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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Co-operatives Bill 2009
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
024--1B page i
Co-operatives Bill 2009
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 2009
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 2009
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 2009
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 2009
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 2009
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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 2009
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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 2009
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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 123
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Co-operatives Bill 2009
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 2009
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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 2009
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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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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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 187
325. Effect of appointment of administrator 187
326. Revocation of appointment 188
327. Expenses of administration 189
328. Liabilities arising from administration 189
329. Additional powers of Registrar 190
330. Stay of proceedings 191
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 192
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 2009
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 2009
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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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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 2009
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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 2009
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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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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
Part 19 -- Transitional and savings
provisions
Division 1 -- Preliminary
492. Terms used in this Part 289
493. Interpretation Act 1984 not affected 289
494. Transitional regulations 289
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Co-operatives Bill 2009
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Division 2 -- Prohibition on registration under
former Act
495. Prohibition on registration under Companies
(Co-operative) Act 1943 or Co-operative and
Provident Societies Act 1903 290
Division 3 -- Transfer to incorporation under
this Act
496. Co-operative companies and registered societies to
register under this Act 291
497. Decision of Registrar to register co-operative
company or registered society 292
Division 4 -- General transitional provisions
498. Special resolutions, applications to the Court and
court orders 293
499. Inspections or inquiry 293
500. Acquisition of shares of shareholders dissenting
from scheme or contract approved by majority 294
501. Transitional provisions about active members 295
Division 5 -- Pending incorporation,
reconstruction or winding-up
502. Pending incorporation 295
503. Pending reconstruction 295
504. Pending wind-up 296
Part 20 -- Consequential
amendments
Division 1 -- Consequential amendments
commencing on registration of
Co-operative Bulk Handling Limited
505. Grain Marketing Act 2002 amended 297
506. Local Government Act 1995 amended 297
Division 2 -- Consequential amendments
commencing on commencement of this
Act
507. Civil Judgments Enforcement Act 2004 amended 298
508. Criminal Property Confiscation Act 2000 amended 298
509. Equal Opportunity Act 1984 amended 298
510. Taxi Act 1994 amended 299
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Co-operatives Bill 2009
Contents
511. Western Australian Treasury Corporation
Act 1986 amended 299
Division 3 -- Consequential amendments
commencing on repeal of former Acts
512. Civil Judgments Enforcement Act 2004 amended 299
513. Criminal Property Confiscation Act 2000 amended 300
514. Equal Opportunity Act 1984 amended 300
515. Housing Loan Guarantee Act 1957 amended 300
516. Local Government Act 1995 amended 300
517. Taxi Act 1994 amended 301
518. Western Australian Treasury Corporation
Act 1986 amended 301
Schedule 1 -- Matters for which rules
must make provision
1. Requirements for all co-operatives 302
2. Additional matters -- co-operatives with share
capital 303
3. Additional matters -- non-distributing
co-operatives 304
Schedule 2 -- Relevant interests,
associates, related bodies
Division 1 -- Relevant interests
1. Terminology used in this Schedule 305
2. Basic rules -- relevant interests 305
3. Control of corporation having power in relation to
a share 305
4. Control of 20% of voting power in corporation
having power in relation to a share 306
5. Deemed relevant interest in advance of
performance of agreement that will give rise to a
relevant interest 306
6. Control of corporation having a relevant interest by
virtue of clause 5 307
7. Matters not affecting application of Division 307
8. Corporation may have a relevant interest in its own
shares 308
9. Exclusions -- money lenders 308
page xxii
Co-operatives Bill 2009
Contents
10. Exclusions -- certain trustees 308
11. Exclusions -- instructions to securities dealer to
dispose of share 309
12. Exclusions -- honorary proxies 309
13. Exclusions -- holders of prescribed offices 309
14. Prescribed exclusions 309
15. Effect of Schedule 309
16. Relevant interest -- corporation other than
co-operative 310
Division 2 -- Associates
17. Effect of Part 310
18. Associates of a corporation 310
19. Matters relating to voting rights 310
20. General 311
21. Exclusions 312
Division 3 -- Related corporations
22. Related corporations 312
Schedule 3 -- Registration etc. of
charges
Division 1 -- Preliminary
1. Interpretation 313
2. Application to charges referred to in clause 17 314
3. Lodgment of documents 314
Division 2 -- Registration
Subdivision 1 -- Charges
4. Charges to which the Schedule applies 314
5. Excluded charges 315
6. Personal chattels 316
7. Book debts 316
8. Crops or stock 317
9. Deposit of documents of title 317
10. Charges on land or fixtures on land 317
11. Where other property is also charged 317
12. Effect of failure to lodge or give notice or
document 317
Subdivision 2 -- Notice of charge
13. Lodgment of notice of charge and copy of
instrument, and transitional provision 318
page xxiii
Co-operatives Bill 2009
Contents
14. Series of debentures 319
15. Operation of priority provisions in respect of issue
of debentures 319
16. Discounts 320
17. Acquisition of property subject to charge 320
Subdivision 3 -- Registration
18. Register of Co-operative Charges 321
19. Registration of documents relating to charge 321
20. Provisional registration if stamp duty not paid 322
21. Provisional registration if required particulars not
supplied 323
22. Effect of provisional registration 324
23. If 2 or more charges relate to the same property 325
24. Registration of assignment or variation of charge 325
25. Standard time for the purposes of this Subdivision 325
Subdivision 4 -- Certain charges void against
liquidator or administrator
26. Definitions 326
27. Certain charges void against liquidator or
administrator 326
28. Certain varied charges void against liquidator or
administrator 327
29. Supreme Court may extend required period 328
30. Certain later charges void 328
31. Effect of provisions on purchaser in good faith 329
Subdivision 5 -- Certain charges in favour of
persons void
32. Definitions 330
33. Charges in favour of certain persons void in certain
cases 330
34. Supreme Court may give leave for enforcement of
charge 331
35. Certain transactions excluded 331
Subdivision 6 -- Assignment, variation or
satisfaction of charges
36. Assignment and variation of charges 332
37. Satisfaction of, and release of property from,
charges 333
Subdivision 7 -- General
38. Lodgment of notices 333
page xxiv
Co-operatives Bill 2009
Contents
39. Lodgment offences 334
40. Co-operative to keep documents relating to charges 334
41. Co-operative to keep register, and transitional
provision 334
42. Certificates 336
43. Power of Supreme Court to rectify register of
charges 337
44. Registrar may exempt from compliance with
certain requirements of Division 337
Division 3 -- Order of priority
Subdivision 1 -- General
45. Definitions 338
46. Priorities of charges 339
Subdivision 2 -- Priority rules
47. General priority rules in relation to registered
charges 340
48. General priority rule in relation to unregistered
charges 341
49. Special priority rules 341
Schedule 4 -- Receivers, and other
controllers, of property of
co-operatives
1. Interpretation 343
2. Application of Schedule 344
3. Persons not to act as receivers 344
4. Supreme Court may declare whether controller is
validly acting 345
5. Liability of controller 346
6. Liability of controller under pre-existing
agreement about property used by co-operative 346
7. Powers of receiver 348
8. Controller's duty of care in exercising power of
sale 350
9. Supreme Court may authorise managing controller
to dispose of property despite prior charge 350
10. Receiver's power to carry on co-operative's
business during winding-up 351
page xxv
Co-operatives Bill 2009
Contents
11. Controller's duties in relation to financial
institution accounts and financial records 352
12. Managing controller to report within 2 months
about co-operative's affairs 353
13. Reports by receiver 354
14. Supervision of controller 355
15. Controller may apply to Supreme Court 356
16. Power of Supreme Court to fix receiver's
remuneration 356
17. Controller has qualified privilege in certain cases 358
18. Notification of matters relating to controller 358
19. Statement that receiver appointed or other
controller acting 359
20. Officers to report to controller about co-operative's
affairs 360
21. Controller may require reports 362
22. Controller may inspect records 363
23. Lodging controller's accounts 363
24. Payment of certain debts, out of property subject to
floating charge, in priority to claims under charge 365
25. Enforcement of controller's duty to make returns 367
26. Supreme Court may remove controller for
misconduct 367
27. Supreme Court may remove redundant controller 367
28. Effect of clauses 26 and 27 368
Schedule 5 -- Applied co-operatives
provisions
1. Provisions applicable to participating co-operatives 369
2. Provisions applicable to non-participating
co-operatives 369
Schedule 6 -- Modifications to
Corporations Act
1. Modifications to winding-up provisions 371
Defined Terms
page xxvi
Western Australia
LEGISLATIVE ASSEMBLY
Co-operatives Bill 2009
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 2009
Part 1 Preliminary
Division 1 Introductory
s. 1
1 Part 1 -- Preliminary
2 Division 1 -- Introductory
3 1. Short title
4 This is the Co-operatives Act 2009.
5 2. Commencement
6 This Act comes into operation as follows --
7 (a) sections 1 and 2 -- on the day after assent day;
8 (b) the rest of the Act, other than sections 490 and 491, and
9 Part 20 Divisions 1 and 3 -- on a day fixed by
10 proclamation;
11 (c) sections 490 and 491, and Part 20 Division 3 -- on the
12 last day of the period of 2 years after the day fixed under
13 paragraph (a);
14 (d) Part 20 Division 1 -- on the day that Co-operative Bulk
15 Handling Limited becomes registered under this Act.
16 3. Objects of this Act
17 The objects of this Act are to --
18 (a) enable the formation, registration and operation of
19 co-operatives; and
20 (b) promote co-operative philosophy, principles, practices
21 and objectives; and
22 (c) protect the interests of co-operatives, their members and
23 the public in the operations and activities of
24 co-operatives; and
25 (d) ensure that the directors of co-operatives are accountable
26 for their actions and decisions to the members of
27 co-operatives; and
28 (e) encourage and facilitate self-management by
29 co-operatives at all levels; and
page 2
Co-operatives Bill 2009
Preliminary Part 1
Introductory Division 1
s. 4
1 (f) encourage the development, integration and
2 strengthening of co-operatives at local, regional,
3 national and international levels by supporting and
4 fostering State and national peak organisations and
5 co-operative instrumentalities.
6 4. Terms used in this Act
7 (1) In this Act --
8 active member has the meaning given to that term in
9 section 111;
10 active membership provision has the meaning given to that term
11 in section 112;
12 agreement means an agreement, arrangement or
13 understanding --
14 (a) whether formal or informal or partly formal and partly
15 informal; and
16 (b) whether written or oral or partly written and partly oral;
17 and
18 (c) whether or not having legal or equitable force and
19 whether or not based on legal or equitable rights;
20 alter, in relation to the rules of a co-operative, includes to add
21 to, substitute or rescind;
22 associate has the meaning given to that term in Schedule 2
23 Division 2;
24 board means the board of directors of a co-operative and in
25 circumstances where a person or committee is exercising a
26 power of the board delegated under the rules of a co-operative,
27 includes that person or committee;
28 chief executive officer, of a co-operative or a subsidiary of a
29 co-operative, means the principal executive officer of the
30 co-operative or subsidiary for the time being, by whatever name
31 called, and whether or not that officer is a director or the
32 secretary;
page 3
Co-operatives Bill 2009
Part 1 Preliminary
Division 1 Introductory
s. 4
1 constitution, of a co-operative, includes the articles of
2 association, memorandum, rules and other constituent
3 documents;
4 co-operative means a body registered under this Act as a
5 co-operative;
6 co-operative capital unit has the meaning given to that term in
7 section 257(1);
8 co-operative group means a co-operative that has a membership
9 as described in section 57;
10 corporation has the meaning given to that term in the
11 Corporations Act;
12 Corporations Act means the Commonwealth Corporations
13 Act 2001;
14 debenture means a document issued by a co-operative that
15 evidences or acknowledges indebtedness of the co-operative in
16 respect of money that is or may be deposited with or lent to the
17 co-operative, whether constituting a charge on property of the
18 co-operative or not, and includes a unit of a debenture, except
19 that it does not include --
20 (a) a cheque, order for the payment of money or bill of
21 exchange; or
22 (b) a promissory note having a face value of not less than
23 $50 000; or
24 (c) any other document of a class that is prescribed by the
25 regulations as exempt from this definition;
26 deed of arrangement means a deed of company arrangement in
27 force under the Corporations Act Part 5.3A as that Part applies
28 under this Act or a deed of that type as varied and in force from
29 time to time;
30 deposit taking co-operative means a co-operative that is
31 permitted under section 246 to accept money on deposit;
32 distributing co-operative means a co-operative as described in
33 section 13;
page 4
Co-operatives Bill 2009
Preliminary Part 1
Introductory Division 1
s. 4
1 eligible member means a person considered by the board of a
2 co-operative to be eligible to become a member of that
3 co-operative;
4 financial records includes --
5 (a) invoices, receipts, orders for the payment of money,
6 bills of exchange, cheques, promissory notes and
7 vouchers;
8 (b) documents of prime entry;
9 (c) working papers and other documents needed to
10 explain --
11 (i) the methods by which financial statements are
12 made up; and
13 (ii) adjustments to be made in preparing financial
14 statements;
15 financial report means an annual financial report or a half-year
16 financial report prepared under the Corporations Act Chapter
17 2M;
18 financial services business has the meaning given to that term
19 in the Corporations Act section 761A;
20 financial services licensee has the meaning given to that term in
21 the Corporations Act section 761A;
22 financial statements means annual financial statements under
23 the Corporations Act section 295 or half-year financial
24 statements applying under the Corporations Act section 303;
25 foreign co-operative means a corporation that is registered,
26 incorporated or formed under, or subject to, a law in force
27 outside this State, including outside Australia, that regulates
28 co-operatives or organisations having attributes the same as or
29 similar to co-operatives except that it does not include --
30 (a) a body incorporated under the Corporations Act or under
31 another law of the Commonwealth; or
32 (b) an authorised deposit-taking institution as defined in the
33 Commonwealth Banking Act 1959 section 5;
page 5
Co-operatives Bill 2009
Part 1 Preliminary
Division 1 Introductory
s. 4
1 inspector means a person appointed as an inspector under
2 Part 15;
3 model rules means the model rules prescribed by the regulations
4 under section 101;
5 mortgage includes lien, charge or other security over property;
6 non-distributing co-operative means a co-operative as
7 described in section 14;
8 officer, of a co-operative, means --
9 (a) a director or secretary of the co-operative; or
10 (b) a person who is concerned, or takes part, in the
11 management of the co-operative, whether or not as a
12 director; or
13 (c) a receiver and manager, appointed under a power
14 contained in an instrument, of property of the
15 co-operative; or
16 (d) an administrator of a deed of arrangement executed by
17 the co-operative; or
18 (e) a liquidator or provisional liquidator appointed in a
19 voluntary winding-up of the co-operative; or
20 (f) an administrator of the co-operative appointed under --
21 (i) the Corporations Act Part 5.3A as applying under
22 this Act; or
23 (ii) Part 12 Division 5 of this Act;
24 or
25 (g) a trustee or other person administering a compromise or
26 arrangement made between the co-operative and another
27 person;
28 primary activity, of a co-operative, means an activity stated in
29 the rules of the co-operative to be a primary activity of the
30 co-operative;
31 records includes books, financial records, financial statements,
32 minutes, registers, deeds, writings, documents and other sources
33 of information compiled, recorded or stored in written form or
page 6
Co-operatives Bill 2009
Preliminary Part 1
Introductory Division 1
s. 4
1 on microfilm, or by electronic process, or in any other manner
2 or by any other means;
3 Registrar means the Registrar of Co-operatives under
4 section 451;
5 related corporation has the meaning given to that term in
6 Schedule 2 Division 3;
7 relevant interest in --
8 (a) a right to vote has the meaning given to that term in
9 Schedule 2 Division 1 clause 2(1); and
10 (b) a share has the meaning given to that term in Schedule 2
11 Division 1 clause 2(2);
12 rules, of a co-operative, means the rules of the co-operative for
13 the time being applying under this Act;
14 seal, of a co-operative, means the common seal or official seal
15 of the co-operative;
16 share means share in the share capital of a co-operative;
17 subsidiary has the meaning given to that term in the
18 Corporations Act;
19 surplus, in relation to a co-operative, means the excess of
20 income over expenditure after making proper allowance for
21 taxation expense, for depreciation in value of the property of the
22 co-operative and for future contingencies;
23 transfer day, for a particular transferred co-operative, means the
24 day on which that co-operative became registered under this
25 Act;
26 transferred co-operative means a co-operative that immediately
27 before the commencement of this Act was registered as a
28 co-operative company under the Companies (Co-operative)
29 Act 1943 or as a registered society under the Co-operative and
30 Provident Societies Act 1903.
page 7
Co-operatives Bill 2009
Part 1 Preliminary
Division 2 Qualified privilege
s. 5
1 (2) A reference in this Act to the Corporations Act or a provision of
2 the Corporations Act applying under this Act (or a part of this
3 Act) is a reference to that Act or provision to the extent that it is
4 declared to apply to a matter for the purposes of the
5 Corporations (Ancillary Provisions) Act 2001 Part 3 as a law of
6 this State.
7 Division 2 -- Qualified privilege
8 5. Qualified privilege
9 (1) If this Act provides that a person has qualified privilege for an
10 act, matter or thing, the person, in relation to the act, matter or
11 thing --
12 (a) has qualified privilege in proceedings for defamation;
13 and
14 (b) is not, in the absence of malice on the person's part,
15 liable to an action for defamation at the suit of a person.
16 (2) In subsection (1) --
17 malice includes ill-will to the person concerned or any other
18 improper motive.
19 (3) Neither this section nor a provision of this Act that provides as
20 mentioned in subsection (1) limits or affects any right, privilege
21 or immunity that a person has, apart from this section or such a
22 provision, as a defendant in proceedings, or an action, for
23 defamation.
24 Division 3 -- The co-operative principles
25 6. Co-operative principles
26 The co-operative principles are the principles set out in the
27 following Table.
page 8
Co-operatives Bill 2009
Preliminary Part 1
The co-operative principles Division 3
s. 6
1 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 2009
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.
1 7. Interpretation to promote co-operative principles
2 In the interpretation of a provision of this Act, a construction
3 that would promote co-operative principles is to be preferred to
4 a construction that would not promote co-operative principles.
5 Division 4 -- Application of Corporations Act to co-operatives
6 8. Definitions
7 In this Division --
8 company has the meaning given to that term in the Corporations
9 Act section 9;
10 Corporations legislation means the Corporations legislation to
11 which the Corporations Act Part 1.1A applies;
12 excluded Corporations legislation provision means any
13 provision of the Corporations legislation that does not apply to
14 co-operatives as a law of the Commonwealth.
page 10
Co-operatives Bill 2009
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 9
1 9. Excluded matter
2 (1) A co-operative is declared to be an excluded matter for the
3 purposes of the Corporations Act section 5F in relation to the
4 whole of the Corporations legislation other than to the extent
5 specified in subsection (2).
6 (2) Subsection (1) does not exclude the application of the following
7 provisions of the Corporations legislation to co-operatives to the
8 extent that the provisions would otherwise be applicable to
9 them --
10 (a) provisions relating to a matter that the regulations
11 provide is not to be excluded from the operation of the
12 Corporations legislation;
13 (b) provisions relating to the role of a co-operative in the
14 formation of a company;
15 (c) provisions relating to the registration of a co-operative
16 as a company under the Corporations Act Chapter 5B;
17 (d) provisions relating to substantial shareholdings, by or
18 involving a co-operative, in a company;
19 (e) provisions conferring or imposing functions on a
20 co-operative as a member, or former member, of a
21 corporation;
22 (f) provisions relating to dealings by a co-operative in
23 financial products of a corporation, other than financial
24 products of the co-operative itself;
25 (g) provisions conferring or imposing functions on a
26 co-operative in its dealings with a corporation, not being
27 dealings in financial products of the co-operative;
28 (h) provisions relating to financial products of a
29 co-operative, other than shares in, co-operative capital
30 units in, debentures of or deposits with a co-operative;
31 (i) provisions relating to financial markets and participants
32 in financial markets;
page 11
Co-operatives Bill 2009
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 10
1 (j) provisions relating to financial services licensees whose
2 licence covers dealing in, or providing advice about,
3 financial products;
4 (k) provisions relating to carrying on a financial services
5 business;
6 (l) provisions relating to financial statements, and audits of
7 financial statements, of financial services licensees
8 whose licence covers dealing in, or providing advice
9 about, financial products;
10 (m) provisions relating to clients of financial services
11 licensees whose licence covers dealing in, or providing
12 advice about, financial products;
13 (n) provisions relating to registers of interests in financial
14 products.
15 (3) To remove doubt it is declared that subsection (1) does not
16 operate to exclude the operation of the following provisions of
17 the Corporations Act, except in relation to shares in,
18 co-operative capital units in, debentures of, or deposits with, a
19 co-operative --
20 (a) Part 1.2A;
21 (b) Chapter 2L;
22 (c) Chapter 6CA;
23 (d) Chapter 6D;
24 (e) Part 7.10.
25 (4) If a co-operative is directed by an order of the Supreme Court
26 under section 84(i) to become registered as a company under the
27 Corporations Act, the provisions referred to in subsection (2)(c)
28 apply to the extent necessary for the co-operative to be
29 registered as a company under Chapter 5B of that Act.
30 10. Applying the Corporations legislation to co-operatives
31 (1) The regulations may declare a matter relating to co-operatives to
32 be an applied Corporations legislation matter for the purposes of
page 12
Co-operatives Bill 2009
Preliminary Part 1
Application of Corporations Act to co-operatives Division 4
s. 10
1 the Corporations (Ancillary Provisions) Act 2001 Part 3 in
2 relation to any excluded Corporations legislation provision or
3 provisions, with any modifications that are specified in the
4 declaration.
5 (2) Without limiting subsection (1), any such regulations may --
6 (a) specify modifications to the definitions and other
7 interpretative provisions of the Corporations legislation
8 relevant to any excluded Corporations legislation
9 provision that is the subject of the declaration; and
10 (b) provide for ASIC to exercise a function under any
11 excluded Corporations legislation provision that is the
12 subject of the declaration, but only if --
13 (i) ASIC is to exercise the function under an
14 agreement referred to in section 11(8) or (9A)(b)
15 of the new ASIC Act; and
16 (ii) ASIC is authorised to exercise that function
17 under section 11 of the new ASIC Act;
18 and
19 (c) specify that a reference to ASIC in an excluded
20 Corporations legislation provision that is the subject of
21 the declaration is to be a reference to another person;
22 and
23 (d) identify an excluded Corporations legislation provision
24 to which the declaration relates by reference to the
25 provision as in force at a particular time; and
26 (e) specify a court (other than the Supreme Court) to
27 exercise a function conferred on a court or the Court by
28 an excluded Corporations legislation provision to which
29 the declaration relates.
30 (3) Words and expressions used in this section and also in the
31 Corporations (Ancillary Provisions) Act 2001 Part 3 have the
32 same meanings in this section as they have in that Part.
page 13
Co-operatives Bill 2009
Part 1 Preliminary
Division 4 Application of Corporations Act to co-operatives
s. 11
1 11. Modifications to applied provisions
2 (1) If a provision of this Act or the regulations declares a matter to
3 be an applied Corporations legislation matter for the purposes of
4 the Corporations (Ancillary Provisions) Act 2001 Part 3 (the
5 declaratory provision) in relation to any provisions of the
6 Corporations legislation (the applied provisions), the
7 declaratory provision is taken to specify the following
8 modifications --
9 (a) a reference in the applied provisions to articles or a
10 memorandum of association or a constitution or
11 replaceable rules is to be read as a reference to rules;
12 (b) a cross-reference in the applied provisions to another
13 provision of the Corporations Act is, if that
14 cross-reference is not appropriate (because for example
15 the provision cross-referred to is not among the applied
16 provisions), to be read as a cross-reference to the
17 equivalent provision of this Act;
18 (c) a reference in the applied provisions to the Gazette is to
19 be read as a reference to the Western Australian
20 Government Gazette;
21 (d) a reference in the applied provisions to the
22 Commonwealth is to be read as a reference to this State;
23 (e) any of the applied provisions that are not relevant to
24 co-operatives or that are incapable of application to
25 co-operatives are to be ignored;
26 (f) modifications prescribed under a regulation under
27 subsection (2).
28 (2) The regulations may prescribe the modifications that are
29 necessary or desirable for the effective operation of the applied
30 provisions.
page 14
Co-operatives Bill 2009
Formation Part 2
Types of co-operatives Division 1
s. 12
1 Part 2 -- Formation
2 Division 1 -- Types of co-operatives
3 12. Types of co-operatives
4 (1) A body may be registered under this Act as a co-operative.
5 (2) A co-operative may be either --
6 (a) a distributing co-operative; or
7 (b) a non-distributing co-operative.
8 13. Distributing co-operatives
9 (1) A distributing co-operative must have a share capital.
10 (2) A distributing co-operative is a co-operative whose rules allow
11 it to give returns or distributions on surplus or share capital.
12 (3) A distributing co-operative must have a membership of --
13 (a) for a co-operative group, 2 or more co-operatives; and
14 (b) for any other distributing co-operative --
15 (i) if a lesser number than 5 is prescribed by the
16 regulations, at least that number of active
17 members; or
18 (ii) otherwise, 5 or more active members.
19 14. Non-distributing co-operatives
20 (1) A non-distributing co-operative is a co-operative whose rules
21 prohibit it from giving returns or distributions on surplus or
22 share capital to members, other than the nominal value of
23 shares, if any, at winding-up.
24 (2) A non-distributing co-operative may or may not have a share
25 capital.
26 (3) A non-distributing co-operative must have a membership of --
27 (a) for a co-operative group, 2 or more co-operatives; and
page 15
Co-operatives Bill 2009
Part 2 Formation
Division 2 Formation meeting
s. 15
1 (b) for any other non-distributing co-operative --
2 (i) if a lesser number than 5 is prescribed by the
3 regulations, at least that number of active
4 members; or
5 (ii) otherwise, 5 or more active members.
6 Division 2 -- Formation meeting
7 15. Formation meeting
8 (1) Before a proposed co-operative, other than an existing
9 corporation, can be registered, a formation meeting must be held
10 in accordance with this section.
11 (2) At the formation meeting --
12 (a) a person must act as chairman, and a person must be
13 specified to act as secretary; and
14 (b) in the case of a proposed distributing co-operative, a
15 disclosure statement approved under section 16 must be
16 presented to the meeting; and
17 (c) the proposed rules of the co-operative approved under
18 section 17 in respect of the proposed co-operative, must
19 be agreed to by two-thirds of the eligible members
20 attending the meeting; and
21 (d) the eligible members attending the meeting must sign
22 the application for membership; and
23 (e) the eligible members attending the meeting must elect
24 the first directors of the proposed co-operative in
25 accordance with the proposed rules; and
26 (f) the eligible members attending the meeting must
27 authorise a person --
28 (i) to apply to the Registrar for registration of the
29 proposed co-operative; and
30 (ii) to do anything necessary to have the proposed
31 co-operative registered.
page 16
Co-operatives Bill 2009
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 16
1 (3) The formation meeting must be held by --
2 (a) for a co-operative group, not less than 2 suitably
3 qualified co-operatives; and
4 (b) for any other co-operative, not less than 5 persons, or if
5 a lesser number than 5 is prescribed by the regulations,
6 not less than the prescribed number of persons, suitably
7 qualified to be members of the proposed co-operative.
8 (4) For the purposes of subsection (3), a person or a co-operative is
9 suitably qualified to be a member if --
10 (a) there are reasonable grounds to believe the person or
11 co-operative will be an active member of the proposed
12 co-operative; and
13 (b) for an individual, the person has attained the age of 18;
14 and
15 (c) the person satisfies any other requirements for
16 membership set out in the proposed rules.
17 (5) Each co-operative forming a proposed co-operative group may
18 be represented at the formation meeting by one person.
19 Division 3 -- Approval of disclosure statement and rules
20 16. Approval of disclosure statement
21 (1) A draft disclosure statement of a proposed distributing
22 co-operative must be submitted to the Registrar at least 35 days
23 (or a shorter period the Registrar may allow in a particular case)
24 before the formation meeting is due to be held.
25 (2) The draft disclosure statement submitted under subsection (1)
26 must be accompanied by a written statement specifying the date
27 on which the formation meeting is due to be held.
28 (3) The disclosure statement must contain the information
29 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 2009
Part 2 Formation
Division 3 Approval of disclosure statement and rules
s. 16
1 involvement or liability as a member of the co-operative
2 including so far as applicable --
3 (a) the estimated costs of formation; and
4 (b) the active membership provisions of the proposed
5 co-operative; and
6 (c) the rights and liabilities attaching to shares in the
7 proposed co-operative; and
8 (d) the capital required for the co-operative at the time of
9 formation; and
10 (e) the projected income and expenditure of the
11 co-operative for its first year of operation; and
12 (f) information about any pre-registration contractual
13 obligations of the co-operative under Part 3 Division 5;
14 and
15 (g) any other information that the Registrar directs.
16 (4) The disclosure statement cannot include a statement purporting
17 to be made by an expert or to be based on a statement made by
18 an expert unless --
19 (a) the expert has given, and has not withdrawn, the
20 expert's written consent to the submission of the
21 disclosure statement with the statement included in the
22 form and context in which it is included; and
23 (b) there appears in the disclosure statement a statement that
24 the expert has given, and has not withdrawn, the
25 expert's consent.
26 (5) The Registrar may --
27 (a) approve the draft statement as submitted; or
28 (b) amend the draft statement, or require a stated
29 amendment of the draft, and then approve the amended
30 statement; or
31 (c) approve a different statement to that submitted; or
32 (d) refuse to approve the statement; or
page 18
Co-operatives Bill 2009
Formation Part 2
Approval of disclosure statement and rules Division 3
s. 17
1 (e) require the person submitting the disclosure statement to
2 give the Registrar any additional information the
3 Registrar reasonably requires, and then act under
4 paragraph (a), (b), (c) or (d).
5 (6) The Registrar may approve a disclosure statement with or
6 without conditions.
7 (7) Subject to subsection (8), the Registrar approves of a disclosure
8 statement by giving written notice of the approval of the
9 statement to the person who submitted the draft statement to the
10 Registrar.
11 (8) The Registrar is taken to have approved the disclosure statement
12 as submitted to the Registrar unless at least 5 days before the
13 date specified in the written statement submitted under
14 subsection (2), the Registrar gives written notice to the person
15 who submitted the draft statement that the Registrar --
16 (a) has approved an amended or different disclosure
17 statement; or
18 (b) is still considering the matter; or
19 (c) refuses to approve the disclosure statement.
20 17. Approval of rules
21 (1) A draft of the rules proposed for the co-operative (including
22 active membership provisions in accordance with Part 6) must
23 be submitted to the Registrar at least 35 days (or a shorter
24 period the Registrar may allow in a particular case) before the
25 formation meeting is due to be held.
26 (2) The draft rules submitted under subsection (1) must be
27 accompanied by a written statement specifying the date on
28 which the formation meeting is due to be held.
29 (3) The proposed rules must --
30 (a) be in accordance with section 98; and
31 (b) be in a form that may reasonably be approved.
page 19
Co-operatives Bill 2009
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 18
1 (4) The Registrar may --
2 (a) approve the proposed rules as submitted; or
3 (b) approve different proposed rules to those submitted; or
4 (c) refuse to approve the proposed rules.
5 (5) Subject to subsection (6), the Registrar approves proposed rules
6 by giving written notice of that approval to the person who
7 submitted the proposed rules to the Registrar.
8 (6) The Registrar is taken to have approved the proposed rules as
9 submitted to the Registrar unless at least 5 days before the date
10 specified in the written statement submitted under
11 subsection (2), the Registrar gives written notice to the person
12 who submitted the proposed rules that the Registrar --
13 (a) has approved different proposed rules to those
14 submitted; or
15 (b) is still considering the matter; or
16 (c) refuses to approve the proposed rules.
17 Division 4 -- Registration of proposed co-operative
18 18. Application for registration of proposed co-operative
19 (1) An application for registration as a co-operative, other than an
20 application by a corporation under Division 5, must --
21 (a) be made in the form approved by the Registrar; and
22 (b) be accompanied by the fee prescribed by the regulations;
23 and
24 (c) be signed by --
25 (i) for a co-operative group, at least 2 directors
26 elected at the formation meeting; and
27 (ii) for any other proposed co-operative, at least 5, or
28 if a lesser number than 5 is prescribed under a
29 regulation, at least the prescribed number of,
page 20
Co-operatives Bill 2009
Formation Part 2
Registration of proposed co-operative Division 4
s. 19
1 suitably qualified members, including 2 directors
2 elected at the formation meeting;
3 and
4 (d) be accompanied by --
5 (i) a copy of the proposed rules, certified in writing
6 by the chairman and secretary for the formation
7 meeting to have been agreed to at the formation
8 meeting in accordance with section 15(2)(c); and
9 (ii) in the case of a proposed distributing
10 co-operative, a copy of the disclosure statement,
11 certified in writing by the chairman and secretary
12 for the formation meeting to have been presented
13 to that meeting as required by section 15(2)(b);
14 and
15 (iii) a statement listing the name, address, occupation
16 and place and date of birth of each person elected
17 at the formation meeting in accordance with
18 section 15(2)(e) to be a director of the proposed
19 co-operative and containing a certificate signed
20 by the chairman and secretary verifying that
21 those persons were elected; and
22 (iv) a certificate signed by the chairman and secretary
23 verifying that a specified person is the person
24 authorised under section 15(2)(f); and
25 (v) any other particulars that the Registrar may
26 require.
27 (2) The application must be lodged with the Registrar within
28 2 months after closure of the formation meeting for the
29 proposed co-operative or within the extended period that the
30 Registrar may allow.
31 19. Registration of co-operative
32 (1) When an application is made under this Division for registration
33 of a proposed co-operative, the Registrar must register the
page 21
Co-operatives Bill 2009
Part 2 Formation
Division 4 Registration of proposed co-operative
s. 20
1 co-operative and its rules if satisfied that the requirements
2 referred to in subsection (2) have been met.
3 (2) The requirements for registration of a co-operative under this
4 Division are that --
5 (a) the proposed rules of the proposed co-operative must be
6 those approved by the Registrar under section 17; and
7 (b) the requirements of this Act must have been complied
8 with in relation to the proposed co-operative and
9 compliance must be likely to continue; and
10 (c) the proposed co-operative must be designed to function
11 in accordance with the co-operative principles or, if it is
12 not designed to function entirely in accordance with the
13 co-operative principles, the Registrar must be satisfied
14 that there are special reasons why the co-operative
15 should be registered under this Act; and
16 (d) there must be no reasonable cause for refusing
17 registration of the proposed co-operative.
18 (3) If the Registrar is not satisfied that the requirements for
19 registration of the co-operative have been met the Registrar may
20 refuse to register the co-operative and its rules.
21 (4) The Registrar must give to the applicant written notice of the
22 refusal and the reasons for the refusal.
23 20. Incorporation and certificate of registration
24 (1) The incorporation of the co-operative takes effect on the
25 registration of the co-operative.
26 (2) On the registration of the co-operative, the Registrar must issue
27 a certificate of registration.
page 22
Co-operatives Bill 2009
Formation Part 2
Registration of an existing corporation Division 5
s. 21
1 Division 5 -- Registration of an existing corporation
2 21. Existing corporation can be registered
3 A corporation may apply to the Registrar to be registered as a
4 co-operative under this Act, if the corporation is --
5 (a) incorporated or registered or deemed to be registered
6 under the Corporations Act; or
7 (b) incorporated or registered under any other Act relating
8 to the incorporation or registration of bodies corporate.
9 22. Formation meeting and transitional provision
10 (1) Before applying for registration as a co-operative, a corporation
11 must pass a special resolution in accordance with its constitution
12 approving of --
13 (a) the proposed registration; and
14 (b) any alterations of its existing constitution necessary to
15 enable the corporation to comply with this Act.
16 (2) At the meeting to pass the special resolution --
17 (a) the proposed rules of the proposed co-operative
18 approved under section 17, and including active
19 membership provisions in accordance with Part 6, must
20 also be passed by special resolution; and
21 (b) in the case of a proposed distributing co-operative, a
22 disclosure statement approved under section 16 must be
23 presented to the meeting.
24 (3) For a corporation that on registration under this Division will be
25 a transferred co-operative, the requirement to pass a special
26 resolution approving the proposed registration and the proposed
27 rules is satisfied if the resolution complies with
28 section 177(1)(a) or (b), and (3).
page 23
Co-operatives Bill 2009
Part 2 Formation
Division 5 Registration of an existing corporation
s. 23
1 23. Application for registration
2 (1) An application for registration under this Division must be --
3 (a) in the form approved by the Registrar; and
4 (b) accompanied by the fee prescribed by the regulations;
5 and
6 (c) accompanied by --
7 (i) a written declaration, signed no more than
8 28 days before the application for registration by
9 the directors or the committee of management of
10 the corporation, stating that at a meeting of the
11 directors or committee they formed the opinion
12 that the corporation will be able to pay its debts
13 as they fall due; and
14 (ii) a report in the form approved by the Registrar as
15 to the affairs of the corporation and showing its
16 assets and liabilities, made up to the latest
17 practicable date before the application; and
18 (iii) a copy of the constitution of the corporation in
19 force at the date of the application; and
20 (iv) 2 copies of the proposed rules of the
21 co-operative, certified in writing by the directors
22 or the committee of management to have been
23 approved under section 22(2) by special
24 resolution; and
25 (v) in the case of a proposed distributing
26 co-operative, a copy of the disclosure statement
27 presented to the meeting held under section 22,
28 certified in writing by the directors or committee
29 of management of the corporation to have been
30 presented to that meeting; and
31 (vi) a list containing the name, address, occupation
32 and place and date of birth of each director; and
33 (vii) evidence to the satisfaction of the Registrar of
34 the incorporation of the existing corporation; and
page 24
Co-operatives Bill 2009
Formation Part 2
Registration of an existing corporation Division 5
s. 24
1 (viii) any other particulars that the Registrar may
2 require.
3 (2) For a corporation that on registration under this Division will be
4 a transferred co-operative, an application need only comprise
5 the requirements of subsection (1)(a), (c)(iv) and (viii).
6 24. Requirements for registration
7 (1) When an application is made for registration as a co-operative
8 under this Division, the Registrar must register the corporation
9 as a co-operative under this Act and register its rules under this
10 Act if the Registrar is satisfied that the requirements for
11 registration of the co-operative have been met.
12 (2) The requirements for registration as a co-operative under this
13 Division are as follows --
14 (a) the proposed rules of the proposed co-operative must be
15 the proposed rules approved by the Registrar under
16 section 17;
17 (b) the requirements of this Act must have been complied
18 with in relation to the proposed co-operative and
19 compliance must be likely to continue;
20 (c) there must be no reasonable cause for refusing
21 registration of the proposed co-operative.
22 (3) If the Registrar is not satisfied that the requirements for
23 registration of the co-operative have been met, the Registrar
24 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
26 for the refusal.
27 (4) If the Registrar has decided under this section to register a
28 corporation under this Act, the corporation must notify the
29 authority responsible for registering the corporation under the
30 law under which it was previously registered of that decision.
31 (5) Despite anything to the contrary in this Division, the registration
32 of a corporation as a co-operative does not take effect until the
page 25
Co-operatives Bill 2009
Part 2 Formation
Division 5 Registration of an existing corporation
s. 25
1 corporation ceases to be registered under the law under which it
2 was previously registered.
3 (6) The corporation must notify the Registrar in writing within
4 7 days after ceasing to be registered under that other law.
5 25. Transitional provision
6 (1) This section applies to a corporation that, on registration under
7 this Division, will be a transferred co-operative.
8 (2) Section 24(4) to (6) does not apply to the corporation.
9 (3) If the Registrar decides to register the corporation, the Registrar
10 must ensure that the corporation ceases to be registered under
11 the old Act.
12 26. Certificate of registration
13 (1) On the registration of a corporation as a co-operative, the
14 Registrar must --
15 (a) issue a certificate of registration to the corporation; and
16 (b) publish notice of the issue of the certificate in the
17 Gazette.
18 (2) The corporate name of a corporation registered as a co-operative
19 is the name approved by the Registrar, as specified in the
20 certificate of registration issued by the Registrar.
21 27. Effect of registration
22 (1) The corporation is taken to be incorporated under this Act on its
23 registration.
24 (2) Except as expressly provided in this Act, the registration and
25 incorporation of the corporation as a co-operative does not
26 prejudice any right of a member in respect of any shares held at
27 the time of registration and incorporation.
28 (3) The change of registration and incorporation does not affect the
29 identity of the corporation which is taken to be the same body
page 26
Co-operatives Bill 2009
Formation Part 2
Conversion of co-operative Division 6
s. 28
1 after registration as a co-operative as it was before and no act,
2 matter or thing is affected by the change.
3 Division 6 -- Conversion of co-operative
4 28. Conversion of co-operative
5 (1) A co-operative may, by alteration of its rules, convert from --
6 (a) a co-operative with share capital to a co-operative
7 without share capital or vice versa; or
8 (b) a distributing co-operative to a non-distributing
9 co-operative or vice versa.
10 (2) An alteration of the rules for the conversion of a co-operative
11 with share capital to a co-operative without share capital cannot
12 be passed until at least 2 weeks after a notice has been published
13 in a newspaper circulating generally in the district in which the
14 registered office of the co-operative is situated advising of the
15 proposal to submit the proposed alteration to members of the
16 co-operative.
17 (3) An alteration of the rules for the conversion of a co-operative
18 must be approved by special resolution passed by means of a
19 special postal ballot.
20 Division 7 -- Reviews
21 29. Appeal against refusal to approve disclosure statement
22 The person who submitted a draft disclosure statement to the
23 Registrar under this Act may appeal to the Supreme Court
24 against a failure of the Registrar to approve the statement.
25 30. Appeal against refusal to approve draft rules
26 The person who submitted draft rules to the Registrar under this
27 Act may appeal to the Supreme Court against a failure of the
28 Registrar to approve the rules.
page 27
Co-operatives Bill 2009
Part 2 Formation
Division 8 General
s. 31
1 31. Appeal against refusal to register
2 The applicant for registration of a proposed co-operative under
3 this Part may appeal to the Supreme Court against a failure of
4 the Registrar to register the co-operative.
5 32. Supreme Court's powers on appeal
6 The Supreme Court may make any order it considers
7 appropriate to dispose of an appeal under this Division.
8 Division 8 -- General
9 33. Acceptance of money by proposed co-operative
10 (1) A proposed co-operative that, or a person on a proposed
11 co-operative's behalf who, accepts money for the proposed
12 co-operative before the proposed co-operative is registered must
13 hold that money on trust until the co-operative is registered.
14 (2) If a co-operative is not registered within the period of 3 months
15 after the acceptance of money under subsection (1), the
16 proposed co-operative or the person who accepted the money on
17 its behalf must refund the money to the person who paid it.
18 Penalty: a fine of $6 000.
19 34. Issue of duplicate certificate
20 The Registrar must issue a duplicate certificate of registration
21 if --
22 (a) the Registrar is satisfied that the original certificate is
23 lost or destroyed; and
24 (b) the fee prescribed by the regulations is paid.
page 28
Co-operatives Bill 2009
Legal capacity and powers Part 3
General powers Division 1
s. 35
1 Part 3 -- Legal capacity and powers
2 Division 1 -- General powers
3 35. Effect of incorporation
4 As a corporation, a co-operative --
5 (a) has perpetual succession; and
6 (b) has a common seal; and
7 (c) may sue and be sued in its corporate name; and
8 (d) subject to this Act, is capable of taking, purchasing,
9 leasing, holding, selling and disposing of real and
10 personal property; and
11 (e) may do and suffer all acts and things that corporations
12 may by law do and suffer and that are necessary or
13 expedient.
14 36. Power to form companies and enter into joint ventures
15 Without limiting any other provision of this Act, a co-operative
16 has power --
17 (a) to form or participate in the formation of a corporation
18 or unit trust; and
19 (b) to acquire interests in and sell or otherwise dispose of
20 interests in corporations, unit trusts and joint ventures;
21 and
22 (c) to form or enter into a partnership, joint venture or other
23 association with other persons or bodies.
24 Division 2 -- Doctrine of ultra vires abolished
25 37. Interpretation
26 In this Division --
27 (a) a reference to the doing of an act by a co-operative
28 includes a reference to the making of an agreement by
page 29
Co-operatives Bill 2009
Part 3 Legal capacity and powers
Division 2 Doctrine of ultra vires abolished
s. 38
1 the co-operative and a reference to a transfer of property
2 to or by the co-operative; and
3 (b) a reference to legal capacity includes a reference to
4 powers.
5 38. Doctrine of ultra vires abolished
6 (1) The objects of this Division are --
7 (a) to provide that the doctrine of ultra vires does not apply
8 to co-operatives; and
9 (b) without affecting the validity of a co-operative's
10 dealings with others, to ensure that the co-operative's
11 officers and members give effect to the provisions of the
12 co-operative's rules relating to the primary activities or
13 powers of the co-operative.
14 (2) This Division is to be construed and have effect in accordance
15 with subsection (1).
16 39. Legal capacity
17 (1) A co-operative has, both within and outside this State, the legal
18 capacity of an individual.
19 (2) Without limiting subsection (1), a co-operative has, both within
20 and outside this State, power --
21 (a) to issue and allot fully or partly paid shares in the
22 co-operative; and
23 (b) to issue debentures of, and co-operative capital units in,
24 the co-operative; and
25 (c) to distribute any of the property of the co-operative
26 among the members, in kind or otherwise; and
27 (d) to give security by charging uncalled capital; and
28 (e) to grant a charge on property of the co-operative; and
29 (f) to procure the co-operative to be registered or
30 recognised as a corporation in any place outside this
31 State; and
page 30
Co-operatives Bill 2009
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 40
1 (g) to do any other act that it is authorised to do by any
2 other law, including a law of a place outside this State.
3 (3) Subsections (1) and (2) have effect in relation to a
4 co-operative --
5 (a) if the co-operative's rules contain an express or implied
6 restriction on, or an express or implied prohibition of,
7 the exercise by the co-operative of any of its powers,
8 despite that restriction or prohibition; and
9 (b) if the rules of the co-operative contain a provision
10 stating the objects of the co-operative, despite that fact.
11 (4) The fact that the doing of an act by a co-operative would not be,
12 or is not, in its best interests does not affect its legal capacity to
13 do the act.
14 40. Restrictions on co-operatives in rules
15 (1) A co-operative's rules may contain an express restriction on, or
16 an express prohibition of, the exercise by the co-operative of a
17 power of the co-operative.
18 (2) The exercise of a power or the doing of an act in contravention
19 of subsection (1) is not invalid merely because of the
20 contravention.
21 (3) A co-operative's rules may set out the object of that
22 co-operative.
23 (4) The exercise of a power or the doing of an act in contravention
24 of subsection (3) is not invalid merely because of the
25 contravention.
26 Division 3 -- Persons having dealings with co-operatives
27 41. Assumptions entitled to be made
28 (1) A person is entitled to make the assumptions in section 42 in
29 relation to --
30 (a) dealings with a co-operative; and
page 31
Co-operatives Bill 2009
Part 3 Legal capacity and powers
Division 3 Persons having dealings with co-operatives
s. 42
1 (b) dealings with a person who has, or purports to have,
2 directly or indirectly acquired title to property from a
3 co-operative.
4 (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
6 proceedings in relation to the dealings that the matter is
7 incorrect.
8 42. Assumptions
9 (1) A person may assume that the co-operative's rules have been
10 complied with.
11 (2) A person may assume that anyone who appears, from
12 information provided by the co-operative that is available to the
13 public from the Registrar, to be a director or officer of the
14 co-operative --
15 (a) has been properly appointed; and
16 (b) has authority to exercise the powers and perform the
17 duties customarily exercised or performed by a director
18 or officer of a similar co-operative.
19 (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 --
21 (a) has been properly appointed; and
22 (b) has authority to exercise the powers and to perform the
23 duties customarily exercised or performed by that kind
24 of officer or agent of a similar co-operative.
25 (4) A person may assume that anyone who is, or may be assumed to
26 be, an officer or agent of the co-operative who has authority to
27 issue a document or a certified copy of a document on its behalf
28 also has authority to warrant that the document is genuine or is a
29 true copy.
30 (5) A person may assume that a document has been duly executed
31 by the co-operative if it is signed by 2 people, one of whom is,
32 or may be assumed to be, a director of the co-operative, and the
page 32
Co-operatives Bill 2009
Legal capacity and powers Part 3
Persons having dealings with co-operatives Division 3
s. 43
1 other is, or may be assumed to be, a director or the secretary of
2 the co-operative.
3 (6) A person may assume that a document has been duly executed
4 by the co-operative if --
5 (a) the co-operative's seal appears to have been fixed to the
6 document in accordance with Division 4; and
7 (b) the fixing of the seal appears to be witnessed by
8 2 people, one of whom is, or may be assumed to be, a
9 director of the co-operative, and the other is, or may be
10 assumed to be, a director or the secretary of the
11 co-operative.
12 (7) A person may assume that the officers and agents of the
13 co-operative properly perform their duties to the co-operative.
14 43. Person who knows or ought to know is not entitled to make
15 assumptions
16 This Division does not entitle a person to make an assumption,
17 and does not prevent an assertion being made in relation to an
18 assumption if --
19 (a) the person has actual knowledge that the assumption is
20 not correct; or
21 (b) the person's connection or relationship with the
22 co-operative is such that the person ought to know that
23 the assumption is not correct.
24 44. Lodgment of documents not to constitute constructive
25 knowledge
26 (1) A person is not considered to have knowledge of a
27 co-operative's rules, any of the contents of a co-operative's
28 rules, a document, the contents of a document, or any
29 particulars, merely because of either or both of the following --
30 (a) the rules, the document or the particulars have been
31 lodged with the Registrar;
page 33
Co-operatives Bill 2009
Part 3 Legal capacity and powers
Division 4 Authentication and execution of documents and confirmation
of contracts
s. 45
1 (b) the rules, the document or the particulars are referred to
2 in any other document that has been lodged with the
3 Registrar, or lodged with a person under a previous law
4 corresponding to a provision of this Act.
5 (2) Subsection (1) does not apply in relation to a document, or in
6 relation to the contents of a document, that has been lodged
7 under Part 10 Division 3 to the extent that the document relates
8 to a charge that is registrable under that Division or law.
9 (3) Despite subsection (1), a member of a co-operative is taken to
10 have knowledge of the rules of the co-operative.
11 45. Effect of fraud
12 (1) A person's entitlement under this Division to make an
13 assumption is not affected merely by the fact that a person --
14 (a) has acted or is acting fraudulently in relation to the
15 dealing or acquisition or purported acquisition of title to
16 property to which the assumption relates; or
17 (b) has forged a document that appears to have been sealed
18 on behalf of a co-operative.
19 (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
21 in subsection (1).
22 Division 4 -- Authentication and execution of documents and
23 confirmation of contracts
24 46. Common seal
25 A document or proceeding requiring authentication by a
26 co-operative may be authenticated under the common seal of the
27 co-operative.
28 47. Official seal
29 (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 2009
Legal capacity and powers Part 3
Authentication and execution of documents and confirmation Division 4
of contracts
s. 48
1 seal is kept, one or more official seals, each of which must be a
2 facsimile of the common seal of the co-operative with the
3 addition on its face of the name of every place where it is to be
4 used.
5 (2) The person affixing an official seal must, in writing signed by
6 the person, certify on the document to which it is affixed the
7 date on which and the place at which it is affixed.
8 (3) A document sealed with an official seal is taken to be sealed
9 with the common seal of the co-operative.
10 48. Authentication need not be under seal
11 A document or proceeding requiring authentication by a
12 co-operative may be authenticated by the signature of two
13 people, one of whom is a director of the co-operative and one of
14 whom is a director or the secretary of the co-operative and need
15 not be authenticated under the seal of the co-operative.
16 49. Co-operative may authorise person to execute deed
17 (1) A co-operative may, by writing under its common seal,
18 empower a person, either generally or in relation to a specified
19 matter, as its agent or attorney (authorised attorney) to execute
20 deeds on its behalf.
21 (2) A deed signed by an authorised attorney on behalf of the
22 co-operative and under the seal of the attorney, or under the
23 appropriate official seal of the co-operative, binds the
24 co-operative and has effect as if it were under the common seal
25 of the co-operative.
26 (3) The authority of an authorised attorney, as between the
27 co-operative and a person dealing with the attorney, continues
28 during the period, if any, specified in the instrument conferring
29 the authority or, if no period is specified, until notice of the
30 revocation or termination of the authority of the attorney has
31 been given to the person dealing with the attorney.
page 35
Co-operatives Bill 2009
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 50
1 50. Execution under seal
2 A contract or other document executed, or purporting to have
3 been executed, under the seal of a co-operative is not invalid
4 merely because a person attesting the affixing of the seal was in
5 any way, whether directly or indirectly, interested in the
6 contract or other document or in the matter to which the contract
7 or other document relates.
8 51. Contractual formalities
9 (1) So far as concerns the formalities of making, varying or
10 discharging a contract, a person acting under the express or
11 implied authority of a co-operative may make, vary or discharge
12 a contract in the name of, or on behalf of, the co-operative as if
13 that contract were made, varied or discharged by an individual.
14 (2) The making, varying or discharging of a contract under
15 subsection (1) is effectual in law and binds the co-operative and
16 other parties to the contract.
17 (3) This section does not prevent a co-operative from making,
18 varying or discharging a contract under its seal.
19 52. Other requirements as to consent or sanction not affected
20 This Division does not affect the operation of a law that requires
21 some consent or sanction to be obtained, or some procedure to
22 be complied with, in relation to the making, varying or
23 discharging of a contract.
24 Division 5 -- Pre-registration contracts
25 53. Contracts before registration
26 (1) If a person enters into, or purports to enter into, a contract on
27 behalf of, or for the benefit of, a proposed co-operative, the
28 co-operative becomes bound by the contract and entitled to its
29 benefit if the co-operative, or a co-operative that is reasonably
30 identifiable with it, is registered and ratifies the contract --
31 (a) within a reasonable period after the contract is entered
32 into; or
page 36
Co-operatives Bill 2009
Legal capacity and powers Part 3
Pre-registration contracts Division 5
s. 53
1 (b) within any period agreed to by the parties to the
2 contract.
3 (2) The person is released from any liability under the
4 pre-registration contract if the co-operative enters into another
5 contract in substitution for it --
6 (a) within a reasonable period after the pre-registration
7 contract is entered into; or
8 (b) within any period agreed to by the parties to the
9 pre-registration contract.
10 (3) The person is liable to pay damages to each other party to the
11 pre-registration contract if the co-operative is not registered, or
12 the co-operative is registered but does not ratify the contract or
13 enter into a substitute for it --
14 (a) within a reasonable period after the contract is entered
15 into; or
16 (b) within the period agreed to by the parties to the contract.
17 (4) The maximum amount of damages the person is liable to pay to
18 a party is the amount the co-operative would be liable to pay to
19 the party if the co-operative had been registered and had ratified
20 the contract and then completely failed to perform it.
21 (5) If proceedings are brought to recover damages under
22 subsection (3) because the co-operative is registered but does
23 not ratify the pre-registration contract or enter into a substitute
24 for it, the court may do anything that it thinks just in the
25 circumstances, including ordering the co-operative --
26 (a) to pay all or part of the damages that the person is liable
27 to pay; or
28 (b) to transfer property that the co-operative received
29 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 2009
Part 3 Legal capacity and powers
Division 5 Pre-registration contracts
s. 54
1 (6) If the co-operative ratifies the pre-registration contract but fails
2 to perform all or part of it, the court may order the person to pay
3 all or part of the damages that the co-operative is ordered to pay.
4 54. Person may be released from liability but is not entitled to
5 indemnity
6 (1) Any of the parties to the pre-registration contract may release
7 the person who entered into, or purported to enter into, the
8 contract from any liability in relation to that contract.
9 (2) The release must be in writing.
10 (3) The party giving the release is not entitled to recover damages
11 under section 53 from the person.
12 (4) Despite any rule of law or equity, the person does not have a
13 right of indemnity against the co-operative in respect of the
14 person's liability under this Division even if the person was
15 acting, or purporting to act, as trustee for the co-operative.
16 55. This Division replaces other rights and liabilities
17 This Division replaces any rights or liabilities anyone would
18 otherwise have in relation to the pre-registration contract.
page 38
Co-operatives Bill 2009
Membership Part 4
General Division 1
s. 56
1 Part 4 -- Membership
2 Division 1 -- General
3 56. Becoming a member
4 (1) On the registration of a co-operative, the persons who signed the
5 application for registration become members of the
6 co-operative.
7 (2) Other persons may be admitted as members of the co-operative
8 as provided by its rules.
9 (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
11 otherwise.
12 (4) A corporation is not, merely because it is a corporation,
13 disqualified from being a member of a co-operative unless the
14 co-operative's rules provide that corporations are disqualified
15 from being members.
16 (5) If 2 or more co-operatives merge, the members of the merged
17 co-operative are --
18 (a) the members of the merging co-operatives; and
19 (b) other persons admitted as members of the merged
20 co-operative in accordance with its rules.
21 57. Members of co-operative group
22 (1) The members of a co-operative group are --
23 (a) the co-operatives by which the co-operative group is
24 formed; and
25 (b) any other co-operative, admitted to membership in
26 accordance with the rules of the co-operative group; and
27 (c) any other corporation or other body admitted to
28 membership in accordance with subsection (2).
page 39
Co-operatives Bill 2009
Part 4 Membership
Division 1 General
s. 58
1 (2) A corporation or other body, not being a co-operative, may be
2 admitted to membership of the co-operative group if --
3 (a) it is incorporated or registered under any other law,
4 whether or not a law of this State; and
5 (b) in the opinion of the board of the co-operative group, it
6 is designed to function in accordance with co-operative
7 principles; and
8 (c) it is eligible to be admitted to membership in accordance
9 with the rules of the co-operative group.
10 58. Qualification for membership and transitional provision
11 (1) Subject to subsection (3), a person is not qualified to be
12 admitted to membership of a co-operative unless --
13 (a) there are reasonable grounds for believing that the
14 person will be an active member of the co-operative;
15 and
16 (b) the person is otherwise eligible under the rules of the
17 co-operative.
18 (2) The rules of a co-operative must contain provisions that --
19 (a) impose a duty on all persons who become members to
20 be active members; and
21 (b) explain the consequences of failing to be or ceasing to
22 be an active member.
23 (3) A person who was a member of a co-operative immediately
24 before that co-operative became a transferred co-operative is
25 qualified to be admitted to membership of the co-operative
26 despite the absence of reasonable grounds for believing that the
27 person will be an active member of the co-operative.
28 59. Membership may be joint
29 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 2009
Membership Part 4
General Division 1
s. 60
1 60. Members under 18 years of age
2 (1) A member of a co-operative is not entitled to avoid any
3 obligation or liability as a member under any contract, deed or
4 other document entered into as a member on any ground
5 relating to minority.
6 (2) A person under 18 years of age is not competent to hold an
7 office in a co-operative.
8 (3) A member of a co-operative who is under 18 years of age is
9 entitled to vote.
10 (4) This section applies only to individuals.
11 61. Representatives of corporations
12 (1) If a corporation is a member of a co-operative, it may by
13 instrument served on the co-operative appoint a person to
14 represent it in relation to its membership.
15 (2) The power to appoint a representative is subject to any
16 restriction imposed by the rules of the co-operative as to the
17 entitlement of a person to represent a corporation.
18 (3) A person is not qualified to be appointed the representative of a
19 company that is not a listed corporation (within the meaning of
20 the Corporations Act) unless the person is an officer, member or
21 employee of the company.
22 62. Notification of shareholders and shareholdings
23 On the request of the board of directors of the co-operative, a
24 corporation that is a corporate member must provide the board
25 of directors of the co-operative with --
26 (a) a list of the names of all the shareholders of the
27 corporation and the number of shares held by each
28 shareholder; or
page 41
Co-operatives Bill 2009
Part 4 Membership
Division 1 General
s. 63
1 (b) in the case of a corporation without share capital, a list
2 of the members of the corporation,
3 within 7 days of the request.
4 Penalty: a fine of $2 000.
5 63. Circumstances in which membership ceases -- all
6 co-operatives
7 (1) A person ceases to be a member of a co-operative in each of
8 the following circumstances and as otherwise provided by
9 this Act --
10 (a) if the member's membership is cancelled under Part 6;
11 (b) if the member is expelled or resigns in accordance with
12 the rules of the co-operative;
13 (c) if --
14 (i) the individual member becomes bankrupt or the
15 corporate member becomes insolvent; or
16 (ii) the member's property becomes subject to
17 control under the law relating to bankruptcy,
18 unless provision is made to the contrary in the rules of
19 the co-operative;
20 (d) on death;
21 (e) if the contract of membership is rescinded on the ground
22 of misrepresentation or mistake;
23 (f) in the case of a member that is a corporation, if the body
24 is deregistered.
25 (2) On the death of a member, the member's estate remains liable
26 under section 67 as the member until the member's personal
27 representative or some other person is registered in the
28 member's place.
page 42
Co-operatives Bill 2009
Membership Part 4
General Division 1
s. 64
1 64. Additional circumstances in which membership
2 ceases -- co-operatives with share capital
3 In the case of a co-operative that has a share capital, in addition
4 to the circumstances in section 63, a member ceases to be a
5 member in each of the following circumstances --
6 (a) the member's total shareholding is transferred to another
7 person in accordance with the rules of the co-operative,
8 and the transferee is registered as holder;
9 (b) the member's total shareholding is forfeited in
10 accordance with this Act or the rules of the co-operative;
11 (c) the member's total shareholding is sold by the
12 co-operative under a power conferred by the rules of the
13 co-operative, and the purchaser is registered as holder;
14 (d) the member's total shareholding is purchased by the
15 co-operative in accordance with this Act;
16 (e) the amount paid up to the stated nominal value on the
17 member's shares is repaid to the member in accordance
18 with the rules of the co-operative.
19 65. Carrying on business with too few members
20 (1) A person who is a director of a co-operative commits an offence
21 if the person knowingly allows the co-operative to continue to
22 carry on business with fewer than the minimum number of
23 members for more than 28 days after the number of members
24 falls below the minimum number.
25 Penalty: a fine of $2 000.
26 (2) Each person who is found guilty of an offence under
27 subsection (1) is also liable to satisfy all obligations of the
28 co-operative incurred after the 28 days referred to in
29 subsection (1), and may be sued without any other member
30 being joined in the action.
31 (3) The minimum number of members allowed is --
32 (a) for a co-operative group, 2; or
page 43
Co-operatives Bill 2009
Part 4 Membership
Division 2 Rights and liabilities of members
s. 66
1 (b) for any other co-operative, 5, or if a lesser number is
2 prescribed by the regulations, the prescribed number.
3 (4) The Registrar may, by written notice, extend and further extend
4 in a particular case the period of 28 days referred to in
5 subsection (1).
6 (5) An application for an extension must be made --
7 (a) in a form approved by the Registrar; and
8 (b) before the period to be extended ends.
9 Division 2 -- Rights and liabilities of members
10 66. Rights of membership not exercisable until registered etc.
11 (1) A member of a co-operative is not entitled to exercise any rights
12 of membership until --
13 (a) the member's name appears as a member in the register
14 of members, directors and shares referred to in
15 section 230(1)(a); and
16 (b) the member has made a payment to the co-operative for
17 membership or acquired a share or interest that is
18 provided for in the rules of the co-operative.
19 (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
21 register of members, directors and shares within 28 days after
22 the person is admitted to membership.
23 Penalty: a fine of $2 000.
24 67. Liability of members to co-operative
25 (1) A member of a co-operative is not, as a member, under any
26 personal liability to the co-operative, except as provided by this
27 Division.
28 (2) A member of a co-operative with a share capital is liable to the
29 co-operative for the amount, if any, unpaid on the shares held by
page 44
Co-operatives Bill 2009
Membership Part 4
Rights and liabilities of members Division 2
s. 68
1 the member together with any charges payable by the member
2 to the co-operative as required by the rules of the co-operative.
3 (3) A member of a co-operative without a share capital is liable to
4 the co-operative for any charges payable by the member to the
5 co-operative as required by the rules of the co-operative.
6 68. Co-operative to make information available to person
7 intending to become a member
8 (1) The board of a co-operative must give written notice to each
9 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
11 the co-operative's nearest office, or be sent --
12 (a) a consolidated copy of the rules of the co-operative; and
13 (b) a copy of all special resolutions applicable to the
14 member and passed by the members of the co-operative
15 since its last annual general meeting, except special
16 resolutions providing for an alteration of the rules of the
17 co-operative; and
18 (c) a copy of the last annual report of the co-operative under
19 section 235.
20 (2) If a person who has received notice under this section makes a
21 request referred to in subsection (1), the co-operative must
22 comply with that request.
23 69. Entry fees and regular subscriptions
24 (1) The rules of a co-operative may --
25 (a) require the payment by members of entry fees and
26 regular subscriptions; and
27 (b) provide for the repayment of those fees and
28 subscriptions on a person ceasing to be a member.
29 (2) The calculation of the amount of a particular member's regular
30 subscription may be based on the amount of business the
31 member does with the co-operative.
page 45
Co-operatives Bill 2009
Part 4 Membership
Division 2 Rights and liabilities of members
s. 70
1 (3) A co-operative must give a person intending to become a
2 member written notice of entry fees or regular subscriptions
3 payable by the member to the co-operative.
4 (4) A person who becomes a member of a co-operative is not liable
5 to pay entry fees or regular subscriptions except --
6 (a) those fees or subscriptions of which the person was
7 given written notice before becoming a member; and
8 (b) any regular subscriptions that may be imposed in
9 accordance with the rules and of which the member has
10 been given notice.
11 70. Members etc. may be required to deal with co-operative
12 (1) The rules of a co-operative may contain provisions that require
13 a member to have specified dealings with the co-operative for a
14 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
16 with a member containing provisions that require the member to
17 have specified dealings with the co-operative for a fixed period.
18 (3) In particular, the provisions of the rules or a contract may
19 require a member --
20 (a) to sell products through or to the co-operative; or
21 (b) to obtain supplies or services through or from the
22 co-operative; or
23 (c) to pay to the co-operative a stated amount as liquidated
24 damages for any failure to comply with a requirement
25 authorised by this section.
26 (4) An amount required to be paid to the co-operative as liquidated
27 damages is, for the purposes of section 72, a debt payable by the
28 member to the co-operative.
29 (5) A contract authorised by this section is binding on the
30 co-operative and all other parties even though, but for this Act,
31 the contract would be invalid as being in restraint of trade.
page 46
Co-operatives Bill 2009
Membership Part 4
Rights and liabilities of members Division 2
s. 71
1 (6) Rules authorised by this section are authorised even though, but
2 for this section, the rules might be invalid as being in restraint of
3 trade.
4 71. Fines payable by members
5 (1) A co-operative may impose a fine on a member for an
6 infringement of the rules of the co-operative if the rules of the
7 co-operative so provide.
8 (2) A fine imposed under subsection (1) cannot exceed the
9 maximum fine fixed by the rules in accordance with section 98.
10 (3) A fine cannot be imposed unless --
11 (a) notice of intention to impose the fine and the reason for
12 it has been given to the member; and
13 (b) the member has been given a reasonable opportunity to
14 appear before the board in person (with or without
15 witnesses) or to send to the board a written statement to
16 show cause why the fine should not be imposed.
17 (4) The co-operative may set off the whole or any part of the fine
18 against an amount payable to the member for produce delivered
19 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
21 of the co-operative, is payable to the member from the
22 co-operative, for produce so delivered.
23 72. Charge and set off of co-operative
24 (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
26 following --
27 (a) the share or interest in the capital and the credit balance
28 and deposits of the member or former member;
29 (b) any rebate, bonus, dividend or interest payable to the
30 member or former member;
page 47
Co-operatives Bill 2009
Part 4 Membership
Division 2 Rights and liabilities of members
s. 73
1 (c) any entry fees and regular subscriptions required to be
2 repaid to a member when the member ceases to be a
3 member.
4 (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
6 the member or former member, in or towards payment of the
7 debt.
8 (3) The charge created by this section may be enforced by the
9 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
11 the member or former member.
12 (4) Any share in respect of which capital has been so appropriated
13 must be cancelled.
14 73. Repayment of shares on resignation or expulsion
15 (1) When a member resigns from a co-operative or is expelled from
16 a co-operative under its rules, the co-operative must --
17 (a) within 12 months after the date of resignation or
18 expulsion, repay to the former member an amount (the
19 repayable amount) made up of the amount paid up to
20 the stated nominal value of the shares held by the
21 member at the resignation or expulsion date, less any
22 amount owed by the member to the co-operative at the
23 resignation or expulsion date under the rules of the
24 co-operative or any contract or otherwise; or
25 (b) in the case of a transferred co-operative the rules of
26 which state how to calculate the repayable amount
27 owing to a former member at the time of resignation or
28 expulsion, within 3 years after the date of resignation or
29 expulsion, repay to the former member an amount in
30 accordance with those rules; or
page 48
Co-operatives Bill 2009
Membership Part 4
Rights and liabilities of members Division 2
s. 73
1 (c) within 12 months after the date of resignation or
2 expulsion, apply the repayable amount under
3 subsection (2) if --
4 (i) the board considers repayment would adversely
5 affect the financial position of the co-operative;
6 or
7 (ii) the board and the former member agree.
8 (2) The repayable amount may be applied in one of the following
9 ways --
10 (a) the co-operative may appropriate the amount as a
11 donation to the co-operative, but only if the former
12 member consents in writing to the donation;
13 (b) if the co-operative is a deposit taking co-operative, the
14 co-operative may apply the amount as a deposit by the
15 former member with the co-operative, subject to the
16 requirements of section 128 as to interest on the deposit;
17 (c) the co-operative may issue debentures or co-operative
18 capital units to the former member in satisfaction of the
19 amount.
20 (3) If the balance sheet of the co-operative last issued before the
21 resignation or expulsion of a member of the co-operative
22 disclosed a loss or deficiency or a significant change in the
23 financial position or prospects of the co-operative is
24 subsequently reported prior to the resignation or expulsion, the
25 paid up value of the member's shares may, for the purposes of
26 calculating the repayable amount, be reduced as described in
27 subsection (4).
28 (4) The paid up value of the member's shares may be reduced by an
29 amount that bears to the amount of the loss or deficiency so
30 disclosed the same proportion as the number of shares held by
31 the member bore to the total number of shares held by all
32 members of the co-operative as at the date of resignation or
33 expulsion of the member.
page 49
Co-operatives Bill 2009
Part 4 Membership
Division 3 Death of member
s. 74
1 (5) Shares for which capital has been repaid under subsection (1)(a)
2 or applied under subsection (1)(c) must be cancelled.
3 Division 3 -- Death of member
4 74. Meaning of interest
5 In this Division --
6 interest, of a deceased member in a co-operative, includes --
7 (a) the member's membership; and
8 (b) any credit balance due to the member; and
9 (c) any loan from or to or deposit with the co-operative; and
10 (d) any surplus arising on the sale by the co-operative as
11 mortgagee of any property mortgaged by the deceased to
12 the co-operative;
13 transfer, of an interest, includes the payment of money.
14 75. Transfer of share or interest on death of member
15 Subject to sections 76 and 159, on the death of a member, the
16 board must transfer the deceased member's share or interest in
17 the co-operative to --
18 (a) the personal representative of the deceased member; or
19 (b) the person that the deceased's personal representative
20 specifies in an application made to the co-operative
21 within 3 months after the death of the member.
22 76. Transfer of small shareholdings and interests on death
23 (1) Subject to section 159, if the total value of a deceased member's
24 shares or interest in a co-operative is less than $10 000 (or such
25 other amount as may be prescribed), the board may, on the basis
26 of such evidence as it considers sufficient, transfer the shares or
27 interest in accordance with whichever of the following
28 paragraphs is appropriate --
29 (a) if the member or person dies testate, to the person who
30 appears to the board to be entitled to the shares or
page 50
Co-operatives Bill 2009
Membership Part 4
Disputes involving members Division 4
s. 77
1 interest under the will of the deceased member or
2 person;
3 (b) if the member or person dies intestate, to any person
4 who appears to the board to be entitled to obtain a grant
5 of administration of the estate of the deceased and that
6 person must then hold the shares or interest on the same
7 trusts as if he or she had obtained that grant.
8 (2) A transfer cannot be made under this section after evidence has
9 been produced to the co-operative of the grant of letters of
10 administration of the estate, or probate of the will, of the
11 deceased member.
12 77. Value of shares and interests
13 The value of the shares or interest of a deceased member must
14 be determined for the purposes of this Division in accordance
15 with the rules of the co-operative.
16 78. Co-operative protected
17 Any transfer of property made by the board of a co-operative in
18 accordance with this Division is valid and effectual against any
19 demand made on the co-operative by any other person.
20 Division 4 -- Disputes involving members
21 79. Grievance procedure
22 (1) The rules of a co-operative must set out a grievance procedure
23 for dealing with any dispute under the rules --
24 (a) between a member and another member; and
25 (b) between a member and the co-operative.
26 (2) A member may appoint any person to act on behalf of the
27 member in the grievance procedure.
28 (3) The grievance procedure must allow for natural justice to be
29 applied.
page 51
Co-operatives Bill 2009
Part 4 Membership
Division 4 Disputes involving members
s. 80
1 (4) In this section and section 80 --
2 member includes any person who was a member not more than
3 6 months before the dispute occurred.
4 80. Application to Supreme Court
5 (1) The Supreme Court may, on the application of a member of a
6 co-operative, or a co-operative, make an order declaring and
7 enforcing --
8 (a) the rights or obligations of members of the co-operative
9 between themselves; or
10 (b) the rights or obligations of the co-operative and any
11 member between themselves.
12 (2) An order may be made under this section whether or not a right
13 of a proprietary nature is involved and whether or not the
14 applicant has an interest in the property of the co-operative.
15 (3) The Supreme Court may refuse to make an order on the
16 application or may make an order for costs against a party,
17 whether successful or not, if the Court is of the opinion that --
18 (a) the issue raised in the application is trivial; or
19 (b) having regard to the importance of the issue, the nature
20 of the co-operative, any other available method of
21 resolving the issue, the costs involved, lapse of time,
22 acquiescence or any other relevant circumstance, it was
23 unreasonable to make the application; or
24 (c) the unreasonable or improper conduct of a party --
25 (i) has been responsible for the making of the
26 application; or
27 (ii) has added to the cost of the proceedings.
page 52
Co-operatives Bill 2009
Membership Part 4
Oppressive conduct of affairs Division 5
s. 81
1 Division 5 -- Oppressive conduct of affairs
2 81. Interpretation
3 In this Division, a reference to a member of a co-operative
4 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
6 been transmitted by will or by operation of law.
7 82. Application of Division
8 This Division does not apply in respect of anything done under
9 Part 6.
10 83. Who may apply for court order
11 The following persons may apply to the Supreme Court for an
12 order under this Division --
13 (a) the Registrar;
14 (b) a member who believes that the affairs of the
15 co-operative are being conducted in a way that is --
16 (i) oppressive or unfairly prejudicial to, or unfairly
17 discriminatory against, a member; or
18 (ii) contrary to the interests of the members as a
19 whole;
20 (c) a member who believes that an act or omission, or a
21 proposed act or omission, by or on behalf of the
22 co-operative, or a resolution, or a proposed resolution,
23 of members, was or would be --
24 (i) oppressive or unfairly prejudicial to, or unfairly
25 discriminatory against, a member; or
26 (ii) contrary to the interests of the members as a
27 whole.
page 53
Co-operatives Bill 2009
Part 4 Membership
Division 5 Oppressive conduct of affairs
s. 84
1 84. Orders that the Supreme Court may make
2 On application under this Division, the Supreme Court may
3 make any order that it considers appropriate including (without
4 being limited to) one or more of the following orders --
5 (a) an order that the Registrar appoint an administrator of
6 the co-operative;
7 (b) an order that the co-operative be wound-up;
8 (c) an order for regulating the conduct of affairs of the
9 co-operative in the future;
10 (d) an order for the repayment of the member's shares in
11 accordance with the provisions of this Act for repayment
12 of share capital;
13 (e) an order for the purchase of the shares of any member
14 by the co-operative and for the reduction accordingly of
15 the co-operative's capital;
16 (f) an order directing the co-operative to institute,
17 prosecute, defend or discontinue specified proceedings,
18 or authorising a member or members of the co-operative
19 to institute, prosecute, defend or discontinue specified
20 proceedings in the name and on behalf of the
21 co-operative;
22 (g) an order appointing a receiver or a receiver and manager
23 of property of the co-operative;
24 (h) an order restraining a person from engaging in specified
25 conduct or from doing a specified act or thing;
26 (i) an order directing a co-operative to become registered as
27 a company under the Corporations Act;
28 (j) an order requiring a person to do a specified act or thing;
29 (k) an order as to costs.
page 54
Co-operatives Bill 2009
Membership Part 4
Oppressive conduct of affairs Division 5
s. 85
1 85. Basis on which Supreme Court makes orders
2 The Supreme Court may make an order under this Division if it
3 considers that --
4 (a) the affairs of a co-operative are being conducted in a
5 way that is --
6 (i) oppressive or unfairly prejudicial to, or unfairly
7 discriminatory against, a member (the oppressed
8 member), whether or not in the capacity of a
9 member; or
10 (ii) contrary to the interests of the members as a
11 whole;
12 or
13 (b) an act or omission, or a proposed act or omission, by or
14 on behalf of a co-operative, or a resolution, or a
15 proposed resolution, of members of a co-operative, was
16 or would be --
17 (i) oppressive or unfairly prejudicial to, or unfairly
18 discriminatory against, a member (the oppressed
19 member), whether or not in the capacity of a
20 member; or
21 (ii) contrary to the interests of the members as a
22 whole.
23 86. Winding-up need not be ordered if oppressed members
24 prejudiced
25 The Supreme Court need not make an order under this Division
26 for the winding-up of a co-operative if the Court considers that
27 the winding-up of the co-operative would unfairly prejudice an
28 oppressed member.
29 87. Application of winding-up provisions
30 If an order that a co-operative be wound-up is made under this
31 Division, the provisions of this Act relating to the winding-up of
32 co-operatives apply, with any changes that are necessary, as if
page 55
Co-operatives Bill 2009
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 88
1 the order had been made on an application filed in the Supreme
2 Court by the co-operative.
3 88. Changes to rules
4 (1) If an order under this Division makes an alteration to the rules
5 of a co-operative --
6 (a) the alteration has effect as if it had been properly made
7 by special resolution of the co-operative; and
8 (b) the co-operative cannot (despite any other provisions of
9 this Act) without the leave of the Supreme Court make
10 any further alteration to the rules inconsistent with the
11 provisions of the order.
12 (2) On receiving a copy of an order altering the rules of a
13 co-operative the Registrar must register the alteration.
14 89. Copy of order to be lodged with Registrar
15 An applicant for an order under this Division must lodge an
16 office copy of the order with the Registrar within 14 days after
17 it is made.
18 Penalty: a fine of $1 000.
19 Division 6 -- Proceedings on behalf of a co-operative by
20 members and others
21 90. Bringing, or intervening in, proceedings on behalf of a
22 co-operative
23 (1) A person may bring proceedings on behalf of a co-operative, or
24 intervene in proceedings to which a co-operative is a party for
25 the purpose of taking responsibility on behalf of the
26 co-operative for those proceedings, or for a particular step in
27 those proceedings (for example, compromising or settling
28 them), if --
29 (a) the person is --
30 (i) a member, former member, or person entitled to
31 be registered as a member, of the co-operative or
32 of a related corporation; or
page 56
Co-operatives Bill 2009
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 91
1 (ii) an officer or former officer of the co-operative;
2 or
3 (iii) the Registrar;
4 and
5 (b) the person is acting with leave granted under section 91.
6 (2) Proceedings brought on behalf of a co-operative may be brought
7 in the co-operative's name.
8 91. Applying for and granting leave
9 (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,
11 proceedings.
12 (2) The Supreme Court may grant the application if it is satisfied
13 that --
14 (a) it is probable that the co-operative will not itself bring
15 the proceedings, or properly take responsibility for
16 them, or for a step in them; and
17 (b) the applicant is acting in good faith; and
18 (c) it is in the best interests of the co-operative that the
19 applicant be granted leave; and
20 (d) if the applicant is applying for leave to bring
21 proceedings, there is a serious question to be tried; and
22 (e) either --
23 (i) at least 14 days before making the application,
24 the applicant gave written notice to the
25 co-operative of the intention to apply for leave
26 and of the reasons for applying; or
27 (ii) it is appropriate to grant leave even if
28 subparagraph (i) is not satisfied.
page 57
Co-operatives Bill 2009
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 92
1 92. Substitution of another person for the person granted leave
2 (1) Any of the following persons may apply to the Supreme Court
3 for an order that they be substituted for a person to whom leave
4 has been granted under section 91 --
5 (a) a member, former member, or person entitled to be
6 registered as a member, of the co-operative or a related
7 corporation;
8 (b) an officer, or former officer, of the co-operative;
9 (c) the Registrar.
10 (2) The application may be made whether or not the other person
11 has already brought the proceedings or made the intervention.
12 (3) The Supreme Court may make the order if it is satisfied that --
13 (a) the applicant is acting in good faith; and
14 (b) in all the circumstances, it is appropriate to make the
15 order.
16 (4) An order substituting one person for another person has the
17 effect that --
18 (a) the grant of leave is taken to have been made in favour
19 of the substituted person; and
20 (b) if the other person has already brought the proceedings
21 or intervened, the substituted person is taken to have
22 brought those proceedings or to have made that
23 intervention.
24 93. Effect of ratification by members
25 (1) A ratification or approval of conduct by members of a
26 co-operative --
27 (a) does not prevent a person from bringing or intervening
28 in proceedings with leave under section 91 or from
29 applying for leave under that section; and
30 (b) does not have the effect that proceedings brought or
31 intervened in with leave under section 91 must be
page 58
Co-operatives Bill 2009
Membership Part 4
Proceedings on behalf of a co-operative by members and Division 6
others
s. 94
1 decided in favour of the defendant, or that an application
2 for leave under that section must be refused.
3 (2) The Supreme Court may take into account a ratification or an
4 approval of the conduct by members of a co-operative in
5 deciding what order or judgment (including as to damages) to
6 make in proceedings brought or intervened in with leave under
7 section 91 or in relation to an application for leave under that
8 section.
9 (3) In taking a ratification or approval into account under
10 subsection (2), the Supreme Court may have regard to --
11 (a) how well-informed about the conduct the members were
12 when deciding whether to ratify or approve that conduct;
13 and
14 (b) whether the members who ratified or approved the
15 conduct were acting for proper purposes.
16 94. Leave to discontinue, compromise or settle proceedings
17 brought, or intervened in, with leave
18 Proceedings brought, or intervened in, with leave cannot be
19 discontinued, compromised or settled without the leave of the
20 Supreme Court.
21 95. General powers of the Supreme Court
22 (1) The Supreme Court may make any order, and give any
23 direction, that it thinks just in relation to proceedings brought or
24 intervened in with leave, or in relation to an application for
25 leave, including --
26 (a) interim orders; and
27 (b) directions about the conduct of the proceedings,
28 including requiring mediation; and
29 (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 2009
Part 4 Membership
Division 6 Proceedings on behalf of a co-operative by members and
others
s. 96
1 (d) an order appointing an independent person to
2 investigate, and report to the Supreme Court, on --
3 (i) the financial affairs of the co-operative; or
4 (ii) the facts or circumstances that gave rise to that
5 cause of action the subject of the proceedings; or
6 (iii) the costs incurred in the proceedings and the
7 person granted leave.
8 (2) A person appointed by the Supreme Court under
9 subsection (1)(d) is entitled, on giving reasonable notice to the
10 co-operative, to inspect and make copies of any books of the
11 co-operative for any purpose connected with their appointment.
12 96. Power of Supreme Court to make costs order
13 At any time, the Supreme Court may, in relation to proceedings
14 brought or intervened in with leave under section 91 or an
15 application for leave under that section, make any orders it
16 thinks just about the costs of the person who applied for or was
17 granted leave, of the co-operative or of any other party to the
18 proceedings or application, including an order requiring
19 indemnification for costs.
page 60
Co-operatives Bill 2009
Rules Part 5
s. 97
1 Part 5 -- Rules
2 97. Effect of rules
3 (1) The rules of a co-operative have the effect of a contract under
4 seal --
5 (a) between the co-operative and each member; and
6 (b) between the co-operative and each director, the secretary
7 and the chief executive officer of the co-operative; and
8 (c) between a member and each other member.
9 (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
11 so far as those provisions apply to that person.
12 98. Content of rules
13 (1) The rules of a co-operative must state or otherwise make
14 provision for the matters specified in Schedule 1.
15 (2) The rules must be divided into paragraphs numbered
16 consecutively.
17 (3) The rules may state the objects of the co-operative.
18 (4) The rules may incorporate any provision of the model rules.
19 (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
21 the rules.
22 (6) If the rules provide for the imposition of a fine, the rules must
23 specify the maximum fine that may be imposed on a member.
24 (7) The maximum fine fixed by the rules cannot be more than an
25 amount prescribed by the regulations as the maximum fine.
26 (8) The rules may contain other provisions not inconsistent with
27 this Act.
page 61
Co-operatives Bill 2009
Part 5 Rules
s. 99
1 99. Purchase and inspection of copy of rules
2 (1) A member is entitled to obtain from a co-operative a copy of its
3 rules on payment of the amount required by the rules of the
4 co-operative or, if the rules do not prescribe an amount, on
5 payment of $5.
6 (2) The amount required by the rules cannot be more than the fee
7 prescribed by the regulations for obtaining a copy of the rules
8 from the Registrar.
9 (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
11 regulations.
12 100. False copies of rules
13 (1) A person who gives to a member of a co-operative or to a
14 person intending or applying to become a member of a
15 co-operative a copy of any rules or any alterations of rules,
16 other than those which have been duly registered, representing
17 that they are binding on the members of the co-operative is
18 guilty of an offence.
19 Penalty: a fine of $1 000.
20 (2) A person who alters any of the rules of a co-operative after they
21 have been registered and circulates them representing that they
22 have been duly registered when they have not been is guilty of
23 an offence.
24 Penalty: a fine of $1 000.
25 101. Model rules
26 (1) The regulations may prescribe model rules.
27 (2) The model rules may make provision for any matter for which
28 the rules of a co-operative may make provision.
page 62
Co-operatives Bill 2009
Rules Part 5
s. 102
1 102. Rules can only be altered in accordance with this Act
2 The rules of a co-operative cannot be altered except in
3 accordance with this Act.
4 103. Approval of alteration of rules
5 (1) A proposed alteration of the rules of a co-operative must be
6 approved by the Registrar before the resolution altering the rules
7 is passed by the co-operative or the board of the co-operative.
8 (2) A draft of the proposed alteration must be submitted to the
9 Registrar at least 21 days (or a shorter period the Registrar may
10 allow in a particular case) before --
11 (a) the notice of the proposed special resolution altering the
12 rules is due to be given to the members by the
13 co-operative; or
14 (b) the resolution is due to be passed by the board of the
15 co-operative.
16 (3) The proposed alteration submitted under subsection (2) must be
17 accompanied by a written statement specifying the date on
18 which the notice is due to be given to members or the resolution
19 is due to be passed by the board, as the case may be.
20 (4) The proposed alteration must --
21 (a) be in accordance with section 98; and
22 (b) be made in a form approved by the Registrar; and
23 (c) be accompanied by a statement setting out the reasons
24 for the alteration.
25 (5) The Registrar may --
26 (a) approve the proposed alteration as submitted; or
27 (b) approve a different alteration to that submitted; or
28 (c) refuse to approve the proposed alteration.
page 63
Co-operatives Bill 2009
Part 5 Rules
s. 104
1 (6) Subject to subsection (7), the Registrar approves a proposed
2 alteration by giving written notice of the approval to the
3 co-operative.
4 (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
6 specified in the written statement submitted under
7 subsection (3), the Registrar gives written notice to the
8 co-operative that the Registrar --
9 (a) has approved a different alteration to that submitted; or
10 (b) has refused to approve the proposed alteration; or
11 (c) is still considering the matter.
12 104. Alteration by special resolution
13 The rules of a co-operative must be altered by special resolution
14 unless this Act provides otherwise.
15 105. Alteration by resolution of board
16 (1) The rules of a co-operative may be altered by a resolution
17 passed by the board if the alteration does no more than give
18 effect to a requirement, restriction or prohibition imposed under
19 the authority of this Act.
20 (2) If the rules of a co-operative are altered under this section, the
21 co-operative must cause the alteration to be notified in writing
22 to its members as soon as practicable after the alteration takes
23 effect and in any event not later than the day when notice is
24 given to the members of the next annual general meeting of the
25 co-operative after the alteration takes effect.
26 106. Alteration does not take effect until registered
27 (1) An alteration of the rules of a co-operative does not take effect
28 unless and until it is registered by the Registrar.
29 (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 2009
Rules Part 5
s. 107
1 (b) be made within 28 days, or a shorter or longer period
2 prescribed by the regulations, after the resolution to alter
3 the rules is passed; and
4 (c) be accompanied by a consolidated copy of the rules of
5 the co-operative, including the alteration.
6 (3) The Registrar must register the alteration unless --
7 (a) the Registrar is satisfied that the alteration is contrary to
8 this Act; or
9 (b) the Registrar has other reasonable cause to refuse to
10 register the alteration.
11 (4) A certificate of registration of an alteration of the rules of a
12 co-operative given by the Registrar is, in favour of any person
13 advancing money to the co-operative on the faith of the
14 certificate or in favour of any guarantor of that advance,
15 evidence that the alteration in the rules was properly made.
16 107. Appeal against refusal to approve alteration
17 A co-operative may appeal to the Supreme Court against a
18 failure of the Registrar to approve an alteration of its rules.
19 108. Appeal against refusal to register
20 A co-operative may appeal to the Supreme Court against a
21 failure of the Registrar to register an alteration of its rules.
22 109. Supreme Court's powers on appeal
23 The Supreme Court may make any order it considers
24 appropriate to dispose of an appeal under section 107 or 108.
page 65
Co-operatives Bill 2009
Part 6 Active membership
Division 1 Definitions
s. 110
1 Part 6 -- Active membership
2 Division 1 -- Definitions
3 110. Meaning of active membership resolution
4 In this Part --
5 active membership resolution has the meaning given in
6 section 112(2).
7 111. What is active membership
8 For the purposes of this Act, a member of a co-operative is an
9 active member of the co-operative if the member --
10 (a) uses or supports an activity of, or maintains a
11 relationship or an arrangement with, the co-operative,
12 for carrying on a primary activity of the co-operative, in
13 the way and to the extent that the rules of the
14 co-operative provide is sufficient to establish active
15 membership; or
16 (b) maintains any other relationship or arrangement with the
17 co-operative for carrying on a primary activity of the
18 co-operative that the regulations provide is sufficient to
19 establish active membership.
20 112. What are active membership provisions and resolutions
21 (1) Active membership provisions in the rules of a co-operative are
22 provisions in the rules that state --
23 (a) which of the activities of the co-operative are the
24 primary activities of the co-operative; and
25 (b) the way in which and the extent to which a member of
26 the co-operative must use or support an activity of, or
27 maintain a relationship or an arrangement with, the
28 co-operative for carrying on a primary activity of the
29 co-operative, in order to establish active membership of
30 the co-operative.
page 66
Co-operatives Bill 2009
Active membership Part 6
Rules to contain active membership provisions Division 2
s. 113
1 (2) An active membership resolution is a resolution that would, if
2 given effect to, make or amend active membership provisions in
3 the rules of a co-operative.
4 Division 2 -- Rules to contain active membership provisions
5 113. Number of primary activities required
6 A co-operative must have at least one primary activity.
7 114. Rules to contain active membership provisions
8 The board of a co-operative must ensure that the rules of the
9 co-operative contain active membership provisions in
10 accordance with this Part.
11 115. Factors and considerations for determining primary
12 activities etc.
13 (1) The board of a co-operative must ensure that the relevant factors
14 and considerations are taken into account in deciding --
15 (a) which of the activities of a co-operative are its primary
16 activities; and
17 (b) the way and extent to which a member is required to use
18 or support an activity of, or maintain a relationship or an
19 arrangement with, a co-operative, for carrying on a
20 primary activity of the co-operative, in order to establish
21 active membership of the co-operative.
22 (2) The relevant factors and considerations are --
23 (a) the primary activity or, if more than one, the primary
24 activities taken together must form the basic purpose for
25 which the co-operative exists and a significant
26 contribution to the business of the co-operative; and
27 (b) the way and extent of the required utilisation, support,
28 relationship or arrangement should be reasonable when
29 considered in relation to the activities of the
30 co-operative as a whole; and
page 67
Co-operatives Bill 2009
Part 6 Active membership
Division 2 Rules to contain active membership provisions
s. 116
1 (c) any other factors and considerations that are prescribed
2 by the regulations.
3 (3) The regulations may --
4 (a) provide for the matters to be taken into account in
5 deciding whether an activity makes a significant
6 contribution to the business of the co-operative; and
7 (b) specify minimum percentages of turnover, minimum
8 amounts of income or minimum amounts of business
9 necessary to constitute that significant contribution.
10 (4) Nothing in this section limits the right of active members other
11 than the board of the co-operative to propose an active
12 membership resolution.
13 116. Active membership provisions -- distributing co-operatives
14 The only active membership provisions that are permitted to be
15 contained in the rules of a distributing co-operative are --
16 (a) provisions requiring a member to use an activity of the
17 co-operative for carrying on a primary activity specified
18 in the provisions to establish active membership; and
19 (b) any other active membership provisions that the
20 Registrar may approve.
21 117. Regular subscription -- active membership of
22 non-distributing co-operative
23 (1) Active membership provisions for a non-distributing
24 co-operative may provide that the payment of a regular
25 subscription by a member of the co-operative, to be applied to a
26 primary activity of the co-operative, is sufficient to establish
27 active membership of the co-operative.
28 (2) A member of a co-operative who would, on payment of the
29 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 2009
Active membership Part 6
Active membership resolutions Division 3
s. 118
1 Division 3 -- Active membership resolutions
2 118. Notice of meeting
3 (1) At least 21 days notice must be given to members of a
4 co-operative of a meeting at which an active membership
5 resolution is to be proposed.
6 (2) The notice must, in addition to the other matters required under
7 this Act to be stated --
8 (a) contain the full text of the proposed resolution; and
9 (b) contain a copy of section 120.
10 119. Eligibility of directors to vote on proposal at board meeting
11 If the board of a co-operative is meeting to consider a proposal
12 to submit an active membership resolution to a meeting of the
13 co-operative all the directors are eligible to vote on that
14 proposal at the meeting of the board.
15 Division 4 -- Cancellation of membership of inactive or
16 missing members
17 120. Cancellation of membership of inactive or missing member
18 (1) In this section --
19 required period, in relation to a co-operative, means --
20 (a) 3 years; or
21 (b) a shorter period if specified in the rules of the
22 co-operative.
23 (2) Subject to subsection (3), sections 123 and 124, the board of a
24 co-operative must declare the membership of a member
25 cancelled if --
26 (a) the whereabouts of the member are not presently known
27 to the co-operative and have not been known to the
page 69
Co-operatives Bill 2009
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 121
1 co-operative for at least the required period before that
2 time; or
3 (b) the member is not presently an active member of the
4 co-operative and has not been an active member of the
5 co-operative at any time during the required period
6 immediately before that time.
7 (3) Subsection (2) applies to a member only if he or she was a
8 member of the co-operative throughout the required period.
9 (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
11 provisions in force at that time.
12 (5) The board's declaration under this section has the effect of
13 cancelling the membership concerned.
14 (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
16 membership under this section.
17 121. Share to be forfeited if membership cancelled
18 (1) If a co-operative has a share capital, the board of the
19 co-operative must declare the shares of a member to be forfeited
20 at the same time as the member's membership is cancelled
21 under section 120.
22 (2) The board's declaration has the effect of forfeiting the shares
23 concerned.
24 (3) Nothing in this section affects the operation of section 127.
25 122. Failure to cancel membership -- offence by director
26 If the board of a co-operative fails to cancel the membership of
27 a member as required by this Part, a director of the co-operative
28 who did not use all due diligence to prevent the failure commits
29 an offence.
30 Penalty: a fine of $2 000.
page 70
Co-operatives Bill 2009
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 123
1 123. Deferral of forfeiture by board
2 (1) The board of a co-operative may by resolution defer
3 cancellation of a member's membership for a period of up to
4 12 months (the deferral period) --
5 (a) if the board has reasonable grounds to believe that a
6 member has ceased to be an active member because of
7 unusual circumstances that prevent the member
8 fulfilling his or her active membership obligations; or
9 (b) if --
10 (i) the board thinks that during the deferral period
11 an active membership resolution may be put to
12 the members of the co-operative; and
13 (ii) the effect of the resolution would be relevant to
14 the question of whether the member is an active
15 member.
16 (2) The board of the co-operative must review the resolution to
17 defer within the deferral period to determine if a further
18 resolution should be made under subsection (1).
19 124. Cancellation of membership prohibited in certain
20 circumstances
21 Unless the regulations otherwise provide, the board of a
22 co-operative must not declare the membership of a member to
23 be cancelled under this Part --
24 (a) if the co-operative is insolvent; or
25 (b) if the co-operative is under administration under the
26 Corporations Act Part 5.3A as applying under this Act;
27 or
28 (c) if a compromise or an arrangement is being
29 administered in relation to the co-operative; or
30 (d) if the co-operative is in the course of being wound-up;
31 or
page 71
Co-operatives Bill 2009
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 125
1 (e) if an appointment of a receiver, whether or not a receiver
2 and manager, of any property of the co-operative is in
3 force; or
4 (f) if the co-operative has, for the purposes of being
5 registered as a company under the Corporations Act,
6 lodged with the Registrar a copy of the entry made in
7 the minute book of the co-operative under section 185;
8 or
9 (g) in other circumstances as may be prescribed by the
10 regulations.
11 125. Notice of intention to cancel membership
12 (1) Unless subsection (2) applies, the board of a co-operative must
13 ensure that notice of its intention to declare the membership of a
14 member to be cancelled is given to the member not less than
15 28 days prior to the day of the cancellation.
16 (2) Notice is not required to be given under this section if --
17 (a) the member's whereabouts are unknown to the
18 co-operative; or
19 (b) the amount required to be repaid to the member in
20 relation to the cancelled membership, whether because
21 of the cancellation of shares or otherwise, does not
22 exceed the amount prescribed by the regulations, or if an
23 amount is not prescribed, $100.
24 126. Order of Supreme Court against cancellation
25 (1) If the Supreme Court is satisfied that the cancellation of a
26 member's membership under section 120 was or would be
27 unreasonable, the Court may by order direct that the
28 membership should not have been cancelled or should not be
29 cancelled.
page 72
Co-operatives Bill 2009
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 127
1 (2) While an order is in force under this section --
2 (a) the membership concerned is not required to be
3 cancelled and any shareholding of the member is not
4 required to be forfeited; and
5 (b) the person whose membership was cancelled is entitled
6 to be reinstated as a member of the co-operative with all
7 the rights and entitlements, including any shareholding,
8 attaching to or arising from the former membership.
9 (3) Reinstatement of a member under this section is to be effected
10 in accordance with the directions of the Supreme Court.
11 127. Repayment of amounts due because of cancelled
12 membership
13 (1) If the membership of a member of a co-operative is cancelled
14 under this Part, the co-operative must --
15 (a) within 12 months after the date of cancellation, repay to
16 the former member an amount (the repayable amount)
17 made up of the amount paid up to the stated nominal
18 value of the shares forfeited by the member at the time
19 of cancellation less any amount owed by the member to
20 the co-operative at that time under the rules of the
21 co-operative or any contract or otherwise; or
22 (b) in the case of a transferred co-operative the rules of
23 which state how to calculate the repayable amount
24 owing to a former member at the time of cancellation of
25 membership, within 3 years after the date of
26 cancellation, repay to the former member an amount in
27 accordance with those rules; or
28 (c) within 12 months after the date of cancellation, apply
29 the repayable amount under subsection (2) if --
30 (i) the board considers that repayment would
31 adversely affect the financial position of the
32 co-operative; or
33 (ii) the board and the former member agree.
page 73
Co-operatives Bill 2009
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 127
1 (2) The repayable amount may be applied in one of the following
2 ways --
3 (a) if the co-operative is a deposit-taking co-operative, the
4 co-operative may apply the amount as a deposit by the
5 former member with the co-operative, subject to the
6 requirements of section 128 as to interest on the deposit;
7 (b) the co-operative may issue debentures or co-operative
8 capital units to the former member in satisfaction of the
9 amount;
10 (c) the co-operative may appropriate the amount as a
11 donation to the co-operative, but only if the former
12 member consents in writing to the donation.
13 (3) If the balance sheet of the co-operative last issued before the
14 cancellation of a member's membership disclosed a loss or
15 deficiency or a significant change in the financial position or
16 prospects of the co-operative is subsequently reported prior to
17 the loss or deficiency, the paid up value of the member's shares
18 may, for the purposes of calculating the repayable amount, be
19 reduced as described in subsection (4).
20 (4) The paid up value of the member's shares may be reduced by an
21 amount that bears to the amount of the loss or deficiency so
22 disclosed the same proportion as the number of shares held by
23 the member bore to the total number of shares held by all
24 members of the co-operative at the time of cancellation.
25 (5) If the former member is subsequently readmitted to
26 membership, any amount held by the co-operative under this
27 section must, if the member so requests, be applied towards the
28 cost of admission to membership, including any subscription for
29 share capital.
30 (6) Despite subsection (2)(c), if --
31 (a) the co-operative cannot, after taking all reasonable
32 action, find the former member; and
page 74
Co-operatives Bill 2009
Active membership Part 6
Cancellation of membership of inactive or missing members Division 4
s. 128
1 (b) the payment due is less than the amount prescribed by
2 the regulations, or if an amount is not prescribed, $100,
3 the co-operative may appropriate the payment as a donation to
4 the co-operative.
5 128. Interest on deposits, debentures and co-operative capital
6 units
7 (1) This section applies when --
8 (a) the amount payable to a former member under
9 section 73 or 127 is applied as a deposit with the
10 co-operative; or
11 (b) the co-operative allots or issues debentures or
12 co-operative capital units to the former member in
13 satisfaction of that amount.
14 (2) The deposit, debenture or co-operative capital unit bears interest
15 during any period --
16 (a) in the case of a co-operative with share capital --
17 (i) at the rate, or if there is more than one rate, at the
18 higher or highest rate, of dividend payable for
19 that period on the share capital of the
20 co-operative; or
21 (ii) if the rate of dividend payable for that period has
22 not been determined, at the rate, or the higher or
23 highest rate, payable for the immediately
24 preceding period for which a rate has been
25 decided; or
26 (iii) if a rate of dividend has never been determined
27 in relation to the share capital of the
28 co-operative, at the rate that the board of the
29 co-operative considers reasonable;
30 or
page 75
Co-operatives Bill 2009
Part 6 Active membership
Division 4 Cancellation of membership of inactive or missing members
s. 129
1 (b) in the case of a co-operative without share capital, at the
2 rate that the board of the co-operative considers
3 reasonable; or
4 (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
6 that higher rate.
7 (3) A former member may agree to the rate of interest being less
8 than that which would otherwise be payable under this section
9 and may agree to no interest being paid.
10 (4) The following provisions of the Corporations Act, as applied by
11 section 250 of this Act, do not apply to an allotment or issue of
12 debentures or co-operative capital units under this section --
13 (a) Chapter 2L;
14 (b) Chapter 6D.
15 129. Repayment of deposits, and redemption of debentures and
16 co-operative capital units
17 (1) A deposit, debenture or co-operative capital unit to which an
18 amount payable to a former member is applied under this
19 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
21 the opinion of the board, adversely affect the financial position
22 of the co-operative.
23 (2) The deposit, debenture or co-operative capital unit must in any
24 case be repaid or redeemed within 10 years, or within any
25 shorter period that the rules of the co-operative may require,
26 after cancellation of the member's membership.
27 130. Register of cancelled memberships
28 A co-operative must keep a register stating the particulars, as
29 prescribed by the regulations, of persons whose membership has
30 been cancelled under this Part.
page 76
Co-operatives Bill 2009
Active membership Part 6
Entitlements of former members of distributing co-operatives Division 5
s. 131
1 Division 5 -- Entitlements of former members of
2 distributing co-operatives
3 131. Application of Division
4 (1) This Division only applies to distributing co-operatives.
5 (2) Sections 132, 133 and 134 apply to the extent they are not
6 inconsistent with the rules of each particular distributing
7 co-operative.
8 132. Former shareholders to be taken to be shareholders for
9 certain purposes
10 (1) Even though a person's shares in a co-operative have been
11 forfeited under this Part, the person is to be taken to be the
12 holder of shares in the co-operative (the same in all respects as
13 those that were forfeited) for the following purposes --
14 (a) the entitlements of a shareholder in relation to the
15 purchase of shares in the co-operative pursuant to an
16 offer described in section 289(a), (b) or (c) or the
17 purchase of all the shares in the co-operative, if the offer
18 or purchase occurs within 2 years after the person's
19 shares were forfeited;
20 (b) the entitlement of a shareholder when the co-operative
21 becomes registered as a company if the relevant special
22 resolution under section 306 is passed within 2 years
23 after the person's shares were forfeited;
24 (c) the entitlement of a shareholder to a distribution of
25 surplus in a winding-up of the co-operative that
26 commences within 2 years after the person's shares were
27 forfeited.
28 (2) Subsection (1)(a) does not apply to --
29 (a) an offer described in section 289(a) or (c) that is made
30 by another co-operative; or
31 (b) the purchase of all the shares in the co-operative by
32 another co-operative.
page 77
Co-operatives Bill 2009
Part 6 Active membership
Division 5 Entitlements of former members of distributing co-operatives
s. 133
1 (3) Subsection (1)(c) does not apply if the winding-up is for the
2 purposes of a merger under Part 12 Division 1.
3 (4) For the removal of doubt, it is declared that the entitlement
4 under subsection (1)(a) of a person whose shares have been
5 forfeited does not include an entitlement to vote on any matter.
6 (5) This section does not apply to a forfeited shareholding in a
7 co-operative if section 133 operates to require that forfeited
8 shareholding to be regarded as a forfeited shareholding in
9 another co-operative.
10 133. Entitlements of former shareholders on mergers etc.
11 (1) This section applies when a person's shares in a co-operative
12 (the original co-operative) are forfeited under this Part and
13 within 2 years after that forfeiture --
14 (a) the original co-operative becomes a subsidiary of
15 another co-operative (the new co-operative); or
16 (b) another co-operative (the new co-operative) is created as
17 a result of a merger under Part 12 Division 1 involving
18 the original co-operative; or
19 (c) the engagements of the original co-operative are
20 transferred to another co-operative (the new
21 co-operative) under Part 12 Division 1.
22 (2) A person referred to in subsection (1) is, for the purposes of the
23 operation of section 132, and the further operation of this
24 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
26 this Part when the person's shares in the original co-operative
27 were forfeited.
28 (3) The extent of the forfeited shareholding in the new co-operative
29 is determined as follows --
30 (a) if the entitlement of active members of the original
31 co-operative in the circumstances concerned is solely an
32 entitlement to be allotted shares in the new co-operative,
33 the forfeited shareholding in the new co-operative is the
page 78
Co-operatives Bill 2009
Active membership Part 6
Entitlements of former members of distributing co-operatives Division 5
s. 134
1 shareholding to which the person would have been
2 entitled had the person's shares in the original
3 co-operative not been forfeited;
4 (b) in any other case, the forfeited shareholding in the new
5 co-operative is the shareholding that is the same in all
6 respects as the forfeited shareholding in the original
7 co-operative.
8 (4) The determination under subsection (3)(a) of the person's
9 shareholding in the new co-operative must be made --
10 (a) solely on the basis of the person's shareholding in the
11 original co-operative when the shares were forfeited or,
12 in a further operation of this section in respect of the
13 person, when the person was first to be regarded as
14 having a forfeited shareholding in the original
15 co-operative; and
16 (b) without regard to any additional shareholding in the
17 original co-operative to which the person would have
18 become entitled had the shares not been forfeited,
19 whether as a result of any bonus share issue or
20 otherwise.
21 134. Set off of amounts repaid etc. on forfeited shares
22 (1) If a person has an entitlement because of the operation of
23 section 133, the entitlement operates to end any liability of the
24 co-operative --
25 (a) to repay to the person under section 127 any amount for
26 the forfeited shares concerned; or
27 (b) in respect of a deposit held by the co-operative, or
28 debentures allotted or issued to the person, or
29 co-operative capital units issued under section 127 for
30 the forfeited shares concerned, except a liability to pay
31 interest that is payable but unpaid.
32 (2) If an amount has been repaid to a person under section 127
33 or 129, the amount repaid is to be set off against any entitlement
page 79
Co-operatives Bill 2009
Part 6 Active membership
Division 5 Entitlements of former members of distributing co-operatives
s. 135
1 of the person under section 132 for the forfeited shares
2 concerned.
3 (3) If the amount repaid cannot be set off against the entitlement
4 because the entitlement is not, or is only partly, an entitlement
5 to money, the entitlement is lost unless the person pays to the
6 co-operative the amount repaid to the person and does so within
7 the period required under subsection (4).
8 (4) If the circumstances referred to in subsection (3) arise, the
9 co-operative concerned must --
10 (a) give written notice of the matter by post to the person
11 concerned at the person's address last known to the
12 co-operative, specifying a period of not less than
13 28 days after the notice is given during which any
14 amount repaid must be paid to the co-operative; and
15 (b) publish a general notice to that effect in a newspaper
16 circulating generally in the district in which the
17 registered office of the co-operative is situated.
18 135. Regulations may exempt co-operatives from provisions
19 The regulations may exempt a co-operative from a provision of
20 this Division.
page 80
Co-operatives Bill 2009
Shares Part 7
Nature of share Division 1
s. 136
1 Part 7 -- Shares
2 Division 1 -- Nature of share
3 136. Nature of share in co-operative
4 (1) A share or other interest in a co-operative --
5 (a) is personal property; and
6 (b) is transferable or transmissible as provided by this Act
7 and the rules of the co-operative; and
8 (c) is, subject to the rules of the co-operative, capable of
9 devolution by will or by operation of law.
10 (2) Subject to subsection (1) --
11 (a) the laws applying to ownership of and dealing with
12 personal property apply to a share or other interest of a
13 member in a co-operative as they apply to other
14 property; and
15 (b) equitable interests in respect of a share or other interest
16 of a member in a co-operative may be created, dealt with
17 and enforced as in the case of other personal property.
18 Division 2 -- Disclosure
19 137. Disclosure to intending shareholders in distributing
20 co-operative
21 (1) An eligible person who intends to apply for shares in a
22 co-operative and is not already a shareholder in the co-operative
23 may request, from the board of the distributing co-operative, a
24 current disclosure statement that --
25 (a) has been approved by the Registrar under section 16(5);
26 or
27 (b) complies with section 138 and has been lodged by the
28 co-operative with the Registrar.
page 81
Co-operatives Bill 2009
Part 7 Shares
Division 2 Disclosure
s. 138
1 (2) The board of the distributing co-operative is to respond to a
2 request for a current disclosure statement within 7 days.
3 138. Content of disclosure statement to intending shareholders
4 (1) A disclosure statement given to a person under section 137 must
5 contain --
6 (a) a statement of the rights and liabilities attaching to
7 shares; and
8 (b) a statement that the person may request to either inspect
9 at the co-operative's nearest office, or be sent --
10 (i) the last annual report of the co-operative under
11 section 235(2); and
12 (ii) any other relevant information about the
13 financial position and prospects of the
14 co-operative if there has been a significant
15 change since the date of the last annual report;
16 and
17 (c) any other information the Registrar directs.
18 (2) If a person who has received a disclosure statement makes a
19 request under subsection (1)(b), the co-operative must comply
20 with that request within 7 days.
21 139. Exemptions for disclosure statements
22 (1) The Registrar may, by order published in the Gazette, exempt
23 the board of a distributing co-operative, or the boards of a class
24 of distributing co-operatives from a requirement under
25 section 137 or 138.
26 (2) An exemption under subsection (1) may be given only if the
27 Registrar is satisfied that compliance with the requirement
28 would be inappropriate in the circumstances or would impose an
29 unreasonable burden.
page 82
Co-operatives Bill 2009
Shares Part 7
Issues of shares Division 3
s. 140
1 Division 3 -- Issues of shares
2 140. Shares -- general
3 (1) The share capital of a co-operative varies in amount according
4 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
6 the rules of the co-operative.
7 (3) A co-operative may have more than one class of shares
8 provided the shareholding and the rights of shareholders comply
9 with the co-operative principles.
10 (4) Subject to this Part and Part 4, shares must not be issued to a
11 non-member.
12 141. Application of Corporations Act for particular share
13 subscriptions
14 (1) If subsection (2) applies to shares of a co-operative, the shares
15 are declared to be applied Corporations legislation matters for
16 the Corporations (Ancillary Provisions) Act 2001 Part 3 in
17 relation to the Corporations Act sections 716(2), 722, 723(2),
18 724(1)(a) and (2)(a) and 734, subject to the following
19 modifications --
20 (a) the provisions apply as if a co-operative were a
21 company;
22 (b) a reference in the provisions to ASIC is to be read as a
23 reference to the Registrar;
24 (c) a reference in the provisions to a disclosure document is
25 to be read as a reference to a disclosure statement, of
26 any type, under this Act;
27 (d) a reference in the provisions to securities is to be read as
28 a reference to shares;
29 (e) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
31 that are prescribed by the regulations.
page 83
Co-operatives Bill 2009
Part 7 Shares
Division 3 Issues of shares
s. 142
1 (2) Shares in a co-operative are subject to the declaration under
2 subsection (1) if --
3 (a) the shares are offered to persons who are not
4 shareholders in the co-operative; or
5 (b) the invitation is made to persons who are not
6 shareholders in the co-operative.
7 142. Minimum paid up amount
8 (1) A share in a co-operative other than a transferred co-operative
9 must not be allotted unless at least 10% of the nominal value of
10 the share has been paid.
11 (2) Any balance unpaid for shares at the time of allotment must be
12 paid in a way specified in the rules of the co-operative or
13 permitted by this Act.
14 (3) This section does not apply to a bonus share issued under
15 section 147 or 271.
16 143. Shares not to be issued at a discount
17 A co-operative must not issue shares at a discount.
18 144. Issue of shares at a premium
19 (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
21 consideration.
22 (3) If a distributing co-operative issues shares for which it receives
23 a premium, an amount equal to the total amount or value of the
24 premiums on the shares must be transferred to a share premium
25 account.
26 (4) The share premium account is to be treated as paid up share
27 capital of the distributing co-operative and may be applied in
28 any one or more of the following ways --
29 (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 2009
Shares Part 7
Issues of shares Division 3
s. 145
1 (b) in paying up, in whole or in part, the balance unpaid on
2 shares previously issued to members of the co-operative;
3 (c) in the payment of dividends, if those dividends are
4 satisfied by the issue of shares to members of the
5 co-operative;
6 (d) in writing off the expenses incurred in establishing the
7 co-operative;
8 (e) in providing for the premium payable on redemption of
9 shares, debentures or co-operative capital units.
10 145. Joint ownership of shares
11 A share may be held by 2 or more persons jointly, unless the
12 rules of the co-operative provide otherwise.
13 146. Members may be required to take up additional shares
14 (1) The board of a distributing co-operative may require a member
15 to take up or subscribe for additional shares under a proposal
16 approved by a special resolution of the co-operative.
17 (2) The board of a distributing co-operative may deduct amounts in
18 payment for additional shares from money payable to members
19 for dealings with the co-operative, under a proposal approved
20 by a special resolution of the co-operative.
21 (3) A proposal to require a member to take up or subscribe for
22 additional shares must --
23 (a) be accompanied by a disclosure statement, approved by
24 the Registrar, that explains the purpose for which the
25 funds raised by the issue of the additional shares are to
26 be used; and
27 (b) clearly show the total number of additional shares to be
28 issued and the basis on which the shares are to be
29 apportioned among members; and
30 (c) be accompanied by a statement informing the member
31 that the member may inform the board by notice on or
32 before the date specified in the statement, being a date
page 85
Co-operatives Bill 2009
Part 7 Shares
Division 3 Issues of shares
s. 147
1 before the passing of the special resolution, that the
2 member resigns on the passing of the special resolution.
3 (4) A proposal to deduct amounts in payment for additional shares
4 from amounts payable to members for dealings with the
5 distributing co-operative must clearly show --
6 (a) the basis on which the deductions are to be made; and
7 (b) the time and way of making those deductions.
8 (5) A proposal approved under this section is binding on --
9 (a) all members of the distributing co-operative at the date
10 of the passing of the special resolution, other than a
11 member who has given a notice of resignation in
12 accordance with subsection (3)(c); and
13 (b) all persons who become members of the distributing
14 co-operative after that date and before the total number
15 of shares to be issued under the proposal has been
16 issued.
17 (6) Sections 16 (except subsection (3)) and 29 apply to the approval
18 of a disclosure statement under this section with any necessary
19 changes and in particular as if any reference in section 16 to a
20 formation meeting were a reference to the special resolution.
21 (7) This section does not apply to the issue of bonus shares to a
22 member under section 271(2).
23 147. Bonus share issues
24 (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
26 of the co-operative --
27 (a) have been sold at a profit; or
28 (b) have been revalued at a greater value than that disclosed
29 before the revaluation in the books of the co-operative.
30 (2) This section does not apply if the assets were acquired for resale
31 at a profit.
page 86
Co-operatives Bill 2009
Shares Part 7
Issues of shares Division 3
s. 148
1 148. Restrictions on bonus shares
2 Bonus shares issued under section 147 may be issued in
3 accordance with the rules of the co-operative, subject to the
4 following restrictions --
5 (a) each issue must have been approved by a special
6 resolution of the co-operative;
7 (b) they are to be issued as fully paid up shares with no
8 payment required to be made by a member of the
9 co-operative to whom they are issued;
10 (c) they are to be issued only for shares of the same class of
11 shares that are fully paid up as at the date of issue of the
12 bonus shares;
13 (d) the total nominal value of bonus shares issued by a
14 co-operative in any one year cannot be more than 20%,
15 or another percentage prescribed by the regulations, of
16 the nominal value of the issued share capital of the
17 co-operative immediately before the date of issue of the
18 bonus shares.
19 149. Notice about bonus shares
20 Notice of the meeting or postal ballot at which a resolution is to
21 be proposed as a special resolution for the purpose of approving
22 a bonus share issue must be accompanied by --
23 (a) a statement of the value of the assets concerned as
24 disclosed in the books of the co-operative before the sale
25 or revaluation; and
26 (b) if the issue arises from, or partly from, a sale of assets, a
27 statement of the price for which the assets were sold;
28 and
29 (c) if the issue arises from, or partly from, a revaluation of
30 assets, a certificate of value of the assets, being a
31 certificate given in relation to a valuation made not more
32 than 12 months before the date of the notice by a person
33 prescribed by the regulations or a person having
34 qualifications prescribed by the regulations; and
page 87
Co-operatives Bill 2009
Part 7 Shares
Division 4 Beneficial and non-beneficial interest in shares
s. 150
1 (d) particulars of acquisitions of shares in the co-operative
2 made within the 3 years immediately preceding the date
3 of the notice by or on behalf of each of its directors and
4 his or her spouse (or de facto partner) and the father,
5 mother, children, brothers and sisters of each such
6 director and spouse (or de facto partner); and
7 (e) a certificate signed by 2 directors of the co-operative
8 stating that to the best of their knowledge and belief the
9 issue of bonus shares would not be imprudent and that
10 no circumstances are known to them as to why the issue
11 should not take place.
12 Division 4 -- Beneficial and non-beneficial interest in shares
13 150. Direction to disclose
14 The board of a co-operative may direct a person to disclose
15 matters as described in section 151 if the person is --
16 (a) a member of the co-operative; or
17 (b) a person named in a disclosure made in response to a
18 previous direction under this section as having a relevant
19 interest in, or having given instructions about, shares in
20 the co-operative.
21 151. Disclosure by member of relevant interests and instructions
22 (1) A person given a direction under section 150 must, unless
23 subsection (2) applies, disclose to the board --
24 (a) full details of the person's relevant interest in the shares
25 of the co-operative (the relevant shares) and of the
26 circumstances that gave rise to the interest; and
27 (b) the name and address of each other person who has a
28 relevant interest in the relevant shares together with full
29 details of --
30 (i) the nature and extent of the interest; and
page 88
Co-operatives Bill 2009
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 151
1 (ii) the circumstances that gave rise to the other
2 person's interest;
3 and
4 (c) the name and address of each person who has given the
5 person instructions about --
6 (i) the acquisition or disposal of the shares; or
7 (ii) the exercise of any voting or other rights attached
8 to the shares; or
9 (iii) any other matter relating to the shares,
10 together with full details of those instructions, including
11 the date or dates on which they were given.
12 Penalty: a fine of $3 000.
13 (2) A matter referred to in subsection (1)(b) or (c) need only be
14 disclosed to the extent to which the matter is ascertainable by
15 the person required to make the disclosure.
16 (3) The disclosure must be made within the period of 5 days after
17 the person is given the direction, unless within that period the
18 person applies in writing to the Registrar for an exemption from
19 compliance with the direction.
20 (4) The Registrar may, in writing, exempt a person from complying
21 with a direction if the Registrar believes the direction is
22 unjustified.
23 (5) If the Registrar refuses to give an exemption under
24 subsection (4), the disclosure required by the direction must be
25 made within the period of 5 days after the person receives
26 written notice of that refusal.
27 (6) A board that receives information from a person acting on a
28 direction given to the person by the board must pay to the
29 person the fee, if any, prescribed by the regulations.
page 89
Co-operatives Bill 2009
Part 7 Shares
Division 4 Beneficial and non-beneficial interest in shares
s. 152
1 152. Registration as trustee etc. on death of owner of shares
2 (1) A trustee, executor or administrator of the estate of a dead
3 person who was the registered holder of a share in a
4 co-operative may be registered as the holder of the share as
5 trustee, executor or administrator of that estate.
6 (2) A trustee, executor or administrator of the estate of a dead
7 person who was entitled in equity to a share in a co-operative
8 may, with the consent of the co-operative and of the registered
9 holder of the share, be registered as the holder of the share as
10 trustee, executor or administrator of that estate.
11 153. Registration as administrator of estate on incapacity of
12 shareholder
13 (1) This section applies to a person (the appointed person) who is
14 appointed under a law of a State or Territory relating to the
15 administration of the estates of persons who, through mental or
16 physical infirmity, are incapable of managing their affairs, to
17 administer the estate of another person (the incapable person).
18 (2) If the incapable person is the registered holder of a share in a
19 co-operative, the appointed person may be registered as the
20 holder of that share as administrator of the estate of the
21 incapable person.
22 (3) If the incapable person is entitled in equity to a share in a
23 co-operative, the appointed person may, with the consent of the
24 co-operative and of the registered holder of that share, be
25 registered as the holder of the share as administrator of the
26 estate of the incapable person.
27 154. Registration as Official Trustee in Bankruptcy
28 (1) This section applies when a share in a co-operative that is the
29 property of a bankrupt vests by force of the Bankruptcy
30 Act 1966 (Commonwealth) in the Official Trustee in
31 Bankruptcy.
page 90
Co-operatives Bill 2009
Shares Part 7
Beneficial and non-beneficial interest in shares Division 4
s. 155
1 (2) If the bankrupt is the registered holder of the share, the Official
2 Trustee may be registered as the holder of the share as the
3 Official Trustee in Bankruptcy.
4 (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
6 registered holder of the share, be registered as the holder of the
7 share as the Official Trustee in Bankruptcy.
8 155. Liabilities of person registered as trustee or administrator
9 (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
11 as those to which the person would have been subject if the
12 share had remained, or had been, registered in the name of the
13 dead person, the incapable person or the bankrupt.
14 (2) The person registered is subject to no other liabilities in relation
15 to the share.
16 156. Notice of trusts in register of members
17 Shares held by a trustee under a particular trust may, with the
18 consent of the co-operative, be marked in the register of
19 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.
21 157. No notice of trust except as provided by this Division
22 Except as provided in this Division --
23 (a) no notice of a trust, whether express, implied or
24 constructive, is to be entered on a register or be
25 receivable by the Registrar; and
26 (b) no liabilities are affected by anything done under this
27 Division; and
28 (c) nothing done under this Division affects a co-operative
29 with notice of a trust.
page 91
Co-operatives Bill 2009
Part 7 Shares
Division 5 Sale or transfer of shares
s. 158
1 Division 5 -- Sale or transfer of shares
2 158. Sale or transfer of shares
3 (1) A share in a co-operative cannot be sold or transferred except --
4 (a) in accordance with Part 4 Division 3 and section 159, on
5 the death of a member; or
6 (b) to a person appointed to administer the estate of a
7 shareholder under a law relating to the administration of
8 the estates of persons who, through mental or physical
9 infirmity, are incapable of managing their affairs; or
10 (c) with the consent of the board, to any person if there are
11 reasonable grounds for believing that the person will be
12 an active member of the co-operative; or
13 (d) in accordance with Part 11 Division 2.
14 (2) A share in a co-operative cannot be sold or transferred except in
15 accordance with the rules of the co-operative.
16 159. Transfer on death of member
17 (1) Despite sections 75 and 76, on the death of a member, the
18 member's share in the co-operative may be transferred to a
19 person other than an administrator or executor with the consent
20 of the board of the co-operative.
21 (2) The board may only give its consent under subsection (1) if
22 there are reasonable grounds for believing that the person will
23 be an active member of the co-operative.
24 160. Restriction on total shareholding
25 The board of a co-operative must not consent under
26 section 158(1)(c) to the issue, sale or transfer of a share if, as a
27 result of the issue, sale or transfer, the nominal value of the
28 shares held by the purchaser or transferee would be more than
29 the maximum permissible level of share interest applying under
30 section 278.
page 92
Co-operatives Bill 2009
Shares Part 7
Repurchase of shares Division 6
s. 161
1 161. Transfer not effective until registered
2 A transferor of a share remains the holder of the share until the
3 transferee is noted as the holder of the share in the register of
4 members, directors and shares referred to in section 230(1)(a).
5 162. Non-members become members on registration
6 Where a share in a co-operative is transferred to a non-member
7 under this Part or Part 4, the transferee becomes a member of
8 the co-operative on the transferee being noted as a member in
9 the register of members, directors and shares referred to in
10 section 230(1)(a).
11 Division 6 -- Repurchase of shares
12 163. Purchase and repayment of shares
13 (1) The rules of a co-operative may authorise the co-operative to --
14 (a) purchase any share of a member in the co-operative at
15 the request of the member; and
16 (b) repay to a member, with the member's consent, all or
17 any part of the amount paid up to the stated nominal
18 value on any share held by the member when the
19 amount repaid is not required for the activities of the
20 co-operative.
21 (2) The amount paid by a co-operative under this section in
22 purchasing shares or repaying an amount paid up to the stated
23 nominal value on shares, or both, in any financial year of the
24 co-operative must not be more than the total of --
25 (a) 5% of the nominal value of the issued share capital of
26 the co-operative immediately before the start of that
27 financial year; and
28 (b) the amount of any additional share capital of the
29 co-operative subscribed for during that year.
30 (3) The members of a co-operative may by special resolution
31 exempt a co-operative from the operation of subsection (2) in
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Part 7 Shares
Division 6 Repurchase of shares
s. 164
1 relation to a particular financial year, either unconditionally or
2 on conditions.
3 (4) The amount paid for a share when it is repurchased may be an
4 amount decided by the board that is less than the nominal value
5 of the share but only --
6 (a) if the records of the co-operative disclose that the
7 amount paid is the net shareholder's equity per share in
8 the undertaking of the co-operative; or
9 (b) in accordance with the rules of the co-operative.
10 (5) This section does not apply if the member has resigned or has
11 been expelled from the co-operative or the member's
12 membership has been otherwise cancelled.
13 164. Deposit, debentures or co-operative capital units instead of
14 payment when share repurchased
15 (1) If a co-operative repurchases a share of a member, the
16 co-operative may instead of paying the purchase price to the
17 member --
18 (a) in the case of a deposit-taking co-operative, apply the
19 amount as an interest bearing deposit by the member
20 with the co-operative; or
21 (b) allot or issue debentures or co-operative capital units of
22 the co-operative to the member in satisfaction of the
23 amount.
24 (2) Subsection (1) applies only if --
25 (a) the board considers that payment of the repurchase price
26 would adversely affect the financial position of the
27 co-operative; or
28 (b) the board and the member so agree.
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Shares Part 7
Repurchase of shares Division 6
s. 164
1 (3) The deposit, debenture or co-operative capital unit bears interest
2 during any period --
3 (a) in the case of a co-operative with share capital --
4 (i) at the rate (or, if there is more than one rate, at
5 the higher or highest rate) of dividend payable
6 for that period on the share capital of the
7 co-operative; or
8 (ii) if the rate of dividend payable for that period has
9 not been decided, at the rate (or the higher or
10 highest rate) payable for the immediately
11 preceding period for which a rate has been
12 decided; or
13 (iii) if a rate of dividend has never been decided for
14 the share capital of the co-operative, at the rate
15 that the board of the co-operative considers
16 reasonable;
17 or
18 (b) in the case of a co-operative without share capital, at the
19 rate that the board of the co-operative considers
20 reasonable; or
21 (c) if the rules provide for a rate to be payable that is higher
22 than the rate applicable under paragraph (a) or (b), at the
23 higher rate.
24 (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
26 as repayment or redemption would not, in the opinion of the
27 board, adversely affect the financial position of the
28 co-operative.
29 (5) The deposit, debenture or co-operative capital unit must in any
30 case be repaid or redeemed within 10 years (or within any
31 shorter period that the rules of the co-operative require) after the
32 repurchase of the shares concerned.
page 95
Co-operatives Bill 2009
Part 7 Shares
Division 6 Repurchase of shares
s. 165
1 165. Cancellation of shares
2 (1) A co-operative must cancel any share purchased by or forfeited
3 to the co-operative in accordance with this Act or the rules of
4 the co-operative.
5 (2) Any shares held by a co-operative in itself at the time the
6 co-operative is registered under this Act are cancelled under this
7 section.
page 96
Co-operatives Bill 2009
Voting and meetings Part 8
Voting entitlements Division 1
s. 166
1 Part 8 -- Voting and meetings
2 Division 1 -- Voting entitlements
3 166. Application of Part to voting
4 The provisions of this Part applying to voting apply to voting on
5 all resolutions.
6 167. Voting
7 (1) The right to vote attaches to membership and not shareholding.
8 (2) Except as provided in subsections (3) and (4), each member has
9 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
11 have the number of votes (up to 5) at a general meeting that is
12 specified in the rules.
13 (4) If the rules so provide, the chairman has a casting vote at a
14 board meeting or general meeting.
15 (5) In the case of joint membership --
16 (a) the joint members have only one vote between them;
17 and
18 (b) that vote may be exercised, subject to the grant of a
19 proxy or power of attorney, only by the joint member
20 determined in accordance with the rules.
21 168. Voting by proxy
22 (1) If the rules so provide, voting may be by proxy at a general
23 meeting.
24 (2) The instrument of proxy may state the way in which a proxy is
25 to vote on a particular resolution.
26 (3) The proxy must vote in the way authorised by an instrument of
27 proxy referred to in subsection (2).
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Co-operatives Bill 2009
Part 8 Voting and meetings
Division 1 Voting entitlements
s. 169
1 (4) The rules of a co-operative may limit the number of persons for
2 whom a person may act as a proxy on the same question.
3 (5) A person cannot exercise more than one proxy vote during a
4 vote on the same question unless the vote is conducted by poll
5 demanded under section 194.
6 169. Control of the right to vote
7 (1) Subject to subsection (3), a person must not directly or
8 indirectly control the exercise of the right to vote of a member.
9 Penalty: a fine of $12 000.
10 (2) If a person controls the exercise of the right to vote of a member
11 at a meeting of a co-operative --
12 (a) the vote of the member is invalid; and
13 (b) if the person is a member, the vote of the person is
14 invalid.
15 (3) Nothing in this section prevents --
16 (a) the exercise of a vote by means of a proxy or power of
17 attorney; or
18 (b) a director controlling the vote of a corporate member; or
19 (c) an agreed purchaser controlling a member's vote
20 pending settlement.
21 170. Effect of disposal of shares on voting rights
22 A member of a co-operative cannot vote if the member has sold
23 or transferred, or disposed of the beneficial interest in, the
24 member's shares, or has agreed to do so.
25 171. Effect of relevant share and voting interests on voting rights
26 (1) A member of a co-operative cannot vote if another person,
27 whether or not a member of the co-operative, has a relevant
28 interest in any share held by the member or in the right to vote
29 of the member.
page 98
Co-operatives Bill 2009
Voting and meetings Part 8
Resolutions Division 2
s. 172
1 (2) A member who cannot vote because of this section may apply to
2 the Registrar to review the matter.
3 (3) The Registrar may order that the member may vote if the
4 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
6 of the Registrar has effect accordingly.
7 172. Rights of representatives
8 A person appointed under this Act to represent a member of a
9 co-operative --
10 (a) is deemed to receive any notice of meetings given to the
11 member represented; and
12 (b) is entitled to exercise the same rights to vote as the
13 member represented.
14 173. Other rights and duties of members not affected by
15 ineligibility to vote
16 A provision of this Act that disentitles a member of a
17 co-operative to vote, either generally or in relation to a
18 particular matter, does not affect any other right, entitlement,
19 obligation or duty of the member as a member.
20 174. Vote of disentitled member to be disregarded
21 Any vote cast by or on behalf of a member of a co-operative
22 when not entitled to vote must be disregarded.
23 Division 2 -- Resolutions
24 175. Decisions to be by ordinary resolution
25 Unless this Act or the rules of the co-operative provide
26 otherwise, every question for decision by a co-operative must be
27 decided by ordinary resolution.
page 99
Co-operatives Bill 2009
Part 8 Voting and meetings
Division 2 Resolutions
s. 176
1 176. Ordinary resolutions
2 An ordinary resolution is a resolution of a co-operative that is
3 passed by a simple majority at a general meeting of the
4 co-operative or in a postal ballot of members.
5 177. Special resolutions
6 (1) A special resolution is a resolution of a co-operative that is
7 passed --
8 (a) by a two-thirds majority at a general meeting of
9 members; or
10 (b) by a two-thirds majority in a postal ballot, other than a
11 special postal ballot, of members; or
12 (c) by a three-quarters majority in a special postal ballot of
13 members.
14 (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
16 resolution to be passed by postal ballot, including a special
17 postal ballot.
18 (3) A resolution is not taken to have been passed as a special
19 resolution unless not less than 21 days notice has been given to
20 the members of the co-operative stating --
21 (a) the intention to propose the special resolution; and
22 (b) the reasons for proposing the special resolution; and
23 (c) the effect of the special resolution being passed.
24 178. How majority obtained is ascertained
25 (1) A resolution is passed by a particular majority at a meeting if
26 that majority of the members of the co-operative who, being
27 entitled to do so, vote in person or, if proxies are allowed, by
28 proxy at the meeting vote in favour of the resolution.
29 (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
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Co-operatives Bill 2009
Voting and meetings Part 8
Resolutions Division 2
s. 179
1 entitled to do so, cast formal votes in the postal ballot vote in
2 favour of the resolution.
3 179. Declaration of passing of special resolution
4 (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
6 that the resolution has been passed as a special resolution is
7 evidence of that fact.
8 (2) A declaration by the returning officer for a postal ballot to pass
9 a special resolution that the resolution has been passed as a
10 special resolution is evidence of that fact.
11 (3) Subsection (1) does not apply if a poll is taken at the meeting of
12 the co-operative.
13 180. Effect of special resolution
14 (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
16 is passed.
17 (2) A special resolution relating to anything for which a special
18 resolution is required to be passed by special postal ballot has
19 no effect until it is registered under section 182(1).
20 181. Lodgment of special resolution
21 (1) A co-operative must lodge 2 copies of each special resolution
22 passed by the co-operative with the Registrar in accordance with
23 this section for registration.
24 (2) The copies must --
25 (a) be lodged within 28 days after the passing of a special
26 resolution or a longer period allowed by the Registrar;
27 and
28 (b) be signed by a director, the secretary of the co-operative
29 or another authorised representative of the co-operative;
30 and
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Co-operatives Bill 2009
Part 8 Voting and meetings
Division 2 Resolutions
s. 182
1 (c) be accompanied by the lodgment fee prescribed by the
2 regulations.
3 (3) A co-operative and an officer of the co-operative must not
4 knowingly fail to lodge the required copies under this section.
5 Penalty: a fine of $2 000.
6 (4) This section and section 182 do not apply to a special resolution
7 altering the rules of a co-operative.
8 182. Decision of Registrar on application to register special
9 resolution
10 (1) If the Registrar is satisfied that the co-operative has complied
11 with this Act, and that a special resolution passed by special
12 postal ballot is not contrary to this Act, the Registrar must
13 register the special resolution.
14 (2) If the Registrar considers that the effect of a special resolution
15 lodged for registration would be in contravention of this Act or
16 any other law, the Registrar --
17 (a) may refuse to register the special resolution; and
18 (b) must give written notice to the co-operative that the
19 special resolution --
20 (i) in the case of a special resolution referred to in
21 section 180(2), has no effect; and
22 (ii) in any other case, has no effect as from the date
23 that it was passed.
24 (3) A certificate of registration of a special resolution given by the
25 Registrar is, in favour of any person advancing money to the
26 co-operative on the faith of the certificate or in favour of any
27 guarantor of that advance, evidence that the resolution was
28 properly passed.
page 102
Co-operatives Bill 2009
Voting and meetings Part 8
Resolution by circulated document Division 3
s. 183
1 Division 3 -- Resolution by circulated document
2 183. Application of Division 3
3 This Division applies to a resolution of a co-operative, including
4 a resolution appointing an officer or auditor or approving of or
5 agreeing to any act, matter or thing, if --
6 (a) the co-operative has fewer than 50 members; and
7 (b) the resolution is required or permitted under this Act or
8 the rules of the co-operative to be passed at a general
9 meeting of the co-operative.
10 184. Resolution by circulation of document -- fewer than
11 50 members
12 (1) If all the members of a co-operative have signed a document
13 that sets out the terms of a resolution and contains a statement
14 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.
16 (2) The meeting is taken to have been held --
17 (a) if all the members signed the document on the one day,
18 on that day and at the time the document was signed by
19 the last member to sign; or
20 (b) if the members signed the document on different days,
21 on the day, and at the time, the document was signed by
22 the last member to sign.
23 (3) The document need not exist as a single document, but may
24 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
26 meeting.
27 (5) Anything attached to the document and signed by the members
28 signing the document is taken to have been laid before the
29 co-operative at the general meeting.
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Co-operatives Bill 2009
Part 8 Voting and meetings
Division 4 Postal ballots
s. 185
1 (6) The document is signed by all members of a co-operative only if
2 the document is signed by each person who was a member of
3 the co-operative at the time the document was signed by the last
4 member to sign.
5 (7) Nothing in this section affects or limits any rule of law about the
6 effectiveness of the assent of a member of a co-operative given
7 to a document, or to an act, matter or thing, otherwise than at a
8 general meeting of the co-operative.
9 Division 4 -- Postal ballots
10 185. Postal ballots
11 (1) A postal ballot may be conducted in the manner provided by the
12 rules of the co-operative and may, if the rules so allow,
13 incorporate one or more methods of electronic voting.
14 (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
16 the minute book of the co-operative showing --
17 (a) the number of formal votes cast in favour of the
18 proposal concerned; and
19 (b) the number of formal votes cast against the proposal;
20 and
21 (c) the number of informal votes cast.
22 186. Special postal ballots
23 (1) A special postal ballot is a postal ballot that is conducted as
24 required by this section.
25 (2) The ballot cannot be held less than 21 days after notice of the
26 ballot is given to members so as to enable sufficient time for a
27 meeting to discuss the proposal that is the subject of the ballot
28 to be convened and held (whether by the board or on the
29 requisition of members).
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Voting and meetings Part 8
Postal ballots Division 4
s. 187
1 (3) The co-operative must send to each member, along with any
2 other material required to be sent in connection with the postal
3 ballot, a disclosure statement approved by the Registrar and
4 containing information about --
5 (a) the financial position of the co-operative; and
6 (b) the interests of the directors of the co-operative in the
7 proposal with which the ballot is concerned, including
8 any interests of the directors in another organisation
9 concerned in the proposal; and
10 (c) any compensation or consideration to be paid to officers
11 or members of the co-operative in connection with the
12 proposal; and
13 (d) any other matters as the Registrar directs.
14 (4) If required by the Registrar, the disclosure statement is to be
15 accompanied by a report, made by an independent person
16 approved by the Registrar, about any matters that the Registrar
17 directs.
18 (5) Sections 16 (except subsection (3)) and 29 apply to the approval
19 of a disclosure statement under this section with any necessary
20 changes and in particular as if any reference in section 16 to a
21 formation meeting were a reference to the notice of the special
22 postal ballot.
23 187. When a special postal ballot required
24 In addition to any requirement of this Act, the rules of a
25 co-operative must require a special postal ballot to be conducted
26 for the purpose of passing a special resolution in relation to any
27 of the following matters relating to the co-operative --
28 (a) conversion of --
29 (i) a share capital co-operative to a non-share capital
30 co-operative or vice versa; or
31 (ii) a distributing co-operative to a non-distributing
32 co-operative or vice versa;
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Part 8 Voting and meetings
Division 4 Postal ballots
s. 188
1 (b) transfer of incorporation;
2 (c) an acquisition or disposal of assets referred to in
3 section 273;
4 (d) the maximum permissible level of share interest in the
5 co-operative;
6 (e) takeover;
7 (f) merger;
8 (g) transfer of engagements;
9 (h) members' voluntary winding-up.
10 188. Holding of postal ballot on requisition
11 (1) The board of a co-operative must conduct a postal ballot,
12 including a special postal ballot, for the passing of a special
13 resolution on the written requisition of such number of members
14 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
16 number of votes able to be cast at a meeting of the co-operative.
17 (2) The following provisions apply to a requisition for a postal
18 ballot --
19 (a) it must state --
20 (i) the proposed special resolution to be voted on;
21 and
22 (ii) the reasons for the making of the special
23 resolution; and
24 (iii) the effect of the special resolution being passed;
25 (b) it must be signed by the requisitioning members, and
26 may consist of several documents in like form each
27 signed by one or more of the requisitioning members;
28 (c) it must be served on the co-operative by being lodged at
29 the registered office of the co-operative.
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Co-operatives Bill 2009
Voting and meetings Part 8
Meetings Division 5
s. 189
1 (3) The postal ballot must be conducted as soon as practicable and
2 in any case must be conducted within 2 months after the
3 requisition is served.
4 (4) If the special resolution for which the requisitioned postal ballot
5 is conducted is not passed, the co-operative may recover the
6 expenses of the postal ballot from the members who
7 requisitioned the postal ballot as a debt due to the co-operative.
8 (5) The members' liability under subregulation (4) is joint and
9 several.
10 189. Expenses involved in postal ballots on requisition
11 (1) All reasonable expenses incurred by a co-operative in and in
12 connection with preparing for and holding a special postal ballot
13 are to be considered to constitute the expenses of the postal
14 ballot for the purposes of section 188(4).
15 (2) Those expenses include (but are not limited to) the following
16 expenses --
17 (a) the cost of obtaining expert advice, including legal and
18 financial advice, and of commissioning expert reports;
19 (b) costs attributable to the use of staff of the co-operative
20 in connection with preparing for and holding the ballot;
21 (c) the cost of producing, printing and posting the ballot
22 papers and other material associated with the ballot;
23 (d) the cost of convening and holding a meeting under
24 section 186(2) at the request of the members who
25 requisitioned the postal ballot.
26 Division 5 -- Meetings
27 190. Annual general meetings
28 (1) In the case of a co-operative registered under Part 2 Division 4,
29 the first annual general meeting of the co-operative must be held
30 within 18 months after registration under this Act.
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Part 8 Voting and meetings
Division 5 Meetings
s. 191
1 (2) In the case of a co-operative registered under Part 2 Division 5,
2 the first annual general meeting of the co-operative must be held
3 within 18 months after the last annual general meeting held by
4 that co-operative before it was registered under this Act.
5 (3) The second or any later annual general meeting of a
6 co-operative must be held within --
7 (a) 5 months after the close of the financial year of the
8 co-operative; or
9 (b) a further time that may be allowed by the Registrar or is
10 prescribed by the regulations.
11 191. Special general meetings
12 A special general meeting of a co-operative may be called at
13 any time by the board of the co-operative.
14 192. Notice of meetings
15 The board must give each member at least 14 days notice of
16 each general meeting.
17 193. Quorum at meetings
18 (1) The quorum for a meeting of a co-operative must be specified in
19 the rules.
20 (2) An item of business cannot be transacted at a meeting of a
21 co-operative unless a quorum of members entitled to vote is
22 present during the transaction of that item.
23 194. Decision at meetings
24 (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
26 a show of hands.
27 (2) A proxy may exercise only one vote on a question determined
28 by a show of hands.
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Voting and meetings Part 8
Meetings Division 5
s. 195
1 (3) A proxy may exercise more than one vote on a question
2 determined by a poll.
3 (4) A question is to be determined by a poll if --
4 (a) 5 members, present in person at the meeting or
5 represented at the meeting by a proxy, demand the poll;
6 or
7 (b) the chairman directs that the question will be determined
8 by poll.
9 (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
11 hands takes place or at which the poll is demanded may exercise
12 a casting vote if the rules so provide.
13 195. Calling of general meeting on requisition
14 (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
16 members who together are able to cast at least 20% (or any
17 lesser percentage specified in the rules of the co-operative) of
18 the total number of votes able to be cast at a meeting of the
19 co-operative.
20 (2) The following provisions apply to a requisition for a general
21 meeting --
22 (a) it must state the objects of the meeting;
23 (b) it must be signed by the requisitioning members, and
24 may consist of several documents in like form each
25 signed by one or more of the requisitioning members;
26 (c) it must be served on the co-operative by being lodged at
27 the registered office of the co-operative.
28 (3) The meeting must be called and held as soon as practicable and
29 in any case must be held within 2 months after the requisition is
30 served.
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Part 8 Voting and meetings
Division 5 Meetings
s. 196
1 (4) If the board does not call a meeting within 35 days after a
2 requisition is served, the following provisions apply --
3 (a) the requisitioning members, or any of them representing
4 at least half their total voting rights, may call the
5 meeting in the same way as nearly as possible as
6 meetings are called by the board;
7 (b) for that purpose they may request the co-operative to
8 supply a written statement setting out the names and
9 addresses of the persons entitled when the requisition
10 was served to receive notice of general meetings of the
11 co-operative;
12 (c) the board must send the requested statement to the
13 requisitioning members within 7 days after the request
14 for the statement is made;
15 (d) the meeting called by the requisitioning members must
16 be held not later than 3 months after the requisition is
17 served;
18 (e) any reasonable expenses incurred by the requisitioning
19 members because of the board's failure to call the
20 meeting must be paid by the co-operative;
21 (f) any amount required to be paid by the co-operative
22 under paragraph (e) must be retained by the co-operative
23 out of any money due from the co-operative by way of
24 fees or other remuneration in respect of their services to
25 such of the directors as were in default.
26 196. Minutes
27 (1) Minutes of --
28 (a) each general meeting; and
29 (b) each meeting of the board; and
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Voting and meetings Part 8
Meetings Division 5
s. 196
1 (c) each meeting of a committee to which the board's
2 functions have been delegated under section 204(1),
3 must be entered in the appropriate records within one month
4 after the meeting and confirmed at, and signed by the chairman
5 of, the next meeting.
6 (2) The minutes of each general meeting must be available for
7 inspection by members.
8 (3) Minutes must be kept in the English language.
page 111
Co-operatives Bill 2009
Part 9 Management and administration of co-operatives
Division 1 The Board
s. 197
1 Part 9 -- Management and administration
2 of co-operatives
3 Division 1 -- The Board
4 197. Board of directors
5 (1) Subject to this Act and the rules of the co-operative, the
6 business of a co-operative is to be managed by a board of
7 directors.
8 (2) The board of directors may exercise all the powers of the
9 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
11 general meeting or by postal ballot.
12 (3) The acts of a director are valid despite any defect that may
13 afterwards be discovered in his or her appointment or
14 qualification.
15 198. Election of directors
16 (1) Except as provided in subsections (2), (3) and (4), the directors
17 of a co-operative are to be elected in the manner specified in the
18 rules of the co-operative.
19 (2) The first directors of --
20 (a) a co-operative formed under this Act are to be elected at
21 its formation meeting; and
22 (b) a co-operative that was a corporation incorporated under
23 another Act are to be the directors in office at the date of
24 registration under this Act.
25 (3) If authorised by the rules of the co-operative, a board of
26 directors may appoint a person to fill a casual vacancy in the
27 office of a director until the next annual general meeting.
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1 (4) A resolution passed at a general meeting of a co-operative
2 electing 2 or more directors is void unless --
3 (a) the meeting previously resolved that the nominations for
4 election could be voted on together; and
5 (b) no votes were cast against that previous resolution.
6 (5) Subsection (4) does not affect --
7 (a) a resolution to appoint directors by an amendment to the
8 co-operative's rules; or
9 (b) a ballot or poll to elect 2 or more directors if the ballot
10 or poll does not require members voting for one
11 candidate to vote for another specific candidate.
12 (6) For the purposes of subsection (5), a ballot or poll does not
13 require a member to vote for a candidate merely because the
14 member is required to express a preference among individual
15 candidates in order to cast a valid vote.
16 (7) A nomination for election or appointment to the office of a
17 director must give details of the qualifications and experience of
18 the person nominated.
19 (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
21 or her term of office.
22 199. Qualification of directors
23 (1) In this section --
24 member director means a director who is a person qualified to
25 be a director under subsection (2)(a).
26 (2) A person is not qualified to be a director of a co-operative
27 unless the person is --
28 (a) a member of the co-operative or a representative of a
29 corporation that is a member of the co-operative; or
30 (b) an employee of the co-operative or a person qualified as
31 provided by the rules.
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1 (3) The majority of directors must be member directors.
2 (4) Subsection (3) does not prevent the rules of a co-operative
3 requiring that a greater number of directors than a majority must
4 be member directors.
5 200. Disqualified persons
6 (1) A person must not act as a director or directly or indirectly take
7 part in or be concerned with the management of a co-operative
8 if the person --
9 (a) is the auditor of the co-operative or a partner, employee
10 or employer of the auditor; or
11 (b) has been convicted, whether before or after the
12 commencement of this section, within or outside this
13 State --
14 (i) on indictment of an offence relating to the
15 promotion, formation or management of a
16 corporation; or
17 (ii) of an offence involving fraud or dishonesty
18 punishable on conviction by imprisonment for
19 not less than 3 months; or
20 (iii) of an offence under the Corporations Act
21 section 184, 344, 590, 592, 670A or 728; or
22 (iv) of an offence under a provision of a previous law
23 of this State or of another State or Territory, with
24 which any of the provisions referred to in
25 subparagraph (iii) corresponds,
26 within 5 years after the conviction or, if sentenced to
27 imprisonment, after the person's release from prison,
28 except with the leave of the Supreme Court.
29 Penalty: a fine of $24 000 and imprisonment for 2 years.
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1 (2) A person must not act as a director or directly or indirectly take
2 part in or be concerned with the management of a co-operative
3 if the person --
4 (a) has been convicted of an offence under this Act, within
5 5 years after the conviction, except with leave of the
6 Supreme Court; or
7 (b) is disqualified from managing corporations under the
8 Corporations Act Part 2D.6; or
9 (c) is an insolvent under administration, as defined in the
10 Corporations Act section 9.
11 Penalty: a fine of $24 000 and imprisonment for 2 years.
12 (3) In proceedings for an offence against subsection (1), a
13 certificate by an authority prescribed by the regulations stating
14 that a person was released from prison on a specified date, is
15 evidence that the person was released from prison on that date.
16 (4) A person who intends to apply for leave of the Supreme Court
17 must give the Registrar at least 21 days notice of the person's
18 intention.
19 (5) The Supreme Court may grant leave subject to any condition or
20 limitation it considers appropriate.
21 (6) A person must comply with any condition or limitation subject
22 to which leave is granted.
23 Penalty: a fine of $24 000 and imprisonment for 2 years.
24 (7) On the application of the Registrar the Supreme Court may
25 revoke its leave.
26 (8) Subject to this section, a co-operative is declared to be an
27 applied Corporations legislation matter for the purposes of the
28 Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
29 to the provisions of the Corporations Act Part 2D.6, subject to
30 the following modifications --
31 (a) a reference in the provisions to a corporation is to be
32 read as a reference to a co-operative;
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1 (b) a reference in the provisions to a company is to be read
2 as a reference to a co-operative;
3 (c) a reference in the provisions to ASIC is to be read as a
4 reference to the Registrar;
5 (d) any other modifications, within the meaning of the
6 Corporations (Ancillary Provisions) Act 2001 Part 3,
7 that are prescribed by the regulations.
8 201. Meeting of the board of directors
9 (1) In this section --
10 independent director means a director who is an employee of
11 the co-operative or a person qualified as provided by the rules;
12 member director has the meaning given to that term in
13 section 199(1).
14 (2) Meetings of the board of directors must be held at least once
15 every 3 months and may be held as often as may be necessary.
16 (3) A meeting of the board of directors may be called by a director
17 giving notice individually to every other director.
18 (4) The board of directors may hold meetings, or allow directors to
19 take part in its meetings by telephone, video link, or another
20 form of communication that allows reasonably
21 contemporaneous and continuous communication between the
22 directors taking part in the meeting.
23 (5) A quorum of a meeting of the board of directors is 50% of the
24 number of directors or a greater number of directors specified in
25 the rules of the co-operative.
26 (6) For a quorum, the member directors must outnumber the
27 independent directors by at least one, or, if a greater number is
28 stated in the rules of the co-operative, the greater number.
29 (7) The chairman of the board may be elected either by the board or
30 at a general meeting of the co-operative, and is to be elected,
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1 hold office, and retire, and may be removed from office, as
2 provided by the rules of the co-operative.
3 202. Transaction of business outside meetings
4 (1) The board of a co-operative may, if it considers appropriate,
5 transact any of its business by the circulation of papers among
6 all of the directors of the board.
7 (2) A resolution in writing approved in writing by a majority of the
8 directors of the board is taken to be a decision of the board.
9 (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
11 identical in each copy.
12 (4) For the purpose of approving a resolution under this section, the
13 chairman of the board and each director have the same voting
14 rights as they have at an ordinary meeting of the board.
15 (5) The resolution is approved when the last director required for
16 the majority signs.
17 (6) A resolution of a board must be recorded in the minutes of the
18 meetings of the board within 28 days after the resolution is
19 approved.
20 (7) Papers may be circulated among directors of the board for the
21 purposes of this section by facsimile or other transmission of the
22 information in the papers concerned.
23 203. Alternate directors
24 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
26 from a meeting of the board.
27 204. Delegation by board
28 (1) If authorised by the rules of a co-operative, the board of the
29 co-operative may, by resolution, delegate the board's powers,
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1 other than this power of delegation, specified in the resolution
2 to --
3 (a) a director; or
4 (b) a committee of 2 or more directors; or
5 (c) a committee of members of the co-operative; or
6 (d) a committee of members of the co-operative and other
7 persons if members form the majority of persons on the
8 committee; or
9 (e) a committee of directors and other persons.
10 (2) The board may, by resolution, revoke wholly or in part a
11 delegation under this section.
12 (3) A function, the exercise of which has been delegated under this
13 section, may be exercised from time to time in accordance with
14 the terms of the delegation while the delegation remains
15 unrevoked.
16 (4) A delegation under this section may be made subject to
17 conditions or limitations as to the exercise of any of the
18 functions delegated, or as to time or circumstance.
19 (5) Despite any delegation under this section, the board may
20 continue to exercise all or any of the functions delegated.
21 205. Removal from and vacation of office
22 (1) The directors hold office and must retire, and may be removed
23 from office, as provided by the rules of the co-operative.
24 (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
26 cases --
27 (a) if the director is disqualified from being a director as
28 provided by section 200;
29 (b) if the director absents himself or herself from
30 3 consecutive ordinary meetings of the board without its
31 leave;
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1 (c) if the director resigns the office of director by written
2 notice given by the director to the co-operative;
3 (d) if the director is removed from office by special
4 resolution of the co-operative;
5 (e) if the person ceases to hold the qualification by reason
6 of which the person was qualified to be a director;
7 (f) if an administrator of the co-operative's affairs is
8 appointed under Part 12 Division 5.
9 Division 2 -- Secretary
10 206. Secretary
11 (1) A co-operative must have a secretary.
12 (2) The board of the co-operative is to appoint the secretary.
13 (3) The board may appoint a person to act as the secretary during
14 the absence or incapacity of the secretary.
15 (4) A person is not qualified to be appointed as, or to act as, the
16 secretary unless the person is an adult who ordinarily lives in
17 Australia.
18 Division 3 -- Duties and liabilities of directors, officers
19 and employees
20 207. Meaning of officer
21 In this Division --
22 officer of a co-operative means --
23 (a) a director or secretary of the co-operative; or
24 (b) a person who is concerned, or takes part, in the
25 management of the co-operative, whether or not as a
26 director; or
27 (c) a receiver, or receiver and manager, of property of the
28 co-operative, or another authorised person who enters
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1 into possession or assumes control of property of the
2 co-operative for the purpose of enforcing a charge; or
3 (d) an administrator of a deed of arrangement executed by
4 the co-operative; or
5 (e) a liquidator or provisional liquidator appointed in a
6 voluntary winding-up of the co-operative; or
7 (f) an administrator of the co-operative appointed under the
8 Corporations Act Part 5.3A as applying under this Act;
9 or
10 (g) a trustee or other person administering a compromise or
11 arrangement made between the co-operative and another
12 person or other persons.
13 208. Officers must act honestly
14 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
16 his or her office, both in the State and elsewhere.
17 Penalty:
18 (a) for a contravention committed with intent to deceive
19 or defraud the co-operative, members or creditors of
20 the co-operative or creditors of another person or for
21 another fraudulent purpose, a fine of $24 000 and
22 imprisonment for 2 years;
23 (b) in any other case, a fine of $6 000.
24 209. Standard of care and diligence required
25 (1) In the exercise of his or her powers and the discharge of his or
26 her functions, an officer of a co-operative must exercise the
27 degree of care and diligence that a reasonable person in a like
28 position in a co-operative would exercise in the co-operative's
29 circumstances.
30 Penalty: a fine of $2 000.
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1 (2) An officer is not liable to be convicted for a contravention of
2 this section if the co-operative has resolved by ordinary
3 resolution to forgive the contravention.
4 (3) An officer of a co-operative who makes a business judgment is
5 taken to meet the requirements of subsection (1), and their
6 equivalent duties at common law and in equity, in respect of the
7 judgment if the officer --
8 (a) makes the judgment in good faith for a proper purpose;
9 and
10 (b) does not have a material personal interest in the subject
11 matter of the judgment; and
12 (c) informs himself or herself about the subject matter of
13 the judgment to the extent he or she reasonably believes
14 to be appropriate; and
15 (d) rationally believes that the judgment is in the best
16 interests of the co-operative.
17 (4) The officer's belief that the judgment is in the best interests of
18 the co-operative is a rational one unless the belief is one that no
19 reasonable person in their position would hold.
20 210. Improper use of information or position
21 (1) An officer or employee or former officer or employee of a
22 co-operative or a member of a committee referred to in
23 section 204(1) must not make improper use of information
24 acquired by reason of his or her position as an officer or
25 employee or member to gain, directly or indirectly, an
26 advantage for himself or herself or for any other person or to
27 cause detriment to the co-operative.
28 (2) An officer or employee of a co-operative or a member of a
29 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,
31 to gain, directly or indirectly, an advantage for himself or
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1 herself or for any other person or to cause detriment to the
2 co-operative.
3 Penalty:
4 (a) for a contravention committed with intent to deceive
5 or defraud the co-operative, members or creditors of
6 the co-operative or creditors of another person or for
7 another fraudulent purpose, a fine of $24 000 and
8 imprisonment for 2 years;
9 (b) in any other case, a penalty not exceeding a fine of
10 $6 000.
11 211. Recovery of damages by co-operative
12 (1) If a person contravenes a provision of this Division in relation to
13 a co-operative, the co-operative may, whether or not the person
14 has been convicted of an offence for that contravention, recover
15 an amount from the person as a debt payable to the
16 co-operative.
17 (2) The amount that the co-operative is entitled to recover from the
18 person is --
19 (a) if the person or another person made a profit as a result
20 of the contravention, an amount equal to that profit; and
21 (b) if the co-operative has suffered loss or damage as a
22 result of the contravention, an amount equal to that loss
23 or damage.
24 212. Other duties and liabilities not affected
25 This Division has effect in addition to, and does not limit, a law
26 relating to the duty or liability of a person because of the
27 person's office or employment in relation to a co-operative and
28 does not prevent the institution of any civil proceeding for a
29 breach of a duty or for a liability of that type.
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1 213. Application of Corporations Act concerning indemnities and
2 insurance for officers and auditors
3 A co-operative is declared to be an applied Corporations
4 legislation matter for the purposes of the Corporations
5 (Ancillary Provisions) Act 2001 Part 3 in relation to the
6 Corporations Act sections 199A, (except 199A(2)(b)), 199B
7 and 199C, subject to the following modifications --
8 (a) a reference in the sections to a company is to be read as
9 a reference to a co-operative;
10 (b) a reference in the sections to ASIC is to be read as a
11 reference to the Registrar;
12 (c) a reference to section 183 is to be read as a reference to
13 section 210(1) of this Act;
14 (d) a reference to section 182 is to be read as a reference to
15 section 210(2) of this Act;
16 (e) any other modifications, within the meaning of the
17 Corporations (Ancillary Provisions) Act 2001 Part 3,
18 that are prescribed by the regulations.
19 214. Application of Corporations Act provisions concerning
20 officers of co-operatives
21 A co-operative is declared to be an applied Corporations
22 legislation matter for the purposes of the Corporations
23 (Ancillary Provisions) Act 2001 Part 3 in relation to the
24 Corporations Act sections 344, 589 to 598 and 1307, subject to
25 the following modifications --
26 (a) in section 344, "a company, registered scheme or
27 disclosing entity" is to be read as "a co-operative";
28 (b) a reference in the sections, other than section 344, to a
29 company is to be read as a reference to a co-operative;
30 (c) a reference in the sections to ASIC is to be read as a
31 reference to the Registrar;
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1 (d) any other modifications, within the meaning of the
2 Corporations (Ancillary Provisions) Act 2001 Part 3,
3 that are prescribed by the regulations.
4 Division 4 -- Restrictions on directors and officers
5 215. Directors' remuneration
6 A director of a co-operative must not receive remuneration for
7 services as a director other than fees, concessions and other
8 benefits that are approved at a general meeting of the
9 co-operative.
10 Penalty: a fine of $24 000 or imprisonment for 2 years.
11 216. Certain financial accommodation to officers prohibited
12 (1) An officer of a co-operative who is not a director of the
13 co-operative must not obtain financial accommodation from the
14 co-operative other than --
15 (a) with the approval of a majority of the directors; or
16 (b) under a scheme about providing financial
17 accommodation to officers that has been approved by a
18 majority of the directors.
19 Penalty: a fine of $24 000 or imprisonment for 2 years.
20 (2) For the purposes of this section, financial accommodation is
21 taken to be obtained by an officer of a co-operative if it is
22 obtained by --
23 (a) a proprietary company in which the officer is a
24 shareholder or director; or
25 (b) a trust of which the officer is a trustee or beneficiary; or
26 (c) a trust of which a corporation is trustee if the officer is a
27 director or other officer of the corporation.
28 (3) A co-operative must not give financial accommodation to an
29 officer of the co-operative if --
30 (a) by giving the financial accommodation, the officer
31 would contravene this section; and
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1 (b) the co-operative knows or should reasonably know of
2 the contravention.
3 Penalty: a fine of $50 000.
4 217. Financial accommodation to directors and associates
5 (1) In this section --
6 associate of a director means --
7 (a) the director's spouse (or de facto partner); or
8 (b) a person when acting in the capacity of trustee of a trust
9 under which --
10 (i) the director or director's spouse (or de facto
11 partner) has a beneficial interest; or
12 (ii) a corporation mentioned in paragraph (c) has a
13 beneficial interest;
14 or
15 (c) a corporation if --
16 (i) the director or director's spouse (or de facto
17 partner) has a material interest in shares in the
18 corporation; and
19 (ii) the nominal value of the shares is not less than
20 10% of the nominal value of the issued share
21 capital of the corporation.
22 (2) For the purposes of this section, a person has a material interest
23 in a share in a corporation if --
24 (a) the person has power to withdraw the share capital
25 subscribed for the share or to exercise control over the
26 withdrawal of the share capital; or
27 (b) the person has power to dispose of or to exercise control
28 over the disposal of the share; or
29 (c) the person has power to exercise or to control the
30 exercise of any right to vote conferred on the holder of
31 the share.
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1 (3) A co-operative must not provide financial accommodation to a
2 director, or to a person the co-operative knows or should
3 reasonably know is an associate of a director, unless the
4 accommodation is --
5 (a) approved under subsection (4); or
6 (b) given under a scheme approved under subsection (4); or
7 (c) provided on terms no more favourable to the director or
8 associate than the terms on which it is reasonable to
9 expect the co-operative would give if dealing with the
10 director or associate at arm's length in the same
11 circumstances.
12 Penalty: a fine of $50 000.
13 (4) For the purposes of subsection (3)(a) and (b), financial
14 accommodation or a scheme is approved if --
15 (a) it is approved by a resolution passed at a general
16 meeting; and
17 (b) the full details of the accommodation or scheme were
18 made available to members at least 21 days before the
19 meeting.
20 (5) A director or an associate of a director must not obtain financial
21 accommodation given in contravention of subsection (3).
22 Penalty: a fine of $24 000 or imprisonment for 2 years.
23 (6) For the purposes of this section, a concessional rate of interest
24 for a borrower from a co-operative is a normal term only if the
25 borrower is entitled to the concession by being a member of a
26 class of borrowers from the co-operative specified in its rules as
27 being entitled to the concession.
28 (7) If a director of a co-operative or an associate of a director
29 accepts in payment of a debt owed by a member of the
30 co-operative to the director or associate, any proceeds of
31 financial accommodation provided to the member by the
32 co-operative, this section has effect as if the financial
33 accommodation has been provided to the director or associate.
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s. 218
1 (8) In this section, a reference to --
2 (a) the provision of financial accommodation to a director
3 or an associate of a director; or
4 (b) the obtaining of financial accommodation by a director
5 or an associate of a director; or
6 (c) a debt owed to a director or an associate of a director,
7 includes a reference to a provision of financial accommodation
8 to, or an obtaining of financial accommodation by, the director
9 or associate, or a debt owed to the director or associate, jointly
10 with another person.
11 218. Restriction on directors of certain co-operatives selling land
12 to co-operative
13 A director of a co-operative the primary activity of which is or
14 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
16 special resolution of the co-operative.
17 Penalty: a fine of $24 000 or imprisonment for 2 years.
18 219. Management contracts
19 (1) In this section --
20 management contract means a contract or other arrangement
21 under which --
22 (a) a person who is not an officer of the co-operative agrees
23 to perform the whole, or a substantial part, of the
24 functions of the co-operative, whether under the control
25 of the co-operative or not; or
26 (b) a co-operative agrees to perform the whole or a
27 substantial part of its functions --
28 (i) in a particular way; or
29 (ii) in accordance with the directions of any person;
30 or
31 (iii) subject to specified restrictions or conditions.
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1 (2) A co-operative must not enter into a management contract
2 unless that contract has first been approved by special
3 resolution.
4 (3) A management contract entered into in contravention of
5 subsection (2) is void.
6 Division 5 -- Declaration of interests
7 220. Declaration of interest
8 (1) A director of a co-operative who is or becomes in any way
9 (whether directly or indirectly) interested in a contract, or
10 proposed contract with the co-operative must declare the nature
11 and extent of the interest to the board of directors under this
12 section.
13 Penalty: a fine of $24 000 and imprisonment for 2 years.
14 (2) In the case of a proposed contract, the declaration must be
15 made --
16 (a) at the meeting of the board at which the question of
17 entering into the contract is first considered; or
18 (b) if the director was not at that time interested in the
19 proposed contract, at the next meeting of the board held
20 after the director becomes interested in the proposed
21 contract.
22 (3) If a director becomes interested in a contract with the
23 co-operative after it is made, the declaration must be made
24 at the next meeting of the board held after the director
25 becomes interested in the contract.
26 (4) For the purposes of this section, a general written notice given
27 to the board by a director to the effect that the director --
28 (a) is a member of a specified entity; and
29 (b) is to be regarded as interested in any contract that may,
30 after the giving of the notice, be made with the entity,
31 is a sufficient declaration.
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s. 220
1 (5) A director of a co-operative who holds an office or has an
2 interest in property whereby, whether directly or indirectly,
3 duties or interests might be created that could conflict with the
4 director's duties or interests as director must, under
5 subsection (6), declare at a meeting of the board of directors the
6 fact and the nature, character and extent of the conflict.
7 Penalty: a fine of $24 000 and imprisonment for 2 years.
8 (6) A declaration required by subsection (5) in relation to holding
9 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
11 or she becomes a director, at the first meeting of the
12 board held after --
13 (i) the person becomes a director; or
14 (ii) the relevant facts as to holding the office or
15 having the interest come to the person's
16 knowledge,
17 whichever is the later; or
18 (b) if the person starts to hold the office or acquires the
19 interest after the person becomes a director, at the first
20 meeting of the board held after the relevant facts as to
21 holding the office or having the interest come to the
22 person's knowledge.
23 (7) If a director has made a declaration under this section, then
24 unless the board determines otherwise, the director cannot --
25 (a) be present during any deliberation of the board in
26 relation to the matter; or
27 (b) take part in any decision of the board in relation to the
28 matter.
29 (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
31 declaration under this section, the director cannot --
32 (a) be present during any deliberation of the board for the
33 purpose of making the determination; or
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1 (b) take part in the making by the board of the
2 determination.
3 221. Declarations to be recorded in minutes
4 Every declaration under this Division is to be recorded in the
5 minutes of the meeting at which it was made.
6 222. Division does not affect other laws or rules
7 Except as provided in section 223, this Division is in addition
8 to, and does not limit, the operation of a law or a provision in
9 the rules of the co-operative restricting a director from having
10 an interest in contracts with the co-operative or from holding
11 offices or possessing properties involving duties or interests in
12 conflict with his or her duties or interests as director.
13 223. Certain interests need not be declared
14 The interest in a contract or proposed contract that a director is
15 required by this Division to declare does not include an interest
16 in --
17 (a) a contract or proposed contract for a purchase of goods
18 and services by the director from the co-operative; or
19 (b) a lease of land to the director by the co-operative; or
20 (c) a contract or proposed contract for the sale of
21 commodities or animals by the director to the
22 co-operative; or
23 (d) a contract or proposed contract that, under the rules of
24 the co-operative, may be made between the co-operative
25 and a member; or
26 (e) a contract or proposed contract of a class of contracts
27 prescribed by the regulations,
28 but only if the contract is made in good faith, in the ordinary
29 course of the business of the co-operative, and on the terms that
30 are usual and proper in similar dealings between the
31 co-operative and its members.
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1 Division 6 -- Financial reports and audit
2 224. Meaning of control and entity
3 In this Division --
4 control has the same meaning in relation to a co-operative that it
5 has under the Corporations Act in relation to a corporation;
6 entity has the same meaning in relation to a co-operative that it
7 has under the Corporations Act in relation to a corporation.
8 225. Requirements for financial records and financial reports
9 (1) A co-operative is declared to be an applied Corporations
10 legislation matter for the purposes of the Corporations
11 (Ancillary Provisions) Act 2001 Part 3 in relation to the
12 provisions of the Corporations Act Part 2F.3, sections 249K
13 and 249V and Chapter 2M, subject to the following
14 modifications --
15 (a) a reference in the provisions to a company or to a public
16 company is to be read as a reference to a co-operative;
17 (b) a reference in the provisions to the Court is to be read as
18 a reference to the Supreme Court;
19 (c) a reference in the provisions to "prescribed" is to be read
20 as a reference to "approved by the Registrar";
21 (d) a reference in the provisions to ASIC is to be read as a
22 reference to the Registrar;
23 (e) an offence created in relation to the provisions is the
24 offence set out in subsection (2);
25 (f) any penalty for the offence referred to in paragraph (e) is
26 the penalty set out in subsection (2);
27 (g) a reference in sections 247A and 300(14) and (15) to the
28 Corporations Act section 237 is to be read as a reference
29 to section 91 of this Act;
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1 (h) a reference in section 300(8) to the Corporations Act
2 section 199A(2) or (3) is to be read as a reference to
3 section 213 of this Act;
4 (i) the provisions apply as if sections 247D, 291, 300(12)
5 and (13), 315(3) and (4), 323D(1) and (2), 323DA, 325
6 and Part 2M.1, Part 2M.4 Division 2, Part 2M.5 and
7 Part 2M.6 of the Corporations Act were omitted;
8 (j) a reference in Chapter 2M.3 to a small proprietary
9 company is to be read as a reference to a small
10 co-operative within a class prescribed by the regulations
11 for the purpose of this paragraph;
12 (k) any other modifications, within the meaning of the
13 Corporations (Ancillary Provisions) Act 2001 Part 3,
14 that are prescribed by the regulations.
15 (2) A co-operative must --
16 (a) keep financial records and prepare financial reports as
17 required under this Act; and
18 (b) ensure that the financial reports are audited in
19 accordance with this Act.
20 Penalty: a fine of $2 000.
21 (3) Without limiting the matters for which regulations under this
22 section may make provision, the regulations may make
23 provision for or in relation to the following --
24 (a) requiring the submission of financial reports to the
25 Australian Accounting Standards Board;
26 (b) requiring the adoption by a co-operative of the same
27 financial year for each entity that the co-operative
28 controls.
29 226. Power of Registrar to grant exemptions
30 The Registrar may, by order published in the Gazette,
31 exempt --
32 (a) a co-operative; or
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1 (b) a person or firm proposed to be appointed as an auditor
2 of a co-operative; or
3 (c) a director or auditor of a co-operative,
4 from compliance with a provision of a regulation made for the
5 purpose of this Part or with a provision of the Corporations Act
6 as that Act applies under section 225.
7 227. Disclosure by directors
8 The directors of a co-operative must make the disclosures about
9 the affairs of the co-operative and of any entity that the
10 co-operative controls that are required by the regulations.
11 Penalty: a fine of $2 000.
12 228. Protection of auditors etc.
13 (1) An auditor of a co-operative has qualified privilege in relation
14 to --
15 (a) a statement that the auditor makes, orally or in writing,
16 in the course of his or her duties as auditor; or
17 (b) the giving of notice, or the sending of copies of financial
18 reports or other reports, to the Registrar under this Act.
19 (2) A person has qualified privilege in relation to --
20 (a) the publishing of a document prepared by an auditor in
21 the course of the auditor's duties and required by or
22 under this Act to be lodged with the Registrar, whether
23 or not the document has been lodged; or
24 (b) the publishing of a statement made by an auditor
25 referred to in subsection (1).
26 (3) This section does not limit or affect a right, privilege or
27 immunity that an auditor or other person has, apart from this
28 section, as defendant in proceedings for defamation.
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1 229. Financial year
2 (1) The financial year of a co-operative ends on the day in each
3 year that is provided for by the rules of the co-operative.
4 (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
6 date of its registration to a date not more than 18 months after
7 registration.
8 (3) In the case of a co-operative registered under Part 2 Division 5,
9 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
11 co-operative's last financial year before the co-operative
12 registered under this Act.
13 (4) On an alteration of the rules of a co-operative altering its
14 financial year, the alteration may provide either that the
15 financial year current at the date of alteration is to be extended
16 for a period not exceeding 6 months or that the financial year
17 next following the financial year that is so current is to be a
18 period exceeding 12 months but not exceeding 18 months.
19 Division 7 -- Registers, records and returns
20 230. Registers to be kept by co-operatives
21 (1) A co-operative must keep the following registers in accordance
22 with this section --
23 (a) a register of members, directors and shares, if any;
24 (b) a register of loans to, securities given by, debentures and
25 co-operative capital units issued by and deposits
26 received by the co-operative;
27 (c) a register of names of persons who have given loans or
28 deposits to, or who hold securities given by, or who hold
29 debentures or co-operative capital units issued by the
30 co-operative;
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1 (d) a register of loans made by or guaranteed by the
2 co-operative, and of any securities taken by the
3 co-operative;
4 (e) a register of holders of co-operative capital units, in
5 accordance with section 257(4);
6 (f) a co-operative register of charges, in accordance with
7 Schedule 3 clause 41;
8 (g) a register of memberships cancelled under Part 6, in
9 accordance with section 130;
10 (h) a register of notifiable interests, in accordance with
11 section 284;
12 (i) a register of undertakings, in accordance with
13 section 472(1);
14 (j) other registers prescribed by the regulations.
15 Penalty: a fine of $2 000.
16 (2) The registers must be kept in the way, and contain the
17 particulars, specified by this Act or prescribed by the
18 regulations.
19 231. Location of registers
20 (1) A register kept under this Division must be kept at --
21 (a) the co-operative's registered office; or
22 (b) an office at the co-operative's principal place of
23 business; or
24 (c) an office, whether of the co-operative or of someone
25 else, where the work involved in maintaining the
26 register is done; or
27 (d) another office approved by the Registrar.
28 (2) The office must be in this State.
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1 (3) The co-operative must lodge with the Registrar a notice of the
2 address at which the register is kept within 28 days after the
3 register is --
4 (a) established at an office that is not the co-operative's
5 registered office; or
6 (b) moved from one office to another.
7 232. Inspection of registers etc.
8 (1) A co-operative must have at the office where the registers are
9 kept and available during all reasonable hours for inspection by
10 a member free of charge the following --
11 (a) a copy of this Act and the regulations;
12 (b) a current copy of the rules of the co-operative and any
13 order under section 345;
14 (c) a copy of the minutes of each general meeting of the
15 co-operative;
16 (d) a copy of the last annual report of the co-operative under
17 section 235;
18 (e) the register of directors, members and shares;
19 (f) the register of names of persons who have given loans or
20 deposits to or hold securities, debentures or co-operative
21 capital units given or issued by the co-operative;
22 (g) other registers prescribed by the regulations.
23 (2) If a register is not kept on a computer, the person may inspect
24 the register itself.
25 (3) If the register is kept on a computer, the person may inspect a
26 hard copy of the information on the register unless the person
27 and the co-operative agree that the person can access the
28 information by computer.
29 (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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s. 233
1 rules of the co-operative require a fee to be paid, in which case
2 on payment of the required fee.
3 (5) The fee required by the rules cannot be more than the fee
4 prescribed for a copy of any entry in the register.
5 (6) A co-operative must --
6 (a) permit a member to inspect a document or make a copy
7 of a document that the member is entitled to inspect or
8 make under this section; and
9 (b) give the member all reasonable assistance to inspect the
10 document or make the copy.
11 Penalty: a fine of $2 000.
12 (7) A co-operative must have at the place where the registers are
13 kept and available during all reasonable hours for inspection by
14 any person such documents in relation to the co-operative as are
15 prescribed.
16 Penalty: a fine of $2 000.
17 233. Use of information on registers
18 (1) A person must not --
19 (a) use information about a person obtained from a register
20 kept under this Division to contact or send material to
21 the person; or
22 (b) disclose information of that kind knowing that the
23 information is likely to be used to contact or send
24 material to the person,
25 unless that use or disclosure of the information is --
26 (c) relevant to the holding of the directorship, membership,
27 shares, loans, securities, debentures, co-operative capital
28 units or deposits concerned or the exercise of the rights
29 attaching to them; or
30 (d) approved by the board; or
31 (e) necessary to comply with a requirement of this Act.
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1 (2) A person who contravenes subsection (1) is liable to
2 compensate anyone else who suffers loss or damage because of
3 the contravention.
4 (3) A person who makes a profit from a contravention of
5 subsection (1) owes a debt to the co-operative.
6 (4) The amount of the debt is the amount of the profit.
7 234. Notice of appointment etc. of directors and officers
8 (1) A co-operative must give notice to the Registrar in accordance
9 with this section of the appointment of a person as a director,
10 chief executive officer or secretary of the co-operative or a
11 subsidiary of the co-operative, and of the cessation of the
12 appointment.
13 (2) The notice must --
14 (a) be in the form approved by the Registrar; and
15 (b) be given within 28 days after the appointment or
16 cessation of appointment; and
17 (c) state the particulars, prescribed by the regulations, of the
18 appointment or cessation of appointment.
19 Penalty: a fine of $2 000.
20 235. Annual report to be lodged with Registrar
21 (1) For the purposes of subsection (2) the required period is --
22 (a) 28 days after the annual general meeting of the
23 co-operative; or
24 (b) if the annual general meeting of the co-operative is not
25 held within the period stated in section 190(3)(a),
26 28 days after the end of that period.
27 (2) A co-operative must lodge with the Registrar, within the
28 required period in each year, an annual report containing the
29 following --
30 (a) a notice in the form approved by the Registrar listing the
31 secretary, the directors and the chief executive officers
32 of the co-operative and of each subsidiary of the
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1 co-operative, as at the date that the annual report is
2 lodged with the Registrar;
3 (b) if the co-operative is required under section 225 to
4 prepare a financial report for its most recently ended
5 financial year, a copy of the financial report;
6 (c) a copy of the financial statements of each subsidiary of
7 the co-operative in relation to the most recently ended
8 financial year of the subsidiary, or a copy of the
9 consolidated financial statements for all subsidiaries of
10 the co-operative in relation to the most recently ended
11 financial year of the subsidiaries;
12 (d) a copy of any report by the auditors or directors of the
13 co-operative or subsidiary --
14 (i) prepared under section 225(2); or
15 (ii) on a financial report referred to in paragraph (b)
16 or a financial statement referred to in
17 paragraph (c);
18 (e) other particulars prescribed by the regulations.
19 Penalty: a fine of $2 000.
20 236. List of members to be provided at request of Registrar
21 A co-operative must, at the written request of the Registrar,
22 send to the Registrar, within the time and in the way that the
23 Registrar specifies, a full list of the members of the co-operative
24 and of each subsidiary of the co-operative, together with the
25 particulars with regard to those members that the Registrar
26 specifies in the request.
27 Penalty: a fine of $2 000.
28 237. Special return to be given at request of Registrar
29 (1) The Registrar may, by direction in writing, require a
30 co-operative to give to the Registrar a special return in the form,
31 within the time, and relating to the subject matter, specified by
32 the Registrar.
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Division 8 Name and registered office
s. 238
1 (2) The co-operative must comply with a direction under
2 subsection (1).
3 Penalty: a fine of $2 000.
4 Division 8 -- Name and registered office
5 238. Name to include certain matter
6 (1) The name of a co-operative may consist of words, numbers or a
7 combination of both.
8 (2) The name of a co-operative must include the word
9 "Co-operative" or "Cooperative" or the abbreviation "Co-op".
10 (3) Subject to subsection (4) the word "Limited" or the abbreviation
11 "Ltd" must be the last word of the name.
12 (4) The Registrar may approve the registration of a co-operative
13 without "Limited" or the abbreviation "Ltd" in its name, or alter
14 the registration of a co-operative by omitting "Limited" or the
15 abbreviation "Ltd" from its name, if its constitution --
16 (a) requires the co-operative to pursue charitable purposes
17 only and to apply its income in promoting those
18 purposes; and
19 (b) prohibits the co-operative making distributions to its
20 members and paying fees to its directors; and
21 (c) requires the directors to approve all other payments the
22 co-operative makes to directors.
23 (5) The co-operative must notify the Registrar as soon as
24 practicable if any of those requirements or prohibitions in its
25 constitution are not complied with or if its constitution is
26 modified to remove any of those requirements or prohibitions.
27 Penalty: a fine of $2 000.
28 (6) The Registrar may at any time by notice in writing to the
29 co-operative revoke an approval under subsection (4) but only
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s. 239
1 after giving the co-operative an opportunity to make
2 submissions to the Registrar on the matter.
3 (7) A corporation that is formed or incorporated under an Act other
4 than this Act must not register under the other Act by a name
5 that includes the word "Co-operative" or "Cooperative" or the
6 abbreviation "Co-op".
7 Penalty: a fine of $2 000.
8 (8) The Registrar cannot register as the name of a co-operative a
9 name that contains anything a regulation declares is an
10 unsuitable name, unless the Minister is satisfied the name is
11 suitable for registration in the circumstances of a particular case.
12 (9) Subsection (7) does not apply to a corporation that is allowed
13 under another Act to use the word "Co-operative" or
14 "Cooperative" or the abbreviation "Co-op" in its name.
15 239. Use of abbreviations
16 A description of a co-operative is not inadequate or incorrect
17 merely because of one or more of the following --
18 (a) the use of the abbreviation "Co-op" instead of the word
19 "Co-operative" or "Cooperative" in the co-operative's
20 name;
21 (b) the use of the abbreviation "Ltd" instead of the word
22 "Limited" in the co-operative's name;
23 (c) the use of the symbol "&" instead of the word "and" in
24 the co-operative's name;
25 (d) the use of any of those words instead of the
26 corresponding abbreviation or symbol in the
27 co-operative's name;
28 (e) the use of any abbreviation or elaboration of the name of
29 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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1 240. Name to appear on business documents etc.
2 (1) A co-operative must ensure its name appears in legible
3 characters on its seal, and in any of the following documents
4 issued, signed or endorsed by or on behalf of the
5 co-operative --
6 (a) a bill of exchange, promissory note, cheque or other
7 negotiable instrument;
8 (b) a receipt or letter of credit issued by the co-operative;
9 (c) a document of a class prescribed by the regulations.
10 Penalty: a fine of $2 000.
11 (2) An officer of a co-operative or a person on its behalf must
12 not --
13 (a) use a seal of the co-operative; or
14 (b) sign or authorise to be signed on behalf of the
15 co-operative any document referred to in subsection (1),
16 in or on which the co-operative's name does not appear in
17 legible characters.
18 Penalty: a fine of $2 000.
19 (3) A director of a co-operative who knowingly authorises or
20 permits a contravention of this section is guilty of an offence.
21 Penalty: a fine of $2 000.
22 241. Change of name of co-operative
23 (1) A co-operative may by special resolution change its name to a
24 name approved by the Registrar.
25 (2) A change of name must be advertised as prescribed by the
26 regulations.
27 (3) A change of name does not take effect until --
28 (a) the Registrar has noted the change on the certificate of
29 registration of the co-operative; or
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s. 242
1 (b) the certificate of registration is surrendered to the
2 Registrar and a replacement certificate of registration is
3 issued in the new name.
4 (4) A change of name by a co-operative does not affect --
5 (a) the identity of the co-operative; or
6 (b) the exercise of a right, or the enforcement of an
7 obligation, by or against the co-operative or a person; or
8 (c) the continuation of legal proceedings by or against the
9 co-operative.
10 (5) Legal proceedings that might have been continued or started by
11 or against the co-operative in its former name may be continued
12 or started by or against the co-operative in its new name.
13 (6) The Registrar may refuse to approve a change of name if the
14 Registrar thinks the new name is unsuitable.
15 (7) The Registrar may direct a co-operative to change its name if
16 the Registrar considers the name is likely to be confused with
17 the name of a corporation or a registered business name.
18 242. Restriction on use of word "co-operative" or similar words
19 (1) A person other than a co-operative must not trade, or carry on
20 business, under a name or title containing the word
21 "Co-operative" or "Cooperative" or the abbreviation "Co-op" or
22 words importing a similar meaning.
23 Penalty: a fine of $2 000.
24 (2) Subsection (1) does not apply to a corporation referred to in
25 section 238(9).
26 243. Registered office of co-operative
27 (1) A co-operative must have a registered office.
28 Penalty: a fine of $2 000.
29 (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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s. 243
1 the co-operative and identifying the premises as its registered
2 office.
3 Penalty: a fine of $2 000.
4 (3) Within 28 days after changing the address of its registered
5 office, a co-operative must give the Registrar written notice of
6 the new address.
7 Penalty: a fine of $2 000.
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1 Part 10 -- Funds and property
2 Division 1 -- Power to raise money
3 244. Meaning of obtaining financial accommodation
4 A reference in this Division to the obtaining of financial
5 accommodation includes a reference to the obtaining of credit
6 and the borrowing or raising of money by any means.
7 245. Fund raising to be in accordance with Act and regulations
8 The regulations may impose requirements and restrictions on
9 the obtaining of financial accommodation, and the giving of
10 security in order to obtain financial accommodation, by a
11 co-operative.
12 246. Limits on deposit taking
13 A co-operative cannot accept money on deposit unless --
14 (a) the co-operative is authorised by its rules to accept
15 money on deposit and was authorised by its rules
16 immediately before the commencement of this section to
17 accept money on deposit; or
18 (b) the co-operative was a deposit-taking corporation
19 immediately before it became a co-operative and it is
20 authorised by its rules to accept money on deposit; or
21 (c) in the case of a merged co-operative, one or more of the
22 co-operatives involved in the merger was a
23 deposit-taking co-operative immediately before the
24 registration of the merged co-operative and the merged
25 co-operative is authorised by its rules to accept money
26 on deposit.
27 247. Members etc. not required to see to application of money
28 A member or other person from whom a co-operative obtains
29 financial accommodation is not required to see to its application
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1 and is not affected or prejudiced by the fact that in obtaining
2 that financial accommodation, the co-operative contravened a
3 provision of this Act or the rules of the co-operative.
4 248. Registrar's directions about fundraising
5 (1) The Registrar may, if the Registrar considers it is in the interests
6 of a co-operative's members, by written notice served on a
7 co-operative, give a direction to the co-operative as to the way
8 in which it is to exercise its functions in connection with the
9 activities of the co-operative in obtaining financial
10 accommodation.
11 (2) A direction under subsection (1) may make provision for any
12 one or more of the following matters --
13 (a) requiring the co-operative to stop obtaining financial
14 accommodation or to stop obtaining financial
15 accommodation in a particular way;
16 (b) requiring the co-operative to repay in accordance with
17 the direction all or part of financial accommodation
18 obtained;
19 (c) requiring the co-operative to re-finance in a specified
20 way financial accommodation repaid in accordance with
21 the Registrar's direction;
22 (d) the way in which the co-operative is permitted to invest
23 or use the proceeds of financial accommodation it
24 obtains.
25 (3) Within 28 days of receiving a direction, a co-operative may
26 apply to the Supreme Court for a review of that decision.
27 249. Subordinated debt
28 (1) In this section --
29 subordinated debt means debt incurred under an agreement
30 under which, in the event of the winding-up of the co-operative,
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1 a claim of the creditor against the co-operative in relation to the
2 debt is to rank in priority --
3 (a) equally with the claim of another creditor who is a party
4 to a similar agreement; and
5 (b) except as provided by paragraph (a), after the claims of
6 another creditor of the co-operative and before the
7 claims of members to repayment of share capital in the
8 co-operative.
9 (2) A co-operative may incur subordinated debt.
10 (3) An agreement under which subordinated debt is incurred has
11 effect despite the provisions of the Corporations Act Part 5.6
12 Division 6, as applied under Part 12 Division 3 of this Act.
13 250. Application of Corporations Act to issues of debentures
14 (1) Subject to subsection (2), the debentures of a co-operative are
15 declared to be applied Corporations legislation matters for the
16 purposes of the Corporations (Ancillary Provisions) Act 2001
17 Part 3 in relation to the provisions of Part 1.2A, Chapter 2L,
18 Chapter 6CA, Chapter 6D and Part 7.10 of the Corporations
19 Act, subject to the following modifications --
20 (a) the provisions apply as if a co-operative were a
21 company;
22 (b) a reference in the provisions to a corporation includes a
23 reference to a co-operative;
24 (c) a reference in the provisions to ASIC is to be read as a
25 reference to the Registrar;
26 (d) any other changes, within the meaning of the
27 Corporations (Ancillary Provisions) Act 2001 Part 3,
28 that are prescribed by the regulations.
29 (2) The provisions of the Corporations Act applying to the
30 debentures of a co-operative by this section do not apply to the
31 following --
32 (a) a loan to which section 255 applies;
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1 (b) an issue of debentures of a co-operative that is made --
2 (i) solely to members; or
3 (ii) solely to members and employees of the
4 co-operative; or
5 (iii) to a person who on becoming an inactive
6 member of the co-operative has had his or her
7 share capital converted to debt.
8 (3) Words used in this section that are not defined in this Act have
9 the same meanings as in the Corporations Act.
10 251. Application of Corporations Act to particular issues of
11 debentures
12 An issue of debentures to which section 252 applies is declared
13 to be an applied Corporations legislation matter for the
14 Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
15 to the Corporations Act, sections 722 and 734, subject to the
16 following modifications --
17 (a) the provisions apply as if a co-operative were a
18 company;
19 (b) a reference in the provisions to a disclosure document is
20 to be read as a reference to a disclosure statement under
21 section 252;
22 (c) a reference in the provisions to securities is to be read as
23 a reference to debentures;
24 (d) a reference in the provisions to ASIC is to be read as a
25 reference to the Registrar;
26 (e) any other modifications, within the meaning of the
27 Corporations (Ancillary Provisions) Act 2001 Part 3 that
28 are prescribed under the regulations.
page 148
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Funds and property Part 10
Power to raise money Division 1
s. 252
1 252. Disclosure statement
2 (1) This section applies to the issue of debentures of a co-operative
3 if the issue is made --
4 (a) solely to members; or
5 (b) solely to members and employees of the co-operative.
6 (2) This section does not apply to the issue of debentures under
7 section 73(2) or 127(1).
8 (3) Before issuing to a person debentures to which this section
9 applies, that person may request a disclosure statement,
10 approved by the Registrar, and containing the information that
11 is reasonably necessary to enable a person to make an informed
12 assessment of the financial prospects of the co-operative,
13 including --
14 (a) the purpose for which the money raised by the
15 co-operative by the issue of debentures is to be used;
16 and
17 (b) the rights and liabilities attaching to the debentures; and
18 (c) the financial position of the co-operative; and
19 (d) the interests of the directors of the co-operative in the
20 issue of the debentures; and
21 (e) compensation or consideration to be paid to officers or
22 members of the co-operative in connection with the
23 issue of debentures; and
24 (f) other matters that the Registrar directs.
25 (4) Sections 16 (except subsection (3)) and 29 apply to the approval
26 of a disclosure statement under this section with any necessary
27 changes and, in particular, as if a reference in section 16 to a
28 formation meeting were a reference to the issue of debentures.
page 149
Co-operatives Bill 2009
Part 10 Funds and property
Division 1 Power to raise money
s. 253
1 253. Approval of board for transfer of debentures
2 A debenture of a co-operative cannot be sold or transferred
3 except with the consent of the board and in accordance with the
4 rules of the co-operative.
5 254. Application of Corporations Act -- reissue of redeemed
6 debentures
7 Debentures issued by a co-operative to any of its members or
8 employees are declared to be applied Corporations legislation
9 matters for the purposes of the Corporations (Ancillary
10 Provisions) Act 2001 Part 3 in relation to the Corporations Act
11 section 124(1)(b) or 563AAA as if a co-operative were a
12 company.
13 255. Compulsory loan by member to co-operative
14 (1) A co-operative may require its members to lend money, with or
15 without security, to the co-operative, in accordance with a
16 proposal approved by special resolution of the co-operative.
17 (2) The proposal cannot require a loan to be for a term of more than
18 7 years or another term prescribed by the regulations.
19 (3) The proposal must --
20 (a) be accompanied by a disclosure statement, approved by
21 the Registrar, that explains the purpose for which the
22 money raised by the co-operative under the proposal is
23 to be used, and includes any other information that the
24 Registrar directs; and
25 (b) show the total amount of the loan to be raised by the
26 co-operative and the basis on which the money required
27 to be lent by each member is to be calculated; and
28 (c) be accompanied by a statement informing the member
29 that the member may inform the board by notice on or
30 before the date specified in the statement, being a date
31 before the passing of the special resolution, that the
32 member resigns on the passing of the special resolution.
page 150
Co-operatives Bill 2009
Funds and property Part 10
Power to raise money Division 1
s. 256
1 (4) If the proposal allows, the board of the co-operative may, under
2 the terms of the proposal, deduct the money required to be lent
3 by a member to the co-operative from money payable from the
4 co-operative to the member for his or her dealings with the
5 co-operative.
6 (5) A proposal to deduct money referred to in subsection (4) must,
7 in addition to meeting the requirements of subsection (3),
8 show --
9 (a) the basis on which the money is to be deducted; and
10 (b) the time and way of making the deductions.
11 (6) When approved the proposal is binding on --
12 (a) all members of the co-operative at the date of passing of
13 the special resolution, other than a member who has
14 given a notice of resignation in accordance with
15 subsection (3)(c); and
16 (b) all persons who become members of the co-operative
17 after that date and before the total amount of the loan to
18 be raised under the proposal has been raised.
19 (7) Sections 16 (except subsection (3)) and 29 apply to the approval
20 of a disclosure statement under this section with any necessary
21 changes and in particular as if a reference in section 16 to a
22 formation meeting were a reference to the special resolution.
23 256. Interest payable on compulsory loan
24 (1) The rate of interest payable by a co-operative on a loan under
25 section 255 during a period is --
26 (a) in the case of a co-operative with share capital --
27 (i) the rate (or if there is more than one rate, the
28 higher or highest rate) of dividend payable for
29 the period on the share capital of the
30 co-operative; or
31 (ii) if the rate of dividend payable for the period has
32 not been determined, the rate (or the higher or
page 151
Co-operatives Bill 2009
Part 10 Funds and property
Division 2 Co-operative capital units
s. 257
1 highest rate) of dividend payable for the
2 immediately preceding period for which a rate
3 has been determined; or
4 (iii) if a rate of dividend has never been determined
5 for the share capital of the co-operative, the rate
6 that the board of the co-operative considers
7 reasonable;
8 or
9 (b) in the case of a co-operative without share capital, the
10 rate that the board of the co-operative considers
11 reasonable; or
12 (c) if the rules provide for a rate to be payable that is higher
13 than the rate applicable under paragraph (a) or (b), that
14 higher rate.
15 (2) A member may agree to the rate of interest being less than the
16 rate that would otherwise be payable under this section and may
17 agree to no interest being paid.
18 Division 2 -- Co-operative capital units
19 257. General nature of co-operative capital units
20 (1) A co-operative capital unit (CCU) is an interest issued by a
21 co-operative conferring an interest in the capital, but not the
22 share capital, of the co-operative.
23 (2) A CCU --
24 (a) is personal property; and
25 (b) is transferable or transmissible as provided by this Act
26 and the rules of the co-operative, subject to the terms of
27 issue of the CCU; and
28 (c) is, subject to the rules of the co-operative, capable of
29 devolution by will or by operation of law.
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Co-operative capital units Division 2
s. 258
1 (3) Subject to subsection (2) --
2 (a) the laws applicable to ownership of and dealing with
3 personal property apply to a CCU as they apply to other
4 property; and
5 (b) equitable interests in respect of a CCU may be created,
6 dealt with and enforced as in the case of other personal
7 property.
8 (4) A transferor of a CCU remains the holder of the CCU until the
9 transfer is registered and the name of the transferee, and the
10 details of the transferee's CCU holding, are entered in the
11 register of CCU holders referred to in section 230(1).
12 (5) Despite any rule of law or equity to the contrary, a condition
13 subject to which a CCU is issued is not invalid merely because
14 the CCU is, by the condition, made irredeemable or redeemable
15 only on the happening of a contingency however remote or at
16 the end of a period however long.
17 258. Priority of CCU's on winding-up
18 (1) On a winding-up of a co-operative, a debt owed to a person as
19 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
21 the CCU.
22 (2) Such a debt may rank as a secured debt if it is secured but if it is
23 unsecured may not rank in priority to other unsecured debts.
24 (3) It may rank equally with or behind unsecured debts and, if the
25 debt ranks behind unsecured debts, may rank in priority to,
26 equally with or behind debts due to contributories.
27 259. Financial accommodation provisions apply to issue of CCUs
28 (1) The issuing of CCUs is to be considered to be the obtaining of
29 financial accommodation and accordingly Part 10 Division 1
30 applies to the issue of CCUs.
page 153
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Part 10 Funds and property
Division 2 Co-operative capital units
s. 260
1 (2) For the purposes of that Division, a CCU is to be considered to
2 be a debenture.
3 260. CCUs to be issued to non-members
4 CCUs may be issued to a person whether or not the person is a
5 member of the co-operative.
6 261. Minimum requirements for rules concerning CCUs
7 The rules of a co-operative that permit the co-operative to issue
8 CCUs must contain provision to the effect of the following
9 provisions and cannot contain provisions that are inconsistent
10 with the following provisions --
11 (a) each holder of a CCU is entitled to one vote per CCU
12 held at a meeting of the holders of CCUs;
13 (b) the rights of the holders of CCUs may be varied only in
14 the way and to the extent provided by their terms of
15 issue and only with the consent of at least 75% of those
16 holders of CCUs who, being entitled to do so, cast a
17 formal vote to accept the variation at a meeting;
18 (c) the holder of a CCU has, in the person's capacity as a
19 holder of a CCU, none of the rights or entitlements of a
20 member of the co-operative;
21 (d) the holder of a CCU is entitled to receive notice of all
22 meetings of the co-operative and all other documents in
23 the same manner as the holder of a debenture of the
24 co-operative.
25 262. CCUs not to be issued unless terms of issue approved by
26 Registrar
27 (1) A co-operative is not to issue CCUs unless --
28 (a) the terms of issue have been approved by a special
29 resolution of the co-operative; and
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Funds and property Part 10
Co-operative capital units Division 2
s. 263
1 (b) the issue is made pursuant to an offer accompanied by a
2 copy of a statement approved by the Registrar under
3 subsection (3); and
4 (c) the Registrar approves of the terms of the issue under
5 subsection (4).
6 (2) The terms of issue must include, but is not limited to including,
7 the following information --
8 (a) details of entitlement to repayment of capital;
9 (b) details of entitlement to participate in surplus assets and
10 profits;
11 (c) details of entitlement to interest on capital, including
12 whether interest is cumulative or non-cumulative;
13 (d) details of how capital and interest on capital are to rank
14 for priority of payment on a winding-up;
15 (e) whether there is a limit on the total holding of CCUs
16 that may be acquired by persons who are not members
17 of the co-operative and, if there is a limit, what the
18 limit is.
19 (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
21 of CCUs, the terms of redemption and the manner of
22 transferability of CCUs.
23 (4) The Registrar is not to approve the terms of issue unless
24 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
26 co-operative or this Act.
27 263. Directors' duties concerning CCUs
28 In discharging their duties, it is proper for the directors of a
29 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
31 entitlements of, and are not entitled to be regarded as, members
32 of the co-operative.
page 155
Co-operatives Bill 2009
Part 10 Funds and property
Division 2 Co-operative capital units
s. 264
1 264. Redemption of CCUs
2 (1) The redemption of CCUs is not to be considered to be a
3 reduction in the share capital of the co-operative.
4 (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
6 they are fully paid up.
7 (3) CCUs may not be redeemed except out of --
8 (a) profits; or
9 (b) the proceeds of a fresh issue of shares, or an approved
10 issue of CCUs, made for the purpose of the redemption.
11 (4) An issue of CCUs is an approved issue for the purposes of
12 subsection (3) if there is the same entitlement to priority of
13 payment of capital and dividend in relation to shares in the
14 co-operative as there was for the redeemed CCUs.
15 (5) Any premium payable on redemption is to be provided for out
16 of profits or out of the share premium account or an account
17 created for that purpose.
18 265. Capital redemption reserve
19 (1) This section applies if CCUs are redeemed out of profits.
20 (2) Subsections (4) and (5) do not apply to a non-distributing
21 co-operative.
22 (3) Out of profits there is to be transferred to a reserve called the
23 capital redemption reserve a sum equal to the nominal amount
24 of the CCUs redeemed.
25 (4) The provisions of this Act relating to the reduction of share
26 capital of a co-operative apply as if the capital redemption
27 reserve were paid up share capital of the co-operative.
28 (5) The capital redemption reserve may be applied in paying up
29 unissued shares of the co-operative to be issued to members of
30 the co-operative as fully paid bonus shares.
page 156
Co-operatives Bill 2009
Funds and property Part 10
Charges Division 3
s. 266
1 266. Issue of shares in substitution for redemption
2 (1) If a co-operative has redeemed or is about to redeem CCUs held
3 by an active member of the co-operative, it may --
4 (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
6 those CCUs had never been issued; or
7 (b) pay up amounts unpaid on shares held by the member up
8 to the sum of the nominal value of the CCUs redeemed
9 or to be redeemed, as if those CCUs had never been
10 issued.
11 (2) This section applies only if the terms of issue of the CCUs
12 provide for the conversion of CCUs held by an active member
13 of the co-operative into shares of the co-operative.
14 Division 3 -- Charges
15 267. Registration of charges
16 Schedule 3 has effect but does not apply to --
17 (a) a mortgage, charge or encumbrance that is over specific
18 land and is registered under the Transfer of Land
19 Act 1893; or
20 (b) a mortgage, charge or encumbrance registered under the
21 Mining Act 1978; or
22 (c) a mortgage, charge or encumbrance registered under the
23 Bills of Sale Act 1899.
24 Division 4 -- Receivers and other controllers of property
25 of co-operatives
26 268. Receivers and other controllers of property of co-operatives
27 Schedule 4 has effect.
page 157
Co-operatives Bill 2009
Part 10 Funds and property
Division 5 Disposal of surplus from activities
s. 269
1 Division 5 -- Disposal of surplus from activities
2 269. Retention of surplus for benefit of co-operative
3 The board of a co-operative may resolve to retain all or part of
4 the surplus arising in a year from the business of the
5 co-operative to be applied for the benefit of the co-operative.
6 270. Application for charitable purposes or members' purposes
7 (1) A co-operative may apply a part of the surplus arising in a year
8 from the business of the co-operative for a charitable purpose.
9 (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
11 supporting an activity approved by the co-operative.
12 (3) The rules must limit the amount that may be applied under
13 subsection (1) or (2) to a specified proportion of the surplus.
14 (4) A co-operative may apply part of the surplus for a purpose and
15 to the extent authorised by rules.
16 271. Distribution of surplus or reserves to members
17 (1) In this section --
18 limited dividend means a dividend that is not more than the
19 amount prescribed by the regulations.
20 (2) A distributing co-operative may apply a part of the surplus
21 arising in any year from the business of the co-operative or a
22 part of the reserves of the co-operative by --
23 (a) distribution to members as a rebate in proportion to the
24 value of business done by each member with the
25 co-operative or to profits earned by the co-operative on
26 business done by each member with the co-operative; or
27 (b) the issue of bonus shares to members in proportion to
28 the value of business done by each member with the
29 co-operative, to profits earned by the co-operative on
30 business done by each member with the co-operative or
31 to shares held by the member; or
page 158
Co-operatives Bill 2009
Funds and property Part 10
Acquisition and disposal of assets Division 6
s. 272
1 (c) the issue to members of a limited dividend in proportion
2 to shares held by the member.
3 (3) The amount of a rebate or dividend payable to a member under
4 subsection (2)(a) or (c) may, with the consent of the member, be
5 applied --
6 (a) in payment for the issue to the member of bonus shares;
7 or
8 (b) as a loan to the co-operative.
9 272. Application of surplus to other persons
10 (1) A part of the surplus arising in a year from the business of a
11 distributing co-operative may be credited to a person who is not
12 a member, but is qualified to be a member, by way of rebate in
13 proportion to the value of business done by the person with the
14 co-operative or to the profit earned by the co-operative on
15 business done by the person with the co-operative, if --
16 (a) the person was a member when the business was done
17 and the membership has lapsed; or
18 (b) the person has applied for membership since the
19 business was done.
20 (2) Nothing in this section precludes the payment of a bonus to an
21 employee in accordance with the terms of his or her
22 employment.
23 Division 6 -- Acquisition and disposal of assets
24 273. Acquisition and disposal of assets
25 (1) In this section --
26 undertaking, of a co-operative, means all the assets of the
27 co-operative.
page 159
Co-operatives Bill 2009
Part 10 Funds and property
Division 6 Acquisition and disposal of assets
s. 273
1 (2) Unless otherwise provided by the rules, a co-operative must not
2 do any of the following things except as approved by special
3 resolution by means of a special postal ballot --
4 (a) sell, or lease as a going concern --
5 (i) the undertaking of the co-operative; or
6 (ii) a part of that undertaking that relates to its
7 primary activities and the value of which
8 represents the percentage prescribed by the
9 regulations or more of the total value of the
10 undertaking;
11 (b) acquire from or dispose of to a director or employee of
12 the co-operative, or a relative, within the meaning of the
13 Corporations Act, of a director or employee of the
14 co-operative or of the spouse (or de facto partner) of a
15 director or employee of the co-operative, property the
16 value of which represents the percentage prescribed by
17 the regulations, or more, of the total value of all the
18 assets of the co-operative that relate to its primary
19 activities;
20 (c) acquire an asset the value of which represents the
21 percentage prescribed by the regulations, or more, of the
22 total value of the assets of the co-operative, if the
23 acquisition would result in the co-operative starting to
24 carry on an activity that is not one of its primary
25 activities.
26 Penalty: a fine of $6 000.
27 (3) If a co-operative contravenes this section, each person who is a
28 member of the board of the co-operative is taken to have
29 committed an offence unless the person satisfies the court that
30 he or she used all due diligence to prevent the contravention by
31 the co-operative.
32 Penalty: a fine of $6 000.
page 160
Co-operatives Bill 2009
Funds and property Part 10
Acquisition and disposal of assets Division 6
s. 273
1 (4) The Registrar may, by order published in the Gazette, exempt a
2 co-operative from compliance with a provision of this section
3 and section 186 in relation to any matter to which this section
4 applies.
page 161
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 274
1 Part 11 -- Restrictions on the acquisition of interests
2 in co-operatives
3 Division 1 -- Restrictions on share and voting interests
4 274. Application of Part
5 This Part applies to --
6 (a) distributing co-operatives; and
7 (b) non-distributing co-operatives with a share capital.
8 275. Notice required to be given of voting interest
9 (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
11 becoming aware that the person has a relevant interest in the
12 right to vote of a member of the co-operative.
13 Penalty: a fine of $2 000.
14 (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
16 member of a co-operative must give notice to the co-operative
17 within 5 business days after becoming aware of the fact.
18 Penalty: a fine of $2 000.
19 (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.
21 276. Notice required to be given of substantial share interest
22 (1) A person must give notice to a co-operative within 5 business
23 days after becoming aware that the person has a substantial
24 share interest in the co-operative.
25 Penalty: a fine of $2 000.
26 (2) A person who has a substantial share interest in a co-operative
27 must give notice to the co-operative within 5 business days after
page 162
Co-operatives Bill 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 277
1 becoming aware that a substantial change has occurred in the
2 share interest.
3 Penalty: a fine of $2 000.
4 (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
6 5 business days after becoming aware that the person has ceased
7 to have the interest.
8 Penalty: a fine of $2 000.
9 (4) A person has a substantial share interest in a co-operative if the
10 nominal value of the shares in the co-operative in which the
11 person has a relevant interest represents 5% or more of the
12 nominal value of the issued share capital of the co-operative.
13 (5) A substantial change takes place in a person's share interest in
14 a co-operative if there is an increase or decrease in the number
15 of shares in the co-operative in which the person has a relevant
16 interest and the increase or decrease represents at least 1% of
17 the nominal value of the issued share capital of the co-operative.
18 277. Requirements for notices
19 A notice required under this Division must --
20 (a) be in the form approved by the Registrar; and
21 (b) state the particulars, prescribed by the regulations, of the
22 interest or change being notified.
23 278. Maximum permissible level of share interest
24 (1) A person cannot have a relevant interest in shares of a
25 co-operative the nominal value of which is more than 20% of
26 the nominal value of the issued share capital of the co-operative.
27 (2) The Registrar, by order published in the Gazette, may specify a
28 maximum greater than 20% as the maximum permissible level
29 of share interest for the purposes of subsection (1) for a
30 particular co-operative.
page 163
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 279
1 (3) Unless an order under subsection (2) is in force, a co-operative,
2 by its rules, may specify a maximum less than 20% as the
3 maximum permissible level of share interest for the purposes of
4 subsection (1) for that co-operative.
5 (4) The maximum permissible level of share interest applying under
6 this section may be increased for a particular person by special
7 resolution of the co-operative concerned passed by a special
8 postal ballot.
9 (5) A resolution under subsection (4) does not have effect unless --
10 (a) it is approved by the Registrar; or
11 (b) the person concerned is another co-operative.
12 (6) The Registrar's approval of the resolution may be given on
13 conditions.
14 279. Transitional provision
15 (1) This section applies to a member of a transferred co-operative
16 whose relevant interest in the shares of that co-operative
17 immediately before the transfer day was more than the
18 maximum permissible level of share interest for the purposes of
19 section 278(1).
20 (2) The maximum permissible level of share interest for the
21 purposes of section 278(1) for the member is the level of the
22 member's relevant interest in the shares immediately before the
23 transfer day.
24 (3) In relation to a particular co-operative, this section ceases to
25 operate 6 months after the transfer day.
26 280. Shares to be forfeited to remedy contravention
27 (1) If a person has a relevant interest in a share of a co-operative in
28 contravention of this Division that is not remedied within
29 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 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 281
1 enough of the shares in which the person has a relevant interest
2 to remedy the contravention.
3 (2) The shares to be forfeited are --
4 (a) the shares nominated by the person for the purpose; or
5 (b) in the absence of such a nomination, the shares in which
6 the person has had a relevant interest for the shortest
7 time.
8 (3) A declaration of the board that shares are forfeited operates to
9 forfeit the shares concerned.
10 (4) On forfeiture of the shares, section 295(1)(b) ceases to apply in
11 relation to the contravention.
12 (5) Sections 127 to 129 apply to shares forfeited under this section
13 as if the shares had been forfeited under Part 6.
14 281. Powers of board in response to suspected contravention
15 (1) If the board of a co-operative is satisfied on reasonable grounds
16 that a person has contravened section 278 in relation to the
17 co-operative, the board may do either or both of the
18 following --
19 (a) refuse to register a share transfer involving the person;
20 (b) suspend a stated right or entitlement that a person has as
21 a member of the co-operative or attaching to any shares
22 of the co-operative in which the person has a relevant
23 interest.
24 (2) The board may request a person who it suspects has a relevant
25 interest in shares of the co-operative to give specified
26 information to the board about the interest.
27 (3) A failure by a person to comply with a request under
28 subsection (2) is a reasonable ground for being satisfied that the
29 person has contravened section 278.
page 165
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 282
1 282. Powers of Supreme Court in relation to contravention
2 (1) If a person has contravened section 278 in relation to a
3 co-operative, the Supreme Court may, on the application of the
4 co-operative or the Registrar, make any order it considers
5 appropriate.
6 (2) Without limiting subsection (1), an order may include --
7 (a) a remedial order; and
8 (b) for the purpose of securing compliance with any other
9 order made under this section, an order directing the
10 co-operative or any other person to do or refrain from
11 doing a specified act.
12 (3) An order may be made whether or not the contravention
13 continues.
14 (4) Proof to the satisfaction of the Supreme Court at the hearing of
15 an application that --
16 (a) a person has a relevant interest in a share of a
17 co-operative because an associate of the person has a
18 relevant interest in a share; and
19 (b) the associate became entitled to the relevant interest
20 within 6 months before the application was filed with
21 the Supreme Court,
22 is evidence that the associate was an associate of the person
23 from the time the person first had the relevant interest until the
24 date of the hearing.
25 283. Co-operative to notify Registrar of interest over 20%
26 (1) A co-operative must notify the Registrar in writing within
27 14 days after the board becomes aware that --
28 (a) a particular person has a relevant interest in shares of the
29 co-operative the nominal value of which is more than
30 20% of the nominal value of the issued share capital of
31 the co-operative; or
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Co-operatives Bill 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on share and voting interests Division 1
s. 284
1 (b) there has been a change in the number of shares in
2 which that person holds a relevant interest.
3 (2) The notification must give details of the relevant interest
4 concerned or of the change concerned.
5 284. Co-operative to keep register
6 (1) A co-operative must keep a register of notifiable interests.
7 (2) The co-operative must enter in the register in alphabetical order
8 the names of persons from whom the co-operative has received
9 notice under this Division together with the information
10 contained in the notice.
11 (3) The register must be open for inspection --
12 (a) by a member in accordance with section 232; and
13 (b) by any other person on payment of the fee (if any) that
14 the co-operative may require, being not more than the
15 maximum fee prescribed by the regulations.
16 285. Unlisted companies to provide list of shareholders etc.
17 (1) This section applies to a company, within the meaning of the
18 Corporations Act, that is not a listed corporation, within the
19 meaning of that Act.
20 (2) A company to which this section applies that is a member of a
21 co-operative must give to the co-operative a list showing --
22 (a) the name of each member of the company as at the end
23 of the financial year of the company and the number of
24 shares in the company held by each member; and
25 (b) the name of each person who has a relevant interest,
26 within the meaning of the Corporations Act, in a share
27 of the company together with details of the interest; and
28 (c) the name of each person who is an associate, within the
29 meaning of the Corporations Act, of the company.
page 167
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 1 Restrictions on share and voting interests
s. 286
1 (3) A list under subsection (2) must be given within 28 days after a
2 written request for the list is made to the company by the
3 co-operative or the Registrar.
4 (4) The details to be shown on the list are the details as at the date
5 specified in the request.
6 (5) The Registrar may make a request under subsection (3) if the
7 Registrar is of the opinion that the company is or may be
8 involved in a suspected contravention of a provision of this
9 Division.
10 286. Excess share interest not to affect loan liability
11 (1) This section applies if a co-operative has made a loan to a
12 member and the member had or has a relevant interest in shares
13 of the co-operative in contravention of this Division.
14 (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
16 make to the co-operative the payments that the member would
17 be liable to make if all the shares concerned were lawfully held
18 by the member.
19 (3) Security for the repayment of the loan is not affected by a
20 contravention of this Division.
21 287. Extent of operation of Division
22 This Division --
23 (a) applies to all individuals, whether resident in this State
24 or in Australia or not and whether Australian citizens or
25 not, and to all bodies, whether incorporated or not, and
26 whether carrying on business in this State or in Australia
27 or not; and
28 (b) extends to acts done or omitted to be done outside this
29 State, whether in Australia or not.
page 168
Co-operatives Bill 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 288
1 288. Registrar may grant exemption from Division
2 The Registrar may, by order published in the Gazette, exempt a
3 person from the operation of this Division.
4 Division 2 -- Restrictions on certain share offers
5 289. Share offers to which Division applies
6 This Division applies to the following offers to purchase shares
7 in a co-operative --
8 (a) an offer made as part of a proposal for, or that is
9 conditional on, the sale of the undertaking or part of the
10 undertaking, as a going concern, of the co-operative;
11 (b) an offer made as part of a proposal for, or that is
12 conditional on, the registration of the co-operative as a
13 company under the Corporations Act;
14 (c) an offer made as part of a proposal for, or that is
15 conditional on, the winding-up of the co-operative;
16 (d) an offer that would result in a contravention of
17 section 278 were the offeror to be registered,
18 immediately after the offer is made, as the holder of the
19 shares that are the subject of the offer.
20 290. Offer to be approved by special resolution using special
21 postal ballot
22 Any offer to which this Division applies must be approved by
23 special resolution by means of a special postal ballot.
24 291. Some offers totally prohibited if they discriminate
25 An offer referred to in section 289(a) to (d) cannot discriminate
26 between members who are active members and members who
27 are not active members.
page 169
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 292
1 292. Offers to be submitted to board first
2 (1) Any proposal to make an offer to which this Division applies
3 must in the first instance be submitted to the board of the
4 co-operative.
5 (2) In order for the board to consider putting a proposed offer to a
6 special postal ballot, arrangements satisfactory to the board
7 must have been made for payment to the co-operative of the
8 expenses involved in holding the ballot.
9 (3) The board may require payment in advance under
10 subsection (2).
11 (4) A requisition for a special postal ballot for the purposes of this
12 Division cannot be served unless and until the board has had a
13 reasonable opportunity to consider the proposed offer
14 concerned.
15 (5) For the purposes of subsection (4), a period of 28 days is a
16 reasonable opportunity for considering a proposed offer but the
17 Registrar may extend that period in a particular case, whether
18 before or after the end of the 28 days, by written notice to the
19 co-operative.
20 293. Announcements of proposed takeovers concerning
21 proposed company
22 (1) This section applies to an offer to purchase shares in a
23 co-operative made as part of a proposal for, or that is
24 conditional on, the registration of the co-operative as a company
25 (the proposed company) under the Corporations Act.
26 (2) A person must not make a public announcement to the effect
27 that the person proposes, or that the person and another person
28 or other persons together propose, to make takeover offers, or to
29 cause a takeover announcement to be made, in relation to the
30 proposed company if --
31 (a) the person knows that the announcement is false or is
32 recklessly indifferent as to whether it is true or false; or
page 170
Co-operatives Bill 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 293
1 (b) the person has no reasonable grounds for believing that
2 the person, or the person and the other person or
3 persons, will be able to perform obligations arising
4 under the scheme or announcement or under the
5 Corporations Act in relation to the scheme or
6 announcement if a substantial proportion of the offers or
7 the offers made under the announcement are accepted.
8 Penalty: a fine of $20 000 or imprisonment for 5 years.
9 (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
11 persons together propose, to make a takeover bid in relation to
12 the proposed company, the person must proceed to make a
13 takeover bid in relation to shares in the company in accordance
14 with the public announcement within 2 months after the day on
15 which the company is incorporated.
16 Penalty: a fine of $10 000 or imprisonment for 2 years.
17 (4) A person is not liable to be convicted of more than one offence
18 under subsection (3) for any one public announcement.
19 (5) A person who contravenes this section, whether or not the
20 person is convicted of an offence for the contravention, is liable
21 to pay compensation to a person who suffered loss as a result of
22 entering into a share transaction in reliance on the public
23 announcement concerned.
24 (6) The amount of that compensation is the difference between the
25 price of the shares at which the transaction was entered into and
26 the price of the shares at which the transaction would have been
27 likely to have been entered into if the person had not made the
28 public announcement.
29 (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
31 person could not reasonably have been expected to make the
32 takeover bid concerned --
33 (a) as a result of circumstances that existed when the public
34 announcement was made but of which the person had no
page 171
Co-operatives Bill 2009
Part 11 Restrictions on the acquisition of interests in co-operatives
Division 2 Restrictions on certain share offers
s. 294
1 knowledge and could not reasonably have been expected
2 to have knowledge; or
3 (b) as a result of a change in circumstances after the
4 announcement was made, other than a change in
5 circumstances caused directly or indirectly by the
6 person.
7 (8) Expressions used in this section have the same meanings as in
8 the Corporations Law section 746 as applying on
9 12 March 2000.
10 294. Additional disclosure requirements for offers involving
11 conversion to company
12 If an offer is part of a proposal for, or is conditional on, the
13 registration of the co-operative as a company under the
14 Corporations Act, the disclosure statement required to be sent to
15 members for the purposes of the special postal ballot relating to
16 the offer must contain the following additional information --
17 (a) full particulars of any proposal by which a director will
18 acquire a relevant interest in a share of the company to
19 be formed;
20 (b) other information that is material to the making of a
21 decision by a member whether or not to agree to the
22 making of the offer, being information that is within the
23 knowledge of the directors and has not previously been
24 disclosed to the members;
25 (c) other information that the Registrar directs.
26 295. Consequences of prohibited offer
27 (1) If a person makes an offer to purchase shares in a co-operative
28 in contravention of this Division --
29 (a) the person cannot be registered as the holder of the
30 shares concerned; and
page 172
Co-operatives Bill 2009
Restrictions on the acquisition of interests in co-operatives Part 11
Restrictions on certain share offers Division 2
s. 296
1 (b) if the transfer of the shares is registered, the person
2 cannot vote at a meeting of, or in a postal ballot
3 conducted by, the co-operative.
4 (2) A vote cast by or for a member when the member cannot vote
5 because of this section must be disregarded.
6 296. Registrar may grant exemptions
7 The Registrar may, by order published in the Gazette, exempt a
8 person or co-operative from compliance with a provision of this
9 Division and section 186 in relation to a matter to which this
10 Division applies.
page 173
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 1 Mergers and transfers of engagements
s. 297
1 Part 12 -- Merger, transfer of engagements,
2 winding-up
3 Division 1 -- Mergers and transfers of engagements
4 297. Application of Division
5 This Division does not apply to a merger or transfer of
6 engagements to which Part 14 applies.
7 298. Mergers and transfers of engagements of local co-operatives
8 Any 2 or more co-operatives may consolidate all or any of their
9 assets, liabilities and undertakings by way of merger or transfer
10 of engagements approved under this Division.
11 299. Requirements before application can be made
12 (1) Before co-operatives can apply for approval under this Division
13 of a merger or transfer of engagements, the proposed merger or
14 transfer must have been approved by each of the co-operatives
15 by --
16 (a) a special resolution passed by means of a special postal
17 ballot; or
18 (b) if permitted by subsection (2), a resolution of the board
19 of the co-operative.
20 (2) The proposed merger or transfer of engagements may be
21 approved by resolution of the board of a co-operative if the
22 Registrar consents to that procedure applying in the particular
23 case.
24 300. Disclosure statement required
25 (1) A special resolution by which members of a co-operative
26 approve a merger or transfer of engagements is not effective for
27 the purposes of this Division unless this section has been
28 complied with.
page 174
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Mergers and transfers of engagements Division 1
s. 300
1 (2) Each co-operative must send to each of its members a disclosure
2 statement approved by the Registrar stating --
3 (a) the financial position of each co-operative concerned in
4 the proposed merger or transfer of engagements as
5 shown in financial statements that have been prepared as
6 at a date that is not more than 6 months before the date
7 of the statement; and
8 (b) any interest that any officer of each co-operative has in
9 the proposed merger or transfer of engagements; and
10 (c) any compensation or other consideration proposed to be
11 paid, or any other incentive proposed to be given, to any
12 officer or member of each co-operative in relation to the
13 proposed merger or transfer of engagements; and
14 (d) whether the proposal is a merger or transfer of
15 engagements and the reason for the merger or transfer of
16 engagements; and
17 (e) in the case of a transfer of engagements, whether it is a
18 total or partial transfer of engagements; and
19 (f) other information that the Registrar directs.
20 (3) The disclosure statement must be sent to the members of each
21 co-operative so that it will, in the ordinary course of post, reach
22 each member who is entitled to vote on the special resolution
23 not later than 21 days before the day on or before which the
24 ballot papers must be returned by members voting in the special
25 postal ballot.
26 (4) The Registrar may, by order published in the Gazette, exempt a
27 co-operative from complying with this section.
28 (5) The Registrar may approve a disclosure statement on any
29 conditions he or she considers appropriate.
page 175
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 1 Mergers and transfers of engagements
s. 301
1 301. Making an application
2 (1) An application for approval of a merger or transfer of
3 engagements under this Division must be made to the Registrar
4 in the way and form required by the Registrar.
5 (2) An application for approval of a merger must be accompanied
6 by 2 copies of the proposed rules of the merged co-operative
7 and any other particulars required by the Registrar.
8 302. Approval of merger
9 (1) The Registrar must approve a merger pursuant to an application
10 under this Division if satisfied that --
11 (a) this Division has been complied with in relation to the
12 application; and
13 (b) the proposed rules of the merged co-operative are
14 consistent with this Act and may reasonably be
15 approved; and
16 (c) the certificates of registration of the co-operatives have
17 been surrendered to the Registrar; and
18 (d) there is no good reason why the merged co-operative
19 and its rules should not be registered.
20 (2) On approving an application for merger, the Registrar must --
21 (a) cancel the registration of the co-operatives involved in
22 the merger; and
23 (b) register the merged co-operative and its rules; and
24 (c) issue to the merged co-operative a certificate of
25 registration under this Act.
26 (3) A merger takes effect on the issue of the certificate of
27 registration for the merged co-operative.
page 176
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Mergers and transfers of engagements Division 1
s. 303
1 303. Approval of transfer of engagements
2 (1) The Registrar must approve a transfer of engagements pursuant
3 to an application under this Division if satisfied that --
4 (a) this Division has been complied with in relation to the
5 application; and
6 (b) the rules or proposed rules of the transferee co-operative
7 are adequate; and
8 (c) in the case of a total transfer of engagements from a
9 co-operative, the certificate of registration of the
10 co-operative has been surrendered to the Registrar; and
11 (d) there is no good reason why the transfer of engagements
12 should not take effect.
13 (2) A transfer of engagements takes effect on the day specified in
14 the approval of the Registrar.
15 304. Transfer of engagements by direction of Registrar
16 (1) The Registrar may, with the approval of the Minister, direct a
17 co-operative --
18 (a) to transfer its engagements to a co-operative approved
19 by the Registrar; and
20 (b) within a period specified by the Registrar when giving
21 the direction or a further period allowed by the
22 Registrar, to enter into an agreement approved by the
23 Registrar to give effect to the transfer of engagements
24 directed.
25 (2) The Registrar cannot give such a direction to a co-operative
26 unless the necessary grounds exist for the giving of the
27 direction, as referred to in section 336(2).
28 (3) The transfer of engagements must make provision, in a way
29 approved by the Registrar, for the members of the transferor
30 co-operative who wish to do so to become members of the
31 transferee co-operative.
page 177
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 2 Transfer of incorporation
s. 305
1 (4) If a co-operative fails to comply with a direction under this
2 section, the Registrar may elect to treat the failure as the
3 necessary grounds --
4 (a) for winding-up the co-operative on a certificate of the
5 Registrar; or
6 (b) for appointing an administrator of the co-operative.
7 (5) The Registrar must notify the co-operative of the Registrar's
8 decision under subsection (4).
9 (6) The Registrar may revoke a direction under this section at any
10 time up until the co-operative has agreed pursuant to the
11 direction to transfer its engagements.
12 (7) A transfer of engagements directed under this section takes
13 effect on a day notified by the Registrar in the Gazette.
14 (8) An officer of a co-operative must not --
15 (a) fail to take all reasonable steps to secure compliance by
16 the co-operative with a direction given under this
17 section; or
18 (b) by a wilful act or omission be the cause of a failure by
19 the co-operative to comply with a direction.
20 Penalty: a fine of $2 000.
21 Division 2 -- Transfer of incorporation
22 305. Application for transfer
23 (1) A co-operative, if approved under this Division, may apply to
24 become registered or incorporated as one of the following
25 corporations --
26 (a) a company under the Corporations Act;
27 (b) an incorporated association under the Associations
28 Incorporation Act 1987;
29 (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 2009
Merger, transfer of engagements, winding-up Part 12
Transfer of incorporation Division 2
s. 306
1 outside this State and that is prescribed by the
2 regulations.
3 (2) For the purposes of subsection (1)(a), an application is to be
4 made in accordance with the Corporations Act section 601BC
5 for registration as a company under Part 5B of that Act.
6 (3) For the purposes of the Corporations Act section 601BC(8)(d), a
7 co-operative is authorised by this Act to transfer its
8 incorporation.
9 306. Requirements before application can be made
10 (1) Before an application is made under section 305, the
11 co-operative must, by special resolution passed by means of a
12 special postal ballot --
13 (a) approve the proposed application; and
14 (b) determine under what name the co-operative is to apply
15 to be incorporated or registered; and
16 (c) adopt a constitution or replaceable rules or rules that
17 may be necessary or considered desirable.
18 (2) The name applied for need not be the same as that of the
19 co-operative and cannot include the word "co-operative" or
20 "cooperative" or another word importing a similar meaning.
21 (3) The regulations may provide that a co-operative is exempt from
22 compliance with a provision of this section and section 186 in
23 relation to a matter to which this section applies.
24 307. Meaning of new body and transfer
25 The registration or incorporation of a co-operative as a
26 corporation as a result of an application under this Division is
27 referred to in this Division as its transfer and the corporation
28 concerned is referred to in this Division as the new body.
page 179
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 2 Transfer of incorporation
s. 308
1 308. New body ceases to be registered as co-operative
2 On the transfer of a co-operative under this Division, it ceases to
3 be registered as a co-operative under this Act.
4 309. Transfer not to impose greater liability etc.
5 (1) The constitution or replaceable rules or rules adopted for the
6 purposes of the transfer cannot be such as to --
7 (a) impose on the members of the new body who were
8 members of the co-operative at the date of transfer any
9 greater or different liability to contribute to the assets of
10 the new body than the liability to which they were
11 subject as members of the co-operative; or
12 (b) deprive a member of the new body of preferential rights
13 to dividend or capital to which the member was entitled
14 as a member of the co-operative at the date of transfer.
15 (2) In subsection (1), member includes former shareholder of a
16 co-operative, whose shares have been forfeited within 2 years of
17 the transfer.
18 (3) The transfer must result in all persons who were members of the
19 co-operative at the date of transfer becoming members of the
20 new body.
21 (4) In the case of a transfer of a co-operative that has a share capital
22 to a new body that has a share capital, the transfer must result in
23 every member of the co-operative at the date of transfer who
24 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
26 the shares held by the member as a member of the co-operative.
27 310. Effect of new certificate of registration
28 A certificate of registration or incorporation as the new body
29 issued by the appropriate officer under the law applicable to the
30 new body is evidence that all the requirements of this Division
31 about registration or incorporation have been complied with.
page 180
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 311
1 311. New body must give copy of new certificate of registration
2 or incorporation to Registrar
3 On the transfer of a co-operative under this Division, the new
4 body must immediately give the Registrar a copy of its new
5 certificate of registration or incorporation.
6 Penalty: a fine of $1 000.
7 312. New body is a continuation of the co-operative
8 (1) When a co-operative transfers to a new body, the corporation
9 constituted by the new body is taken to be the same entity as the
10 corporation constituted by the co-operative.
11 (2) Without limiting subsection (1), Division 6 applies to a transfer
12 under this Division.
13 Division 3 -- Winding-up and deregistration
14 313. Methods of winding-up
15 (1) A co-operative may be wound-up voluntarily or by the Supreme
16 Court or on a certificate of the Registrar.
17 (2) In the case of a winding-up voluntarily or by the Supreme
18 Court, the co-operative may be wound-up in the same way and
19 in the same circumstances as a company under the Corporations
20 Act may be wound-up.
21 314. Winding-up on Registrar's certificate
22 (1) A co-operative may be wound-up on a certificate of the
23 Registrar only if the necessary grounds for taking the action
24 exist, as referred to in section 336.
25 (2) A winding-up on a certificate of the Registrar starts when the
26 Registrar gives the certificate to the co-operative.
page 181
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 3 Winding-up and deregistration
s. 315
1 (3) On the giving of a certificate, the Registrar may appoint a
2 person to be the liquidator of the co-operative.
3 (4) The liquidator need not be a registered liquidator under the
4 Corporations Act.
5 (5) The liquidator must, within 10 days after appointment, give
6 notice of his or her appointment in the Gazette.
7 (6) The liquidator must give the security prescribed by the
8 regulations and is entitled to receive the fees fixed by the
9 Registrar.
10 (7) Any vacancy occurring in the office of liquidator is to be filled
11 by a person appointed by the Registrar.
12 315. Method of deregistration
13 A co-operative may be deregistered in the same way and in the
14 same circumstances as a company under the Corporations Act
15 may be deregistered.
16 316. Application of Corporations Act to winding-up and
17 deregistration
18 The winding-up or deregistration of a co-operative, and a
19 deregistered co-operative, are declared to be applied
20 Corporations legislation matters for the purposes of the
21 Corporations (Ancillary Provisions) Act 2001 Part 3 in relation
22 to the provisions of the Corporations Act Parts 5.4, 5.4A, 5.4B,
23 5.5, 5.6, 5.7 and 5A.1, subject to the following modifications --
24 (a) a reference in the provisions to a special resolution or an
25 extraordinary resolution is to be read as a reference to a
26 special resolution within the meaning of this Act;
27 (b) a reference in the provisions to ASIC is to be read as a
28 reference to the Registrar;
page 182
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 316
1 (c) section 513B is to be considered to be amended by
2 inserting after paragraph (d) --
3 "
4 (da) if the winding-up is on the certificate of the
5 Registrar -- on the date that the certificate is
6 given; or
7 ";
8 (d) section 516 is to be considered to be amended by
9 inserting after "past member" --
10 "
11 together with any charges payable by him or her to the
12 co-operative in accordance with the rules
13 ";
14 (e) a reference in the provisions to a registered liquidator is
15 to be read as including a reference to a person approved
16 or appointed by the Registrar as a liquidator of a
17 co-operative;
18 (f) a reference in the provisions to the Corporations Act
19 Part 2F.1 is to be read as a reference to Part 4 Division 5
20 of this Act;
21 (g) for the purposes of the application of the provisions to a
22 winding-up on the certificate of the Registrar, the
23 winding-up is taken to be a voluntary winding-up, but
24 the Corporations Act section 490 does not apply;
25 (h) the provisions are to be read subject to sections 67
26 and 322 of this Act for the purposes of determining the
27 liability of members and former members to contribute
28 on a winding-up of a co-operative;
29 (i) any other modifications, within the meaning of the
30 Corporations (Ancillary Provisions) Act 2001 Part 3,
31 that are prescribed by the regulations.
page 183
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 3 Winding-up and deregistration
s. 317
1 317. Restrictions on voluntary winding-up
2 (1) A co-operative may be wound-up voluntarily only --
3 (a) by a creditors' voluntary winding-up; or
4 (b) if a special resolution is passed by means of a special
5 postal ballot in favour of voluntary winding-up.
6 (2) A regulation may exempt a co-operative from compliance with
7 a provision of this section or section 186.
8 (3) When a special postal ballot referred to in subsection (1)(b) is
9 held, the members may, by means of the same ballot, by simple
10 majority --
11 (a) appoint one or more liquidators to wind-up the affairs
12 and distribute the assets of the co-operative; and
13 (b) fix the remuneration to be paid to the liquidator.
14 318. Start of members' voluntary winding-up
15 A members' voluntary winding-up of a co-operative starts when
16 the result of the special postal ballot is noted in the minute book
17 by the secretary of the co-operative.
18 319. Distribution of surplus -- non-distributing co-operatives
19 (1) In this section --
20 surplus property means property of the co-operative that
21 remains after satisfaction of the debts and liabilities of the
22 co-operative and the costs, charges and expenses of the
23 winding-up.
24 (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
26 the rules of the co-operative.
27 (3) The rules of a non-distributing co-operative must make
28 provision for the way in which the surplus property of the
29 co-operative is to be distributed in a winding-up.
page 184
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Winding-up and deregistration Division 3
s. 320
1 320. Liquidator -- vacancy may be filled by Registrar
2 If a co-operative is being wound-up voluntarily and a vacancy
3 occurs in the office of liquidator that in the opinion of the
4 Registrar is unlikely to be filled in the way provided by the
5 Corporations Act, as applied by this Division, the Registrar may
6 appoint a person to be liquidator.
7 321. Review of liquidator's remuneration
8 A member or creditor of a co-operative or the liquidator may at
9 any time before the completion of the winding-up of the
10 co-operative apply to the Supreme Court to review the amount
11 of the remuneration of the liquidator.
12 322. Liability of member to contribute in a winding-up where
13 shares forfeited etc.
14 (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
16 co-operative, the person is liable on the winding-up to
17 contribute to the property of the co-operative the amount paid
18 by the co-operative to the member or former member in respect
19 of any shares forfeited in connection with that cancellation,
20 together with any amount unpaid on the shares immediately
21 before the cancellation.
22 (2) If under section 163 a co-operative --
23 (a) purchases a share of a member in the co-operative; or
24 (b) repays to a member the whole or any part of the amount
25 paid up up to the stated nominal value on a share held by
26 a member,
27 within 2 years before the start of the winding-up of the
28 co-operative, the member or former member is liable on the
29 winding-up to contribute to the property of the co-operative the
30 amount paid by the co-operative to the member or former
31 member in respect of the purchase or repayment together with
page 185
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 4 Administration of co-operative -- application of Corporations
Act
s. 323
1 any amount unpaid on the shares immediately before the
2 purchase or repayment.
3 (3) If a person contributes to the property of a co-operative under a
4 liability under this section, the amount contributed is, for the
5 purposes of the winding-up, to be treated as having been paid up
6 by the person on shares of the co-operative.
7 (4) The liability of a member or former member of a co-operative
8 under this section is in addition to any other liability of the
9 member or former member to contribute to the property of the
10 co-operative on a winding-up of the co-operative.
11 Division 4 -- Administration of co-operative -- application of
12 Corporations Act
13 323. Application of Corporations Act to administration of
14 co-operative
15 A co-operative is declared to be an applied Corporations
16 legislation matter for the purposes of the Corporations
17 (Ancillary Provisions) Act 2001 Part 3 in relation to the
18 provisions of the Corporations Act Part 5.3A and Part 5.9
19 Division 3, subject to the following modifications --
20 (a) the provisions are to be read as if a co-operative were a
21 company;
22 (b) a reference in the provisions to the Corporations Act
23 sections 128 and 129 is to be read as a reference to
24 sections 41 to 43, and section 45 of this Act;
25 (c) a reference in the provisions to ASIC is to be read as a
26 reference to the Registrar;
27 (d) any other modifications, within the meaning of the
28 Corporations (Ancillary Provisions) Act 2001 Part 3,
29 that are prescribed by the regulations.
page 186
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Appointment of administrator Division 5
s. 324
1 Division 5 -- Appointment of administrator
2 324. Appointment of administrator
3 (1) The Registrar may, by written notice, appoint an administrator
4 to conduct the affairs of a co-operative.
5 (2) A notice of appointment must state --
6 (a) the date of appointment; and
7 (b) the appointee's name; and
8 (c) the appointee's business address.
9 (3) If the appointee's name or business address changes, the
10 appointee must immediately give written notice of the change to
11 the Registrar.
12 (4) The Registrar cannot appoint an administrator unless the
13 necessary grounds for taking the action exist, as referred to in
14 section 336(2).
15 325. Effect of appointment of administrator
16 (1) On the appointment of an administrator of a co-operative --
17 (a) the directors of the co-operative cease to hold office; and
18 (b) all contracts of employment with the co-operative are
19 terminated; and
20 (c) all contracts for the provision of secretarial or
21 administrative services for the co-operative are
22 terminated; and
23 (d) the administrator may terminate any contract for
24 providing other services to the co-operative.
25 (2) An administrator of a co-operative has the functions of the
26 board of the co-operative, including the board's powers of
27 delegation.
page 187
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 5 Appointment of administrator
s. 326
1 (3) A director of a co-operative cannot be appointed or elected
2 while the administrator is in office except as provided by this
3 Division.
4 326. Revocation of appointment
5 (1) An administrator holds office until the administrator's
6 appointment is revoked.
7 (2) The Registrar may, by written notice, revoke the appointment of
8 an administrator.
9 (3) When a liquidator of a co-operative is appointed, the
10 appointment of any administrator of the co-operative is
11 automatically revoked.
12 (4) Immediately on the revocation of an administrator's
13 appointment, the administrator must prepare and submit a report
14 to the Registrar showing how the administration was carried
15 out, and for that purpose an administrator has access to the
16 co-operative's records.
17 (5) On giving the report and accounting fully for the administration
18 of the co-operative to the satisfaction of the Registrar, the
19 administrator is released from any further duty to account for
20 the administration of the co-operative other than on account of
21 fraud, dishonesty, negligence or wilful failure to comply with
22 this Act.
23 (6) Before revoking the appointment of an administrator of a
24 co-operative, the Registrar must --
25 (a) appoint another administrator; or
26 (b) appoint a liquidator; or
27 (c) ensure that directors of the co-operative have been
28 elected in accordance with the rules of the co-operative
29 at a meeting called by the administrator in accordance
30 with those rules; or
31 (d) appoint directors of the co-operative.
page 188
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Appointment of administrator Division 5
s. 327
1 (7) Directors elected or appointed under subsection (6) --
2 (a) take office on revocation of the administrator's
3 appointment; and
4 (b) in the case of directors appointed under subsection (6),
5 hold office until the next annual general meeting of the
6 co-operative after the revocation of that appointment.
7 327. Expenses of administration
8 (1) The expenses of and incidental to the conduct of a
9 co-operative's affairs by an administrator are payable from the
10 co-operative's funds.
11 (2) The expenses of conducting a co-operative's affairs include --
12 (a) if the administrator is not an officer or employee of the
13 public service, remuneration of the administrator at a
14 rate approved by the Registrar; or
15 (b) if the administrator is an officer or employee of the
16 public service, the amount that the Registrar certifies
17 should be paid to the State as repayment of the
18 administrator's remuneration.
19 (3) An amount certified under subsection (2)(b) may be recovered
20 in a court of competent jurisdiction as a debt payable to the
21 State.
22 (4) An administrator has, in relation to the expenses referred to in
23 subsection (1), the same priority on the winding-up of a
24 co-operative as the liquidator of the co-operative has, as set out
25 in the Corporations Act Part 5.6.
26 328. Liabilities arising from administration
27 (1) If a co-operative incurs loss because of fraud, dishonesty,
28 negligence or wilful failure to comply with this Act or the rules
29 of the co-operative by an administrator, the administrator is
30 liable for the loss.
page 189
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 5 Appointment of administrator
s. 329
1 (2) An administrator is not liable for loss that is not a loss to which
2 subsection (1) applies but must account for the loss in a report
3 given under section 326.
4 329. Additional powers of Registrar
5 (1) If the Registrar appoints directors of a co-operative under
6 section 326, the Registrar may, by written notice given to the
7 co-operative, specify --
8 (a) a time during which this section is to apply in relation to
9 the co-operative; and
10 (b) the terms on which all or any of the directors hold
11 office; and
12 (c) the rules that are to be the co-operative's rules.
13 (2) While this section applies to a co-operative, the Registrar
14 may --
15 (a) remove and appoint directors; and
16 (b) vary, revoke or state new terms in place of all or any of
17 the terms specified under subsection (1); and
18 (c) amend all or any of the rules specified under
19 subsection (1).
20 (3) The Registrar may, by written notice given to the co-operative,
21 extend the time for which this section is to apply to a
22 co-operative.
23 (4) A rule specified by the Registrar under this section to be a rule
24 of a co-operative --
25 (a) cannot be altered except in the way set out in this
26 section; and
27 (b) if it is inconsistent with another rule of the co-operative,
28 prevails over the other rule, and the other rule is to the
29 extent of the inconsistency inoperative; and
30 (c) has the same evidentiary value as is by this Act accorded
31 to the co-operative's rules and to copies of them.
page 190
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 330
1 330. Stay of proceedings
2 (1) If the Registrar appoints an administrator to conduct a
3 co-operative's affairs, a person cannot begin or continue
4 proceedings in a court against the co-operative until the
5 administrator's appointment is revoked except with the leave of
6 the Supreme Court and, if the Supreme Court grants leave, in
7 accordance with any terms that the Supreme Court imposes.
8 (2) A person intending to apply for leave of the Supreme Court
9 under subsection (1) must give the Registrar at least 10 days
10 notice of intention to apply.
11 (3) On the hearing of an application under subsection (1), the
12 Registrar may be represented and may oppose the application.
13 331. Administrator to report to Registrar
14 On the receipt of a request from the Registrar, the administrator
15 of a co-operative must, without delay, prepare and give to the
16 Registrar a report showing how the administration is being
17 carried out.
18 Division 6 -- Effect of merger etc. on property, liabilities etc.
19 332. How this Division applies to a merger
20 (1) This Division applies to a merger of co-operatives under
21 this Part.
22 (2) In the application of this Division to a merger --
23 new body means the co-operative that results from the merger;
24 original body means each co-operative that is a party to the
25 merger;
26 relevant day means the day on which the merged co-operative is
27 registered under this Act.
page 191
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 6 Effect of merger etc. on property, liabilities etc.
s. 333
1 333. How this Division applies to a transfer of engagements
2 (1) This Division applies to a transfer of the engagements of a
3 co-operative to another co-operative under Division 1.
4 (2) In the application of this Division to a transfer of
5 engagements --
6 new body means the co-operative to which the engagements are
7 transferred;
8 original body means the co-operative that transfers its
9 engagements;
10 relevant day means the day on which the transfer of
11 engagements takes effect.
12 334. How this Division applies to a transfer of incorporation
13 (1) This Division applies to a transfer of incorporation under
14 Division 2.
15 (2) In the application of this Division to such a transfer --
16 new body means the corporation that results from the transfer;
17 original body means the co-operative that transfers its
18 incorporation;
19 relevant day means the day on which the transfer takes effect.
20 335. Effect of merger etc. on property, liabilities etc.
21 (1) In this section --
22 assets means any legal or equitable estate or interest (whether
23 present or future and whether vested or contingent) in real or
24 personal property of any description (including money), and
25 includes securities, choses in action and documents;
26 instrument means an instrument (other than this Act) which
27 creates, modifies or extinguishes rights or liabilities (or would
28 do so if lodged, filed or registered in accordance with any law),
29 and includes any judgment, order and process of a court;
page 192
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Effect of merger etc. on property, liabilities etc. Division 6
s. 335
1 liabilities means liabilities, debts and obligations (whether
2 present or future and whether vested or contingent).
3 (2) On and from the relevant day for an event to which this
4 Division applies --
5 (a) the assets of the original body vest in the new body
6 without the need for a conveyance, transfer, assignment
7 or assurance; and
8 (b) the rights and liabilities of the original body become the
9 rights and liabilities of the new body; and
10 (c) all proceedings by or against the original body that are
11 pending immediately before the relevant day are taken
12 to be proceedings pending by or against the new body;
13 and
14 (d) an act, matter or thing done or omitted to be done by, to
15 or in relation to the original body before the relevant day
16 is, to the extent to which that act, matter or thing has any
17 force or effect, taken to have been done or omitted by, to
18 or in relation to the new body; and
19 (e) a reference in an instrument or document of any kind to
20 the original body is to be read as, or as including, a
21 reference to the new body.
22 (3) The operation of this section cannot be regarded --
23 (a) as a breach of contract or confidence or otherwise as a
24 civil wrong; or
25 (b) as a breach of any contractual provision prohibiting,
26 restricting or regulating the assignment or transfer of
27 assets, rights or liabilities; or
28 (c) as giving rise to a remedy by a party to an instrument, or
29 as causing or permitting the termination of an
30 instrument, because of a change in the beneficial or legal
31 ownership of an asset, right or liability.
page 193
Co-operatives Bill 2009
Part 12 Merger, transfer of engagements, winding-up
Division 7 Miscellaneous
s. 336
1 Division 7 -- Miscellaneous
2 336. Grounds for winding-up, transfer of engagements,
3 appointment of administrator
4 (1) This section applies to the following actions --
5 (a) a direction by the Registrar to a co-operative to transfer
6 its engagements under section 304;
7 (b) the appointment of an administrator of a co-operative
8 under Division 5;
9 (c) the winding-up of a co-operative on a certificate of the
10 Registrar under section 314.
11 (2) The necessary grounds for taking action to which this section
12 applies exist if the Registrar certifies that --
13 (a) the number of members is reduced to less than the
14 minimum number of persons allowed under section 65;
15 or
16 (b) the co-operative has not commenced business within
17 one year of registration or has suspended business for
18 more than 6 months; or
19 (c) the registration of the co-operative has been obtained by
20 mistake or fraud; or
21 (d) the co-operative exists for an illegal purpose; or
22 (e) the co-operative has wilfully, and after notice from the
23 Registrar, violated the provisions of this Act or of the
24 rules of the co-operative; or
25 (f) the board of the co-operative has, after notice from the
26 Registrar, failed to ensure that the rules of the
27 co-operative contain active membership provisions in
28 accordance with Part 6; or
29 (g) there are, and have been, for one month immediately
30 before the date of the Registrar's certificate, insufficient
31 directors of the co-operative to form a quorum in
32 accordance with the rules of the co-operative; or
page 194
Co-operatives Bill 2009
Merger, transfer of engagements, winding-up Part 12
Miscellaneous Division 7
s. 337
1 (h) after an inquiry under this Act into the affairs of a
2 co-operative or the working and financial condition of a
3 co-operative, that in the interests of members or
4 creditors of the co-operative or the public the action
5 concerned should be taken.
6 (3) Alternatively, the necessary grounds for winding-up a
7 co-operative on a certificate of the Registrar exist if the
8 Registrar certifies that --
9 (a) the period, if any, fixed for the duration of the
10 co-operative by its rules has ended; or
11 (b) an event, to be specified in the certificate, has occurred
12 on the occurrence of which the regulations or the rules
13 provide that the co-operative is to be wound-up.
14 (4) The Registrar cannot certify under this section as to any matter
15 unless the matter has been proved to the Registrar's satisfaction.
16 337. Application of Corporations Act for insolvent co-operatives
17 A co-operative is declared to be an applied Corporations
18 legislation matter for the purposes of the Corporations
19 (Ancillary Provisions) Act 2001 Part 3 in relation to the
20 provisions of the Corporations Act Part 5.7B, subject to the
21 following modifications --
22 (a) the provisions are to be read as if a co-operative were a
23 company;
24 (b) a reference in the provisions to a provision of the
25 Corporations Act sections 286 to 290, as applied under
26 section 225 of this Act, is to be read with any
27 modifications prescribed by the regulations;
28 (c) any other modifications, within the meaning of the
29 Corporations (Ancillary Provisions) Act 2001 Part 3,
30 that are prescribed by the regulations.
page 195
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 338
1 Part 13 -- Arrangements and reconstructions
2 Division 1 -- General requirements
3 338. Requirements for binding compromise or arrangement
4 (1) A compromise or arrangement is binding only if it is approved
5 by order of the Supreme Court after having been agreed to --
6 (a) if the compromise or arrangement is between the
7 co-operative and any of its creditors, at a court ordered
8 meeting by a majority in number of the creditors
9 concerned who are present and voting (in person or by
10 proxy), being a majority whose debts or claims against
11 the co-operative amount to at least 75% of the total of
12 the debts and claims of all those creditors who are
13 present and voting (in person or by proxy); or
14 (b) if the compromise or arrangement is between the
15 co-operative and any of its members, by the members
16 concerned, by special resolution passed by means of a
17 special postal ballot.
18 (2) The court ordered meeting referred to in subsection (1)(a) is a
19 meeting called in accordance with an order of the Supreme
20 Court under this Part.
21 (3) The Supreme Court may grant its approval to a compromise or
22 arrangement subject to the alterations or conditions it considers
23 appropriate.
24 (4) An order of the Supreme Court approving a compromise or
25 arrangement does not have effect until an office copy of the
26 order is lodged with the Registrar.
27 (5) On the copy being lodged, the order takes effect from the date
28 of lodgment or an earlier date the Supreme Court specifies in
29 the order.
page 196
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
General requirements Division 1
s. 339
1 339. Supreme Court ordered meeting of creditors
2 (1) In this section --
3 appropriate person, in relation to an application for an order,
4 means --
5 (a) the co-operative; or
6 (b) a member of the co-operative; or
7 (c) one of the creditors concerned; or
8 (d) in the case of a co-operative being wound-up, the
9 liquidator.
10 (2) If a compromise or arrangement is proposed between a
11 co-operative and any of its creditors, the Supreme Court may on
12 application by an appropriate person order a meeting or
13 meetings of the creditors concerned.
14 (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
16 Court directs.
17 (4) In considering whether to make an order for a meeting to be
18 held in another jurisdiction, the Supreme Court may have regard
19 to where creditors concerned reside.
20 340. Registrar to be given notice and opportunity to make
21 submissions
22 The Supreme Court may, on the application of an appropriate
23 person as defined in section 339(1), make an order under this
24 Division approving a compromise or arrangement if the Court is
25 satisfied that --
26 (a) at least 14 days notice of the hearing of the application
27 for the order, or a shorter period of notice the Court or
28 the Registrar permits, has been given to the Registrar;
29 and
page 197
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 341
1 (b) the Registrar has had a reasonable opportunity to
2 examine --
3 (i) the terms of that compromise or arrangement;
4 and
5 (ii) the explanatory statement to be sent to creditors
6 or members under section 349,
7 and make submissions to the Court.
8 341. Results of 2 or more meetings
9 If the Supreme Court orders 2 or more meetings of creditors to
10 be held in relation to a proposed compromise or arrangement --
11 (a) the meetings are taken to form a single meeting; and
12 (b) the votes in favour of the proposed compromise or
13 arrangement cast at each of the meetings are to be
14 added; and
15 (c) the votes against the proposed compromise or
16 arrangement cast at each of the meetings are to be
17 added.
18 342. Persons disqualified from administering compromise etc.
19 Except with the leave of the Supreme Court, a person cannot be
20 appointed to administer, and cannot administer, a compromise
21 or arrangement approved under this Act between a co-operative
22 and any of its creditors or members, whether by the terms of the
23 compromise or arrangement or under a power given by the
24 terms of a compromise or arrangement, if the person --
25 (a) is a mortgagee of property of the co-operative; or
26 (b) is an auditor or an officer of the co-operative; or
27 (c) is an officer of a corporation that is a mortgagee of
28 property of the co-operative; or
29 (d) is not a registered liquidator under the Corporations Act
30 unless the person is a corporation authorised by or under
31 a law of this State to administer the compromise or
32 arrangement concerned; or
page 198
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
General requirements Division 1
s. 343
1 (e) is an officer of a corporation related to the co-operative;
2 or
3 (f) unless the Registrar directs in writing that this paragraph
4 does not apply in relation to the person in relation to the
5 co-operative, has at any time within the last 12 months
6 been an officer or promoter of the co-operative or of a
7 related corporation of the co-operative.
8 343. Application of Schedule 4 to person appointed
9 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
11 if the appointment were an appointment of the person as a
12 receiver and manager of property of the co-operative and as if a
13 reference to a receiver were a reference to that person.
14 344. Application of Corporations Act to person appointed
15 A person appointed to administer a compromise or arrangement
16 is declared to be an applied Corporations legislation matter for
17 the purposes of the Corporations (Ancillary Provisions)
18 Act 2001 Part 3 in relation to the Corporations Act section 536
19 as if --
20 (a) the appointment were an appointment as a liquidator of
21 the co-operative; and
22 (b) a reference in the section to a liquidator were a reference
23 to that person; and
24 (c) a reference in that section to ASIC were a reference to
25 the Registrar.
26 345. Copy of order to be attached to rules
27 (1) A co-operative must ensure that a copy of an order of the
28 Supreme Court approving a compromise or arrangement is
29 attached to each copy of the rules of the co-operative issued
30 after the order is made.
31 Penalty: a fine of $2 000.
page 199
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 1 General requirements
s. 346
1 (2) The Supreme Court may, by order, exempt a co-operative from
2 compliance with this section or determine the period during
3 which the co-operative must comply.
4 346. Directors to arrange for reports
5 (1) When a compromise or arrangement (whether or not for the
6 purposes of or in connection with a scheme for the
7 reconstruction of a co-operative or the merger of any 2 or more
8 co-operatives) has been proposed, the directors of the
9 co-operative must --
10 (a) if a meeting of the members of the co-operative by
11 resolution so directs, instruct the accountants or legal
12 practitioners or both named in the resolution to report on
13 the proposals and send their report or reports to the
14 directors as soon as practicable; and
15 (b) make any report or reports so obtained available at the
16 registered office of the co-operative for inspection by
17 the members and creditors of the co-operative at least
18 7 days before the day of the meeting ordered by the
19 Supreme Court or the holding of the special postal
20 ballot, as appropriate.
21 (2) If subsection (1) is not complied with, each director of the
22 co-operative commits an offence.
23 Penalty: a fine of $2 000.
24 347. Power of Supreme Court to restrain further proceedings
25 (1) If a proposed compromise or arrangement is between a
26 co-operative and any of its creditors and no order has been made
27 or resolution passed for the winding-up of the co-operative, the
28 Supreme Court may restrain further proceedings in an action or
29 other civil proceeding against the co-operative except by leave
30 of the Supreme Court and subject to such terms as the Supreme
31 Court imposes.
page 200
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 348
1 (2) The Supreme Court's power under this section is in addition to
2 any of its other powers and cannot be exercised except on
3 application by the co-operative or of any creditor or member of
4 the co-operative.
5 348. Supreme Court need not approve compromise or
6 arrangement takeovers
7 (1) The Supreme Court need not approve a compromise or
8 arrangement unless --
9 (a) it is satisfied that the compromise or arrangement has
10 not been proposed for the purpose of enabling any
11 person to avoid the operation of any of the provisions of
12 Part 11 Division 2; and
13 (b) there is produced to the Supreme Court a statement in
14 writing by the Registrar stating that the Registrar has no
15 objection to the compromise or arrangement.
16 (2) The Supreme Court need not approve a compromise or
17 arrangement merely because a statement by the Registrar stating
18 that the Registrar has no objection to the compromise or
19 arrangement has been produced to the Supreme Court.
20 Division 2 -- Explanatory statements
21 349. Explanatory statement required to accompany notice of
22 meeting etc.
23 (1) An explanatory statement must accompany every notice --
24 (a) that is sent to a creditor of a co-operative calling a court
25 ordered meeting to obtain agreement to a compromise or
26 arrangement; or
27 (b) that is sent to a member of a co-operative for the
28 purpose of the conduct of the special postal ballot to
29 obtain agreement to the compromise or arrangement.
30 (2) In every notice of a meeting referred to in subsection (1) that is
31 given by advertisement there must be included either a copy of
page 201
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 2 Explanatory statements
s. 349
1 the explanatory statement or notification of the place at which
2 and the way in which creditors entitled to attend the meeting
3 may obtain copies of the explanatory statement.
4 (3) The explanatory statement must --
5 (a) explain the effect of the compromise or arrangement
6 and, in particular, state --
7 (i) material interests of the directors, whether as
8 directors, members or creditors of the
9 co-operative or otherwise; and
10 (ii) the effect on those interests of the compromise or
11 arrangement in so far as that effect is different
12 from the effect on the like interests of other
13 persons;
14 and
15 (b) set out --
16 (i) the information prescribed by the regulations;
17 and
18 (ii) other information that is material to the making
19 of a decision by a creditor or member whether or
20 not to agree to the compromise or arrangement,
21 is within the knowledge of the directors and has
22 not previously been disclosed to the creditors or
23 members.
24 (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
26 otherwise.
27 (5) The notice calling the meeting that is sent to a creditor referred
28 to in subsection (1)(a) must specify a place at which a copy of
29 the explanatory statement can be obtained on request.
30 (6) The co-operative must comply with a request under
31 subsection (5) as soon as practicable.
page 202
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
Explanatory statements Division 2
s. 350
1 350. Requirements for explanatory statement
2 (1) An explanatory statement must be as approved by the Registrar.
3 (2) If the compromise or arrangement affects the rights of debenture
4 holders, the explanatory statement must specify --
5 (a) any material interests of the trustees for the debenture
6 holders, whether as such trustees, as members or
7 creditors of the co-operative or otherwise; and
8 (b) the effect on those interests of the compromise or
9 arrangement to the extent that that effect is different
10 from the effect on the like interests of other persons.
11 (3) If a notice given by advertisement includes a notification that
12 copies of the explanatory statement can be obtained in a
13 particular way, the co-operative must give a copy of the
14 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
16 way.
17 (4) Each person who is a director or trustee for debenture holders
18 must give notice to the co-operative of such matters relating to
19 the person as are required to be included in the explanatory
20 statement.
21 351. Contravention of Division -- offence by co-operative
22 (1) If a provision of this Division is contravened, the co-operative
23 concerned and any other person involved in the contravention
24 commits an offence.
25 Penalty: a fine of $2 000.
26 (2) It is a defence to a prosecution for an offence under
27 subsection (1) if it is proved that the contravention was due to
28 the failure of a person, other than the defendant, who is a
29 director of the co-operative or a trustee for debenture holders of
30 the co-operative, to supply for the purposes of the explanatory
31 statement particulars of the person's interests.
page 203
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 3 Facilitating reconstructions and mergers
s. 352
1 Division 3 -- Facilitating reconstructions and mergers
2 352. Provisions for facilitating reconstructions and mergers
3 (1) In this section --
4 co-operative includes a foreign co-operative;
5 liabilities includes duties of any description, including duties
6 that are of a personal character or are incapable under the
7 general law of being assigned or performed vicariously;
8 property includes rights and powers of any description,
9 including rights and powers that are of a personal character and
10 are incapable under the general law of being assigned or
11 performed vicariously.
12 (2) This section applies if an application is made to the Supreme
13 Court under this Part for the approval of a compromise or
14 arrangement and it is shown to the Court that --
15 (a) the compromise or arrangement has been proposed for
16 the purposes of a scheme for the reconstruction of a
17 co-operative or the merger of a co-operative with
18 another co-operative or with another corporation; and
19 (b) under the scheme all or part of the undertaking or of the
20 property of a co-operative concerned in the scheme (the
21 transferor) is to be transferred to another corporation
22 (the transferee) and the transferee is not a company
23 within the meaning of the Corporations Act.
24 (3) If this section applies, the Supreme Court may, either by the
25 order approving the compromise or arrangement or by a later
26 order provide for any one or more of the following --
27 (a) the transfer to the transferee of all or part of the
28 undertaking and the property or liabilities of the
29 transferor;
30 (b) the allotting or appropriation by the transferee of shares,
31 debentures, co-operative capital units, policies or other
32 interests in the transferee that, under the compromise or
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Co-operatives Bill 2009
Arrangements and reconstructions Part 13
Facilitating reconstructions and mergers Division 3
s. 352
1 arrangement, are to be allotted or appropriated by the
2 transferee to or for a person;
3 (c) the continuation by or against the transferee of legal
4 proceedings pending by or against the transferor;
5 (d) the deregistration, without winding-up, of the transferor;
6 (e) the provision to be made for any persons who, within
7 the time and in the way the Court directs, dissent from
8 the compromise or arrangement;
9 (f) the transfer or allotment of any interest in property to a
10 person concerned in the compromise or arrangement;
11 (g) the incidental, consequential and supplemental matters
12 necessary to ensure that the reconstruction or merger is
13 fully and effectively carried out.
14 (4) If an order made under this section provides for the transfer of
15 property or liabilities, then, by virtue of the order --
16 (a) the property is transferred to and vests in the transferee
17 free, in the case of a particular property if the order so
18 directs, from a charge that is under the compromise or
19 arrangement to cease to have effect; and
20 (b) the liabilities are transferred to and become the liabilities
21 of the transferee.
22 (5) If an order is made under this section, each body to which the
23 order relates must, within 14 days after the making of the order,
24 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
26 Court in making an order under this section, the Court may
27 make an award of costs to the Registrar for the appearance.
page 205
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 353
1 Division 4 -- Acquisition of shares of dissenting shareholders
2 353. Definitions
3 In this Division --
4 dissenting shareholder, in relation to a scheme or contract,
5 means a shareholder who has not assented to the scheme or
6 contract or who has failed to transfer the shareholder's shares
7 under the scheme or contract;
8 excluded shares, in relation to a scheme or contract involving a
9 transfer to a person of shares in a class of shares in a
10 co-operative, means shares in the class that, when the offer
11 relating to the scheme or contract is made, are held by --
12 (a) in any case, the person or a nominee of the person; or
13 (b) if the person is a corporation, a subsidiary of the body.
14 354. Schemes and contracts to which Division applies
15 (1) This Division applies to a scheme or contract involving a
16 transfer of shares in a co-operative (the transferor) to a person
17 (the transferee) that has, within 4 months after the making of
18 the offer relating to the scheme or contract by the transferee,
19 been approved by the holders of at least 90% in nominal value
20 of all the shares (other than excluded shares) to which the offer
21 relates.
22 (2) This Division does not apply to a scheme or contract arising out
23 of the making of an offer to which Part 11 Division 2 applies.
24 355. Acquisition of shares pursuant to notice to dissenting
25 shareholder
26 (1) The transferee under the scheme or contract may, within
27 2 months after the offer is approved, give notice as prescribed
28 by the regulations (a compulsory acquisition notice) to a
29 dissenting shareholder that the transferee wishes to acquire the
30 shares held by that shareholder.
page 206
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 356
1 (2) If a compulsory acquisition notice is given, the dissenting
2 shareholder may, by written notice given to the transferee
3 within one month after the day on which the compulsory
4 acquisition notice was given, ask for a statement in writing of
5 the names and addresses of all other dissenting shareholders as
6 shown in the register of members and the transferee must give
7 that statement.
8 (3) Having given the compulsory acquisition notice, the transferee
9 is, unless the Supreme Court orders to the contrary, entitled and
10 bound to acquire the shares of the dissenting shareholder on the
11 terms on which, under the scheme or contract, the shares of the
12 approving shareholders are to be transferred to the transferee.
13 (4) The Supreme Court may give an order to the contrary only on
14 the application of the dissenting shareholder made within the
15 later of 28 days after the compulsory acquisition notice was
16 given or within 14 days after a statement asked for under
17 subsection (2) was given.
18 (5) If alternative terms are offered to the approving shareholders --
19 (a) the dissenting shareholder is entitled to elect which of
20 those terms are preferred but must make the election
21 within the time allowed for making an application to the
22 Supreme Court under subsection (4); and
23 (b) if the dissenting shareholder fails to make the election
24 within the time, the transferee may, unless the Supreme
25 Court orders otherwise, decide which of the terms is to
26 apply to the acquisition of the shares of the dissenting
27 shareholder.
28 356. Restrictions when excluded shares exceed 10%
29 If the nominal value of excluded shares is more than 10% of the
30 total nominal value of all the shares, including excluded shares,
31 to be transferred under the scheme or contract, section 355 does
32 not apply unless --
page 207
Co-operatives Bill 2009
Part 13 Arrangements and reconstructions
Division 4 Acquisition of shares of dissenting shareholders
s. 357
1 (a) the transferee offers the same terms to all holders of the
2 shares, other than excluded shares, to be transferred
3 under the scheme or contract; and
4 (b) the holders who approve the scheme or contract together
5 hold at least 90% in nominal value of the shares (other
6 than excluded shares) to be transferred under the scheme
7 or contract and are also at least 75% in number of the
8 holders of those shares, with joint owners of shares
9 being counted as one person.
10 357. Remaining shareholders may require acquisition
11 (1) If, under a scheme or contract to which this Division applies, the
12 transferee becomes beneficially entitled to shares in the
13 transferor that, together with other shares in the transferor to
14 which the transferee or a corporation related to the transferee is
15 beneficially entitled, comprise or include 90% in nominal value
16 of the shares to which the offer relates, then --
17 (a) the transferee must, within 28 days after becoming
18 beneficially entitled to the shares, give notice of the fact
19 as prescribed by the regulations to the holders of the
20 remaining shares concerned who, when the notice was
21 given, had not assented to the scheme or contract or
22 been given a compulsory acquisition notice by the
23 transferee under this Division; and
24 (b) a holder referred to in paragraph (a) may, within
25 3 months after being given that notice, by notice to the
26 transferee require the transferee to acquire the holder's
27 share and, if alternative terms were offered to the
28 approving shareholders, elect which of those terms the
29 holder will accept.
30 (2) If a shareholder gives notice under this section with respect to
31 the shareholder's shares, the transferee is entitled and bound to
32 acquire those shares --
33 (a) on the terms on which under the scheme or contract the
34 shares of the approving shareholders were transferred to
page 208
Co-operatives Bill 2009
Arrangements and reconstructions Part 13
Acquisition of shares of dissenting shareholders Division 4
s. 358
1 the transferee and, if alternative terms were offered to
2 those shareholders, on the terms for which the
3 shareholder has elected, or, if no election is made, for
4 whichever of the terms the transferee determines; or
5 (b) on such other terms as are agreed or as the Supreme
6 Court, on the application of the transferee or of the
7 shareholder, considers appropriate to order.
8 358. Transfer of shares pursuant to compulsory acquisition
9 (1) A transferee who has given a compulsory acquisition notice
10 must --
11 (a) send a copy of the notice to the transferor together with
12 an instrument of transfer for the shares that the
13 transferee is entitled to acquire under this Division and
14 that is executed, on the shareholder's behalf, by a person
15 appointed by the transferee and, on the transferee's own
16 behalf, by the transferee; and
17 (b) pay, allot or transfer to the transferor the consideration
18 for the shares.
19 (2) The transferee must do so within 14 days after whichever of the
20 following happens last --
21 (a) the period of 28 days after the day on which the
22 compulsory acquisition notice was given expires;
23 (b) the period of 14 days after a statement of the names and
24 addresses of dissenting shareholders is supplied under
25 this Division expires;
26 (c) if an application has been made to the Supreme Court by
27 a dissenting shareholder, the application is disposed of.
28 (3) When the transferee has complied with this section, the
29