing co-operatives
s. 135
of the person under section 132 for the forfeited shares
concerned.
(3) If the amount repaid cannot be set off against the entitlement
because the entitlement is not, or is only partly, an entitlement
5 to money, the entitlement is lost unless the person pays to the
co-operative the amount repaid to the person and does so within
the period required under subsection (4).
(4) If the circumstances referred to in subsection (3) arise, the
co-operative concerned must --
10 (a) give written notice of the matter by post to the person
concerned at the person's address last known to the
co-operative, specifying a period of not less than
28 days after the notice is given during which any
amount repaid must be paid to the co-operative; and
15 (b) publish a general notice to that effect in a newspaper
circulating generally in the district in which the
registered office of the co-operative is situated.
135. Regulations may exempt co-operatives from provisions
The regulations may exempt a co-operative from a provision of
20 this Division.
page 80
Co-operatives Bill 2007
Shares Part 7
Nature of share Division 1
s. 136
Part 7 -- Shares
Division 1 -- Nature of share
136. Nature of share in co-operative
(1) A share or other interest in a co-operative --
5 (a) is personal property; and
(b) is transferable or transmissible as provided by this Act
and the rules of the co-operative; and
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
10 (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 co-operative as they apply to other
property; and
15 (b) equitable interests in respect of a share or other interest
of a member in a co-operative may be created, dealt with
and enforced as in the case of other personal property.
Division 2 -- Disclosure
137. Disclosure to intending shareholders in distributing
20 co-operative
(1) An eligible person who intends to apply for shares in a
co-operative and is not already a shareholder in the co-operative
may request, from the board of the distributing co-operative, a
current disclosure statement that --
25 (a) has been approved by the Registrar under section 16(5);
or
(b) complies with section 138 and has been lodged by the
co-operative with the Registrar.
page 81
Co-operatives Bill 2007
Part 7 Shares
Division 2 Disclosure
s. 138
(2) The board of the distributing co-operative is to respond to a
request for a current disclosure statement within 7 days.
138. Content of disclosure statement to intending shareholders
(1) A disclosure statement given to a person under section 137 must
5 contain --
(a) a statement of the rights and liabilities attaching to
shares; and
(b) a statement that the person may request to either inspect
at the co-operative's nearest office, or be sent --
10 (i) the last annual report of the co-operative under
section 235(2); and
(ii) any other relevant information about the
financial position and prospects of the
co-operative if there has been a significant
15 change since the date of the last annual report;
and
(c) any other information the Registrar directs.
(2) If a person who has received a disclosure statement makes a
request under subsection (1)(b), the co-operative must comply
20 with that request within 7 days.
139. Exemptions for disclosure statements
(1) The Registrar may, by order published in the Gazette, exempt
the board of a distributing co-operative, or the boards of a class
of distributing co-operatives from a requirement under
25 section 137 or 138.
(2) An exemption under subsection (1) may be given only if the
Registrar is satisfied that compliance with the requirement
would be inappropriate in the circumstances or would impose an
unreasonable burden.
page 82
Co-operatives Bill 2007
Shares Part 7
Issues of shares Division 3
s. 140
Division 3 -- Issues of shares
140. Shares -- general
(1) The share capital of a co-operative varies in amount according
to the nominal value of shares from time to time subscribed.
5 (2) Shares are to be of a fixed amount which is to be specified in
the rules of the co-operative.
(3) A co-operative may have more than one class of shares
provided the shareholding and the rights of shareholders comply
with the co-operative principles.
10 (4) Subject to this Part and Part 4, shares must not be issued to a
non-member.
141. Application of Corporations Act for particular share
subscriptions
(1) If subsection (2) applies to shares of a co-operative, the shares
15 are declared to be applied Corporations legislation matters for
the Corporations (Ancillary Provisions) Act 2001 Part 3 in
relation to the Corporations Act sections 716(2), 722, 723(2),
724(1)(a) and (2)(a) and 734, subject to the following
modifications --
20 (a) the provisions apply as if a co-operative were a
company;
(b) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
(c) a reference in the provisions to a disclosure document is
25 to be read as a reference to a disclosure statement, of
any type, under this Act;
(d) a reference in the provisions to securities is to be read as
a reference to shares;
(e) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 83
Co-operatives Bill 2007
Part 7 Shares
Division 3 Issues of shares
s. 142
(2) Shares in a co-operative are subject to the declaration under
subsection (1) if --
(a) the shares are offered to persons who are not
shareholders in the co-operative; or
5 (b) the invitation is made to persons who are not
shareholders in the co-operative.
142. Minimum paid up amount
(1) A share in a co-operative other than a transferred co-operative
must not be allotted unless at least 10% of the nominal value of
10 the share has been paid.
(2) Any balance unpaid for shares at the time of allotment must be
paid in a way specified in the rules of the co-operative or
permitted by this Act.
(3) This section does not apply to a bonus share issued under
15 section 147 or 271.
143. Shares not to be issued at a discount
A co-operative must not issue shares at a discount.
144. Issue of shares at a premium
(1) A distributing co-operative may issue shares at a premium.
20 (2) A premium may be in the form of cash or other valuable
consideration.
(3) If a distributing co-operative issues shares for which it receives
a premium, an amount equal to the total amount or value of the
premiums on the shares must be transferred to a share premium
25 account.
(4) The share premium account is to be treated as paid up share
capital of the distributing co-operative and may be applied in
any one or more of the following ways --
(a) in paying up unissued shares to be issued to members of
30 the co-operative as fully paid bonus shares;
page 84
Co-operatives Bill 2007
Shares Part 7
Issues of shares Division 3
s. 145
(b) in paying up, in whole or in part, the balance unpaid on
shares previously issued to members of the co-operative;
(c) in the payment of dividends, if those dividends are
satisfied by the issue of shares to members of the
5 co-operative;
(d) in writing off the expenses incurred in establishing the
co-operative;
(e) in providing for the premium payable on redemption of
shares, debentures or co-operative capital units.
10 145. Joint ownership of shares
A share may be held by 2 or more persons jointly, unless the
rules of the co-operative provide otherwise.
146. Members may be required to take up additional shares
(1) The board of a distributing co-operative may require a member
15 to take up or subscribe for additional shares under a proposal
approved by a special resolution of the co-operative.
(2) The board of a distributing co-operative may deduct amounts in
payment for additional shares from money payable to members
for dealings with the co-operative, under a proposal approved
20 by a special resolution of the co-operative.
(3) A proposal to require a member to take up or subscribe for
additional shares must --
(a) be accompanied by a disclosure statement, approved by
the Registrar, that explains the purpose for which the
25 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
30 (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
page 85
Co-operatives Bill 2007
Part 7 Shares
Division 3 Issues of shares
s. 147
before the passing of the special resolution, that the
member resigns on the passing of the special resolution.
(4) A proposal to deduct amounts in payment for additional shares
from amounts payable to members for dealings with the
5 distributing co-operative must clearly show --
(a) the basis on which the deductions are to be made; and
(b) the time and way of making those deductions.
(5) A proposal approved under this section is binding on --
(a) all members of the distributing co-operative at the date
10 of the passing of the special resolution, other than a
member who has given a notice of resignation in
accordance with subsection (3)(c); and
(b) all persons who become members of the distributing
co-operative after that date and before the total number
15 of shares to be issued under the proposal has been
issued.
(6) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
changes and in particular as if any reference in section 16 to a
20 formation meeting were a reference to the special resolution.
(7) This section does not apply to the issue of bonus shares to a
member under section 271(2).
147. Bonus share issues
(1) In addition to section 271(2) a distributing co-operative may
25 issue bonus shares to members of the co-operative if the assets
of the co-operative --
(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 co-operative.
30 (2) This section does not apply if the assets were acquired for resale
at a profit.
page 86
Co-operatives Bill 2007
Shares Part 7
Issues of shares Division 3
s. 148
148. Restrictions on bonus shares
Bonus shares issued under section 147 may be issued in
accordance with the rules of the co-operative, subject to the
following restrictions --
5 (a) each issue must have been approved by a special
resolution of the co-operative;
(b) they are to be issued as fully paid up shares with no
payment required to be made by a member of the
co-operative to whom they are issued;
10 (c) they are to be issued only for 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
co-operative in any one year cannot be more than 20%,
15 or another percentage prescribed by the regulations, of
the nominal value of the issued share capital of the
co-operative immediately before the date of issue of the
bonus shares.
149. Notice about bonus shares
20 Notice of the meeting or postal ballot at which a resolution is to
be proposed as a special resolution for the purpose of approving
a bonus share issue must be accompanied by --
(a) a statement of the value of the assets concerned as
disclosed in the books of the co-operative before the sale
25 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
30 assets, a certificate of value of the assets, being a
certificate given in relation to a valuation made not more
than 12 months before the date of the notice by a person
prescribed by the regulations or a person having
qualifications prescribed by the regulations; and
page 87
Co-operatives Bill 2007
Part 7 Shares
Division 4 Beneficial and non-beneficial interest in shares
s. 150
(d) particulars of acquisitions of shares in the co-operative
made within the 3 years immediately preceding the date
of the notice by or on behalf of each of its directors and
his or her spouse (or de facto partner) and the father,
5 mother, children, brothers and sisters of each such
director and spouse (or de facto partner); and
(e) a certificate signed by 2 directors of the co-operative
stating that to the best of their knowledge and belief the
issue of bonus shares would not be imprudent and that
10 no circumstances are known to them as to why the issue
should not take place.
Division 4 -- Beneficial and non-beneficial interest in shares
150. Direction to disclose
The board of a co-operative may direct a person to disclose
15 matters as described in section 151 if the person is --
(a) a member of the co-operative; or
(b) a person named in a disclosure made in response to a
previous direction under this section as having a relevant
interest in, or having given instructions about, shares in
20 the co-operative.
151. Disclosure by member of relevant interests and instructions
(1) A person given a direction under section 150 must, unless
subsection (2) applies, disclose to the board --
(a) full details of the person's relevant interest in the shares
25 of the co-operative (the "relevant shares") and of the
circumstances that gave rise to the interest; and
(b) the name and address of each other person who has a
relevant interest in the relevant shares together with full
details of --
30 (i) the nature and extent of the interest; and
page 88
Co-operatives Bill 2007
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 151
(ii) the circumstances that gave rise to the other
person's interest;
and
(c) the name and address of each person who has given the
5 person instructions about --
(i) the acquisition or disposal of the shares; or
(ii) the exercise of any voting or other rights attached
to the shares; or
(iii) any other matter relating to the shares,
10 together with full details of those instructions, including
the date or dates on which they were given.
Penalty: a fine of $3 000.
(2) A matter referred to in subsection (1)(b) or (c) need only be
disclosed to the extent to which the matter is ascertainable by
15 the person required to make the disclosure.
(3) The disclosure must be made within the period of 5 days after
the person is given the direction, unless within that period the
person applies in writing to the Registrar for an exemption from
compliance with the direction.
20 (4) The Registrar may, in writing, exempt a person from complying
with a direction if the Registrar believes the direction is
unjustified.
(5) If the Registrar refuses to give an exemption under
subsection (4), the disclosure required by the direction must be
25 made within the period of 5 days after the person receives
written notice of that refusal.
(6) A board that receives information from a person acting on a
direction given to the person by the board must pay to the
person the fee, if any, prescribed by the regulations.
page 89
Co-operatives Bill 2007
Part 7 Shares
Division 4 Beneficial and non-beneficial interest in shares
s. 152
152. Registration as trustee etc. on death of owner of shares
(1) A trustee, executor or administrator of the estate of a dead
person who was the registered holder of a share in a
co-operative may be registered as the holder of the share as
5 trustee, executor or administrator of that estate.
(2) A trustee, executor or administrator of the estate of a dead
person who was entitled in equity to a share in a co-operative
may, with the consent of the co-operative and of the registered
holder of the share, be registered as the holder of the share as
10 trustee, executor or administrator of that estate.
153. Registration as administrator of estate on incapacity of
shareholder
(1) This section applies to a person (the "appointed person") who
is appointed under a law of a State or Territory relating to the
15 administration of the estates of persons who, through mental or
physical infirmity, are incapable of managing their affairs, to
administer the estate of another person (the "incapable
person").
(2) If the incapable person is the registered holder of a share in a
20 co-operative, the appointed person may be registered as the
holder of that share as administrator of the estate of the
incapable person.
(3) If the incapable person is entitled in equity to a share in a
co-operative, the appointed person may, with the consent of the
25 co-operative and of the registered holder of that share, be
registered as the holder of the share as administrator of the
estate of the incapable person.
154. Registration as Official Trustee in Bankruptcy
(1) This section applies when a share in a co-operative that is the
30 property of a bankrupt vests by force of the Commonwealth
Bankruptcy Act 1966 in the Official Trustee in Bankruptcy.
page 90
Co-operatives Bill 2007
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 155
(2) If the bankrupt is the registered holder of the share, the Official
Trustee may be registered as the holder of the share as the
Official Trustee in Bankruptcy.
(3) If the bankrupt is entitled in equity to the share, the Official
5 Trustee may, with the consent of the co-operative and of the
registered holder of the share, be registered as the holder of the
share as the Official Trustee in Bankruptcy.
155. Liabilities of person registered as trustee or administrator
(1) A person registered under section 152, 153 or 154 is, while so
10 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
15 to the share.
156. Notice of trusts in register of members
Shares held by a trustee under a particular trust may, with the
consent of the co-operative, be marked in the register of
members, directors and shares referred to in section 230(1)(a) in
20 a way that identifies the shares as being held under the trust.
157. No notice of trust except as provided by this Division
Except as provided in this Division --
(a) no notice of a trust, whether express, implied or
constructive, is to be entered on a register or be
25 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 co-operative
with notice of a trust.
page 91
Co-operatives Bill 2007
Part 7 Shares
Division 5 Sale or transfer of shares
s. 158
Division 5 -- Sale or transfer of shares
158. Sale or transfer of shares
(1) A share in a co-operative cannot be sold or transferred except --
(a) in accordance with Part 4 Division 3 and section 159, on
5 the death of a member; or
(b) to a person appointed to administer the estate of a
shareholder under a law relating to the administration of
the estates of persons who, through mental or physical
infirmity, are incapable of managing their affairs; or
10 (c) with the consent of the board, to any person if there are
reasonable grounds for believing that the person will be
an active member of the co-operative; or
(d) in accordance with Part 11 Division 2.
(2) A share in a co-operative cannot be sold or transferred except in
15 accordance with the rules of the co-operative.
159. Transfer on death of member
(1) Despite sections 75 and 76, on the death of a member, the
member's share in the co-operative may be transferred to a
person other than an administrator or executor with the consent
20 of the board of the co-operative.
(2) The board may only give its consent under subsection (1) if
there are reasonable grounds for believing that the person will
be an active member of the co-operative.
160. Restriction on total shareholding
25 The board of a co-operative must not consent under
section 158(1)(c) to the issue, sale or transfer of a share if, as a
result of the issue, sale or transfer, the nominal value of the
shares held by the purchaser or transferee would be more than
the maximum permissible level of share interest applying under
30 section 278.
page 92
Co-operatives Bill 2007
Shares Part 7
Repurchase of shares Division 6
s. 161
161. Transfer not effective until registered
A transferor of a share remains the holder of the share until the
transferee is noted as the holder of the share in the register of
members, directors and shares referred to in section 230(1)(a).
5 162. Non-members become members on registration
Where a share in a co-operative is transferred to a non-member
under this Part or Part 4, the transferee becomes a member of
the co-operative on the transferee being noted as a member in
the register of members, directors and shares referred to in
10 section 230(1)(a).
Division 6 -- Repurchase of shares
163. Purchase and repayment of shares
(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
15 the request of the member; and
(b) repay to a member, with the member's consent, all or
any part of the amount paid up to the stated nominal
value on any share held by the member when the
amount repaid is not required for the activities of the
20 co-operative.
(2) The amount paid by a co-operative under this section in
purchasing shares or repaying an amount paid up to the stated
nominal value on shares, or both, in any financial year of the
co-operative must not be more than the total of --
25 (a) 5% of the nominal value of the issued share capital of
the co-operative immediately before the start of that
financial year; and
(b) the amount of any additional share capital of the
co-operative subscribed for during that year.
30 (3) The members of a co-operative may by special resolution
exempt a co-operative from the operation of subsection (2) in
page 93
Co-operatives Bill 2007
Part 7 Shares
Division 6 Repurchase of shares
s. 164
relation to a particular financial year, either unconditionally or
on 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
5 of the share but only --
(a) if the records 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.
10 (5) This section does not apply if the member has resigned or has
been expelled from the co-operative or the member's
membership has been otherwise cancelled.
164. Deposit, debentures or co-operative capital units instead of
payment when share repurchased
15 (1) If a co-operative repurchases a share of a member, the
co-operative may instead of paying the purchase price to the
member --
(a) in the case of a deposit-taking co-operative, apply the
amount as an interest bearing deposit by the member
20 with the co-operative; or
(b) allot or issue debentures or co-operative capital units of
the co-operative to the member in satisfaction of the
amount.
(2) Subsection (1) applies only if --
25 (a) the board considers that payment of the repurchase price
would adversely affect the financial position of the
co-operative; or
(b) the board and the member so agree.
page 94
Co-operatives Bill 2007
Shares Part 7
Repurchase of shares Division 6
s. 164
(3) The deposit, debenture or co-operative capital unit bears interest
during any period --
(a) in the case of a co-operative with share capital --
(i) at the rate (or, if there is more than one rate, at
5 the higher or highest rate) of dividend payable
for that period on the share capital of the
co-operative; or
(ii) if the rate of dividend payable for that period has
not been decided, at the rate (or the higher or
10 highest rate) payable for the immediately
preceding period for which a rate has been
decided; or
(iii) if a rate of dividend has never been decided for
the share capital of the co-operative, at the rate
15 that the board of the co-operative considers
reasonable;
or
(b) in the case of a co-operative without share capital, at the
rate that the board of the co-operative considers
20 reasonable; or
(c) if the rules provide for a rate to be payable that is higher
than the rate applicable under paragraph (a) or (b), at the
higher rate.
(4) The deposit, debenture or co-operative capital unit must be
25 repaid to the member or redeemed, as the case may be, as soon
as repayment or redemption would not, in the opinion of the
board, adversely affect the financial position of the
co-operative.
(5) The deposit, debenture or co-operative capital unit must in any
30 case be repaid or redeemed within 10 years (or within any
shorter period that the rules of the co-operative require) after the
repurchase of the shares concerned.
page 95
Co-operatives Bill 2007
Part 7 Shares
Division 6 Repurchase of shares
s. 165
165. Cancellation of shares
(1) A co-operative must cancel any share purchased by or forfeited
to the co-operative in accordance with this Act or the rules of
the co-operative.
5 (2) Any shares held by a co-operative in itself at the time the
co-operative is registered under this Act are cancelled under this
section.
page 96
Co-operatives Bill 2007
Voting and meetings Part 8
Voting entitlements Division 1
s. 166
Part 8 -- Voting and meetings
Division 1 -- Voting entitlements
166. Application of Part to voting
The provisions of this Part applying to voting apply to voting on
5 all resolutions.
167. Voting
(1) The right to vote attaches to membership and not shareholding.
(2) Except as provided in subsections (3) and (4), each member has
only one vote at a meeting of the co-operative.
10 (3) If its rules so provide, a member of a co-operative group may
have the number of votes (up to 5) at a general meeting that is
specified in the rules.
(4) If the rules so provide, the chairman has a casting vote at a
board meeting or general meeting.
15 (5) In the case of joint membership --
(a) the joint members have only one vote between them;
and
(b) that vote may be exercised, subject to the grant of a
proxy or power of attorney, only by the joint member
20 determined in accordance with the rules.
168. Voting by proxy
(1) If the rules so provide, voting may be by proxy at a general
meeting.
(2) The instrument of proxy may state the way in which a proxy is
25 to vote on a particular resolution.
(3) The proxy must vote in the way authorised by an instrument of
proxy referred to in subsection (2).
page 97
Co-operatives Bill 2007
Part 8 Voting and meetings
Division 1 Voting entitlements
s. 169
(4) The rules of a co-operative may limit the number of persons for
whom a person may act as a proxy on the same question.
(5) A person cannot exercise more than one proxy vote during a
vote on the same question unless the vote is conducted by poll
5 demanded under section 194.
169. Control of the right to vote
(1) Subject to subsection (3), a person must not directly or
indirectly control the exercise of the right to vote of a member.
Penalty: a fine of $12 000.
10 (2) If a person controls the exercise of the right to vote of a member
at a meeting of a co-operative --
(a) the vote of the member is invalid; and
(b) if the person is a member, the vote of the person is
invalid.
15 (3) Nothing in this section prevents --
(a) the exercise of a vote by means of a proxy or power of
attorney; or
(b) a director controlling the vote of a corporate member; or
(c) an agreed purchaser controlling a member's vote
20 pending settlement.
170. Effect of disposal of shares on voting rights
A member of a co-operative 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.
25 171. Effect of relevant share and voting interests on voting rights
(1) A member of a co-operative cannot vote if another person,
whether or not a member of the co-operative, has a relevant
interest in any share held by the member or in the right to vote
of the member.
page 98
Co-operatives Bill 2007
Voting and meetings Part 8
Resolutions Division 2
s. 172
(2) A member who cannot vote because of this section may apply to
the Registrar to review the matter.
(3) The Registrar may order that the member may vote if the
Registrar is satisfied in the circumstances of the case that loss of
5 the right to vote would be unjust or unreasonable, and the order
of the Registrar has effect accordingly.
172. Rights of representatives
A person appointed under this Act to represent a member of a
co-operative --
10 (a) is deemed to receive any notice of meetings given to the
member represented; and
(b) is entitled to exercise the same rights to vote as the
member represented.
173. Other rights and duties of members not affected by
15 ineligibility to vote
A provision of this Act that disentitles a member of a
co-operative to vote, either generally or in relation to a
particular matter, does not affect any other right, entitlement,
obligation or duty of the member as a member.
20 174. Vote of disentitled member to be disregarded
Any vote cast by or on behalf of a member of a co-operative
when not entitled to vote must be disregarded.
Division 2 -- Resolutions
175. Decisions to be by ordinary resolution
25 Unless this Act or the rules of the co-operative provide
otherwise, every question for decision by a co-operative must be
decided by ordinary resolution.
page 99
Co-operatives Bill 2007
Part 8 Voting and meetings
Division 2 Resolutions
s. 176
176. Ordinary resolutions
An ordinary resolution is a resolution of a co-operative that is
passed by a simple majority at a general meeting of the
co-operative or in a postal ballot of members.
5 177. Special resolutions
(1) A special resolution is a resolution of a co-operative that is
passed --
(a) by a two-thirds majority at a general meeting of
members; or
10 (b) by a two-thirds majority in a postal ballot, other than a
special postal ballot, of members; or
(c) by a three-quarters majority in a special postal ballot of
members.
(2) A special resolution may be passed by a postal ballot only if the
15 rules of the co-operative allow, or this Act requires, the special
resolution to be passed by postal ballot, including a special
postal ballot.
(3) A resolution is not taken to have been passed as a special
resolution unless not less than 21 days notice has been given to
20 the members of the co-operative stating --
(a) the intention to propose the special resolution; and
(b) the reasons for proposing the special resolution; and
(c) the effect of the special resolution being passed.
178. How majority obtained is ascertained
25 (1) A resolution is passed by a particular majority at a meeting if
that majority of the members of the co-operative who, being
entitled to do so, vote in person or, if proxies are allowed, by
proxy at the meeting vote in favour of the resolution.
(2) A resolution is passed by a particular majority in a postal ballot
30 if that majority of the members of the co-operative who, being
page 100
Co-operatives Bill 2007
Voting and meetings Part 8
Resolutions Division 2
s. 179
entitled to do so, cast formal votes in the postal ballot vote in
favour of the resolution.
179. Declaration of passing of special resolution
(1) At a meeting of a co-operative for the purpose of passing a
5 special resolution, a declaration by the chairman of the meeting
that the resolution has been passed as a special resolution is
evidence of that fact.
(2) A declaration by the returning officer for a postal ballot to pass
a special resolution that the resolution has been passed as a
10 special resolution is evidence of that fact.
(3) Subsection (1) does not apply if a poll is taken at the meeting of
the co-operative.
180. Effect of special resolution
(1) A special resolution, other than a special resolution required to
15 be passed by special postal ballot, has effect from the date that it
is passed.
(2) A special resolution relating to anything for which a special
resolution is required to be passed by special postal ballot has
no effect until it is registered under section 182(1).
20 181. Lodgment of special resolution
(1) A co-operative must lodge 2 copies of each special resolution
passed by the co-operative with the Registrar in accordance with
this section for registration.
(2) The copies must --
25 (a) be lodged within 28 days after the passing of a special
resolution or a longer period allowed by the Registrar;
and
(b) be signed by a director, the secretary of the co-operative
or another authorised representative of the co-operative;
30 and
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Co-operatives Bill 2007
Part 8 Voting and meetings
Division 2 Resolutions
s. 182
(c) be accompanied by the lodgment fee prescribed by the
regulations.
(3) A co-operative and an officer of the co-operative must not
knowingly fail to lodge the required copies under this section.
5 Penalty: a fine of $2 000.
(4) This section and section 182 do not apply to a special resolution
altering the rules of a co-operative.
182. Decision of Registrar on application to register special
resolution
10 (1) If the Registrar is satisfied that the co-operative has complied
with this Act, and that a special resolution passed by special
postal ballot is not contrary to this Act, the Registrar must
register the special resolution.
(2) If the Registrar considers that the effect of a special resolution
15 lodged for registration would be in contravention of this Act or
any other law, the Registrar --
(a) may refuse to register the special resolution; and
(b) must give written notice to the co-operative that the
special resolution --
20 (i) in the case of a special resolution referred to in
section 180(2), has no effect; and
(ii) in any other case, has no effect as from the date
that it was passed.
(3) A certificate of registration of a special resolution given by the
25 Registrar is, in favour of any person advancing money to the
co-operative on the faith of the certificate or in favour of any
guarantor of that advance, evidence that the resolution was
properly passed.
page 102
Co-operatives Bill 2007
Voting and meetings Part 8
Resolution by circulated document Division 3
s. 183
Division 3 -- Resolution by circulated document
183. Application of Division 3
This Division applies to a resolution of a co-operative, including
a resolution appointing an officer or auditor or approving of or
5 agreeing to any act, matter or thing, if --
(a) the co-operative has fewer than 50 members; and
(b) the resolution is required or permitted under this Act or
the rules of the co-operative to be passed at a general
meeting of the co-operative.
10 184. Resolution by circulation of document -- fewer than
50 members
(1) If all the members of a co-operative have signed a document
that sets out the terms of a resolution and contains a statement
that they are in favour of the resolution, the resolution is taken
15 to have been passed at a general meeting of the co-operative.
(2) The meeting is taken to have been held --
(a) if all the members signed the document on the one day,
on that day and at the time the document was signed by
the last member to sign; or
20 (b) if the members signed the document on different days,
on the day, and at the time, the document was signed by
the last member to sign.
(3) The document need not exist as a single document, but may
exist in the form of 2 or more documents in identical terms.
25 (4) The document is taken to constitute a minute of the general
meeting.
(5) Anything attached to the document and signed by the members
signing the document is taken to have been laid before the
co-operative at the general meeting.
page 103
Co-operatives Bill 2007
Part 8 Voting and meetings
Division 4 Postal ballots
s. 185
(6) The document is signed by all members of a co-operative only if
the document is signed by each person who was a member of
the co-operative at the time the document was signed by the last
member to sign.
5 (7) Nothing in this section affects or limits any rule of law about the
effectiveness of the assent of a member of a co-operative given
to a document, or to an act, matter or thing, otherwise than at a
general meeting of the co-operative.
Division 4 -- Postal ballots
10 185. Postal ballots
(1) A postal ballot may be conducted in the manner provided by the
rules of the co-operative and may, if the rules so allow,
incorporate one or more methods of electronic voting.
(2) On the declaration by the returning officer of the result of the
15 ballot, the secretary of the co-operative must make an entry in
the minute book of the co-operative showing --
(a) the number of formal votes cast in favour of the
proposal concerned; and
(b) the number of formal votes cast against the proposal;
20 and
(c) the number of informal votes cast.
186. Special postal ballots
(1) A special postal ballot is a postal ballot that is conducted as
required by this section.
25 (2) The ballot cannot be held less than 21 days after notice of the
ballot is given to members so as to enable sufficient time for a
meeting to discuss the proposal that is the subject of the ballot
to be convened and held (whether by the board or on the
requisition of members).
page 104
Co-operatives Bill 2007
Voting and meetings Part 8
Postal ballots Division 4
s. 187
(3) The co-operative must send to each member, along with any
other material required to be sent in connection with the postal
ballot, a disclosure statement approved by the Registrar and
containing information about --
5 (a) the financial position of the co-operative; and
(b) the interests of the directors of the co-operative in the
proposal with which the ballot is concerned, including
any interests of the directors in another organisation
concerned in the proposal; and
10 (c) any compensation or consideration to be paid to officers
or members of the co-operative in connection with the
proposal; and
(d) any other matters as the Registrar directs.
(4) If required by the Registrar, the disclosure statement is to be
15 accompanied by a report, made by an independent person
approved by the Registrar, about any matters that the Registrar
directs.
(5) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
20 changes and in particular as if any reference in section 16 to a
formation meeting were a reference to the notice of the special
postal ballot.
187. When a special postal ballot required
In addition to any requirement of this Act, the rules of a
25 co-operative must require a special postal ballot to be conducted
for the purpose of passing a special resolution in relation to any
of the following matters relating to the co-operative --
(a) conversion of --
(i) a share capital co-operative to a non-share capital
30 co-operative or vice versa; or
(ii) a distributing co-operative to a non-distributing
co-operative or vice versa;
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Co-operatives Bill 2007
Part 8 Voting and meetings
Division 4 Postal ballots
s. 188
(b) transfer of incorporation;
(c) an acquisition or disposal of assets referred to in
section 273;
(d) the maximum permissible level of share interest in the
5 co-operative;
(e) takeover;
(f) merger;
(g) transfer of engagements;
(h) members' voluntary winding-up.
10 188. Holding of postal ballot on requisition
(1) The board of a co-operative must conduct a postal ballot,
including a special postal ballot, for the passing of a special
resolution on the written requisition of such number of members
who together are able to cast at least 20%, or any lesser
15 percentage specified in the rules of the co-operative, of the total
number of votes able to be cast at a meeting of the co-operative.
(2) The following provisions apply to a requisition for a postal
ballot --
(a) it must state --
20 (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;
25 (b) it must be signed by the requisitioning members, and
may consist of several documents in like form each
signed by one or more of the requisitioning members;
(c) it must be served on the co-operative by being lodged at
the registered office of the co-operative.
page 106
Co-operatives Bill 2007
Voting and meetings Part 8
Meetings Division 5
s. 189
(3) 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.
(4) If the special resolution for which the requisitioned postal ballot
5 is conducted is not passed, the co-operative may recover the
expenses of the postal ballot from the members who
requisitioned the postal ballot as a debt due to the co-operative.
(5) The members' liability under subregulation (4) is joint and
several.
10 189. Expenses involved in postal ballots on requisition
(1) All reasonable expenses incurred by a co-operative in and in
connection with preparing for and holding a special postal ballot
are to be considered to constitute the "expenses of the postal
ballot" for the purposes of section 188(4).
15 (2) Those expenses include (but are not limited to) the following
expenses --
(a) the cost of obtaining expert advice, including legal and
financial advice, and of commissioning expert reports;
(b) costs attributable to the use of staff of the co-operative
20 in connection with preparing for and holding the ballot;
(c) the cost of producing, printing and posting the ballot
papers and other material associated with the ballot;
(d) the cost of convening and holding a meeting under
section 186(2) at the request of the members who
25 requisitioned the postal ballot.
Division 5 -- Meetings
190. Annual general meetings
(1) In the case of a co-operative registered under Part 2 Division 4,
the first annual general meeting of the co-operative must be held
30 within 18 months after registration under this Act.
page 107
Co-operatives Bill 2007
Part 8 Voting and meetings
Division 5 Meetings
s. 191
(2) In the case of a co-operative registered under Part 2 Division 5,
the first annual general meeting of the co-operative must be held
within 18 months after the last annual general meeting held by
that co-operative before it was registered under this Act.
5 (3) The second or any later annual general meeting of a
co-operative must be held within --
(a) 5 months after the close of the financial year of the
co-operative; or
(b) a further time that may be allowed by the Registrar or is
10 prescribed by the regulations.
191. Special general meetings
A special general meeting of a co-operative may be called at
any time by the board of the co-operative.
192. Notice of meetings
15 The board must give each member at least 14 days notice of
each general meeting.
193. Quorum at meetings
(1) The quorum for a meeting of a co-operative must be specified in
the rules.
20 (2) An item of business cannot be transacted at a meeting of a
co-operative unless a quorum of members entitled to vote is
present during the transaction of that item.
194. Decision at meetings
(1) Unless subsection (4) requires it to be determined by a poll, a
25 question for decision at a general meeting is to be determined by
a show of hands.
(2) A proxy may exercise only one vote on a question determined
by a show of hands.
page 108
Co-operatives Bill 2007
Voting and meetings Part 8
Meetings Division 5
s. 195
(3) A proxy may exercise more than one vote on a question
determined by a poll.
(4) A question is to be determined by a poll if --
(a) 5 members, present in person at the meeting or
5 represented at the meeting by a proxy, demand the poll;
or
(b) the chairman directs that the question will be determined
by poll.
(5) In the case of an equality of votes, whether on a show of hands
10 or on a poll, the chairman of the meeting at which the show of
hands takes place or at which the poll is demanded may exercise
a casting vote if the rules so provide.
195. Calling of general meeting on requisition
(1) The board of a co-operative must convene a general meeting of
15 the co-operative on the written requisition of such number of
members who together are able to cast at least 20% (or any
lesser percentage specified in the rules of the co-operative) of
the total number of votes able to be cast at a meeting of the
co-operative.
20 (2) The following provisions apply to a requisition for a general
meeting --
(a) it must state the objects of the meeting;
(b) it must be signed by the requisitioning members, and
may consist of several documents in like form each
25 signed by one or more of the requisitioning members;
(c) it must be served on the co-operative by being lodged at
the registered office of the co-operative.
(3) The meeting must be called and held as soon as practicable and
in any case must be held within 2 months after the requisition is
30 served.
page 109
Co-operatives Bill 2007
Part 8 Voting and meetings
Division 5 Meetings
s. 196
(4) If the board does not call a meeting within 35 days after a
requisition is served, the following provisions apply --
(a) the requisitioning members, or any of them representing
at least half their total voting rights, may call the
5 meeting in the same way as nearly as possible as
meetings are called by the board;
(b) for that purpose they may request the co-operative to
supply a written statement setting out the names and
addresses of the persons entitled when the requisition
10 was served to receive notice of general meetings of the
co-operative;
(c) the board must send the requested statement to the
requisitioning members within 7 days after the request
for the statement is made;
15 (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
20 meeting must be paid by the co-operative;
(f) any amount required to be paid by the co-operative
under paragraph (e) must be retained by the co-operative
out of any money due from the co-operative by way of
fees or other remuneration in respect of their services to
25 such of the directors as were in default.
196. Minutes
(1) Minutes of --
(a) each general meeting; and
(b) each meeting of the board; and
page 110
Co-operatives Bill 2007
Voting and meetings Part 8
Meetings Division 5
s. 196
(c) each meeting of a committee to which the board's
functions have been delegated under section 204(1),
must be entered in the appropriate records within one month
after the meeting and confirmed at, and signed by the chairman
5 of, the next meeting.
(2) The minutes of each general meeting must be available for
inspection by members.
(3) Minutes must be kept in the English language.
page 111
Co-operatives Bill 2007
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 197
Part 9 -- Management and administration
of co-operatives
Division 1 -- The Board
197. Board of directors
5 (1) Subject to this Act and the rules of the co-operative, the
business of a co-operative is to be managed by a board of
directors.
(2) The board of directors may exercise all the powers of the
co-operative that are not, by this Act or the rules of the
10 co-operative, required to be exercised by the co-operative in a
general meeting or by postal ballot.
(3) The acts of a director are valid despite any defect that may
afterwards be discovered in his or her appointment or
qualification.
15 198. Election of directors
(1) Except as provided in subsections (2), (3) and (4), the directors
of a co-operative are to be elected in the manner specified in the
rules of the co-operative.
(2) The first directors of --
20 (a) a co-operative formed under this Act are to be elected at
its formation meeting; and
(b) a co-operative that was a corporation incorporated under
another Act are to be the directors in office at the date of
registration under this Act.
25 (3) If authorised by the rules of the co-operative, a board of
directors may appoint a person to fill a casual vacancy in the
office of a director until the next annual general meeting.
page 112
Co-operatives Bill 2007
Management and administration of co-operatives Part 9
The Board Division 1
s. 199
(4) A resolution passed at a general meeting of a co-operative
electing 2 or more directors is void unless --
(a) the meeting previously resolved that the nominations for
election could be voted on together; and
5 (b) no votes were cast against that previous resolution.
(5) Subsection (4) does not affect --
(a) a resolution to appoint directors by an amendment to the
co-operative's rules; or
(b) a ballot or poll to elect 2 or more directors if the ballot
10 or poll does not require members voting for one
candidate to vote for another specific candidate.
(6) For the purposes of subsection (5), a ballot or poll does not
require a member to vote for a candidate merely because the
member is required to express a preference among individual
15 candidates in order to cast a valid vote.
(7) A nomination for election or appointment to the office of a
director must give details of the qualifications and experience of
the person nominated.
(8) Unless this Act or the rules of a co-operative provides
20 otherwise, a director is eligible for re-election at the end of his
or her term of office.
199. Qualification of directors
(1) In this section --
"member director" means a director who is a person qualified
25 to be a director under subsection (2)(a).
(2) A person is not qualified to be a director of a co-operative
unless the person is --
(a) a member of the co-operative or a representative of a
corporation that is a member of the co-operative; or
30 (b) an employee of the co-operative or a person qualified as
provided by the rules.
page 113
Co-operatives Bill 2007
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 200
(3) The majority of directors must be member directors.
(4) Subsection (3) does not prevent the rules of a co-operative
requiring that a greater number of directors than a majority must
be member directors.
5 200. Disqualified persons
(1) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative
if the person --
(a) is the auditor of the co-operative or a partner, employee
10 or employer of the auditor; or
(b) has been convicted, whether before or after the
commencement of this section, within or outside this
State --
(i) on indictment of an offence relating to the
15 promotion, formation or management of a
corporation; or
(ii) of an offence involving fraud or dishonesty
punishable on conviction by imprisonment for
not less than 3 months; or
20 (iii) of an offence under the Corporations Act
section 184, 344, 590, 592, 670A or 728; or
(iv) of an offence under a provision of a previous law
of this State or of another State or Territory, with
which any of the provisions referred to in
25 subparagraph (iii) corresponds,
within 5 years after the conviction or, if sentenced to
imprisonment, after the person's release from prison,
except with the leave of the Supreme Court.
Penalty: a fine of $24 000 and imprisonment for 2 years.
page 114
Co-operatives Bill 2007
Management and administration of co-operatives Part 9
The Board Division 1
s. 200
(2) A person must not act as a director or directly or indirectly take
part in or be concerned with the management of a co-operative
if the person --
(a) has been convicted of an offence under this Act, within
5 5 years after the conviction, except with leave of the
Supreme Court; or
(b) is disqualified from managing corporations under the
Corporations Act Part 2D.6; or
(c) is an insolvent under administration, as defined in the
10 Corporations Act section 9.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(3) In proceedings for an offence against subsection (1), a
certificate by an authority prescribed by the regulations stating
that a person was released from prison on a specified date, is
15 evidence that the person was released from prison on that date.
(4) A person who intends to apply for leave of the Supreme Court
must give the Registrar at least 21 days notice of the person's
intention.
(5) The Supreme Court may grant leave subject to any condition or
20 limitation it considers appropriate.
(6) A person must comply with any condition or limitation subject
to which leave is granted.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(7) On the application of the Registrar the Supreme Court may
25 revoke its leave.
(8) Subject to this section, a co-operative is declared to be an
applied Corporations legislation matter for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
to the provisions of the Corporations Act Part 2D.6, subject to
30 the following modifications --
(a) a reference in the provisions to a corporation is to be
read as a reference to a co-operative;
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Co-operatives Bill 2007
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 201
(b) a reference in the provisions to a company is to be read
as a reference to a co-operative;
(c) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
5 (d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
201. Meeting of the board of directors
(1) In this section --
10 "independent director" means a director who is an employee
of the co-operative or a person qualified as provided by the
rules;
"member director" has the meaning given to that term in
section 199(1).
15 (2) Meetings of the board of directors must be held at least once
every 3 months and may be held as often as may be necessary.
(3) A meeting of the board of directors may be called by a director
giving notice individually to every other director.
(4) The board of directors may hold meetings, or allow directors to
20 take part in its meetings by telephone, video link, or another
form of communication that allows reasonably
contemporaneous and continuous communication between the
directors taking part in the meeting.
(5) A quorum of a meeting of the board of directors is 50% of the
25 number of directors or a greater number of directors specified in
the rules of the co-operative.
(6) For a quorum, the member directors must outnumber the
independent directors by at least one, or, if a greater number is
stated in the rules of the co-operative, the greater number.
30 (7) The chairman of the board may be elected either by the board or
at a general meeting of the co-operative, and is to be elected,
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s. 202
hold office, and retire, and may be removed from office, as
provided by the rules of the co-operative.
202. Transaction of business outside meetings
(1) The board of a co-operative may, if it considers appropriate,
5 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 of the board may be signed by
10 the directors if the wording of the resolution and approval is
identical in each copy.
(4) For the purpose of approving a resolution under this section, the
chairman of the board and each director have the same voting
rights as they have at an ordinary meeting of the board.
15 (5) The resolution is approved when the last director required for
the majority signs.
(6) A resolution of a board must be recorded in the minutes of the
meetings of the board within 28 days after the resolution is
approved.
20 (7) Papers may be circulated among directors of the board for the
purposes of this section by facsimile or other transmission of the
information in the papers concerned.
203. Alternate directors
The rules of a co-operative may provide for an alternate director
25 to be appointed to act in the place of a director who is absent
from a meeting of the board.
204. Delegation by board
(1) If authorised by the rules of a co-operative, the board of the
co-operative may, by resolution, delegate the board's powers,
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Division 1 The Board
s. 205
other than this power of delegation, specified in the resolution
to --
(a) a director; or
(b) a committee of 2 or more directors; or
5 (c) a committee of members of the co-operative; or
(d) a committee of members of the co-operative and other
persons if members form the majority of persons on the
committee; or
(e) a committee of directors and other persons.
10 (2) The board may, by resolution, revoke wholly or in part a
delegation under this section.
(3) A function, the exercise of which has been delegated under this
section, may be exercised from time to time in accordance with
the terms of the delegation while the delegation remains
15 unrevoked.
(4) A delegation under this section may be made subject to
conditions or limitations as to the exercise of any of the
functions delegated, or as to time or circumstance.
(5) Despite any delegation under this section, the board may
20 continue to exercise all or any of the functions delegated.
205. Removal from and vacation of office
(1) The directors hold office and must retire, and may be removed
from office, as provided by the rules of the co-operative.
(2) A director vacates office in the circumstances, if any, provided
25 in the rules of the co-operative and in any of the following
cases --
(a) if the director is disqualified from being a director as
provided by section 200;
(b) if the director absents himself or herself from
30 3 consecutive ordinary meetings of the board without its
leave;
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Secretary Division 2
s. 206
(c) if the director resigns the office of director by written
notice given by the director to the co-operative;
(d) if the director is removed from office by special
resolution of the co-operative;
5 (e) if the person ceases to hold the qualification by reason
of which the person was qualified to be a director;
(f) if an administrator of the co-operative's affairs is
appointed under Part 12 Division 5.
Division 2 -- Secretary
10 206. Secretary
(1) A co-operative must have a secretary.
(2) The board of the co-operative is to appoint the secretary.
(3) The board may appoint a person to act as the secretary during
the absence or incapacity of the secretary.
15 (4) A person is not qualified to be appointed as, or to act as, the
secretary unless the person is an adult who ordinarily lives in
Australia.
Division 3 -- Duties and liabilities of directors, officers
and employees
20 207. Meaning of "officer"
In this Division --
"officer" of a co-operative means --
(a) a director or secretary of the co-operative; or
(b) a person who is concerned, or takes part, in the
25 management of the co-operative, whether or not as a
director; or
(c) a receiver, or receiver and manager, of property of
the co-operative, or another authorised person who
enters into possession or assumes control of property
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Division 3 Duties and liabilities of directors, officers and employees
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of the co-operative for the purpose of enforcing a
charge; or
(d) an administrator of a deed of arrangement executed
by the co-operative; or
5 (e) a liquidator or provisional liquidator appointed in a
voluntary winding-up of the co-operative; or
(f) an administrator of the co-operative appointed under
the Corporations Act Part 5.3A as applying under
this Act; or
10 (g) a trustee or other person administering a compromise
or arrangement made between the co-operative and
another person or other persons.
208. Officers must act honestly
An officer of a co-operative must at all times act honestly in the
15 exercise of his or her powers and the discharge of the duties of
his or her office, both in the State and elsewhere.
Penalty:
(a) for a contravention committed with intent to deceive
or defraud the co-operative, members or creditors of
20 the co-operative or creditors of another person or for
another fraudulent purpose, a fine of $24 000 and
imprisonment for 2 years;
(b) in any other case, a fine of $6 000.
209. Standard of care and diligence required
25 (1) In the exercise of his or her powers and the discharge of his or
her functions, an officer of a co-operative must exercise the
degree of care and diligence that a reasonable person in a like
position in a co-operative would exercise in the co-operative's
circumstances.
30 Penalty: a fine of $2 000.
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s. 210
(2) An officer is not liable to be convicted for a contravention of
this section if the co-operative has resolved by ordinary
resolution to forgive the contravention.
(3) An officer of a co-operative who makes a business judgment is
5 taken to meet the requirements of subsection (1), and their
equivalent duties at common law and in equity, in respect of the
judgment if the officer --
(a) makes the judgment in good faith for a proper purpose;
and
10 (b) does not have a material personal interest in the subject
matter of the judgment; and
(c) informs himself or herself about the subject matter of
the judgment to the extent he or she reasonably believes
to be appropriate; and
15 (d) rationally believes that the judgment is in the best
interests of the co-operative.
(4) The officer's belief that the judgment is in the best interests of
the co-operative is a rational one unless the belief is one that no
reasonable person in their position would hold.
20 210. Improper use of information or position
(1) An officer or employee or former officer or employee of a
co-operative or a member of a committee referred to in
section 204(1) must not make improper use of information
acquired by reason of his or her position as an officer or
25 employee or member to gain, directly or indirectly, an
advantage for himself or herself or for any other person or to
cause detriment to the co-operative.
(2) An officer or employee of a co-operative or a member of a
committee referred to in section 204(1) must not make improper
30 use of his or her position as an officer or employee or member,
to gain, directly or indirectly, an advantage for himself or
herself or for any other person or to cause detriment to the
co-operative.
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Division 3 Duties and liabilities of directors, officers and employees
s. 211
Penalty:
(a) for a contravention committed with intent to deceive
or defraud the co-operative, members or creditors of
the co-operative or creditors of another person or for
5 another fraudulent purpose, a fine of $24 000 and
imprisonment for 2 years;
(b) in any other case, a penalty not exceeding a fine of
$6 000.
211. Recovery of damages by co-operative
10 (1) If a person contravenes a provision of this Division in relation to
a co-operative, the co-operative may, whether or not the person
has been convicted of an offence for that contravention, recover
an amount from the person as a debt payable to the
co-operative.
15 (2) The amount that the co-operative is entitled to recover from the
person is --
(a) if the person or another person made a profit as a result
of the contravention, an amount equal to that profit; and
(b) if the co-operative has suffered loss or damage as a
20 result of the contravention, an amount equal to that loss
or damage.
212. Other duties and liabilities not affected
This Division has effect in addition to, and does not limit, a law
relating to the duty or liability of a person because of the
25 person's office or employment in relation to a co-operative and
does not prevent the institution of any civil proceeding for a
breach of a duty or for a liability of that type.
213. Application of Corporations Act concerning indemnities and
insurance for officers and auditors
30 A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
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Duties and liabilities of directors, officers and employees Division 3
s. 214
(Ancillary Provisions) Act 2001 Part 3 in relation to the
Corporations Act sections 199A, (except 199A(2)(b)), 199B
and 199C, subject to the following modifications --
(a) a reference in the sections to a company is to be read as
5 a reference to a co-operative;
(b) a reference in the sections to ASIC is to be read as a
reference to the Registrar;
(c) a reference to section 183 is to be read as a reference to
section 210(1) of this Act;
10 (d) a reference to section 182 is to be read as a reference to
section 210(2) of this Act;
(e) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
15 214. Application of Corporations Act provisions concerning
officers of co-operatives
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
20 Corporations Act sections 344, 589 to 598 and 1307, subject to
the following modifications --
(a) in section 344, "a company, registered scheme or
disclosing entity" is to be read as "a co-operative";
(b) a reference in the sections, other than section 344, to a
25 company is to be read as a reference to a co-operative;
(c) a reference in the sections to ASIC is to be read as a
reference to the Registrar;
(d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
30 that are prescribed by the regulations.
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Co-operatives Bill 2007
Part 9 Management and administration of co-operatives
Division 4 Restrictions on directors and officers
s. 215
Division 4 -- Restrictions on directors and officers
215. Directors' remuneration
A director of a co-operative must not receive remuneration for
services as a director other than fees, concessions and other
5 benefits that are approved at a general meeting of the
co-operative.
Penalty: a fine of $24 000 or imprisonment for 2 years.
216. Certain financial accommodation to officers prohibited
(1) An officer of a co-operative who is not a director of the
10 co-operative must not obtain financial accommodation from the
co-operative 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
15 majority of the directors.
Penalty: a fine of $24 000 or imprisonment for 2 years.
(2) For the purposes of this section, financial accommodation is
taken to be obtained by an officer of a co-operative if it is
obtained by --
20 (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.
25 (3) A co-operative must not give financial accommodation to an
officer of the co-operative if --
(a) by giving the financial accommodation, the officer
would contravene this section; and
(b) the co-operative knows or should reasonably know of
30 the contravention.
Penalty: a fine of $50 000.
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Restrictions on directors and officers Division 4
s. 217
217. Financial accommodation to directors and associates
(1) In this section --
"associate" of a director means --
(a) the director's spouse (or de facto partner); or
5 (b) a person when acting in the capacity of trustee of a
trust under which --
(i) the director or director's spouse (or de facto
partner) has a beneficial interest; or
(ii) a corporation mentioned in paragraph (c) has
10 a beneficial interest;
or
(c) a corporation if --
(i) the director or director's spouse (or de facto
partner) has a material interest in shares in the
15 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 purposes of this section, a person has a "material
20 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
25 over the disposal of the share; or
(c) the person has power to exercise or to control the
exercise of any right to vote conferred on the holder of
the share.
(3) A co-operative must not provide financial accommodation to a
30 director, or to a person the co-operative knows or should
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Division 4 Restrictions on directors and officers
s. 217
reasonably know is an associate of a director, unless the
accommodation is --
(a) approved under subsection (4); or
(b) given under a scheme approved under subsection (4); or
5 (c) provided on terms no more favourable to the director or
associate than the terms on which it is reasonable to
expect the co-operative would give if dealing with the
director or associate at arm's length in the same
circumstances.
10 Penalty: a fine of $50 000.
(4) For the purposes of subsection (3)(a) and (b), financial
accommodation or a scheme is approved if --
(a) it is approved by a resolution passed at a general
meeting; and
15 (b) the full details of the accommodation or scheme were
made available to members at least 21 days before the
meeting.
(5) A director or an associate of a director must not obtain financial
accommodation given in contravention of subsection (3).
20 Penalty: a fine of $24 000 or imprisonment for 2 years.
(6) For the purposes of this section, a concessional rate of interest
for a borrower from a co-operative is a normal term only if the
borrower is entitled to the concession by being a member of a
class of borrowers from the co-operative specified in its rules as
25 being entitled to the concession.
(7) If a director of a co-operative or an associate of a director
accepts in payment of a debt owed by a member of the
co-operative to the director or associate, any proceeds of
financial accommodation provided to the member by the
30 co-operative, this section has effect as if the financial
accommodation has been provided to the director or associate.
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Restrictions on directors and officers Division 4
s. 218
(8) In this section, a reference to --
(a) the provision of financial accommodation to a director
or an associate of a director; or
(b) the obtaining of financial accommodation by a director
5 or an associate of a director; or
(c) a debt owed to a director or an associate of a director,
includes a reference to a provision of financial accommodation
to, or an obtaining of financial accommodation by, the director
or associate, or a debt owed to the director or associate, jointly
10 with another person.
218. Restriction on directors of certain co-operatives selling land
to co-operative
A director of a co-operative the primary activity of which is or
includes the acquisition of land in order to settle or retain people
15 on the land, must not sell land to the co-operative except under a
special resolution of the co-operative.
Penalty: a fine of $24 000 or imprisonment for 2 years.
219. Management contracts
(1) In this section --
20 "management contract" means a contract or other
arrangement under which --
(a) a person who is not an officer of the co-operative
agrees to perform the whole, or a substantial part, of
the functions of the co-operative, whether under the
25 control of the co-operative or not; or
(b) a co-operative agrees to perform the whole or a
substantial part of its functions --
(i) in a particular way; or
(ii) in accordance with the directions of any
30 person; or
(iii) subject to specified restrictions or conditions.
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Division 5 Declaration of interests
s. 220
(2) A co-operative must not enter into a management contract
unless that contract has first been approved by special
resolution.
(3) A management contract entered into in contravention of
5 subsection (2) is void.
Division 5 -- Declaration of interests
220. Declaration of interest
(1) A director of a co-operative who is or becomes in any way
(whether directly or indirectly) interested in a contract, or
10 proposed contract with the co-operative must declare the nature
and extent of the interest to the board of directors under this
section.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(2) In the case of a proposed contract, the declaration must be
15 made --
(a) at the meeting of the board at which the question of
entering into the contract is first considered; or
(b) if the director was not at that time interested in the
proposed contract, at the next meeting of the board held
20 after the director becomes interested in the proposed
contract.
(3) If a director becomes interested in a contract with the
co-operative after it is made, the declaration must be made
at the next meeting of the board held after the director
25 becomes interested in the contract.
(4) For the purposes of this section, a general written notice given
to the board by a director to the effect that the director --
(a) is a member of a specified entity; and
(b) is to be regarded as interested in any contract that may,
30 after the giving of the notice, be made with the entity,
is a sufficient declaration.
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Declaration of interests Division 5
s. 220
(5) A director of a co-operative who holds an office or has an
interest in property whereby, whether directly or indirectly,
duties or interests might be created that could conflict with the
director's duties or interests as director must, under
5 subsection (6), declare at a meeting of the board of directors the
fact and the nature, character and extent of the conflict.
Penalty: a fine of $24 000 and imprisonment for 2 years.
(6) A declaration required by subsection (5) in relation to holding
an office or having an interest must be made by a person --
10 (a) if the person holds the office or has the interest when he
or she becomes a director, at the first meeting of the
board held after --
(i) the person becomes a director; or
(ii) the relevant facts as to holding the office or
15 having the interest come to the person's
knowledge,
whichever is the later; or
(b) if the person starts to hold the office or acquires the
interest after the person becomes a director, at the first
20 meeting of the board held after the relevant facts as to
holding the office or having the interest come to the
person's knowledge.
(7) If a director has made a declaration under this section, then
unless the board determines otherwise, the director cannot --
25 (a) be present during any deliberation of the board in
relation to the matter; or
(b) take part in any decision of the board in relation to the
matter.
(8) For the purposes of the making of a determination of the board
30 under subsection (7) in relation to a director who has made a
declaration under this section, the director cannot --
(a) be present during any deliberation of the board for the
purpose of making the determination; or
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Part 9 Management and administration of co-operatives
Division 5 Declaration of interests
s. 221
(b) take part in the making by the board of the
determination.
221. Declarations to be recorded in minutes
Every declaration under this Division is to be recorded in the
5 minutes of the meeting at which it was made.
222. Division does not affect other laws or rules
Except as provided in section 223, this Division is in addition
to, and does not limit, the operation of a law or a provision in
the rules of the co-operative restricting a director from having
10 an interest in contracts with the co-operative or from holding
offices or possessing properties involving duties or interests in
conflict with his or her duties or interests as director.
223. Certain interests need not be declared
The interest in a contract or proposed contract that a director is
15 required by this Division to declare does not include an interest
in --
(a) a contract or proposed contract for a purchase of goods
and services by the director from the co-operative; or
(b) a lease of land to the director by the co-operative; or
20 (c) a contract or proposed contract for the sale of
commodities or animals by the director to the
co-operative; or
(d) a contract or proposed contract that, under the rules of
the co-operative, may be made between the co-operative
25 and a member; or
(e) a contract or proposed contract of a class of contracts
prescribed by the regulations,
but only if the contract is made in good faith, in the ordinary
course of the business of the co-operative, and on the terms that
30 are usual and proper in similar dealings between the
co-operative and its members.
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Co-operatives Bill 2007
Management and administration of co-operatives Part 9
Financial reports and audit Division 6
s. 224
Division 6 -- Financial reports and audit
224. Meaning of "control" and "entity"
In this Division --
"control" has the same meaning in relation to a co-operative
5 that it has under the Corporations Act in relation to a
corporation;
"entity" has the same meaning in relation to a co-operative that
it has under the Corporations Act in relation to a
corporation.
10 225. Requirements for financial records and financial reports
(1) A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
provisions of the Corporations Act Part 2F.3, sections 249K
15 and 249V and Chapter 2M, subject to the following
modifications --
(a) a reference in the provisions to a company or to a public
company is to be read as a reference to a co-operative;
(b) a reference in the provisions to the Court is to be read as
20 a reference to the Supreme Court;
(c) a reference in the provisions to "prescribed" is to be read
as a reference to "approved by the Registrar";
(d) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
25 (e) an offence created in relation to the provisions is the
offence set out in subsection (2);
(f) any penalty for the offence referred to in paragraph (e) is
the penalty set out in subsection (2);
(g) a reference in sections 247A and 300(14) and (15) to the
30 Corporations Act section 237 is to be read as a reference
to section 91 of this Act;
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Division 6 Financial reports and audit
s. 226
(h) a reference in section 300(8) to the Corporations Act
section 199A(2) or (3) is to be read as a reference to
section 213 of this Act;
(i) the provisions apply as if sections 247D, 291, 300(12)
5 and (13), 315(3) and (4), 323D(1) and (2), 323DA, 325
and Part 2M.1, Part 2M.4 Division 2, Part 2M.5 and
Part 2M.6 of the Corporations Act were omitted;
(j) a reference in Chapter 2M.3 to a small proprietary
company is to be read as a reference to a co-operative
10 with a monetary threshold of or under the prescribed
amount;
(k) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
15 (2) A co-operative must --
(a) keep financial records and prepare financial reports as
required under this Act; and
(b) ensure that the financial reports are audited in
accordance with this Act.
20 Penalty: a fine of $2 000.
(3) Without limiting the matters for which regulations under this
section may make provision, the regulations may make
provision for or in relation to the following --
(a) requiring the submission of financial reports to the
25 Australian Accounting Standards Board;
(b) requiring the adoption by a co-operative of the same
financial year for each entity that the co-operative
controls.
226. Power of Registrar to grant exemptions
30 The Registrar may, by order published in the Gazette,
exempt --
(a) a co-operative; or
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Financial reports and audit Division 6
s. 227
(b) a person or firm proposed to be appointed as an auditor
of a co-operative; or
(c) a director or auditor of a co-operative,
from compliance with a provision of a regulation made for the
5 purpose of this Part or with a provision of the Corporations Act
as that Act applies under section 225.
227. Disclosure by directors
The directors of a co-operative must make the disclosures about
the affairs of the co-operative and of any entity that the
10 co-operative controls that are required by the regulations.
Penalty: a fine of $2 000.
228. Protection of auditors etc.
(1) An auditor of a co-operative has qualified privilege in relation
to --
15 (a) a statement that the auditor makes, orally or in writing,
in the course of his or her duties as auditor; or
(b) the giving of notice, or the sending of copies of financial
reports or other reports, to the Registrar under this Act.
(2) A person has qualified privilege in relation to --
20 (a) the publishing of a document prepared by an auditor in
the course of the auditor's duties and required by or
under this Act to be lodged with the Registrar, whether
or not the document has been lodged; or
(b) the publishing of a statement made by an auditor
25 referred to in subsection (1).
(3) This section does not limit or affect a right, privilege or
immunity that an auditor or other person has, apart from this
section, as defendant in proceedings for defamation.
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Co-operatives Bill 2007
Part 9 Management and administration of co-operatives
Division 7 Registers, records and returns
s. 229
229. Financial year
(1) The financial year of a co-operative ends on the day in each
year that is provided for by the rules of the co-operative.
(2) In the case of a co-operative registered under Part 2 Division 4,
5 the first financial year of the co-operative may extend from the
date of its registration to a date not more than 18 months after
registration.
(3) In the case of a co-operative registered under Part 2 Division 5,
the first financial year of the co-operative is to be a period not
10 extending beyond a date that is 18 months after the end of the
co-operative's last financial year before the co-operative
registered under this Act.
(4) On an alteration of the rules of a co-operative altering its
financial year, the alteration may provide either that the
15 financial year current at the date of alteration is to be extended
for a period not exceeding 6 months or that the financial year
next following the financial year that is so current is to be a
period exceeding 12 months but not exceeding 18 months.
Division 7 -- Registers, records and returns
20 230. Registers to be kept by co-operatives
(1) A co-operative must keep the following registers in accordance
with this section --
(a) a register of members, directors and shares, if any;
(b) a register of loans to, securities given by, debentures and
25 co-operative capital units issued by and deposits
received by the co-operative;
(c) a register of names of persons who have given loans or
deposits to, or who hold securities given by, or who hold
debentures or co-operative capital units issued by the
30 co-operative;
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Registers, records and returns Division 7
s. 231
(d) a register of loans made by or guaranteed by the
co-operative, and of any securities taken by the
co-operative;
(e) a register of holders of co-operative capital units, in
5 accordance with section 257(4);
(f) a co-operative register of charges, in accordance with
Schedule 3 clause 41;
(g) a register of memberships cancelled under Part 6, in
accordance with section 130;
10 (h) a register of notifiable interests, in accordance with
section 284;
(i) a register of undertakings, in accordance with
section 472(1);
(j) other registers prescribed by the regulations.
15 Penalty: a fine of $2 000.
(2) The registers must be kept in the way, and contain the
particulars, specified by this Act or prescribed by the
regulations.
231. Location of registers
20 (1) A register kept under this Division must be kept at --
(a) the co-operative's registered office; or
(b) an office at the co-operative's principal place of
business; or
(c) an office, whether of the co-operative or of someone
25 else, where the work involved in maintaining the
register is done; or
(d) another office approved by the Registrar.
(2) The office must be in this State.
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(3) The co-operative must lodge with the Registrar a notice of the
address at which the register is kept within 28 days after the
register is --
(a) established at an office that is not the co-operative's
5 registered office; or
(b) moved from one office to another.
232. Inspection of registers etc.
(1) A co-operative must have at the office where the registers are
kept and available during all reasonable hours for inspection by
10 a member free of charge the following --
(a) a copy of this Act and the regulations;
(b) a current copy of the rules of the co-operative and any
order under section 345;
(c) a copy of the minutes of each general meeting of the
15 co-operative;
(d) a copy of the last annual report of the co-operative under
section 235;
(e) the register of directors, members and shares;
(f) the register of names of persons who have given loans or
20 deposits to or hold securities, debentures or co-operative
capital units given or issued by the co-operative;
(g) other registers prescribed by the regulations.
(2) If a register is not kept on a computer, the person may inspect
the register itself.
25 (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 co-operative agree that the person can access the
information by computer.
(4) A member is entitled to make a copy of entries in a register
30 specified in subsection (1) and to do so free of charge unless the
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rules of the co-operative require a fee to be paid, in which case
on payment of the required fee.
(5) The fee required by the rules cannot be more than the fee
prescribed for a copy of any entry in the register.
5 (6) A co-operative must --
(a) permit a member to inspect a document or make a copy
of a document that the member is entitled to inspect or
make under this section; and
(b) give the member all reasonable assistance to inspect the
10 document or make the copy.
Penalty: a fine of $2 000.
(7) A co-operative must have at the place where the registers are
kept and available during all reasonable hours for inspection by
any person such documents in relation to the co-operative as are
15 prescribed.
Penalty: a fine of $2 000.
233. Use of information on registers
(1) A person must not --
(a) use information about a person obtained from a register
20 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,
25 unless that use or disclosure of the information is --
(c) relevant to the holding of the directorship, membership,
shares, loans, securities, debentures, co-operative capital
units or deposits concerned or the exercise of the rights
attaching to them; or
30 (d) approved by the board; or
(e) necessary to comply with a requirement of this Act.
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(2) A person who contravenes subsection (1) is liable to
compensate anyone else who suffers loss or damage because of
the contravention.
(3) A person who makes a profit from a contravention of
5 subsection (1) owes a debt to the co-operative.
(4) The amount of the debt is the amount of the profit.
234. Notice of appointment etc. of directors and officers
(1) A co-operative must give notice to the Registrar in accordance
with this section of the appointment of a person as a director,
10 chief executive officer or secretary of the co-operative or a
subsidiary of the co-operative, and of the cessation of the
appointment.
(2) The notice must --
(a) be in the form approved by the Registrar; and
15 (b) be given within 28 days after the appointment or
cessation of appointment; and
(c) state the particulars, prescribed by the regulations, of the
appointment or cessation of appointment.
Penalty: a fine of $2 000.
20 235. Annual report to be lodged with Registrar
(1) For the purposes of subsection (2) the required period is --
(a) 28 days after the annual general meeting of the
co-operative; or
(b) if the annual general meeting of the co-operative is not
25 held within the period stated in section 190(3)(a),
28 days after the end of that period.
(2) A co-operative must lodge with the Registrar, within the
required period in each year, an annual report containing the
following --
30 (a) a notice in the form approved by the Registrar listing the
secretary, the directors and the chief executive officers
of the co-operative and of each subsidiary of the
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co-operative, as at the date that the annual report is
lodged with the Registrar;
(b) if the co-operative is required under section 225 to
prepare a financial report for its most recently ended
5 financial year, a copy of the financial report;
(c) a copy of the financial statements of each subsidiary of
the co-operative in relation to the most recently ended
financial year of the subsidiary, or a copy of the
consolidated financial statements for all subsidiaries of
10 the co-operative in relation to the most recently ended
financial year of the subsidiaries;
(d) a copy of any report by the auditors or directors of the
co-operative or subsidiary --
(i) prepared under section 225(2); or
15 (ii) on a financial report referred to in paragraph (b)
or a financial statement referred to in
paragraph (c);
(e) other particulars prescribed by the regulations.
Penalty: a fine of $2 000.
20 236. List of members to be provided at request of Registrar
A co-operative must, at the written request of the Registrar,
send to the Registrar, within the time and in the way that the
Registrar specifies, a full list of the members of the co-operative
and of each subsidiary of the co-operative, together with the
25 particulars with regard to those members that the Registrar
specifies in the request.
Penalty: a fine of $2 000.
237. Special return to be given at request of Registrar
(1) The Registrar may, by direction in writing, require a
30 co-operative to give to the Registrar a special return in the form,
within the time, and relating to the subject matter, specified by
the Registrar.
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(2) The co-operative must comply with a direction under
subsection (1).
Penalty: a fine of $2 000.
Division 8 -- Name and registered office
5 238. Name to include certain matter
(1) The name of a co-operative may consist of words, numbers or a
combination of both.
(2) The name of a co-operative must include the word
"Co-operative" or "Cooperative" or the abbreviation "Co-op".
10 (3) Subject to subsection (4) the word "Limited" or the abbreviation
"Ltd" must be the last word of the name.
(4) The Registrar may approve the registration of a co-operative
without "Limited" or the abbreviation "Ltd" in its name, or alter
the registration of a co-operative by omitting "Limited" or the
15 abbreviation "Ltd" from its name, if its constitution --
(a) requires the co-operative to pursue charitable purposes
only and to apply its income in promoting those
purposes; and
(b) prohibits the co-operative making distributions to its
20 members and paying fees to its directors; and
(c) requires the directors to approve all other payments the
co-operative makes to directors.
(5) The co-operative must notify the Registrar as soon as
practicable if any of those requirements or prohibitions in its
25 constitution are not complied with or if its constitution is
modified to remove any of those requirements or prohibitions.
Penalty: a fine of $2 000.
(6) The Registrar may at any time by notice in writing to the
co-operative revoke an approval under subsection (4) but only
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after giving the co-operative an opportunity to make
submissions to the Registrar on the matter.
(7) A corporation that is formed or incorporated under an Act other
than this Act must not register under the other Act by a name
5 that includes the word "Co-operative" or "Cooperative" or the
abbreviation "Co-op".
Penalty: a fine of $2 000.
(8) The Registrar cannot register as the name of a co-operative a
name that contains anything a regulation declares is an
10 unsuitable name, unless the Minister is satisfied the name is
suitable for registration in the circumstances of a particular case.
(9) Subsection (7) does not apply to a corporation that is allowed
under another Act to use the word "Co-operative" or
"Cooperative" or the abbreviation "Co-op" in its name.
15 239. Use of abbreviations
A description of a co-operative is not inadequate or incorrect
merely because of one or more of the following --
(a) the use of the abbreviation "Co-op" instead of the word
"Co-operative" or "Cooperative" in the co-operative's
20 name;
(b) the use of the abbreviation "Ltd" instead of the word
"Limited" in the co-operative's name;
(c) the use of the symbol "&" instead of the word "and" in
the co-operative's name;
25 (d) the use of any of those words instead of the
corresponding abbreviation or symbol in the
co-operative's name;
(e) the use of any abbreviation or elaboration of the name of
the co-operative that is approved in a particular case or
30 for a particular purpose by the Registrar in writing.
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240. Name to appear on business documents etc.
(1) A co-operative must ensure its name appears in legible
characters on its seal, and in any of the following documents
issued, signed or endorsed by or on behalf of the
5 co-operative --
(a) a bill of exchange, promissory note, cheque or other
negotiable instrument;
(b) a receipt or letter of credit issued by the co-operative;
(c) a document of a class prescribed by the regulations.
10 Penalty: a fine of $2 000.
(2) An officer of a co-operative or a person on its behalf must
not --
(a) use a seal of the co-operative; or
(b) sign or authorise to be signed on behalf of the
15 co-operative any document referred to in subsection (1),
in or on which the co-operative's name does not appear in
legible characters.
Penalty: a fine of $2 000.
(3) A director of a co-operative who knowingly authorises or
20 permits a contravention of this section is guilty of an offence.
Penalty: a fine of $2 000.
241. Change of name of co-operative
(1) A co-operative may by special resolution change its name to a
name approved by the Registrar.
25 (2) A change of name must be advertised as prescribed by 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 co-operative; or
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(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 co-operative does not affect --
5 (a) the identity of the co-operative; or
(b) the exercise of a right, or the enforcement of an
obligation, by or against the co-operative or a person; or
(c) the continuation of legal proceedings by or against the
co-operative.
10 (5) Legal proceedings that might have been continued or started by
or against the co-operative in its former name may be continued
or started by or against the co-operative in its new name.
(6) The Registrar may refuse to approve a change of name if the
Registrar thinks the new name is unsuitable.
15 (7) The Registrar may direct a co-operative to change its name if
the Registrar considers the name is likely to be confused with
the name of a corporation or a registered business name.
242. Restriction on use of word "co-operative" or similar words
(1) A person other than a co-operative must not trade, or carry on
20 business, under a name or title containing the word
"Co-operative" or "Cooperative" or the abbreviation "Co-op" or
words importing a similar meaning.
Penalty: a fine of $2 000.
(2) Subsection (1) does not apply to a corporation referred to in
25 section 238(9).
243. Registered office of co-operative
(1) A co-operative must have a registered office.
Penalty: a fine of $2 000.
(2) A co-operative must, at the premises of its registered office,
30 publicly and conspicuously display a notice stating the name of
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the co-operative and identifying the premises as its registered
office.
Penalty: a fine of $2 000.
(3) Within 28 days after changing the address of its registered
5 office, a co-operative must give the Registrar written notice of
the new address.
Penalty: a fine of $2 000.
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Part 10 -- Funds and property
Division 1 -- Power to raise money
244. Meaning of obtaining financial accommodation
A reference in this Division to the obtaining of financial
5 accommodation includes a reference to the obtaining of credit
and the borrowing or raising of money by any means.
245. Fund raising to be in accordance with Act and regulations
The regulations may impose requirements and restrictions on
the obtaining of financial accommodation, and the giving of
10 security in order to obtain financial accommodation, by a
co-operative.
246. Limits on deposit taking
A co-operative cannot accept money on deposit unless --
(a) the co-operative is authorised by its rules to accept
15 money on deposit and was authorised by its rules
immediately before the commencement of this section to
accept money on deposit; or
(b) the co-operative was a deposit-taking corporation
immediately before it became a co-operative and it is
20 authorised by its rules to accept money on deposit; or
(c) in the case of a merged co-operative, one or more of the
co-operatives involved in the merger was a
deposit-taking co-operative immediately before the
registration of the merged co-operative and the merged
25 co-operative is authorised by its rules to accept money
on deposit.
247. Members etc. not required to see to application of money
A member or other person from whom a co-operative obtains
financial accommodation is not required to see to its application
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and is not affected or prejudiced by the fact that in obtaining
that financial accommodation, the co-operative contravened a
provision of this Act or the rules of the co-operative.
248. Registrar's directions about fundraising
5 (1) The Registrar may, if the Registrar considers it is in the interests
of a co-operative's members, by written notice served on a
co-operative, give a direction to the co-operative as to the way
in which it is to exercise its functions in connection with the
activities of the co-operative in obtaining financial
10 accommodation.
(2) A direction under subsection (1) may make provision for any
one or more of the following matters --
(a) requiring the co-operative to stop obtaining financial
accommodation or to stop obtaining financial
15 accommodation in a particular way;
(b) requiring the co-operative to repay in accordance with
the direction all or part of financial accommodation
obtained;
(c) requiring the co-operative to re-finance in a specified
20 way financial accommodation repaid in accordance with
the Registrar's direction;
(d) the way in which the co-operative is permitted to invest
or use the proceeds of financial accommodation it
obtains.
25 (3) Within 28 days of receiving a direction, a co-operative may
apply to the Supreme Court for a review of that decision.
249. Subordinated debt
(1) In this section --
"subordinated debt" means debt incurred under an agreement
30 under which, in the event of the winding-up of the
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co-operative, a claim of the creditor against the
co-operative in relation to the debt is to rank in priority --
(a) equally with the claim of another creditor who is a
party to a similar agreement; and
5 (b) except as provided by paragraph (a), after the claims
of another creditor of the co-operative and before the
claims of members to repayment of share capital in
the co-operative.
(2) A co-operative may incur subordinated debt.
10 (3) An agreement under which subordinated debt is incurred has
effect despite the provisions of the Corporations Act Part 5.6
Division 6, as applied under Part 12 Division 3 of this Act.
250. Application of Corporations Act to issues of debentures
(1) Subject to subsection (2), the debentures of a co-operative are
15 declared to be applied Corporations legislation matters for the
purposes of the Corporations (Ancillary Provisions) Act 2001
Part 3 in relation to the provisions of Part 1.2A, Chapter 2L,
Chapter 6CA, Chapter 6D and Part 7.10 of the Corporations
Act, subject to the following modifications --
20 (a) the provisions apply as if a co-operative were a
company;
(b) a reference in the provisions to a corporation includes a
reference to a co-operative;
(c) a reference in the provisions to ASIC is to be read as a
25 reference to the Registrar;
(d) any other changes, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
(2) The provisions of the Corporations Act applying to the
30 debentures of a co-operative by this section do not apply to the
following --
(a) a loan to which section 255 applies;
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(b) an issue of debentures of a co-operative that is made --
(i) solely to members; or
(ii) solely to members and employees of the
co-operative; or
5 (iii) to a person who on becoming an inactive
member of the co-operative has had his or her
share capital converted to debt.
(3) Words used in this section that are not defined in this Act have
the same meanings as in the Corporations Act.
10 251. Application of Corporations Act to particular issues of
debentures
An issue of debentures to which section 252 applies is declared
to be an applied Corporations legislation matter for the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
15 to the Corporations Act, sections 722 and 734, subject to the
following modifications --
(a) the provisions apply as if a co-operative were a
company;
(b) a reference in the provisions to a disclosure document is
20 to be read as a reference to a disclosure statement under
section 252;
(c) a reference in the provisions to securities is to be read as
a reference to debentures;
(d) a reference in the provisions to ASIC is to be read as a
25 reference to the Registrar;
(e) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3 that
are prescribed under the regulations.
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252. Disclosure statement
(1) This section applies to the issue of debentures of a co-operative
if the issue is made --
(a) solely to members; or
5 (b) solely to members and employees of the co-operative.
(2) This section does not apply to the issue of debentures under
section 73(2) or 127(1).
(3) Before issuing to a person debentures to which this section
applies, that person may request a disclosure statement,
10 approved by the Registrar, and containing the information that
is reasonably necessary to enable a person to make an informed
assessment of the financial prospects of the co-operative,
including --
(a) the purpose for which the money raised by the
15 co-operative by the issue of debentures is to be used;
and
(b) the rights and liabilities attaching to the debentures; and
(c) the financial position of the co-operative; and
(d) the interests of the directors of the co-operative in the
20 issue of the debentures; and
(e) compensation or consideration to be paid to officers or
members of the co-operative in connection with the
issue of debentures; and
(f) other matters that the Registrar directs.
25 (4) Sections 16 (except subsection (3)) and 29 apply to the approval
of a disclosure statement under this section with any necessary
changes and, in particular, as if a reference in section 16 to a
formation meeting were a reference to the issue of debentures.
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253. Approval of board for transfer of debentures
A debenture of a co-operative cannot be sold or transferred
except with the consent of the board and in accordance with the
rules of the co-operative.
5 254. Application of Corporations Act -- reissue of redeemed
debentures
Debentures issued by a co-operative to any of its members or
employees are declared to be applied Corporations legislation
matters for the purposes of the Corporations (Ancillary
10 Provisions) Act 2001 Part 3 in relation to the Corporations Act
section 124(1)(b) or 563AAA as if a co-operative were a
company.
255. Compulsory loan by member to co-operative
(1) A co-operative may require its members to lend money, with or
15 without security, to the co-operative, in accordance with a
proposal approved by special resolution of the co-operative.
(2) The proposal cannot require a loan to be for a term of more than
7 years or another term prescribed by the regulations.
(3) The proposal must --
20 (a) be accompanied by a disclosure statement, approved by
the Registrar, that explains the purpose for which the
money raised by the co-operative under the proposal is
to be used, and includes any other information that the
Registrar directs; and
25 (b) 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
30 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.
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(4) If the proposal allows, the board of the co-operative may, under
the terms of the proposal, deduct the money required to be lent
by a member to the co-operative from money payable from the
co-operative to the member for his or her dealings with the
5 co-operative.
(5) A proposal to deduct money referred to in subsection (4) must,
in addition to meeting the requirements of subsection (3),
show --
(a) the basis on which the money is to be deducted; and
10 (b) the time and way 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
15 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 under the proposal has been raised.
(7) Sections 16 (except subsection (3)) and 29 apply to the approval
20 of a disclosure statement under this section with any necessary
changes and in particular as if a reference in section 16 to a
formation meeting were a reference to the special resolution.
256. Interest payable on compulsory loan
(1) The rate of interest payable by a co-operative on a loan under
25 section 255 during a period is --
(a) in the case of a co-operative with share capital --
(i) the rate (or if there is more than one rate, the
higher or highest rate) of dividend payable for
the period on the share capital of the
30 co-operative; or
(ii) if the rate of dividend payable for the period has
not been determined, the rate (or the higher or
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Division 2 Co-operative capital units
s. 257
highest rate) of dividend payable for the
immediately preceding period for which a rate
has been determined; or
(iii) if a rate of dividend has never been determined
5 for the share capital of the co-operative, the rate
that the board of the co-operative considers
reasonable;
or
(b) in the case of a co-operative without share capital, the
10 rate that the board of the co-operative considers
reasonable; or
(c) if the rules provide for a rate to be payable that is higher
than the rate applicable under paragraph (a) or (b), that
higher rate.
15 (2) A member may agree to the rate of interest being less than the
rate that would otherwise be payable under this section and may
agree to no interest being paid.
Division 2 -- Co-operative capital units
257. General nature of co-operative capital units
20 (1) A co-operative capital unit ("CCU") is an interest issued by a
co-operative conferring an interest in the capital, but not the
share capital, of the co-operative.
(2) A CCU --
(a) is personal property; and
25 (b) is transferable or transmissible as provided by this Act
and the rules of the co-operative, subject to the terms of
issue of the CCU; and
(c) is, subject to the rules of the co-operative, capable of
devolution by will or by operation of law.
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(3) Subject to subsection (2) --
(a) the laws applicable to ownership of and dealing with
personal property apply to a CCU as they apply to other
property; and
5 (b) equitable interests in respect of a CCU may be created,
dealt with and enforced as in the case of other personal
property.
(4) A transferor of a CCU remains the holder of the CCU until the
transfer is registered and the name of the transferee, and the
10 details of the transferee's CCU holding, are entered in the
register of CCU holders referred to in section 230(1).
(5) Despite any rule of law or equity to the contrary, a condition
subject to which a CCU is issued is not invalid merely because
the CCU is, by the condition, made irredeemable or redeemable
15 only on the happening of a contingency however remote or at
the end of a period however long.
258. Priority of CCU's on winding-up
(1) On a winding-up of a co-operative, a debt owed to a person as
the holder of a CCU issued by the co-operative is to rank for
20 priority of payment in accordance with the terms of issue of
the CCU.
(2) Such a debt may rank as a secured debt if it is secured but if it is
unsecured may not rank in priority to other unsecured debts.
(3) It may rank equally with or behind unsecured debts and, if the
25 debt ranks behind unsecured debts, may rank in priority to,
equally with or behind debts due to contributories.
259. Financial accommodation provisions apply to issue of CCUs
(1) The issuing of CCUs is to be considered to be the obtaining of
financial accommodation and accordingly Part 10 Division 1
30 applies to the issue of CCUs.
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(2) For the purposes of that Division, a CCU is to be considered to
be a debenture.
260. CCUs to be issued to non-members
CCUs may be issued to a person whether or not the person is a
5 member of the co-operative.
261. Minimum requirements for rules concerning CCUs
The rules of a co-operative that permit the co-operative to issue
CCUs must contain provision to the effect of the following
provisions and cannot contain provisions that are inconsistent
10 with the following provisions --
(a) each holder of a CCU is entitled to one vote per CCU
held at a meeting of the holders of CCUs;
(b) the rights of the holders of CCUs may be varied only in
the way and to the extent provided by their terms of
15 issue and only with the consent of at least 75% of those
holders of CCUs who, being entitled to do so, cast a
formal vote to accept the variation at a meeting;
(c) the holder of a CCU has, in the person's capacity as a
holder of a CCU, none of the rights or entitlements of a
20 member of the co-operative;
(d) the holder of a CCU is entitled to receive notice of all
meetings of the co-operative and all other documents in
the same manner as the holder of a debenture of the
co-operative.
25 262. CCUs not to be issued unless terms of issue approved by
Registrar
(1) A co-operative is not to issue CCUs unless --
(a) the terms of issue have been approved by a special
resolution of the co-operative; and
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Co-operatives Bill 2007
Funds and property Part 10
Co-operative capital units Division 2
s. 263
(b) the issue is made pursuant to an offer accompanied by a
copy of a statement approved by the Registrar under
subsection (3); and
(c) the Registrar approves of the terms of the issue under
5 subsection (4).
(2) The terms of issue must include, but is not limited to including,
the following information --
(a) details of entitlement to repayment of capital;
(b) details of entitlement to participate in surplus assets and
10 profits;
(c) details of entitlement to interest on capital, including
whether interest is cumulative or non-cumulative;
(d) details of how capital and interest on capital are to rank
for priority of payment on a winding-up;
15 (e) whether there is a limit on the total holding of CCUs
that may be acquired by persons who are not members
of the co-operative and, if there is a limit, what the
limit is.
(3) The statement approved by the Registrar for the purposes of the
20 issue is to set out the terms of the issue, the rights of the holders
of CCUs, the terms of redemption and the manner of
transferability of CCUs.
(4) The Registrar is not to approve the terms of issue unless
satisfied that they will not result in a failure to comply with
25 co-operative principles and are not contrary to the rules of the
co-operative or this Act.
263. Directors' duties concerning CCUs
In discharging their duties, it is proper for the directors of a
co-operative to take into account that the holders of CCUs, in
30 their capacity as holders of CCUs, have none of the rights and
entitlements of, and are not entitled to be regarded as, members
of the co-operative.
page 155
Co-operatives Bill 2007
Part 10 Funds and property
Division 2 Co-operative capital units
s. 264
264. Redemption of CCUs
(1) The redemption of CCUs is not to be considered to be a
reduction in the share capital of the co-operative.
(2) A co-operative may redeem CCUs but only on the terms and in
5 the way that is provided by the terms of their issue and only if
they are fully paid up.
(3) CCUs may not be redeemed except out of --
(a) profits that would otherwise be available for dividends;
or
10 (b) the proceeds of a fresh issue of shares, or an approved
issue of CCUs, made for the purpose of the redemption.
(4) An issue of CCUs is an approved issue for the purposes of
subsection (3) if there is the same entitlement to priority of
payment of capital and dividend in relation to shares in the
15 co-operative as there was for the redeemed CCUs.
(5) Any premium payable on redemption is to be provided for out
of profits or out of the share premium account or an account
created for that purpose.
265. Capital redemption reserve
20 (1) This section applies if CCUs are redeemed out of profits that
would otherwise be available for dividends.
(2) Out of profits that would otherwise have been available for
dividends there is to be transferred to a reserve called the capital
redemption reserve a sum equal to the nominal amount of the
25 CCUs redeemed.
(3) The provisions of this Act relating to the reduction of share
capital of a co-operative apply as if the capital redemption
reserve were paid up share capital of the co-operative.
(4) The capital redemption reserve may be applied in paying up
30 unissued shares of the co-operative to be issued to members of
the co-operative as fully paid bonus shares.
page 156
Co-operatives Bill 2007
Funds and property Part 10
Charges Division 3
s. 266
266. Issue of shares in substitution for redemption
(1) If a co-operative has redeemed or is about to redeem CCUs held
by an active member of the co-operative, it may --
(a) issue shares to the member up to the sum of the nominal
5 value of the CCUs redeemed or to be redeemed, as if
those CCUs had never been issued; or
(b) pay up amounts unpaid on shares held by the member up
to the sum of the nominal value of the CCUs redeemed
or to be redeemed, as if those CCUs had never been
10 issued.
(2) This section applies only if the terms of issue of the CCUs
provide for the conversion of CCUs held by an active member
of the co-operative into shares of the co-operative.
Division 3 -- Charges
15 267. Registration of charges
Schedule 3 has effect but does not apply to --
(a) a mortgage, charge or encumbrance that is over specific
land and is registered under the Transfer of Land
Act 1893; or
20 (b) a mortgage, charge or encumbrance registered under the
Mining Act 1978; or
(c) a mortgage, charge or encumbrance registered under the
Bills of Sale Act 1899.
Division 4 -- Receivers and other controllers of property
25 of co-operatives
268. Receivers and other controllers of property of co-operatives
Schedule 4 has effect.
page 157
Co-operatives Bill 2007
Part 10 Funds and property
Division 5 Disposal of surplus from activities
s. 269
Division 5 -- Disposal of surplus from activities
269. Retention of surplus for benefit of co-operative
The board of a co-operative may resolve to retain all or part of
the surplus arising in a year from the business of the
5 co-operative to be applied for the benefit of the co-operative.
270. Application for charitable purposes or members' purposes
(1) A co-operative may apply a part of the surplus arising in a year
from the business of the co-operative for a charitable purpose.
(2) A distributing co-operative may apply a part of the surplus
10 arising in a year from the business of the co-operative towards
supporting an activity approved by the co-operative.
(3) The rules must limit the amount that may be applied under
subsection (1) or (2) to a specified proportion of the surplus.
(4) A co-operative may apply part of the surplus for a purpose and
15 to the extent authorised by rules.
271. Distribution of surplus or reserves to members
(1) In this section --
"limited dividend" means a dividend that is not more than the
amount prescribed by the regulations.
20 (2) A distributing co-operative may apply a part of the surplus
arising in any year from the business of the co-operative or a
part of the reserves of the co-operative by --
(a) distribution to members as a rebate in proportion to the
value of business done by each member with the
25 co-operative or to profits earned by the co-operative on
business done by each member with the co-operative; or
(b) the issue of bonus shares to members in proportion to
the value of business done by each member with the
co-operative, to profits earned by the co-operative on
30 business done by each member with the co-operative or
to shares held by the member; or
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Co-operatives Bill 2007
Funds and property Part 10
Acquisition and disposal of assets Division 6
s. 272
(c) the issue to members of a limited dividend in proportion
to shares held by the member.
(3) The amount of a rebate or dividend payable to a member under
subsection (2)(a) or (c) may, with the consent of the member, be
5 applied --
(a) in payment for the issue to the member of bonus shares;
or
(b) as a loan to the co-operative.
272. Application of surplus to other persons
10 (1) A part of the surplus arising in a year from the business of a
distributing co-operative may be credited to a person who is not
a member, but is qualified to be a member, by way of rebate in
proportion to the value of business done by the person with the
co-operative or to the profit earned by the co-operative on
15 business done by the person with the co-operative, if --
(a) the person was a member when the business was done
and the membership has lapsed; or
(b) the person has applied for membership since the
business was done.
20 (2) Nothing in this section precludes the payment of a bonus to an
employee in accordance with the terms of his or her
employment.
Division 6 -- Acquisition and disposal of assets
273. Acquisition and disposal of assets
25 (1) In this section --
"undertaking", of a co-operative, means all the assets of the
co-operative.
page 159
Co-operatives Bill 2007
Part 10 Funds and property
Division 6 Acquisition and disposal of assets
s. 273
(2) Unless otherwise provided by the rules, a co-operative must not
do any of the following things except as approved by special
resolution by means of a special postal ballot --
(a) sell, or lease as a going concern --
5 (i) the undertaking of the co-operative; or
(ii) a part of that undertaking that relates to its
primary activities and the value of which
represents the percentage prescribed by the
regulations or more of the total value of the
10 undertaking;
(b) acquire from or dispose of to a director or employee of
the co-operative, or a relative, within the meaning of the
Corporations Act, of a director or employee of the
co-operative or of the spouse (or de facto partner) of a
15 director or employee of the co-operative, property the
value of which represents the percentage prescribed by
the regulations, or more, of the total value of all the
assets of the co-operative that relate to its primary
activities;
20 (c) acquire an asset the value of which represents the
percentage prescribed by the regulations, or more, of the
total value of the assets of the co-operative, if the
acquisition would result in the co-operative starting to
carry on an activity that is not one of its primary
25 activities.
Penalty: a fine of $6 000.
(3) If a co-operative contravenes this section, each person who is a
member of the board of the co-operative is taken to have
committed an offence unless the person satisfies the court that
30 he or she used all due diligence to prevent the contravention by
the co-operative.
Penalty: a fine of $6 000.
page 160
Co-operatives Bill 2007
Funds and property Part 10
Acquisition and disposal of assets Division 6
s. 273
(4) The Registrar may, by order published in the Gazette, exempt a
co-operative from compliance with a provision of this section
and section 186 in relation to any matter to which this section
applies.
page 161
Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 274
Part 11 -- Restrictions on the acquisition of interests
in co-operatives
Division 1 -- Restrictions on share and voting interests
274. Application of Part
5 This Part applies to --
(a) distributing co-operatives; and
(b) non-distributing co-operatives with a share capital.
275. Notice required to be given of voting interest
(1) A person, whether or not a member of the co-operative, must
10 give notice to a co-operative within 5 business days after
becoming aware that the person has a relevant interest in the
right to vote of a member of the co-operative.
Penalty: a fine of $2 000.
(2) A person, whether or not a member of the co-operative, who has
15 ceased to have a relevant interest in the right to vote of a
member of a co-operative must give notice to the co-operative
within 5 business days after becoming aware of the fact.
Penalty: a fine of $2 000.
(3) Section 171 provides for the effect of a person having a relevant
20 interest in the right to vote of a member of a co-operative.
276. Notice required to be given of substantial share interest
(1) A person must give notice to a co-operative within 5 business
days after becoming aware that the person has a substantial
share interest in the co-operative.
25 Penalty: a fine of $2 000.
(2) A person who has a substantial share interest in a co-operative
must give notice to the co-operative within 5 business days after
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Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 277
becoming aware that a substantial change has occurred in the
share interest.
Penalty: a fine of $2 000.
(3) A person who has ceased to have a substantial share interest in a
5 co-operative must give notice to the co-operative within
5 business days after becoming aware that the person has ceased
to have the interest.
Penalty: a fine of $2 000.
(4) A person has a "substantial share interest" in a co-operative if
10 the nominal value of the shares in the co-operative in which the
person has a relevant interest represents 5% or more of the
nominal value of the issued share capital of the co-operative.
(5) A "substantial change" takes place in a person's share interest
in a co-operative if there is an increase or decrease in the
15 number of shares in the co-operative in which the person has a
relevant interest and the increase or decrease represents at least
1% of the nominal value of the issued share capital of the
co-operative.
277. Requirements for notices
20 A notice required under this Division must --
(a) be in the form approved by the Registrar; and
(b) state the particulars, prescribed by the regulations, of the
interest or change being notified.
278. Maximum permissible level of share interest
25 (1) A person cannot have a relevant interest in shares of a
co-operative the nominal value of which is more than 20% of
the nominal value of the issued share capital of the co-operative.
(2) The Registrar, by order published in the Gazette, may specify a
maximum greater than 20% as the maximum permissible level
30 of share interest for the purposes of subsection (1) for a
particular co-operative.
page 163
Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 279
(3) Unless an order under subsection (2) is in force, a co-operative,
by its rules, may specify a maximum less than 20% as the
maximum permissible level of share interest for the purposes of
subsection (1) for that co-operative.
5 (4) The maximum permissible level of share interest applying under
this section may be increased for a particular person by special
resolution of the co-operative concerned passed by a special
postal ballot.
(5) A resolution under subsection (4) does not have effect unless --
10 (a) it is approved by the Registrar; or
(b) the person concerned is another co-operative.
(6) The Registrar's approval of the resolution may be given on
conditions.
279. Transitional provision
15 (1) This section applies to a member of a transferred co-operative
whose relevant interest in the shares of that co-operative
immediately before the transfer day was more than the
maximum permissible level of share interest for the purposes of
section 278(1).
20 (2) The maximum permissible level of share interest for the
purposes of section 278(1) for the member is the level of the
member's relevant interest in the shares immediately before the
transfer day.
(3) In relation to a particular co-operative, this section ceases to
25 operate 6 months after the transfer day.
280. Shares to be forfeited to remedy contravention
(1) If a person has a relevant interest in a share of a co-operative in
contravention of this Division that is not remedied within
14 days of a notice of that contravention being issued by the
30 board, the board of the co-operative must declare to be forfeited
page 164
Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 281
enough of the shares in which the person has a relevant interest
to remedy the contravention.
(2) The shares to be forfeited are --
(a) the shares nominated by the person for the purpose; or
5 (b) in the absence of such a nomination, the shares in which
the person has had a relevant interest for the shortest
time.
(3) A declaration of the board that shares are forfeited operates to
forfeit the shares concerned.
10 (4) On forfeiture of the shares, section 295(1)(b) ceases to apply in
relation to the contravention.
(5) Sections 127 to 129 apply to shares forfeited under this section
as if the shares had been forfeited under Part 6.
281. Powers of board in response to suspected contravention
15 (1) If the board of a co-operative is satisfied on reasonable grounds
that a person has contravened section 278 in relation to the
co-operative, the board may do either or both of the
following --
(a) refuse to register a share transfer involving the person;
20 (b) suspend a stated right or entitlement that a person has as
a member of the co-operative or attaching to any shares
of the co-operative in which the person has a relevant
interest.
(2) The board may request a person who it suspects has a relevant
25 interest in shares of the co-operative to give specified
information to the board about the interest.
(3) A failure by a person to comply with a request under
subsection (2) is a reasonable ground for being satisfied that the
person has contravened section 278.
page 165
Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 282
282. Powers of Supreme Court in relation to contravention
(1) If a person has contravened section 278 in relation to a
co-operative, the Supreme Court may, on the application of the
co-operative or the Registrar, make any order it considers
5 appropriate.
(2) Without limiting subsection (1), an order may include --
(a) a remedial order; and
(b) for the purpose of securing compliance with any other
order made under this section, an order directing the
10 co-operative or any other person to do or refrain from
doing a specified act.
(3) An order may be made whether or not the contravention
continues.
(4) Proof to the satisfaction of the Supreme Court at the hearing of
15 an application that --
(a) a person has a relevant interest in a share of a
co-operative because an associate of the person has a
relevant interest in a share; and
(b) the associate became entitled to the relevant interest
20 within 6 months before the application was filed with
the Supreme Court,
is evidence that the associate was an associate of the person
from the time the person first had the relevant interest until the
date of the hearing.
25 283. Co-operative to notify Registrar of interest over 20%
(1) A co-operative must notify the Registrar in writing within
14 days after the board becomes aware that --
(a) a particular person has a relevant interest in shares of the
co-operative the nominal value of which is more than
30 20% of the nominal value of the issued share capital of
the co-operative; or
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Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 284
(b) there has been a change in the number of shares in
which that person holds a relevant interest.
(2) The notification must give details of the relevant interest
concerned or of the change concerned.
5 284. Co-operative to keep register
(1) A co-operative must keep a register of notifiable interests.
(2) The co-operative must enter in the register in alphabetical order
the names of persons from whom the co-operative has received
notice under this Division together with the information
10 contained in the notice.
(3) The register must be open for inspection --
(a) by a member in accordance with section 232; and
(b) by any other person on payment of the fee (if any) that
the co-operative may require, being not more than the
15 maximum fee prescribed by the regulations.
285. Unlisted companies to provide list of shareholders etc.
(1) This section applies to a company, within the meaning of the
Corporations Act, that is not a listed corporation, within the
meaning of that Act.
20 (2) A company to which this section applies that is a member of a
co-operative must give to the co-operative a list showing --
(a) the name of each member of the company as at the end
of the financial year of the company and the number of
shares in the company held by each member; and
25 (b) the name of each person who has a relevant interest,
within the meaning of the Corporations Act, in a share
of the company together with details of the interest; and
(c) the name of each person who is an associate, within the
meaning of the Corporations Act, of the company.
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Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 286
(3) A list under subsection (2) must be given within 28 days after a
written request for the list is made to the company by the
co-operative or the Registrar.
(4) The details to be shown on the list are the details as at the date
5 specified in the request.
(5) The Registrar may make a request under subsection (3) if the
Registrar is of the opinion that the company is or may be
involved in a suspected contravention of a provision of this
Division.
10 286. Excess share interest not to affect loan liability
(1) This section applies if a co-operative has made a loan to a
member and the member had or has a relevant interest in shares
of the co-operative in contravention of this Division.
(2) Until the amount lent to the member has been repaid to the
15 co-operative, with any interest payable, the member is liable to
make to the co-operative the payments that the member would
be liable to make if all the shares concerned were lawfully held
by the member.
(3) Security for the repayment of the loan is not affected by a
20 contravention of this Division.
287. Extent of operation of Division
This Division --
(a) applies to all individuals, whether resident in this State
or in Australia or not and whether Australian citizens or
25 not, and to all bodies, whether incorporated or not, and
whether carrying on business in this State or in Australia
or not; and
(b) extends to acts done or omitted to be done outside this
State, whether in Australia or not.
page 168
Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 288
288. Registrar may grant exemption from Division
The Registrar may, by order published in the Gazette, exempt a
person from the operation of this Division.
Division 2 -- Restrictions on certain share offers
5 289. Share offers to which Division applies
This Division applies to the following offers to purchase shares
in a co-operative --
(a) an offer made as part of a proposal for, or that is
conditional on, the sale of the undertaking or part of the
10 undertaking, as a going concern, of the co-operative;
(b) an offer made as part of a proposal for, or that is
conditional on, the registration of the co-operative as a
company under the Corporations Act;
(c) an offer made as part of a proposal for, or that is
15 conditional on, the winding-up of the co-operative;
(d) an offer that would result in a contravention of
section 278 were the offeror to be registered,
immediately after the offer is made, as the holder of the
shares that are the subject of the offer.
20 290. Offer to be approved by special resolution using special
postal ballot
Any offer to which this Division applies must be approved by
special resolution by means of a special postal ballot.
291. Some offers totally prohibited if they discriminate
25 An offer referred to in section 289(a) to (d) cannot discriminate
between members who are active members and members who
are not active members.
page 169
Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 292
292. Offers to be submitted to board first
(1) Any proposal to make an offer to which this Division applies
must in the first instance be submitted to the board of the
co-operative.
5 (2) In order for the board to consider putting a proposed offer to a
special postal ballot, arrangements satisfactory to the board
must have been made for payment to the co-operative of the
expenses involved in holding the ballot.
(3) The board may require payment in advance under
10 subsection (2).
(4) A requisition for a special postal ballot for the purposes of this
Division cannot be served unless and until the board has had a
reasonable opportunity to consider the proposed offer
concerned.
15 (5) For the purposes of subsection (4), a period of 28 days is a
reasonable opportunity for considering a proposed offer but the
Registrar may extend that period in a particular case, whether
before or after the end of the 28 days, by written notice to the
co-operative.
20 293. Announcements of proposed takeovers concerning
proposed company
(1) This section applies to an offer to purchase shares in a
co-operative made as part of a proposal for, or that is
conditional on, the registration of the co-operative as a company
25 (the "proposed company") under the Corporations Act.
(2) A person must not make a public announcement to the effect
that the person proposes, or that the person and another person
or other persons together propose, to make takeover offers, or to
cause a takeover announcement to be made, in relation to the
30 proposed company if --
(a) the person knows that the announcement is false or is
recklessly indifferent as to whether it is true or false; or
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Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 293
(b) the person has no reasonable grounds for believing that
the person, or the person and the other person or
persons, will be able to perform obligations arising
under the scheme or announcement or under the
5 Corporations Act in relation to the scheme or
announcement if a substantial proportion of the offers or
the offers made under the announcement are accepted.
Penalty: a fine of $20 000 or imprisonment for 5 years.
(3) If a person makes a public announcement to the effect that the
10 person proposes, or that the person and another person or other
persons together propose, to make a takeover bid in relation to
the proposed company, the person must proceed to make a
takeover bid in relation to shares in the company in accordance
with the public announcement within 2 months after the day on
15 which the company is incorporated.
Penalty: a fine of $10 000 or imprisonment for 2 years.
(4) A person is not liable to be convicted of more than one offence
under subsection (3) for any one public announcement.
(5) A person who contravenes this section, whether or not the
20 person is convicted of an offence for the contravention, is liable
to pay compensation to a person who suffered loss as a result of
entering into a share transaction in reliance on the public
announcement concerned.
(6) The amount of that compensation is the difference between the
25 price of the shares at which the transaction was entered into and
the price of the shares at which the transaction would have been
likely to have been entered into if the person had not made the
public announcement.
(7) A person does not contravene subsection (3) and is not liable to
30 pay compensation for the contravention if it is proved that the
person could not reasonably have been expected to make the
takeover bid concerned --
(a) as a result of circumstances that existed when the public
announcement was made but of which the person had no
page 171
Co-operatives Bill 2007
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 294
knowledge and could not reasonably have been expected
to have knowledge; or
(b) as a result of a change in circumstances after the
announcement was made, other than a change in
5 circumstances caused directly or indirectly by the
person.
(8) Expressions used in this section have the same meanings as in
the Corporations Law section 746 as applying on
12 March 2000.
10 294. Additional disclosure requirements for offers involving
conversion to company
If an offer is part of a proposal for, or is conditional on, the
registration of the co-operative as a company under the
Corporations Act, the disclosure statement required to be sent to
15 members for the purposes of the special postal ballot relating to
the offer must contain the following additional information --
(a) full particulars of any proposal by which a director will
acquire a relevant interest in a share of the company to
be formed;
20 (b) other information that is material to the making of a
decision by a member whether or not to agree to the
making of the offer, being information that is within the
knowledge of the directors and has not previously been
disclosed to the members;
25 (c) other information that the Registrar directs.
295. Consequences of prohibited offer
(1) If a person makes an offer to purchase shares in a co-operative
in contravention of this Division --
(a) the person cannot be registered as the holder of the
30 shares concerned; and
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Co-operatives Bill 2007
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 296
(b) if the transfer of the shares is registered, the person
cannot vote at a meeting of, or in a postal ballot
conducted by, the co-operative.
(2) A vote cast by or for a member when the member cannot vote
5 because of this section must be disregarded.
296. Registrar may grant exemptions
The Registrar may, by order published in the Gazette, exempt a
person or co-operative from compliance with a provision of this
Division and section 186 in relation to a matter to which this
10 Division applies.
page 173
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 1 Mergers and transfers of engagements
s. 297
Part 12 -- Merger, transfer of engagements,
winding-up
Division 1 -- Mergers and transfers of engagements
297. Application of Division
5 This Division does not apply to a merger or transfer of
engagements to which Part 14 applies.
298. Mergers and transfers of engagements of local co-operatives
Any 2 or more co-operatives may consolidate all or any of their
assets, liabilities and undertakings by way of merger or transfer
10 of engagements approved under this Division.
299. Requirements before application can be made
(1) Before co-operatives can apply for approval under this Division
of a merger or transfer of engagements, the proposed merger or
transfer must have been approved by each of the co-operatives
15 by --
(a) a special resolution passed by means of a special postal
ballot; or
(b) if permitted by subsection (2), a resolution of the board
of the co-operative.
20 (2) The proposed merger or transfer of engagements may be
approved by resolution of the board of a co-operative if the
Registrar consents to that procedure applying in the particular
case.
300. Disclosure statement required
25 (1) A special resolution by which members of a co-operative
approve a merger or transfer of engagements is not effective for
the purposes of this Division unless this section has been
complied with.
page 174
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Mergers and transfers of engagements Division 1
s. 300
(2) Each co-operative must send to each of its members a disclosure
statement approved by the Registrar stating --
(a) the financial position of each co-operative concerned in
the proposed merger or transfer of engagements as
5 shown in financial statements that have been prepared as
at a date that is not more than 6 months before the date
of the statement; and
(b) any interest that any officer of each co-operative has in
the proposed merger or transfer of engagements; and
10 (c) any compensation or other consideration proposed to be
paid, or any other incentive proposed to be given, to any
officer or member of each co-operative in relation to the
proposed merger or transfer of engagements; and
(d) whether the proposal is a merger or transfer of
15 engagements and the reason for the merger or transfer of
engagements; and
(e) in the case of a transfer of engagements, whether it is a
total or partial transfer of engagements; and
(f) other information that the Registrar directs.
20 (3) The disclosure statement must be sent to the members of each
co-operative so that it will, in the ordinary course of post, reach
each member who is entitled to vote on the special resolution
not later than 21 days before the day on or before which the
ballot papers must be returned by members voting in the special
25 postal ballot.
(4) The Registrar may, by order published in the Gazette, exempt a
co-operative from complying with this section.
(5) The Registrar may approve a disclosure statement on any
conditions he or she considers appropriate.
page 175
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 1 Mergers and transfers of engagements
s. 301
301. Making an application
(1) An application for approval of a merger or transfer of
engagements under this Division must be made to the Registrar
in the way and form required by the Registrar.
5 (2) An application for approval of a merger must be accompanied
by 2 copies of the proposed rules of the merged co-operative
and any other particulars required by the Registrar.
302. Approval of merger
(1) The Registrar must approve a merger pursuant to an application
10 under this Division if satisfied that --
(a) this Division has been complied with in relation to the
application; and
(b) the proposed rules of the merged co-operative are
consistent with this Act and may reasonably be
15 approved; and
(c) the certificates of registration of the co-operatives have
been surrendered to the Registrar; and
(d) there is no good reason why the merged co-operative
and its rules should not be registered.
20 (2) On approving an application for merger, the Registrar must --
(a) cancel the registration of the co-operatives involved in
the merger; and
(b) register the merged co-operative and its rules; and
(c) issue to the merged co-operative a certificate of
25 registration under this Act.
(3) A merger takes effect on the issue of the certificate of
registration for the merged co-operative.
page 176
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Mergers and transfers of engagements Division 1
s. 303
303. Approval of transfer of engagements
(1) The Registrar must approve a transfer of engagements pursuant
to an application under this Division if satisfied that --
(a) this Division has been complied with in relation to the
5 application; and
(b) the rules or proposed rules of the transferee co-operative
are adequate; and
(c) in the case of a total transfer of engagements from a
co-operative, the certificate of registration of the
10 co-operative has been surrendered to the Registrar; and
(d) there is no good reason why the transfer of engagements
should not take effect.
(2) A transfer of engagements takes effect on the day specified in
the approval of the Registrar.
15 304. Transfer of engagements by direction of Registrar
(1) The Registrar may, with the approval of the Minister, direct a
co-operative --
(a) to transfer its engagements to a co-operative approved
by the Registrar; and
20 (b) within a period specified by the Registrar when giving
the direction or a further period allowed by the
Registrar, to enter into an agreement approved by the
Registrar to give effect to the transfer of engagements
directed.
25 (2) The Registrar cannot give such a direction to a co-operative
unless the necessary grounds exist for the giving of the
direction, as referred to in section 336(2).
(3) The transfer of engagements must make provision, in a way
approved by the Registrar, for the members of the transferor
30 co-operative who wish to do so to become members of the
transferee co-operative.
page 177
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 2 Transfer of incorporation
s. 305
(4) If a co-operative fails to comply with a direction under this
section, the Registrar may elect to treat the failure as the
necessary grounds --
(a) for winding-up the co-operative on a certificate of the
5 Registrar; or
(b) for appointing an administrator of the co-operative.
(5) The Registrar must notify the co-operative of the Registrar's
decision under subsection (4).
(6) The Registrar may revoke a direction under this section at any
10 time up until the co-operative has agreed pursuant to the
direction to transfer its engagements.
(7) A transfer of engagements directed under this section takes
effect on a day notified by the Registrar in the Gazette.
(8) An officer of a co-operative must not --
15 (a) fail to take all reasonable steps to secure compliance by
the co-operative with a direction given under this
section; or
(b) by a wilful act or omission be the cause of a failure by
the co-operative to comply with a direction.
20 Penalty: a fine of $2 000.
Division 2 -- Transfer of incorporation
305. Application for transfer
(1) A co-operative, if approved under this Division, may apply to
become registered or incorporated as one of the following
25 corporations --
(a) a company under the Corporations Act;
(b) an incorporated association under the Associations
Incorporation Act 1987;
(c) a corporation that is incorporated, registered or
30 otherwise established under a law that is a law of a place
page 178
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Transfer of incorporation Division 2
s. 306
outside this State and that is prescribed by the
regulations.
(2) For the purposes of subsection (1)(a), an application is to be
made in accordance with the Corporations Act section 601BC
5 for registration as a company under Part 5B of that Act.
(3) For the purposes of the Corporations Act section 601BC(8)(d), a
co-operative is authorised by this Act to transfer its
incorporation.
306. Requirements before application can be made
10 (1) Before an application is made under section 305, the
co-operative must, by special resolution passed by means of a
special postal ballot --
(a) approve the proposed application; and
(b) determine under what name the co-operative is to apply
15 to be incorporated or registered; and
(c) adopt a constitution or replaceable rules or rules that
may be necessary or considered desirable.
(2) The name applied for need not be the same as that of the
co-operative and cannot include the word "co-operative" or
20 "cooperative" or another word importing a similar meaning.
(3) The regulations may provide that a co-operative is exempt from
compliance with a provision of this section and section 186 in
relation to a matter to which this section applies.
307. Meaning of "new body" and "transfer"
25 The registration or incorporation of a co-operative as a
corporation as a result of an application under this Division is
referred to in this Division as its "transfer" and the corporation
concerned is referred to in this Division as the "new body".
page 179
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 2 Transfer of incorporation
s. 308
308. New body ceases to be registered as co-operative
On the transfer of a co-operative under this Division, it ceases to
be registered as a co-operative under this Act.
309. Transfer not to impose greater liability etc.
5 (1) The constitution or replaceable rules or rules adopted for the
purposes of the transfer cannot be such as to --
(a) impose on the members of the new body who were
members of the co-operative at the date of transfer any
greater or different liability to contribute to the assets of
10 the new body than the liability to which they were
subject as members of the co-operative; or
(b) deprive a member of the new body of preferential rights
to dividend or capital to which the member was entitled
as a member of the co-operative at the date of transfer.
15 (2) In subsection (1), "member" includes former shareholder of a
co-operative, whose shares have been forfeited within 2 years of
the transfer.
(3) The transfer must result in all persons who were members of the
co-operative at the date of transfer becoming members of the
20 new body.
(4) In the case of a transfer of a co-operative that has a share capital
to a new body that has a share capital, the transfer must result in
every member of the co-operative at the date of transfer who
held shares in the co-operative being the holder of shares in the
25 capital of the new body equal in number and nominal value to
the shares held by the member as a member of the co-operative.
310. Effect of new certificate of registration
A certificate of registration or incorporation as the new body
issued by the appropriate officer under the law applicable to the
30 new body is evidence that all the requirements of this Division
about registration or incorporation have been complied with.
page 180
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 311
311. New body must give copy of new certificate of registration
or incorporation to Registrar
On the transfer of a co-operative under this Division, the new
body must immediately give the Registrar a copy of its new
5 certificate of registration or incorporation.
Penalty: a fine of $1 000.
312. New body is a continuation of the co-operative
(1) When a co-operative transfers to a new body, the corporation
constituted by the new body is taken to be the same entity as the
10 corporation constituted by the co-operative.
(2) Without limiting subsection (1), Division 6 applies to a transfer
under this Division.
Division 3 -- Winding-up and deregistration
313. Methods of winding-up
15 (1) A co-operative may be wound-up voluntarily or by the Supreme
Court or on a certificate of the Registrar.
(2) In the case of a winding-up voluntarily or by the Supreme
Court, the co-operative may be wound-up in the same way and
in the same circumstances as a company under the Corporations
20 Act may be wound-up.
314. Winding-up on Registrar's certificate
(1) A co-operative may be wound-up on a certificate of the
Registrar only if the necessary grounds for taking the action
exist, as referred to in section 336.
25 (2) A winding-up on a certificate of the Registrar starts when the
Registrar gives the certificate to the co-operative.
page 181
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 3 Winding-up and deregistration
s. 315
(3) On the giving of a certificate, the Registrar may appoint a
person to be the liquidator of the co-operative.
(4) The liquidator need not be a registered liquidator under the
Corporations Act.
5 (5) The liquidator must, within 10 days after appointment, give
notice of his or her appointment in the Gazette.
(6) The liquidator must give the security prescribed by the
regulations and is entitled to receive the fees fixed by the
Registrar.
10 (7) Any vacancy occurring in the office of liquidator is to be filled
by a person appointed by the Registrar.
315. Method of deregistration
A co-operative may be deregistered in the same way and in the
same circumstances as a company under the Corporations Act
15 may be deregistered.
316. Application of Corporations Act to winding-up and
deregistration
The winding-up or deregistration of a co-operative, and a
deregistered co-operative, are declared to be applied
20 Corporations legislation matters for the purposes of the
Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
to the provisions of the Corporations Act Parts 5.4, 5.4A, 5.4B,
5.5, 5.6, 5.7 and 5A.1, subject to the following modifications --
(a) a reference in the provisions to a special resolution or an
25 extraordinary resolution is to be read as a reference to a
special resolution within the meaning of this Act;
(b) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
page 182
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 316
(c) section 513B is to be considered to be amended by
inserting after paragraph (d) --
"
(da) if the winding-up is on the certificate of the
5 Registrar -- on the date that the certificate is
given; or
";
(d) section 516 is to be considered to be amended by
inserting after "past member" --
10 "
together with any charges payable by him or her to the
co-operative in accordance with the rules
";
(e) a reference in the provisions to a registered liquidator is
15 to be read as including a reference to a person approved
or appointed by the Registrar as a liquidator of a
co-operative;
(f) a reference in the provisions to the Corporations Act
Part 2F.1 is to be read as a reference to Part 4 Division 5
20 of this Act;
(g) for the purposes of the application of the provisions to a
winding-up on the certificate of the Registrar, the
winding-up is taken to be a voluntary winding-up, but
the Corporations Act section 490 does not apply;
25 (h) the provisions are to be read subject to sections 67
and 322 of this Act for the purposes of determining the
liability of members and former members to contribute
on a winding-up of a co-operative;
(i) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
page 183
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 3 Winding-up and deregistration
s. 317
317. Restrictions on voluntary winding-up
(1) A co-operative may be wound-up voluntarily only --
(a) by a creditors' voluntary winding-up; or
(b) if a special resolution is passed by means of a special
5 postal ballot in favour of voluntary winding-up.
(2) A regulation may exempt a co-operative from compliance with
a provision of this section or section 186.
(3) When a special postal ballot referred to in subsection (1)(b) is
held, the members may, by means of the same ballot, by simple
10 majority --
(a) appoint one or more liquidators to wind-up the affairs
and distribute the assets of the co-operative; and
(b) fix the remuneration to be paid to the liquidator.
318. Start of members' voluntary winding-up
15 A members' voluntary winding-up of a co-operative starts when
the result of the special postal ballot is noted in the minute book
by the secretary of the co-operative.
319. Distribution of surplus -- non-distributing co-operatives
(1) In this section --
20 "surplus property" means property of the co-operative that
remains after satisfaction of the debts and liabilities of the
co-operative and the costs, charges and expenses of the
winding-up.
(2) On a winding-up of a non-distributing co-operative, the surplus
25 property of the co-operative must be distributed as required by
the rules of the co-operative.
(3) The rules of a non-distributing co-operative must make
provision for the way in which the surplus property of the
co-operative is to be distributed in a winding-up.
page 184
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 320
320. Liquidator -- vacancy may be filled by Registrar
If a co-operative is being wound-up voluntarily and a vacancy
occurs in the office of liquidator that in the opinion of the
Registrar is unlikely to be filled in the way provided by the
5 Corporations Act, as applied by this Division, the Registrar may
appoint a person to be liquidator.
321. Review of liquidator's remuneration
A member or creditor of a co-operative or the liquidator may at
any time before the completion of the winding-up of the
10 co-operative apply to the Supreme Court to review the amount
of the remuneration of the liquidator.
322. Liability of member to contribute in a winding-up where
shares forfeited etc.
(1) If a person's membership of a co-operative is cancelled under
15 Part 6 within 2 years before the start of the winding-up of the
co-operative, the person is liable on the winding-up to
contribute to the property of the co-operative the nominal value
of any shares forfeited in connection with that cancellation,
being their nominal value immediately before cancellation.
20 (2) If under section 163 a co-operative --
(a) purchases a share of a member in the co-operative; or
(b) repays to a member the whole or any part of the amount
paid up up to the stated nominal value on a share held by
a member,
25 within 2 years before the start of the winding-up of the
co-operative, the member or former member is liable on the
winding-up to contribute to the property of the co-operative the
amount paid by the co-operative to the member or former
member in respect of the purchase or repayment together with
30 any amount unpaid on the shares immediately before the
purchase or repayment.
page 185
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 4 Administration of co-operative -- application of Corporations
Act
s. 323
(3) If a person contributes to the property of a co-operative under a
liability under this section, the amount contributed is, for the
purposes of the winding-up, to be treated as having been paid up
by the person on shares of the co-operative.
5 (4) The liability of a member or former member of a co-operative
under this section is in addition to any other liability of the
member or former member to contribute to the property of the
co-operative on a winding-up of the co-operative.
Division 4 -- Administration of co-operative -- application of
10 Corporations Act
323. Application of Corporations Act to administration of
co-operative
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
15 (Ancillary Provisions) Act 2001 Part 3 in relation to the
provisions of the Corporations Act Part 5.3A and Part 5.9
Division 3, subject to the following modifications --
(a) the provisions are to be read as if a co-operative were a
company;
20 (b) a reference in the provisions to the Corporations Act
sections 128 and 129 is to be read as a reference to
sections 41 to 43, and section 45 of this Act;
(c) a reference in the provisions to ASIC is to be read as a
reference to the Registrar;
25 (d) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
that are prescribed by the regulations.
Division 5 -- Appointment of administrator
324. Appointment of administrator
30 (1) The Registrar may, by written notice, appoint an administrator
to conduct the affairs of a co-operative.
page 186
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Appointment of administrator Division 5
s. 325
(2) A notice of appointment must state --
(a) the date of appointment; and
(b) the appointee's name; and
(c) the appointee's business address.
5 (3) If the appointee's name or business address changes, the
appointee must immediately give written notice of the change to
the Registrar.
(4) The Registrar cannot appoint an administrator unless the
necessary grounds for taking the action exist, as referred to in
10 section 336(2).
325. Effect of appointment of administrator
(1) On the appointment of an administrator of a co-operative --
(a) the directors of the co-operative cease to hold office; and
(b) all contracts of employment with the co-operative are
15 terminated; and
(c) all contracts for the provision of secretarial or
administrative services for the co-operative are
terminated; and
(d) the administrator may terminate any contract for
20 providing other services to the co-operative.
(2) An administrator of a co-operative has the functions of the
board of the co-operative, including the board's powers of
delegation.
(3) A director of a co-operative cannot be appointed or elected
25 while the administrator is in office except as provided by this
Division.
326. Revocation of appointment
(1) An administrator holds office until the administrator's
appointment is revoked.
page 187
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 5 Appointment of administrator
s. 326
(2) The Registrar may, by written notice, revoke the appointment of
an administrator.
(3) When a liquidator of a co-operative is appointed, the
appointment of any administrator of the co-operative is
5 automatically revoked.
(4) Immediately on the revocation of an administrator's
appointment, the administrator must prepare and submit a report
to the Registrar showing how the administration was carried
out, and for that purpose an administrator has access to the
10 co-operative's records.
(5) On giving the report and accounting fully for the administration
of the co-operative to the satisfaction of the Registrar, the
administrator is released from any further duty to account for
the administration of the co-operative other than on account of
15 fraud, dishonesty, negligence or wilful failure to comply with
this Act.
(6) Before revoking the appointment of an administrator of a
co-operative, the Registrar must --
(a) appoint another administrator; or
20 (b) appoint a liquidator; or
(c) ensure that directors of the co-operative have been
elected in accordance with the rules of the co-operative
at a meeting called by the administrator in accordance
with those rules; or
25 (d) appoint directors of the co-operative.
(7) Directors elected or appointed under subsection (6) --
(a) take office on revocation of the administrator's
appointment; and
(b) in the case of directors appointed under subsection (6),
30 hold office until the next annual general meeting of the
co-operative after the revocation of that appointment.
page 188
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Appointment of administrator Division 5
s. 327
327. Expenses of administration
(1) The expenses of and incidental to the conduct of a
co-operative's affairs by an administrator are payable from the
co-operative's funds.
5 (2) The expenses of conducting a co-operative's affairs include --
(a) if the administrator is not an officer or employee of the
public service, remuneration of the administrator at a
rate approved by the Registrar; or
(b) if the administrator is an officer or employee of the
10 public service, the amount that the Registrar certifies
should be paid to the State as repayment of the
administrator's remuneration.
(3) An amount certified under subsection (2)(b) may be recovered
in a court of competent jurisdiction as a debt payable to the
15 State.
(4) An administrator has, in relation to the expenses referred to in
subsection (1), the same priority on the winding-up of a
co-operative as the liquidator of the co-operative has, as set out
in the Corporations Act Part 5.6.
20 328. Liabilities arising from administration
(1) If a co-operative incurs loss because of fraud, dishonesty,
negligence or wilful failure to comply with this Act or the rules
of the co-operative by an administrator, the administrator is
liable for the loss.
25 (2) An administrator is not liable for loss that is not a loss to which
subsection (1) applies but must account for the loss in a report
given under section 326.
page 189
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 5 Appointment of administrator
s. 329
329. Additional powers of Registrar
(1) If the Registrar appoints directors of a co-operative under
section 326, the Registrar may, by written notice given to the
co-operative, specify --
5 (a) a time during which this section is to apply in relation to
the co-operative; and
(b) the terms on which all or any of the directors hold
office; and
(c) the rules that are to be the co-operative's rules.
10 (2) While this section applies to a co-operative, the Registrar
may --
(a) remove and appoint directors; and
(b) vary, revoke or state new terms in place of all or any of
the terms specified under subsection (1); and
15 (c) amend all or any of the rules specified under
subsection (1).
(3) The Registrar may, by written notice given to the co-operative,
extend the time for which this section is to apply to a
co-operative.
20 (4) A rule specified by the Registrar under this section to be a rule
of a co-operative --
(a) cannot be altered except in the way set out in this
section; and
(b) if it is inconsistent with another rule of the co-operative,
25 prevails over the other rule, and the other rule is to the
extent of the inconsistency inoperative; and
(c) has the same evidentiary value as is by this Act accorded
to the co-operative's rules and to copies of them.
330. Stay of proceedings
30 (1) If the Registrar appoints an administrator to conduct a
co-operative's affairs, a person cannot begin or continue
page 190
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 331
proceedings in a court against the co-operative until the
administrator's appointment is revoked except with the leave of
the Supreme Court and, if the Supreme Court grants leave, in
accordance with any terms that the Supreme Court imposes.
5 (2) A person intending to apply for leave of the Supreme Court
under subsection (1) must give the Registrar at least 10 days
notice of intention to apply.
(3) On the hearing of an application under subsection (1), the
Registrar may be represented and may oppose the application.
10 331. Administrator to report to Registrar
On the receipt of a request from the Registrar, the administrator
of a co-operative must, without delay, prepare and give to the
Registrar a report showing how the administration is being
carried out.
15 Division 6 -- Effect of merger etc. on property, liabilities etc.
332. How this Division applies to a merger
(1) This Division applies to a merger of co-operatives under
this Part.
(2) In the application of this Division to a merger --
20 "new body" means the co-operative that results from the
merger;
"original body" means each co-operative that is a party to the
merger;
"relevant day" means the day on which the merged
25 co-operative is registered under this Act.
333. How this Division applies to a transfer of engagements
(1) This Division applies to a transfer of the engagements of a
co-operative to another co-operative under Division 1.
page 191
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 6 Effect of merger etc. on property, liabilities etc.
s. 334
(2) In the application of this Division to a transfer of
engagements --
"new body" means the co-operative to which the engagements
are transferred;
5 "original body" means the co-operative that transfers its
engagements;
"relevant day" means the day on which the transfer of
engagements takes effect.
334. How this Division applies to a transfer of incorporation
10 (1) This Division applies to a transfer of incorporation under
Division 2.
(2) In the application of this Division to such a transfer --
"new body" means the corporation that results from the
transfer;
15 "original body" means the co-operative that transfers its
incorporation;
"relevant day" means the day on which the transfer takes
effect.
335. Effect of merger etc. on property, liabilities etc.
20 (1) In this section --
"assets" means any legal or equitable estate or interest (whether
present or future and whether vested or contingent) in real
or personal property of any description (including money),
and includes securities, choses in action and documents;
25 "instrument" means an instrument (other than this Act) which
creates, modifies or extinguishes rights or liabilities (or
would do so if lodged, filed or registered in accordance
with any law), and includes any judgment, order and
process of a court;
30 "liabilities" means liabilities, debts and obligations (whether
present or future and whether vested or contingent).
page 192
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 335
(2) On and from the relevant day for an event to which this
Division applies --
(a) the assets of the original body vest in the new body
without the need for a conveyance, transfer, assignment
5 or assurance; and
(b) the rights and liabilities of the original body become the
rights and liabilities of the new body; and
(c) all proceedings by or against the original body that are
pending immediately before the relevant day are taken
10 to be proceedings pending by or against the new body;
and
(d) an act, matter or thing done or omitted to be done by, to
or in relation to the original body before the relevant day
is, to the extent to which that act, matter or thing has any
15 force or effect, taken to have been done or omitted by, to
or in relation to the new body; and
(e) a reference in an instrument or document of any kind to
the original body is to be read as, or as including, a
reference to the new body.
20 (3) The operation of this section cannot be regarded --
(a) as a breach of contract or confidence or otherwise as a
civil wrong; or
(b) as a breach of any contractual provision prohibiting,
restricting or regulating the assignment or transfer of
25 assets, rights or liabilities; or
(c) as giving rise to a remedy by a party to an instrument, or
as causing or permitting the termination of an
instrument, because of a change in the beneficial or legal
ownership of an asset, right or liability.
page 193
Co-operatives Bill 2007
Part 12 Merger, transfer of engagements, winding-up
Division 7 Miscellaneous
s. 336
Division 7 -- Miscellaneous
336. Grounds for winding-up, transfer of engagements,
appointment of administrator
(1) This section applies to the following actions --
5 (a) a direction by the Registrar to a co-operative to transfer
its engagements under section 304;
(b) the appointment of an administrator of a co-operative
under Division 5;
(c) the winding-up of a co-operative on a certificate of the
10 Registrar under section 314.
(2) The necessary grounds for taking action to which this section
applies exist if the Registrar certifies that --
(a) the number of members is reduced to less than the
minimum number of persons allowed under section 65;
15 or
(b) the co-operative has not commenced business within
one year of registration or has suspended business for
more than 6 months; or
(c) the registration of the co-operative has been obtained by
20 mistake or fraud; or
(d) the co-operative exists for an illegal purpose; or
(e) the co-operative has wilfully, and after notice from the
Registrar, violated the provisions of this Act or of the
rules of the co-operative; or
25 (f) the board of the co-operative has, after notice from the
Registrar, failed to ensure that the rules of the
co-operative contain active membership provisions in
accordance with Part 6; or
(g) there are, and have been, for one month immediately
30 before the date of the Registrar's certificate, insufficient
directors of the co-operative to form a quorum in
accordance with the rules of the co-operative; or
page 194
Co-operatives Bill 2007
Merger, transfer of engagements, winding-up Part 12
Miscellaneous Division 7
s. 337
(h) after an inquiry under this Act into the affairs of a
co-operative or the working and financial condition of a
co-operative, that in the interests of members or
creditors of the co-operative or the public the action
5 concerned should be taken.
(3) Alternatively, the necessary grounds for winding-up a
co-operative on a certificate of the Registrar exist if the
Registrar certifies that --
(a) the period, if any, fixed for the duration of the
10 co-operative by its rules has ended; or
(b) an event, to be specified in the certificate, has occurred
on the occurrence of which the regulations or the rules
provide that the co-operative is to be wound-up.
(4) The Registrar cannot certify under this section as to any matter
15 unless the matter has been proved to the Registrar's satisfaction.
337. Application of Corporations Act for insolvent co-operatives
A co-operative is declared to be an applied Corporations
legislation matter for the purposes of the Corporations
(Ancillary Provisions) Act 2001 Part 3 in relation to the
20 provisions of the Corporations Act Part 5.7B, subject to the
following modifications --
(a) the provisions are to be read as if a co-operative were a
company;
(b) a reference in the provisions to a provision of the
25 Corporations Act sections 286 to 290, as applied under
section 225 of this Act, is to be read with any
modifications prescribed by the regulations;
(c) any other modifications, within the meaning of the
Corporations (Ancillary Provisions) Act 2001 Part 3,
30 that are prescribed by the regulations.
page 195
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 338
Part 13 -- Arrangements and reconstructions
Division 1 -- General requirements
338. Requirements for binding compromise or arrangement
(1) A compromise or arrangement is binding only if it is approved
5 by order of the Supreme Court after having been agreed to --
(a) if the compromise or arrangement is between the
co-operative and any of its creditors, at a court ordered
meeting by a majority in number of the creditors
concerned who are present and voting (in person or by
10 proxy), being a majority whose debts or claims against
the co-operative amount to at least 75% of the total of
the debts and claims of all those creditors who are
present and voting (in person or by proxy); or
(b) if the compromise or arrangement is between the
15 co-operative and any of its members, by the members
concerned, by special resolution passed by means of a
special postal ballot.
(2) The court ordered meeting referred to in subsection (1)(a) is a
meeting called in accordance with an order of the Supreme
20 Court under this Part.
(3) The Supreme Court may grant its approval to a compromise or
arrangement subject to the alterations or conditions it considers
appropriate.
(4) An order of the Supreme Court approving a compromise or
25 arrangement does not have effect until an office copy of the
order is lodged with the Registrar.
(5) On the copy being lodged, the order takes effect from the date
of lodgment or an earlier date the Supreme Court specifies in
the order.
page 196
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
General requirements Division 1
s. 339
339. Supreme Court ordered meeting of creditors
(1) In this section --
"appropriate person", in relation to an application for an
order, means --
5 (a) the co-operative; or
(b) a member of the co-operative; or
(c) one of the creditors concerned; or
(d) in the case of a co-operative being wound-up, the
liquidator.
10 (2) If a compromise or arrangement is proposed between a
co-operative and any of its creditors, the Supreme Court may on
application by an appropriate person order a meeting or
meetings of the creditors concerned.
(3) The meeting must be convened in the way and be held in the
15 place or places, in this State or elsewhere, that the Supreme
Court directs.
(4) In considering whether to make an order for a meeting to be
held in another jurisdiction, the Supreme Court may have regard
to where creditors concerned reside.
20 340. Registrar to be given notice and opportunity to make
submissions
The Supreme Court may, on the application of an appropriate
person as defined in section 339(1), make an order under this
Division approving a compromise or arrangement if the Court is
25 satisfied that --
(a) at least 14 days notice of the hearing of the application
for the order, or a shorter period of notice the Court or
the Registrar permits, has been given to the Registrar;
and
page 197
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 341
(b) the Registrar has had a reasonable opportunity to
examine --
(i) the terms of that compromise or arrangement;
and
5 (ii) the explanatory statement to be sent to creditors
or members under section 349,
and make submissions to the Court.
341. Results of 2 or more meetings
If the Supreme Court orders 2 or more meetings of creditors to
10 be held in relation to a proposed compromise or arrangement --
(a) the meetings are taken to form a single meeting; and
(b) the votes in favour of the proposed compromise or
arrangement cast at each of the meetings are to be
added; and
15 (c) the votes against the proposed compromise or
arrangement cast at each of the meetings are to be
added.
342. Persons disqualified from administering compromise etc.
Except with the leave of the Supreme Court, a person cannot be
20 appointed to administer, and cannot administer, a compromise
or arrangement approved under this Act between a co-operative
and any of its creditors or members, whether by the terms of the
compromise or arrangement or under a power given by the
terms of a compromise or arrangement, if the person --
25 (a) is a mortgagee of property of the co-operative; or
(b) is an auditor or an officer of the co-operative; or
(c) is an officer of a corporation that is a mortgagee of
property of the co-operative; or
(d) is not a registered liquidator under the Corporations Act
30 unless the person is a corporation authorised by or under
a law of this State to administer the compromise or
arrangement concerned; or
page 198
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
General requirements Division 1
s. 343
(e) is an officer of a corporation related to the co-operative;
or
(f) unless the Registrar directs in writing that this paragraph
does not apply in relation to the person in relation to the
5 co-operative, has at any time within the last 12 months
been an officer or promoter of the co-operative or of a
related corporation of the co-operative.
343. Application of Schedule 4 to person appointed
Schedule 4 clauses 16, 18(2) and (4), 19, 23 and 25 apply to a
10 person appointed to administer a compromise or arrangement as
if the appointment were an appointment of the person as a
receiver and manager of property of the co-operative and as if a
reference to a receiver were a reference to that person.
344. Application of Corporations Act to person appointed
15 A person appointed to administer a compromise or arrangement
is declared to be an applied Corporations legislation matter for
the purposes of the Corporations (Ancillary Provisions)
Act 2001 Part 3 in relation to the Corporations Act section 536
as if --
20 (a) the appointment were an appointment as a liquidator of
the co-operative; and
(b) a reference in the section to a liquidator were a reference
to that person; and
(c) a reference in that section to ASIC were a reference to
25 the Registrar.
345. Copy of order to be attached to rules
(1) A co-operative must ensure that a copy of an order of the
Supreme Court approving a compromise or arrangement is
attached to each copy of the rules of the co-operative issued
30 after the order is made.
Penalty: a fine of $2 000.
page 199
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 346
(2) The Supreme Court may, by order, exempt a co-operative from
compliance with this section or determine the period during
which the co-operative must comply.
346. Directors to arrange for reports
5 (1) When a compromise or arrangement (whether or not for the
purposes of or in connection with a scheme for the
reconstruction of a co-operative or the merger of any 2 or more
co-operatives) has been proposed, the directors of the
co-operative must --
10 (a) if a meeting of the members of the co-operative by
resolution so directs, instruct the accountants or legal
practitioners or both named in the resolution to report on
the proposals and send their report or reports to the
directors as soon as practicable; and
15 (b) make any report or reports so obtained available at the
registered office of the co-operative for inspection by
the members and creditors of the co-operative at least
7 days before the day of the meeting ordered by the
Supreme Court or the holding of the special postal
20 ballot, as appropriate.
(2) If subsection (1) is not complied with, each director of the
co-operative commits an offence.
Penalty: a fine of $2 000.
347. Power of Supreme Court to restrain further proceedings
25 (1) If a proposed compromise or arrangement is between a
co-operative and any of its creditors and no order has been made
or resolution passed for the winding-up of the co-operative, the
Supreme Court may restrain further proceedings in an action or
other civil proceeding against the co-operative except by leave
30 of the Supreme Court and subject to such terms as the Supreme
Court imposes.
page 200
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 348
(2) The Supreme Court's power under this section is in addition to
any of its other powers and cannot be exercised except on
application by the co-operative or of any creditor or member of
the co-operative.
5 348. Supreme Court need not approve compromise or
arrangement takeovers
(1) The Supreme Court need not approve a compromise or
arrangement unless --
(a) it is satisfied that the compromise or arrangement has
10 not been proposed for the purpose of enabling any
person to avoid the operation of any of the provisions of
Part 11 Division 2; and
(b) there is produced to the Supreme Court a statement in
writing by the Registrar stating that the Registrar has no
15 objection to the compromise or arrangement.
(2) The Supreme Court need not approve a compromise or
arrangement merely because a statement by the Registrar stating
that the Registrar has no objection to the compromise or
arrangement has been produced to the Supreme Court.
20 Division 2 -- Explanatory statements
349. Explanatory statement required to accompany notice of
meeting etc.
(1) An explanatory statement must accompany every notice --
(a) that is sent to a creditor of a co-operative calling a court
25 ordered meeting to obtain agreement to a compromise or
arrangement; or
(b) that is sent to a member of a co-operative for the
purpose of the conduct of the special postal ballot to
obtain agreement to the compromise or arrangement.
30 (2) In every notice of a meeting referred to in subsection (1) that is
given by advertisement there must be included either a copy of
page 201
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 2 Explanatory statements
s. 349
the explanatory statement or notification of the place at which
and the way in which creditors entitled to attend the meeting
may obtain copies of the explanatory statement.
(3) The explanatory statement must --
5 (a) explain the effect of the compromise or arrangement
and, in particular, state --
(i) material interests of the directors, whether as
directors, members or creditors of the
co-operative or otherwise; and
10 (ii) the effect on those interests of the compromise or
arrangement in so far as that effect is different
from the effect on the like interests of other
persons;
and
15 (b) set out --
(i) the information prescribed by the regulations;
and
(ii) other information that is material to the making
of a decision by a creditor or member whether or
20 not to agree to the compromise or arrangement,
is within the knowledge of the directors and has
not previously been disclosed to the creditors or
members.
(4) Subsection (1)(a) does not apply in the case of a creditor whose
25 debt does not exceed $200 unless the Supreme Court orders
otherwise.
(5) The notice calling the meeting that is sent to a creditor referred
to in subsection (1)(a) must specify a place at which a copy of
the explanatory statement can be obtained on request.
30 (6) The co-operative must comply with a request under
subsection (5) as soon as practicable.
page 202
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 350
350. Requirements for explanatory statement
(1) An explanatory statement must be as approved by the Registrar.
(2) If the compromise or arrangement affects the rights of debenture
holders, the explanatory statement must specify --
5 (a) any material interests of the trustees for the debenture
holders, whether as such trustees, as members or
creditors of the co-operative or otherwise; and
(b) the effect on those interests of the compromise or
arrangement to the extent that that effect is different
10 from the effect on the like interests of other persons.
(3) If a notice given by advertisement includes a notification that
copies of the explanatory statement can be obtained in a
particular way, the co-operative must give a copy of the
statement free of charge to each creditor or member entitled to
15 attend the meeting or vote in the ballot who applies for it in that
way.
(4) Each person who is a director or trustee for debenture holders
must give notice to the co-operative of such matters relating to
the person as are required to be included in the explanatory
20 statement.
351. Contravention of Division -- offence by co-operative
(1) If a provision of this Division is contravened, the co-operative
concerned and any other person involved in the contravention
commits an offence.
25 Penalty: a fine of $2 000.
(2) It is a defence to a prosecution for an offence under
subsection (1) if it is proved that the contravention was due to
the failure of a person, other than the defendant, who is a
director of the co-operative or a trustee for debenture holders of
30 the co-operative, to supply for the purposes of the explanatory
statement particulars of the person's interests.
page 203
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 3 Facilitating reconstructions and mergers
s. 352
Division 3 -- Facilitating reconstructions and mergers
352. Provisions for facilitating reconstructions and mergers
(1) In this section --
"co-operative" includes a foreign co-operative;
5 "liabilities" includes duties of any description, including duties
that are of a personal character or are incapable under the
general law of being assigned or performed vicariously;
"property" includes rights and powers of any description,
including rights and powers that are of a personal character
10 and are incapable under the general law of being assigned
or performed vicariously.
(2) This section applies if an application is made to the Supreme
Court under this Part for the approval of a compromise or
arrangement and it is shown to the Court that --
15 (a) the compromise or arrangement has been proposed for
the purposes of a scheme for the reconstruction of a
co-operative or the merger of a co-operative with
another co-operative or with another corporation; and
(b) under the scheme all or part of the undertaking or of the
20 property of a co-operative concerned in the scheme (the
"transferor") is to be transferred to another corporation
(the "transferee") and the transferee is not a company
within the meaning of the Corporations Act.
(3) If this section applies, the Supreme Court may, either by the
25 order approving the compromise or arrangement or by a later
order provide for any one or more of the following --
(a) the transfer to the transferee of all or part of the
undertaking and the property or liabilities of the
transferor;
30 (b) the allotting or appropriation by the transferee of shares,
debentures, co-operative capital units, policies or other
interests in the transferee that, under the compromise or
page 204
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
Facilitating reconstructions and mergers Division 3
s. 352
arrangement, are to be allotted or appropriated by the
transferee to or for a person;
(c) the continuation by or against the transferee of legal
proceedings pending by or against the transferor;
5 (d) the deregistration, without winding-up, of the transferor;
(e) the provision to be made for any persons who, within
the time and in the way the Court directs, dissent from
the compromise or arrangement;
(f) the transfer or allotment of any interest in property to a
10 person concerned in the compromise or arrangement;
(g) the incidental, consequential and supplemental matters
necessary to ensure that the reconstruction or merger is
fully and effectively carried out.
(4) If an order made under this section provides for the transfer of
15 property or liabilities, then, by virtue of the order --
(a) the property is transferred to and vests in the transferee
free, in the case of a particular property if the order so
directs, from a charge that is under the compromise or
arrangement to cease to have effect; and
20 (b) the liabilities are transferred to and become the liabilities
of the transferee.
(5) If an order is made under this section, each body to which the
order relates must, within 14 days after the making of the order,
lodge with the Registrar an office copy of the order.
25 (6) If the Registrar is required by the Court to appear and assist the
Court in making an order under this section, the Court may
make an award of costs to the Registrar for the appearance.
page 205
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 353
Division 4 -- Acquisition of shares of dissenting shareholders
353. Definitions
In this Division --
"dissenting shareholder", in relation to a scheme or contract,
5 means a shareholder who has not assented to the scheme or
contract or who has failed to transfer the shareholder's
shares under the scheme or contract;
"excluded shares", in relation to a scheme or contract
involving a transfer to a person of shares in a class of
10 shares in a co-operative, means shares in the class that,
when the offer relating to the scheme or contract is made,
are held by --
(a) in any case, the person or a nominee of the person; or
(b) if the person is a corporation, a subsidiary of the
15 body.
354. Schemes and contracts to which Division applies
(1) This Division applies to a scheme or contract involving a
transfer of shares in a co-operative (the "transferor") to a
person (the "transferee") that has, within 4 months after the
20 making of the offer relating to the scheme or contract by the
transferee, been approved by the holders of at least 90% in
nominal value of all the shares (other than excluded shares) to
which the offer relates.
(2) This Division does not apply to a scheme or contract arising out
25 of the making of an offer to which Part 11 Division 2 applies.
355. Acquisition of shares pursuant to notice to dissenting
shareholder
(1) The transferee under the scheme or contract may, within
2 months after the offer is approved, give notice as prescribed
30 by the regulations (a "compulsory acquisition notice") to a
page 206
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 356
dissenting shareholder that the transferee wishes to acquire the
shares held by that shareholder.
(2) If a compulsory acquisition notice is given, the dissenting
shareholder may, by written notice given to the transferee
5 within one month after the day on which the compulsory
acquisition notice was given, ask for a statement in writing of
the names and addresses of all other dissenting shareholders as
shown in the register of members and the transferee must give
that statement.
10 (3) Having given the compulsory acquisition notice, the transferee
is, unless the Supreme Court orders to the contrary, entitled and
bound to acquire the shares of the dissenting shareholder on the
terms on which, under the scheme or contract, the shares of the
approving shareholders are to be transferred to the transferee.
15 (4) The Supreme Court may give an order to the contrary only on
the application of the dissenting shareholder made within the
later of 28 days after the compulsory acquisition notice was
given or within 14 days after a statement asked for under
subsection (2) was given.
20 (5) If alternative terms are offered to the approving shareholders --
(a) the dissenting shareholder is entitled to elect which of
those terms are preferred but must make the election
within the time allowed for making an application to the
Supreme Court under subsection (4); and
25 (b) if the dissenting shareholder fails to make the election
within the time, the transferee may, unless the Supreme
Court orders otherwise, decide which of the terms is to
apply to the acquisition of the shares of the dissenting
shareholder.
30 356. Restrictions when excluded shares exceed 10%
If the nominal value of excluded shares is more than 10% of the
total nominal value of all the shares, including excluded shares,
page 207
Co-operatives Bill 2007
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 357
to be transferred under the scheme or contract, section 355 does
not apply unless --
(a) the transferee offers the same terms to all holders of the
shares, other than excluded shares, to be transferred
5 under the scheme or contract; and
(b) the holders who approve the scheme or contract together
hold at least 90% in nominal value of the shares (other
than excluded shares) to be transferred under the scheme
or contract and are also at least 75% in number of the
10 holders of those shares, with joint owners of shares
being counted as one person.
357. Remaining shareholders may require acquisition
(1) If, under a scheme or contract to which this Division applies, the
transferee becomes beneficially entitled to shares in the
15 transferor that, together with other shares in the transferor to
which the transferee or a corporation related to the transferee is
beneficially entitled, comprise or include 90% in nominal value
of the shares to which the offer relates, then --
(a) the transferee must, within 28 days after becoming
20 beneficially entitled to the shares, give notice of the fact
as prescribed by the regulations to the holders of the
remaining shares concerned who, when the notice was
given, had not assented to the scheme or contract or
been given a compulsory acquisition notice by the
25 transferee under this Division; and
(b) a holder referred to in paragraph (a) may, within
3 months after being given that notice, by notice to the
transferee require the transferee to acquire the holder's
share and, if alternative terms were offered to the
30 approving shareholders, elect which of those terms the
holder will accept.
page 208
Co-operatives Bill 2007
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 358
(2) If a shareholder gives notice under this section with respect to
the shareholder's shares, the transferee is entitled and bound to
acquire those shares --
(a) on the terms on which under the scheme or contract the
5 shares of the approving shareholders were transferred to
the transferee and, if alternative terms were offered to
those shareholders, on the terms for which the
shareholder has elected, or, if no election is made, for
whichever of the terms the transferee determines; or
10 (b) on such other terms as are agreed or as the Supreme
Court, on the application of the transferee or of the
shareholder, considers appropriate to order.
358. Transfer of shares pursuant to compulsory acquisition
(1) A transferee who has given a compulsory acquisition notice
15 must --
(a) send a copy of the notice to the transferor together with
an instrument of transfer for the shares that the
transferee is entitled to acquire under this Division and
that is executed, on the shareholder's behalf, by a person
20 appointed by the transferee and, on the transferee's own
behalf, by the transferee; and
(b) pay, allot or transfer to the transferor the consideration
for the shares.
(2) The transferee must do so within 14 days after whichever of the
25 following happens last --
(a) the period of 28 days after the day on which the
compulsory acquisition notice was given expires;
(b) the period of 14 days after a statement of the names and
addresses of dissenting shareholders is supplied under
30 this Division expires;
(c) if an application has been made to the Supreme Court by
a dissenting shareholder, the application is disposed of.
page 209
Co-oper