Part 1 Preliminary

Part 1 Preliminary

1 Name of Act

1 Name of Act

This Act is the Co-operatives (Adoption of National Law) Act 2012.

2 Commencement

2 Commencement

(1) This Act commences on a day or days to be appointed by proclamation.

(2) Different days may be appointed under subsection (1) for the commencement of different provisions of the Co-operatives National Law.

3 Definitions

3 Definitions

(1) For the purposes of this Act, the local application provisions of this Act are the provisions of this Act other than the Co-operatives National Law.

(2) In the local application provisions of this Act—

Co-operatives National Law (NSW) means the provisions applying in relation to this jurisdiction because of section 4 (1).

Co-operatives National Regulations or National Regulations means the Co-operatives National Regulations made under the Co-operatives National Law.

Co-operatives National Regulations (NSW) means the provisions applying in relation to this jurisdiction because of section 4 (2).

instrument includes a document.

local regulations means regulations made under section 18, but does not include the Co-operatives National Regulations and the Co-operatives National Regulations (NSW).

Secretary means—

(a) the Commissioner for Fair Trading, Department of Customer Service, or

(b) if there is no person employed as Commissioner for Fair Trading—the Secretary of the Department of Customer Service.

this jurisdiction means the State of New South Wales.

(3) Terms used in the local application provisions of this Act and also in the Co-operatives National Law have the same meanings in those provisions as they have in that Law.

(4) The Appendix forms part of this Act but notes included in this Act (other than in the Appendix) do not form part of this Act.

s 3: Am 2015 No 58, Sch 3.25 [1]; 2022 No 59, Sch 3.16.

Part 2 Application of Co-operatives National Law and Co-operatives National Regulations

Part 2 Application of Co-operatives National Law and Co-operatives National Regulations

4 Adoption of Co-operatives National Law and Co-operatives National Regulations

4 Adoption of Co-operatives National Law and Co-operatives National Regulations

(1) The Co-operatives National Law, as in force from time to time, set out in the Appendix to this Act—

(a) applies as a law of this jurisdiction, and

(b) as so applying may be referred to as the Co-operatives National Law (NSW), and

(c) so applies as if it were an Act.

(2) The Co-operatives National Regulations, as in force from time to time—

(a) apply as National Regulations in force for the purposes of the Co-operatives National Law (NSW), subject to modifications prescribed by the local regulations, and

(b) as so applying may be referred to as the Co-operatives National Regulations (NSW).

Note—

The Co-operatives National Regulations as in force from time to time apply by virtue of this provision as National Regulations for the purposes of the Co-operatives National Law (NSW). The regulations as so applying and referred to as the Co-operatives National Regulations (NSW) are interpreted in accordance with that Law (and see in particular clauses 15 and 37 of Schedule 4 to that Law).

5 Meaning of certain terms in Co-operatives National Law for purposes of this jurisdiction

5 Meaning of certain terms in Co-operatives National Law for purposes of this jurisdiction

In the Co-operatives National Law (NSW)—

police officer means a member of the NSW Police Force who is a police officer within the meaning of the Police Act 1990.

public sector official means a person employed in the Public Service.

Registrar means the Secretary, who is designated by section 24 as the Registrar of Co-operatives.

this jurisdiction means the State of New South Wales.

s 5: Am 2015 No 58, Sch 3.25 [2] [3].

6 Exclusion of legislation of this jurisdiction

6 Exclusion of legislation of this jurisdiction

The following Acts of this jurisdiction do not apply to the Co-operatives National Law (NSW), the Co-operatives National Regulations (NSW), the Co-operatives National Regulations or other instruments (excluding local regulations) made under that Law—

(a) Interpretation Act 1987,

(b) Subordinate Legislation Act 1989.

Part 3 Some matters referred to in Co-operatives National Law (NSW)

Part 3 Some matters referred to in Co-operatives National Law (NSW)

7 Designated authority, designated instrument and designated tribunal (Co-operatives National Law s 4)

7 Designated authority, designated instrument and designated tribunal (Co-operatives National Law s 4)

(1) With respect to the definition of designated authority in the Co-operatives National Law (NSW)—

(a) the Registrar is specified for the purposes of sections 15, 601 and 622 of that Law, and

(b) the Secretary is specified for the purposes of sections 492, 494 and 520 of that Law, and

(c) an authorised officer within the meaning of the Law Enforcement (Powers and Responsibilities) Act 2002 is specified for the purposes of sections 504 and 505 of that Law.

(2) With respect to the definition of designated instrument in the Co-operatives National Law (NSW)—

(a) an order in writing in the approved form is specified for the purposes of the provisions of that Law referred to in Column 2 of the table to this subsection and for the person or class (if any) or in the circumstances (if any) specified in that Column, and

(b) a Gazette notice in the approved form is specified for the purposes of the provisions of that Law referred to in Column 3 of the table to this subsection and for the person or class (if any) or in the circumstances (if any) specified in that Column, and

(c) a written notice in the approved form is specified for the purposes of section 443 (5) of that Law.

Table

| Column 1 | Column 2 | Column 3 | | Item | Designated instrument is an order in writing | Designated instrument is a Gazette notice | | 1 | … | Section 33 (1) (certificate of registration) | | 2 | Section 35 (5) (a) (exemption from special postal ballot for amendment of rules for conversion)—for individual co-operative | Section 35 (5) (b) (exemption from special postal ballot for amendment of rules for conversion)—for class of co-operatives | | 3 | … | Section 60 (2) (specifying rule amendments requiring prior approval by Registrar) | | 4 | Section 71 (1) (exemption from requirements of Division 2 of Part 2.4)—for individual co-operative | Section 71 (1) (exemption from requirements of Division 2 of Part 2.4)—for class of co-operatives | | 5 | Section 92 (6) (exemption from complying with disclosure direction) | … | | 6 | Section 171 (1) (exemption from requirements of Division 5 of Part 2.6)—for individual co-operative | Section 171 (1) (exemption from requirements of Division 5 of Part 2.6)—for class of co-operatives | | 7 | … | Section 221 (1) (approval of omission of “Limited” or “Ltd” from name) | | 8 | Section 226 (6) (exemption from requirement to display location notice)—for individual small co-operative | Section 226 (6) (exemption from requirement to display location notice)—for class of or all small co-operatives) | | 9 | Section 316 (1) (exemption for individual co-operative from accounting and auditing provisions) | … | | 10 | … | Section 317 (1) (exemption for class of co-operatives from accounting and auditing provisions) | | 11 | … | Section 319 (1) (exemption for non-auditor members and former members of audit firms, and former employees of audit companies from accounting and auditing provisions) | | 12 | … | Section 320 (1) (exemption for classes of non-auditor members etc from accounting and auditing provisions) | | 13 | … | Section 322 (1) (exemption from National Regulations made under Part 3.3) | | 14 | Section 338 (6) (exemption from compliance with section 338)—for individual co-operative | Section 338 (6) (exemption from compliance with section 338)—for class of co-operatives | | 15 | Section 343 (10) (exemption from compliance with section 343)—for individual co-operative | Section 343 (10) (exemption from compliance with section 343)—for class of co-operatives | | 16 | Section 359 (3) (exemption from compliance with section 359 or 248) | … | | 17 | Section 363 (2) (stating maximum greater than 20% of nominal value of issued share capital)—for individual co-operative | Section 363 (2) (stating maximum greater than 20% of nominal value of issued share capital)—for class of co-operatives | | 18 | … | Section 372 (1) (exemption of person or class of persons from the operation of Division 1 of Part 3.5) | | 19 | Section 380 (1) (exemption from compliance with Division 2 of Part 3.5 or section 248) | … | | 20 | Section 397 (4) (exemption from compliance with section 397) | … | | 21 | … | Section 401 (7) (notification by Registrar of date of effect of transfer of engagements between co-operatives) | | 22 | Section 404 (4) (exemption from compliance with section 404 or 248) | … | | 23 | Section 445 (3) (exemption from compliance with section 445 or 248)—for individual co-operative | Section 445 (3) (exemption from compliance with section 445 or 248)—for class of co-operatives | | 24 | Section 607 (3) (Registrar’s approval)—for individual co-operative or person | Section 607 (3) (Registrar’s approval)—for class of co-operatives or persons |

(3) The following provisions have effect with respect to the definition of designated tribunal in the Co-operatives National Law (NSW)—

(a) the Supreme Court is specified for the purposes of the provisions of that Law in which the term is used, except Part 7.3 of that Law,

(b) the Civil and Administrative Tribunal is specified for the purposes of Part 7.3 of that Law.

s 7: Am 2013 No 95, Sch 2.39; 2015 No 58, Sch 3.25 [3].

8 Adjustment of date referred to in Corporations Act as applied (Co-operatives National Law ss 201, 444 and 451)

8 Adjustment of date referred to in Corporations Act as applied (Co-operatives National Law ss 201, 444 and 451)

For the purposes of sections 201 (b), 444 (3) (k) and 451 (1) (f) of the Co-operatives National Law (NSW), the reference to 23 June 1993 is to be read as a reference to 15 December 1995.

9 Disposal of consideration for shares compulsorily acquired (Co-operatives National Law s 436)

9 Disposal of consideration for shares compulsorily acquired (Co-operatives National Law s 436)

(1) For the purposes of section 436 (3) (b) (i) of the Co-operatives National Law (NSW), references in section 1339 of the Corporations Act to crediting an amount to the Companies and Unclaimed Moneys Special Account are to be read as references to dealing with the amount as unclaimed money in accordance with the Unclaimed Money Act 1995.

(2) For the purposes of section 436 (3) (b) (ii) of the Co-operatives National Law (NSW), section 1341 (1) and (2) of the Corporations Act are taken to be replaced by subsection (3) of this section.

(3) The amount is to be dealt with in accordance with the Unclaimed Money Act 1995, and accordingly applications for the payment of the amount may be made under that Act to the Chief Commissioner of State Revenue.

10 Deregistration (Co-operatives National Law s 453—sections 601AD, 601AE and 601AF of Corporations Act as applied)

10 Deregistration (Co-operatives National Law s 453—sections 601AD, 601AE and 601AF of Corporations Act as applied)

(1) For the purposes of section 453 (d) of the Co-operatives National Law (NSW), references in sections 601AD–601AF of the Corporations Act to the Commonwealth are to be read as references to the State of New South Wales.

(2) For the purposes of section 453 (e) of the Co-operatives National Law (NSW), references in section 601AE of the Corporations Act to crediting an amount to a Special Account (within the meaning of the Financial Management and Accountability Act 1997 of the Commonwealth) are to be read as references to crediting the amount to the Special Deposits Account (within the meaning of the Government Sector Finance Act 2018).

s 10: Am 2018 No 70, Sch 4.18.

11 Warrants (Co-operatives National Law ss 483 and 518)

11 Warrants (Co-operatives National Law ss 483 and 518)

(1) Division 4 of Part 5 of the Law Enforcement (Powers and Responsibilities) Act 2002 applies to warrants under Part 6.4 of the Co-operatives National Law (NSW).

(2) Part 6.4 of the Co-operatives National Law (NSW) does not apply to the extent of any inconsistency with that Division.

Note 1—

Section 7 (1) (c) of this Act provides for authorised officers within the meaning of the Law Enforcement (Powers and Responsibilities) Act 2002 to be designated authorities for the issue of warrants under the Law.

Note 2—

Section 518 of the Law contemplates that the Co-operatives National Law Act of a jurisdiction may contain machinery and other provisions for applications for, the issue of, and the execution of, warrants.

Note 3—

Section 483 of the Law provides that Part 6.4 (which includes section 518) applies to a jurisdiction except to the extent (if any) that the Co-operatives National Law Act of a jurisdiction provides otherwise, and with the modifications (if any) made by that Act.

12 Costs of inquiry (Co-operatives National Law s 530)

12 Costs of inquiry (Co-operatives National Law s 530)

For the purposes of section 530 (3) (b) of the Co-operatives National Law (NSW), the prescribed entity is the State of New South Wales.

13 Secrecy (Co-operatives National Law s 537)

13 Secrecy (Co-operatives National Law s 537)

(1) For the purposes of section 537 (4) (c) of the Co-operatives National Law (NSW), information may be divulged to—

(a) the Treasurer, or

(b) the Chief Commissioner of State Revenue, or

(c) the Auditor-General, or

(d) the Independent Commission Against Corruption, or

(e) any special commission (within the meaning of the Special Commissions of Inquiry Act 1983) if—

(i) the Registrar has received a written request for information from the special commission, and

(ii) the Minister has given written approval to the Registrar of the communication of that information, and

(iii) the Registrar has given to the special commission written approval of the communication of that information.

(2) For the purposes of the definition of former Act in section 537 (6) of the Co-operatives National Law (NSW), the Co-operatives Act 1992 is specified.

14 Pecuniary penalty orders (Co-operatives National Law s 556)

14 Pecuniary penalty orders (Co-operatives National Law s 556)

(1) For the purposes of section 556 (2) of the Co-operatives National Law (NSW), a pecuniary penalty ordered to be paid in this jurisdiction is to be paid and treated in accordance with this section.

(2) The penalty is a civil debt payable to the Registrar on behalf of the State.

(3) The Registrar or the State may enforce the order as if it were an order made in civil proceedings against the person to recover a debt due by the person.

(4) The debt arising from the order is taken to be a judgment debt.

15 Stamp duty (Co-operatives National Law s 620)

15 Stamp duty (Co-operatives National Law s 620)

(1) No duty is payable in respect of any of the following instruments—

(a) in the case of a co-operative that—

(i) has as its primary activity the providing of any community service or benefit, and

(ii) was, before it was incorporated under the Co-operatives National Law (NSW), an unincorporated club, association or body operating to provide sporting or recreational facilities for its members and not carried on for the pecuniary benefit of its members,

an instrument transferring to the co-operative any property that was, immediately before the co-operative was so incorporated, held by or on behalf of the unincorporated club, association or body,

(b) an instrument executed or registered for or with respect to a transfer of any property to give effect to section 413 or 481 of the Co-operatives National Law (NSW) in respect of—

(i) a merger of co-operatives, or

(ii) a transfer of engagements,

(c) a share certificate or any other instrument issued or executed in connection with the capital of a co-operative.

(2) If—

(a) a co-operative that transfers its incorporation under Division 2 of Part 4.3 of the Co-operatives National Law (NSW) was before its registration as a co-operative under that Law a company under the Corporations Act or any corresponding previous law of this jurisdiction, and

(b) stamp duty had been paid on its incorporation as such a company in respect of the amount of the nominal capital of the company (or if subsequently increased on the amount of its nominal capital as so increased),

any stamp duty so paid is to be taken into account and included in assessing the stamp duty payable on its incorporation or registration pursuant to the transfer.

(3) An instrument issued or executed in connection with a CCU of a co-operative is not exempt under subsection (2).

16 Registration fees (Co-operatives National Law s 620)

16 Registration fees (Co-operatives National Law s 620)

No fee is chargeable under any Act for registration of an instrument executed or registered for or with respect to a transfer of any property to give effect to section 413 or 481 of the Co-operatives National Law (NSW) in respect of—

(a) a merger of co-operatives, or

(b) a transfer of engagements, or

(c) a transfer of incorporation.

Part 4 Regulations

Part 4 Regulations

17 National Regulations

17 National Regulations

(1) The Governor is authorised to exercise the power to make Co-operatives National Regulations conferred by the Co-operatives National Law as applied by an Act of any jurisdiction.

(2) The Executive Council of the State is authorised to advise the Governor in the exercise of the power referred to in subsection (1).

(3) This section does not limit the power of the Governor to make local regulations conferred under the Co-operatives National Law (NSW).

18 Local regulations

18 Local regulations

(1) The Governor may make regulations (the local regulations), not inconsistent with the local application provisions of this Act or the Co-operatives National Law (NSW), for or with respect to any matter—

(a) that by the local application provisions of this Act is required or permitted to be prescribed by the local regulations or that is necessary or convenient to be prescribed by the local regulations for carrying out or giving effect to the local application provisions of this Act, or

(b) that by the Co-operatives National Law (NSW) is required or permitted to be prescribed by the local regulations.

(2) Without limitation, the local regulations may make provision for or with respect to—

(a) the administration of the Co-operatives National Law (NSW), and

(b) procedural matters relating to any aspects of the Co-operatives National Law (NSW), and

(c) without limiting paragraphs (a) and (b), administrative matters relating to the supervision and inspection of co-operatives, and

(d) the fees to be paid in respect of matters arising under this Act, the Co-operatives National Law (NSW) or the Co-operatives National Regulations (NSW), and

(e) the waiver, reduction, postponement or refund by the Registrar of Co-operatives of fees payable or paid under—

(i) this Act, or

(ii) the Co-operatives National Law (NSW), or

(iii) the Co-operatives National Regulations (NSW), or

(iv) the local regulations.

(3) The local regulations may create offences and impose penalties for an offence of not more than the amount specified in section 612 (5) of the Co-operatives National Law (NSW).

s 18: Am 2019 No 14, Sch 1.5; 2020 No 3, Sch 1.10[1].

Part 5 Miscellaneous

Part 5 Miscellaneous

19 Non-application of Co-operatives National Law to co-operative housing societies and other bodies

19 Non-application of Co-operatives National Law to co-operative housing societies and other bodies

Except as provided by the local regulations, the Co-operatives National Law (NSW) does not apply to or in respect of—

(a) a co-operative housing body under the Co-operative Housing and Starr-Bowkett Societies Act 1998, or

(b) a body that is of the same nature as such a co-operative housing body but that is not registered under that Act.

20 Orders and other instruments published in Gazette

20 Orders and other instruments published in Gazette

A copy of an order, notice, exemption or other instrument published in the Gazette purporting to have been given or issued under this Act, the Co-operatives National Law (NSW), the Co-operatives National Regulations (NSW) or the local regulations is evidence of the giving or issuing of the order, notice, exemption or other instrument of which it purports to be a copy.

21 Proceedings for offences

21 Proceedings for offences

(1) In this section—

offence means an offence under the local application provisions of this Act, the local regulations, the Co-operatives National Law (NSW) or the Co-operatives National Regulations (NSW).

(2) Proceedings for an offence are to be disposed of summarily before—

(a) the Local Court, or

(b) the Supreme Court in its summary jurisdiction.

(3) The maximum penalty that may be imposed by the Local Court for an offence is 50 penalty units or imprisonment for 12 months, or both.

(4) Proceedings for an offence under the local application provisions of this Act or the local regulations may be—

(a) started no later than 5 years after the alleged commission of the offence, and

(b) started only by the Registrar or a person authorised in writing by the Registrar to start the proceedings.

Note—

See sections 551 and 552 of the Co-operatives National Law about starting proceedings for an offence under that Law or the National Regulations.

(5) Nothing in this section affects the operation of the Director of Public Prosecutions Act 1986.

22 Proceedings for recovery of fines or penalties under co-operative’s rules

22 Proceedings for recovery of fines or penalties under co-operative’s rules

(1) Proceedings for the recovery of any fine or penalty imposed by the rules of a co-operative are to be disposed of summarily before the Local Court.

(2) Proceedings for the recovery of a fine or penalty imposed by the rules of a co-operative may be instituted only by the co-operative.

23 Particular officials protected from liability

23 Particular officials protected from liability

(1) In this section—

official means—

(a) the Minister, or

(b) the Registrar, or

(c) a public sector official (within the meaning of section 5) engaged in the administration of the local application provisions of this Act or the Co-operatives National Law (NSW).

(2) An official does not incur civil liability for an act done, or omission made, honestly and without negligence under the local application provisions of this Act, the local regulations, the Co-operatives National Law (NSW) or the Co-operatives National Regulations (NSW).

(3) If subsection (2) prevents a civil liability attaching to an official, the liability attaches instead to the State.

24 Registrar of Co-operatives

24 Registrar of Co-operatives

(1) The Secretary is designated as the Registrar of Co-operatives and may exercise the functions of the Registrar of Co-operatives expressed to be conferred or imposed on the Registrar by or under the local application provisions of this Act, the local regulations, the Co-operatives National Law (NSW) or the Co-operatives National Regulations (NSW).

(2) For that purpose, a reference in the local application provisions of this Act, the local regulations, the Co-operatives National Law (NSW) or the Co-operatives National Regulations (NSW) to the Registrar is to be read as a reference to the Secretary, but those functions are to be exercised under the title of the Registrar of Co-operatives.

s 24: Am 2015 No 58, Sch 3.25 [3].

25 Investigators under Fair Trading Act 1987 taken to be inspectors

25 Investigators under Fair Trading Act 1987 taken to be inspectors

A person appointed as an investigator under section 18 of the Fair Trading Act 1987 is taken to have been appointed as an inspector under section 492 of the Co-operatives National Law (NSW).

s 25: Rep 1987 No 15, sec 30C. Ins 2020 No 30, Sch 1.12.

Schedule 1 Savings and transitional provisions

Schedule 1 Savings and transitional provisions

sch 1: Am 2020 No 3, Sch 1.10[2].

sch Co-operatives National Law

Appendix Co-operatives National Law

(Section 4)

Chapter 1 Preliminary

Chapter 2 Formation, powers and constitution of co-operatives

Chapter 3 Management and operation of co-operatives

Chapter 4 Structural and other events for co-operatives

Chapter 5 Participating co-operatives

Chapter 6 Supervision and protection of co-operatives

Chapter 7 Legal proceedings and other matters

Chapter 8 General

Appendix: Am 2012 No 42, Sch 2.11 [1] [2]; 2012 No 95, Sch 2.7.

Division 1 Exclusion of matters from the Corporations legislation

Division 1 Exclusion of matters from the Corporations legislation

Division 2 Applied matters (applied Corporations legislation matters)

Division 2 Applied matters (applied Corporations legislation matters)

Division 3 Prescription by National Regulations of other matters dealt with by Corporations legislation

Division 3 Prescription by National Regulations of other matters dealt with by Corporations legislation

Division 4 Registration of proposed co-operative

Division 4 Registration of proposed co-operative

26 Application for registration of proposed co-operative

26 Application for registration of proposed co-operative

(1) An application for registration of a proposed co-operative (other than an existing corporation) must—

(a) be made in the approved form; and

(b) be accompanied by the fee—

(i) prescribed by the National Regulations, unless subparagraph (ii) applies; or

(ii) prescribed by the local regulations; and

(c) be signed by—

(i) in the case of a co-operative group—at least 2 directors; and

(ii) in the case of any other proposed co-operative—at least 5, or if a lesser number than 5 is approved by the Registrar at least the approved number of, suitably qualified members, including 2 directors elected at the formation meeting; and

(d) be accompanied by—

(i) 2 copies of the proposed rules signed and certified by the persons who acted as chairperson and secretary at the formation meeting; and

(ii) in the case of—

(A) a proposed distributing co-operative; or

(B) a proposed non-distributing co-operative that is subject to a direction under section 23 (2);

a copy of the formation disclosure statement presented to the formation meeting signed and certified by the persons who acted as chairperson and secretary at the formation meeting; and

(iii) a statement listing the name, address, occupation and place and date of birth of each director; and

(iv) a statement of the address (located in this jurisdiction) of the co-operative’s registered office or proposed registered office; and

(v) any other particulars the Registrar may require in a particular case.

(2) The application must be filed with the Registrar within 2 months after closure of the formation meeting for the proposed co-operative or within the extended period that the Registrar may allow.

27 Registration of proposed co-operative

27 Registration of proposed co-operative

(1) If an application is made under this Division for registration of a proposed co-operative, the Registrar must register the co-operative and its rules if the Registrar is satisfied that the requirements for registration of the co-operative have been met.

(2) The requirements for registration of a co-operative under this Division are as follows—

(a) the proposed rules of the proposed co-operative must be the rules approved by the Registrar under section 24;

(b) the requirements of this Law must have been complied with in relation to the proposed co-operative;

(c) the proposed co-operative must be designed to function under the co-operative principles or, if it is not designed to function entirely under the co-operative principles, the Registrar must be satisfied there are special reasons why the co-operative should be registered under this Law;

(d) there must be no reasonable cause for refusing registration of the proposed co-operative.

(3) If the Registrar is not satisfied that the requirements for registration of the co-operative have been met, the Registrar may refuse to register the co-operative and its rules.

(4) The Registrar must give to the applicant written notice of the refusal and the reasons for the refusal.

28 Incorporation and certificate of registration

28 Incorporation and certificate of registration

(1) A co-operative becomes a corporation on being registered.

(2) On the registration of the co-operative, the Registrar must issue a certificate of registration.

Division 5 Registration of existing corporation

Division 5 Registration of existing corporation

29 Existing corporation can be registered

29 Existing corporation can be registered

A corporation (other than a co-operative taken to be registered under this Law) may apply to the Registrar to be registered as a co-operative under this Law.

30 Formation meeting (existing corporation)

30 Formation meeting (existing corporation)

(1) Before applying for registration as a co-operative, the corporation must, at the formation meeting, by a resolution approve of—

(a) the proposed registration; and

(b) any amendment of its existing constituent documents necessary to enable the corporation to comply with this Law; and

(c) the proposed rules of the proposed co-operative approved under section 24, including active membership provisions.

(2) The formation disclosure statement approved under section 25 must be presented to the formation meeting, in the case of—

(a) a proposed distributing co-operative; or

(b) a proposed non-distributing co-operative that is the subject of a direction under section 23 (2).

(3) A resolution under this section must have been passed by a two-thirds majority of eligible members present at the formation meeting.

Note—

Section 32 (5) provides that, despite anything to the contrary in this Division, the registration of a corporation as a co-operative does not take effect until the corporation ceases to be registered under the law under which it was previously registered.

31 Application for registration of existing corporation

31 Application for registration of existing corporation

An application for the registration of an existing corporation must—

(a) be in the approved form; and

(b) be accompanied by the fee—

(i) prescribed by the National Regulations, unless subparagraph (ii) applies; or

(ii) prescribed by the local regulations; and

(c) be accompanied by—

(i) a written declaration, signed no more than 28 days before the application for registration by the directors or committee of management of the corporation, stating that at a meeting of the directors or committee they formed the opinion that the corporation will be able to pay its debts as they fall due; and

(ii) a report in the approved form as to the affairs of the corporation and showing its assets and liabilities, made up to the latest practicable date before the application; and

(iii) a copy of the constituent documents of the corporation in force at the date of the application; and

(iv) 2 copies of the proposed rules of the co-operative, as provided for by the special resolution; and

(v) in the case of a proposed distributing co-operative or in the case of a proposed non-distributing co-operative that is subject to a direction under section 23 (2)—a copy of the formation disclosure statement presented to the meeting held under section 30, certified by the directors or committee of management of the corporation; and

(vi) a list containing the name, address, occupation and place and date of birth of each director; and

(vii) evidence to the satisfaction of the Registrar of the incorporation of the corporation; and

(viii) a statement setting out the connection that the proposed co-operative would have to this jurisdiction; and

(ix) a statement of the address (located in this jurisdiction) of the co-operative’s registered office or proposed registered office; and

(x) any other particulars the Registrar may require in a particular case.

32 Requirements for registration

32 Requirements for registration

(1) When an application is made for the registration of a corporation as a co-operative under this Division, the Registrar must register the corporation as a co-operative under this Law and register its rules under this Law if the Registrar is satisfied the requirements for the registration of the corporation as a co-operative have been met.

(2) The requirements for the registration of a corporation as a co-operative under this Division are as follows—

(a) the proposed rules of the proposed co-operative must be the rules approved by the Registrar under section 24;

(b) the requirements of this Law must have been complied with in relation to the proposed co-operative;

(c) there must be no reasonable cause for refusing registration of the proposed co-operative;

(d) the proposed co-operative must have a sufficient connection with this jurisdiction.

(3) If the Registrar is not satisfied the requirements for registration of the corporation as a co-operative have been met, the Registrar may refuse to register the proposed co-operative and its rules and must give to the applicant written notice of the refusal and the reasons for the refusal.

(4) If the Registrar has decided under this section to register a corporation under this Law, the corporation must notify the authority responsible for registering the corporation under the law under which it was previously registered of that decision.

(5) Despite anything to the contrary in this Division, the registration of a corporation as a co-operative does not take effect until the corporation ceases to be registered under the law under which it was previously registered.

(6) The corporation must notify the Registrar in writing within 7 days after ceasing to be registered under that other law.

33 Certificate of registration

33 Certificate of registration

(1) On the registration of the corporation as a co-operative, the Registrar must—

(a) issue a certificate of registration; and

(b) publish notice of the issue of the certificate by designated instrument.

(2) The corporate name of a corporation registered as a co-operative is the name approved by the Registrar, as stated in the certificate of registration issued by the Registrar.

34 Effect of registration

34 Effect of registration

(1) The corporation is to be taken to be incorporated under this Law on its registration.

(2) Except as expressly provided in this Law, the registration and incorporation of the corporation as a co-operative does not prejudice any right of a member in relation to any shares held at the time of registration and incorporation.

(3) The change of registration and incorporation does not affect the identity of the corporation and it is taken to be the same body after registration as a co-operative as it was before and no act, matter or thing is affected by the change.

Division 6 Conversion of co-operative

Division 6 Conversion of co-operative

35 Conversion of co-operative

35 Conversion of co-operative

(1) A co-operative may, by amendment of its rules, convert from—

(a) a co-operative with share capital to a co-operative without share capital, or vice versa; or

(b) a distributing co-operative to a non-distributing co-operative, or vice versa.

(2) An amendment of the rules for the conversion of a co-operative with share capital to a co-operative without share capital cannot be passed until at least 2 weeks after a notice has been published in a newspaper circulating generally in the district in which the registered office of the co-operative is situated advising of the proposal to submit the proposed amendment to members of the co-operative.

(3) An amendment of the rules for the conversion of a non-distributing co-operative to a distributing co-operative does not have effect without the prior approval of the Registrar under section 60.

(4) An amendment of the rules for the conversion of a co-operative must be approved by special resolution passed by a special postal ballot.

(5) The Registrar may exempt—

(a) a co-operative from subsection (4) by designated instrument; or

(b) a class of co-operatives from subsection (4) by designated instrument.

(6) An exemption may be given unconditionally or subject to conditions.

Division 7 General

Division 7 General

36 Acceptance of money by proposed co-operative

36 Acceptance of money by proposed co-operative

(1) A proposed co-operative or any person on its behalf or otherwise who accepts money for the proposed co-operative before the proposed co-operative is registered must hold that money on trust until the co-operative is registered.

(2) If a co-operative is not registered within 3 months after the acceptance of money under subsection (1), the proposed co-operative or the person who accepted the money on its behalf must refund the money to the person who paid it.

Maximum penalty—$6,000.

37 Issue of duplicate certificate

37 Issue of duplicate certificate

The Registrar must issue a duplicate certificate of registration—

(a) if the Registrar is satisfied the original certificate is lost or destroyed; and

(b) on payment of the fee—

(i) prescribed by the National Regulations, unless subparagraph (ii) applies; or

(ii) prescribed by the local regulations.

38 Effect of incorporation

38 Effect of incorporation

As a corporation, a co-operative—

(a) has perpetual succession; and

(b) may have a common seal; and

(c) may sue and be sued in its corporate name; and

(d) subject to this Law, is capable of taking, purchasing, leasing, holding, selling and disposing of real and personal property; and

(e) may do and suffer all acts and things that corporations may by law do and suffer and that are necessary or expedient.

39 Power to form companies and enter into joint ventures

39 Power to form companies and enter into joint ventures

Without limiting any other provision of this Law, a co-operative has power—

(a) to form or participate in the formation of a corporation or unit trust; and

(b) to acquire interests in and sell or otherwise dispose of interests in corporations, unit trusts and joint ventures; and

(c) to form or enter into a partnership, joint venture or other association with other persons or bodies.

40 Interpretation

40 Interpretation

In this Division—

(a) a reference to the doing of an act by a co-operative includes a reference to the making of an agreement by the co-operative and a reference to a transfer of property to or by the co-operative; and

(b) a reference to legal capacity includes a reference to powers.

41 Doctrine of ultra vires not to apply

41 Doctrine of ultra vires not to apply

(1) The objects of this Division are—

(a) to provide that the doctrine of ultra vires does not apply to co-operatives; and

(b) without affecting the validity of a co-operative’s dealings with others—to ensure the co-operative’s officers and members give effect to the provisions of the rules of the co-operative relating to the primary activities or powers of the co-operative.

(2) This Division is to be construed and to have effect in accordance with subsection (1).

42 Legal capacity

42 Legal capacity

(1) A co-operative has, both within and outside this jurisdiction, the legal capacity of an individual.

(2) Without limiting subsection (1), a co-operative has, both within and outside this jurisdiction, power—

(a) to issue and allot fully or partly paid shares in the co-operative; and

(b) to issue debentures and CCUs of the co-operative; and

(c) to distribute any of the property of the co-operative among the members, in kind or otherwise; and

(d) to give security by charging uncalled capital; and

(e) to grant a security interest in property of the co-operative; and

(f) to procure the co-operative to be registered or recognised as a corporation in any place outside this jurisdiction; and

(g) to do any other act it is authorised to do by any other law (including a law of a place outside this jurisdiction).

(3) The fact that the doing of an act by a co-operative would not be, or is not, in its best interests does not affect its legal capacity to do the act.

(4) To avoid doubt, this section does not—

(a) authorise a co-operative to do an act that is prohibited by a law of this jurisdiction; or

(b) give a co-operative a right that a law of this jurisdiction denies the co-operative.

43 Rules may limit powers and set out objects

43 Rules may limit powers and set out objects

(cf Corporations Act s 125)

(1) The rules of a co-operative may contain an express restriction on, or a prohibition of, the co-operative’s exercise of any of its powers, but the exercise of a power by the co-operative is not invalid merely because it is contrary to an express restriction or prohibition in the rules of the co-operative.

(2) The rules of a co-operative may set out the co-operative’s objects, but an act of the co-operative is not invalid merely because it is contrary to or beyond any objects in the rules of the co-operative.

44 Entitlement to make assumptions

44 Entitlement to make assumptions

(1) A person may make the assumptions in section 45 in relation to—

(a) dealings with a co-operative; or

(b) dealings with a person who has, or purports to have, directly or indirectly acquired title to property from a co-operative.

(2) If a person may assume a matter, the co-operative or anyone referred to in subsection (1) (b) cannot assert in proceedings in relation to the dealings that the matter is incorrect.

45 Assumptions

45 Assumptions

(cf Corporations Act s 129)

(1) A person may assume that the rules of a co-operative have been complied with.

(2) A person may assume that anyone who appears, from information provided by the co-operative that is available to the public from the Registrar, to be a director or secretary of the co-operative—

(a) has been duly appointed; and

(b) has authority to exercise the powers and perform the duties customarily exercised or performed by a director or secretary of a similar co-operative.

(3) A person may assume that anyone who is held out by the co-operative to be an officer or agent of the co-operative—

(a) has been duly appointed; and

(b) has authority to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent of a similar co-operative.

(4) A person may assume that the officers and agents of the co-operative properly perform their duties to the co-operative.

(5) A person may assume that a document has been properly executed by the co-operative if it is signed by 2 people, one of whom is, or may be assumed to be, a director of the co-operative, and the other is, or may be assumed to be, a director or secretary of the co-operative.

(6) A person may assume that a document has been sealed by the co-operative if it bears what appears to be an impression of the co-operative’s common seal and the sealing of the document appears to be witnessed by 2 people, one of whom is, or may be assumed to be, a director of the co-operative, and the other is, or may be assumed to be, a director or secretary of the co-operative.

(7) A person may assume that anyone who is, or may be assumed to be, an officer or agent of the co-operative who has authority to issue a document or a certified copy of a document on its behalf also has authority to warrant that the document is genuine or is a true copy.

46 Person who knows or ought to know cannot make assumptions

46 Person who knows or ought to know cannot make assumptions

This Division does not entitle a person to make an assumption, and does not prevent an assertion being made in relation to an assumption, if—

(a) the person has actual knowledge that the assumption is not correct; or

(b) the person ought to know that the assumption is not correct because of the nature of the person’s connection or relationship with the co-operative.

47 Filing of documents not to constitute constructive knowledge

47 Filing of documents not to constitute constructive knowledge

(1) A person is not considered to have knowledge of the rules of a co-operative, any of the contents of the rules of a co-operative, a document, the contents of a document, or any particulars, merely because of either or both of the following—

(a) the rules, the document or the particulars have been filed with the Registrar;

(b) the rules, the document or the particulars are mentioned in any other document that has been filed with the Registrar, or filed with a person under a previous law corresponding to a provision of this Law.

(2) Despite subsection (1), a member of a co-operative is taken to have knowledge of the rules of the co-operative.

48 Effect of fraud

48 Effect of fraud

(1) A person’s entitlement under this Division to make an assumption is not affected merely by the fact that any person—

(a) has acted or is acting fraudulently in relation to the dealing, acquisition or purported acquisition of title to property to which the assumption relates; or

(b) has forged a document that appears to have been sealed on behalf of a co-operative.

(2) A person may not make an assumption if the person has actual knowledge of the fraudulent action or forgery referred to in subsection (1).

49 Execution of documents by co-operative

49 Execution of documents by co-operative

(cf Corporations Act s 127)

(1) A co-operative may execute a document without using a common seal if the document is signed by—

(a) 2 directors of the co-operative; or

(b) a director and the secretary of the co-operative.

(2) A co-operative with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by—

(a) 2 directors of the co-operative; or

(b) a director and the secretary of the co-operative.

(3) A co-operative may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with subsection (1) or (2).

(4) This section does not limit the ways in which a co-operative may execute a document (including a deed).

50 Agent exercising co-operative’s power to make contracts

50 Agent exercising co-operative’s power to make contracts

(cf Corporations Act s 126)

(1) A co-operative’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the co-operative’s express or implied authority and on behalf of the co-operative.

(2) The power may be exercised without using a common seal.

(3) This section does not affect the operation of a law that requires a particular procedure to be complied with in relation to the contract.

51 Other requirements as to consent or sanction not affected

51 Other requirements as to consent or sanction not affected

This Division does not affect the operation of a law that requires some consent or sanction to be obtained, or some procedure to be complied with, in relation to the making, varying or discharging of a contract.

52 Contracts before registration

52 Contracts before registration

(1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a proposed co-operative (pre-registration contract), the co-operative becomes bound by the contract and entitled to its benefit if the co-operative, or a co-operative that is reasonably identifiable with it, is registered and ratifies the contract—

(a) within a reasonable period after the contract is entered into; or

(b) within any period agreed to by the parties to the contract.

(2) The person is released from any liability under the pre-registration contract if the co-operative enters into another contract in substitution for it—

(a) within a reasonable period after the pre-registration contract is entered into; or

(b) within any period agreed to by the parties to the pre-registration contract.

(3) The person is liable to pay damages to each other party to the pre-registration contract if a co-operative is not registered, or a co-operative is registered but does not ratify the contract or enter into a substitute for it—

(a) within a reasonable period after the contract is entered into; or

(b) within the period agreed to by the parties to the contract.

(4) The maximum amount of damages the person is liable to pay to a party is the amount the co-operative would be liable to pay to the party if the co-operative had been registered and had ratified the contract and then completely failed to perform it.

(5) If proceedings are brought to recover damages under subsection (3) because the co-operative is registered but does not ratify the pre-registration contract or enter into a substitute for it, the court may do anything it thinks just in the circumstances, including ordering the co-operative—

(a) to pay all or part of the damages the person is liable to pay; or

(b) to transfer property the co-operative received because of the contract to a party to the contract; or

(c) to pay an amount to a party to the contract.

(6) If the co-operative ratifies the pre-registration contract but fails to perform all or part of it, the court may order the person to pay all or part of the damages that the co-operative is ordered to pay.

53 Person may be released from liability but is not entitled to indemnity

53 Person may be released from liability but is not entitled to indemnity

(1) Any of the parties to the pre-registration contract may release the person who entered into, or purported to enter into, the contract from any liability in relation to that contract.

(2) The release must be in writing.

(3) The party giving the release cannot recover damages under section 52 from the person.

(4) Despite any rule of law or equity, the person does not have a right of indemnity against the co-operative in relation to the person’s liability under this Division even if the person was acting, or purporting to act, as trustee for the co-operative.

54 This Division replaces other rights and liabilities

54 This Division replaces other rights and liabilities

This Division replaces any rights or liabilities anyone would otherwise have in relation to the pre-registration contract.

55 Effect of rules

55 Effect of rules

(1) The rules of a co-operative have the effect of a contract under seal—

(a) between the co-operative and each member; and

(b) between the co-operative and each director, the chief executive officer and the secretary of the co-operative; and

(c) between a member and each other member.

(2) Under the contract, each of those persons agrees to observe and perform the provisions of the rules as in force for the time being so far as those provisions apply to the person.

56 Content of rules

56 Content of rules

(1) The rules of a co-operative must state or otherwise make provision for the matters included in Schedule 1.

(2) The rules must be divided into consecutively numbered paragraphs.

(3) The rules may state the objects of the co-operative.

(4) The rules may adopt by reference all or any of the provisions of the model rules, as provided in Division 2.

(5) The rules may provide for the imposition of a fine on a member for an infringement of the rules.

(6) If the rules provide for the imposition of a fine, the rules must state the maximum fine that may be imposed on a member.

(7) The maximum fine fixed by the rules must not be more than any amount prescribed by the National Regulations as the maximum fine.

(8) The rules may contain other provisions not inconsistent with this Law.

57 Purchase and inspection of copy of rules

57 Purchase and inspection of copy of rules

(1) Any member is entitled to obtain from a co-operative a copy of its rules on payment of the amount required by the rules of the co-operative or, if the rules do not prescribe an amount, on payment of $5.

(2) The amount required by the rules must not be more than the fee—

(a) prescribed by the National Regulations, unless paragraph (b) applies; or

(b) prescribed by the local regulations;

for obtaining a copy of the rules from the Registrar.

(3) Any person is entitled to obtain from the Registrar a copy of the rules of a co-operative on payment of the fee—

(a) prescribed by the National Regulations, unless paragraph (b) applies; or

(b) prescribed by the local regulations.

58 False copies of rules

58 False copies of rules

(1) A person must not give to a member of a co-operative or to a person intending or applying to become a member of a co-operative a copy of any rules or any amendments of rules, other than those that have been registered, representing that they are binding on the members of the co-operative.

(2) A person must not amend any of the rules of a co-operative after they have been registered and circulate the amended rules representing that they have been registered when they have not been.

Maximum penalty—$1,000.

59 Rules can only be amended under this Law

59 Rules can only be amended under this Law

The rules of a co-operative cannot be amended except under this Law.

60 Approval of certain rule amendments

60 Approval of certain rule amendments

(1) This section applies to—

(a) an amendment of rules that is referred to in subsection (2); and

(b) an amendment of rules that are referred to in section 35 (3) relating to the conversion of a non-distributing co-operative to a distributing co-operative.

(2) The Registrar may, by designated instrument, specify for the purposes of this section classes of amendments that must not be made to the rules of a co-operative without the prior approval of the Registrar, and without limitation may do so by reference to classes or subclasses of matters referred to in Schedule 1.

(3) A proposed amendment to which this section applies must be approved by the Registrar before the resolution amending the rules is passed by a co-operative or the board of a co-operative.

(4) A draft of the proposed amendment must be submitted to the Registrar before—

(a) the notice of the proposed special resolution amending the rules is given to the members by the co-operative; or

(b) the resolution is passed by the board of the co-operative.

(5) The proposed amendment must—

(a) be in accordance with section 56; and

(b) be in a form that may reasonably be approved; and

(c) be accompanied by a statement stating the reasons for the amendment.

(6) The Registrar may—

(a) approve the amendment as submitted; or

(b) approve a different amendment to that submitted; or

(c) refuse to approve the amendment; or

(d) require the person submitting the draft amendment to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b) or (c).

(7) Subject to subsection (8), the Registrar approves of the amendment by giving written notice of the approval of the amendment to the person who submitted the draft amendment to the Registrar.

(8) The Registrar is taken to have approved the proposed amendment (as submitted to the Registrar) at the end of the period of 28 days after it was submitted, unless before the end of that period the Registrar gives written notice to the person who submitted it that the Registrar—

(a) has approved a different amendment to that submitted; or

(b) is still considering the matter; or

(c) refuses to approve the proposed amendment.

(9) The Registrar must give the person who submitted the draft amendment to the Registrar written notice of the reasons for acting under subsection (8) (a) or (c).

61 Amendment by special resolution

61 Amendment by special resolution

The rules of a co-operative may only be amended by special resolution unless this Law otherwise provides.

62 Amendment by resolution of board

62 Amendment by resolution of board

(1) The rules of a co-operative may be amended by a resolution passed by the board if the amendment does no more than give effect to a requirement, direction, restriction or prohibition imposed or given under the authority of this Law.

(2) If the rules of a co-operative are amended under this section, the co-operative must cause the amendment to be notified in writing to its members as soon as practicable after the amendment takes effect and in any event no later than the day when notice of the next annual general meeting of the co-operative after the amendment takes effect is given to the members.

63 Amendment does not take effect until registered

63 Amendment does not take effect until registered

(1) An amendment of the rules of a co-operative does not take effect unless and until it is registered by the Registrar.

(2) An application for registration of an amendment must—

(a) be made in the approved form; and

(b) be made within 28 days, or a shorter or longer time prescribed by the National Regulations, after the amendment is made; and

(c) be accompanied by a consolidated copy of the rules of the co-operative, including the amendment.

(3) The Registrar must register the amendment unless—

(a) the Registrar is satisfied the amendment is contrary to this Law; or

(b) the Registrar has other reasonable cause to refuse to register the amendment.

(4) A certificate of registration of an amendment of the rules of a co-operative given by the Registrar is, in favour of any person advancing money to the co-operative on the faith of the certificate or a guarantor of that advance, evidence that the amendment in the rules was properly made.

64 Model rules

64 Model rules

(1) The National Regulations may prescribe model rules.

(2) The model rules may make provision for anything for which the rules of a co-operative may make provision.

(3) A model rule commences on—

(a) the day occurring 28 days after the date of publication of the National Regulations containing the model rule; or

(b) a later day specified in, or ascertained in accordance with, the model rule or the National Regulations.

(4) A model rule may apply generally or be limited in its application to a specified class of co-operatives.

65 Adoption of model rules

65 Adoption of model rules

The rules of a co-operative may adopt by reference all or any of the provisions of the model rules—

(a) as in force from time to time, unless paragraph (b) applies; or

(b) as in force at a particular time, if the rules so provide.

66 Relationship of this Division to Division 1

66 Relationship of this Division to Division 1

If the rules of a co-operative adopt a model rule as in force from time to time and the model rule is amended, Division 1 does not require the amendment (so far as it affects the rules of the co-operative) to be approved or registered before the amendment takes effect in relation to the co-operative.

67 Nature of share in co-operative

67 Nature of share in co-operative

(1) A share or other interest in a co-operative—

(a) is personal property; and

(b) is transferable or transmissible as provided by this Law and the rules of the co-operative; and

(c) is, subject to the rules of the co-operative, capable of devolution by will or by operation of law.

(2) Subject to subsection (1)—

(a) the laws applying to ownership of and dealing with personal property apply to a share or other interest of a member in a co-operative as they apply to other property; and

(b) equitable interests in a share or other interest of a member in a co-operative may be created, dealt with and enforced as in the case of other personal property.

68 Registration of current disclosure statement

68 Registration of current disclosure statement

(1) A distributing co-operative must take all reasonable steps to ensure that it has a current disclosure statement registered with the Registrar.

(2) The disclosure statement must contain the information necessary to ensure prospective members are adequately informed of the nature and extent of a person’s financial involvement or liability as a member of the co-operative including so far as applicable—

(a) the active membership provisions of the co-operative; and

(b) the rights and liabilities attaching to shares in the co-operative; and

(c) any other information that the Registrar directs to be included.

(3) A formation disclosure statement approved by the Registrar under section 25 is taken to be registered with the Registrar for the purposes of this section until it stops being current under subsection (4).

(4) A disclosure statement stops being current when—

(a) a change occurs in the rights or liabilities attaching to any class of share in the co-operative; or

(b) a significant change occurs in the financial position or prospects of the co-operative.

(5) The co-operative must register a new disclosure statement with the Registrar when the currently registered disclosure statement stops being current, and must do so within 14 days (or a longer period approved by the Registrar) after it stops being current.

Maximum penalty—$1,000.

69 Restrictions on advertising and publicity

69 Restrictions on advertising and publicity

(cf Corporations Act s 734)

(1) A person must not—

(a) advertise; or

(b) publish a statement that directly or indirectly refers to;

an offer, or intended offer, of shares in a distributing co-operative unless a current disclosure statement relating to the shares is—

(c) registered with the Registrar under section 68; or

(d) lodged with the Registrar for registration under section 68.

Maximum penalty—$1,000.

(2) Subsection (1) applies in relation to shares in a distributing co-operative only if—

(a) the shares are offered to persons who are not shareholders in the co-operative; or

(b) the invitation is made to persons who are not shareholders in the co-operative.

(3) A person does not contravene subsection (1) by publishing an advertisement or statement if they publish it in the ordinary course of a business of—

(a) publishing a newspaper or magazine; or

(b) broadcasting by radio or television;

and the person did not know and had no reason to suspect that its publication would amount to a contravention of a provision of that subsection.

(4) An offence based on subsection (1) is an offence of strict liability.

70 Disclosure to intending shareholders in distributing co-operative

70 Disclosure to intending shareholders in distributing co-operative

(1) The board of a distributing co-operative must give a person who intends to acquire shares in the co-operative and is not already a shareholder in the co-operative—

(a) a current disclosure statement; and

(b) any other information the Registrar directs.

(2) The disclosure statement and any other information required under subsection (1) and Part 2.5 must be given before the person becomes bound to acquire the shares.

71 Exemptions from disclosure statements

71 Exemptions from disclosure statements

(1) The Registrar may, by designated instrument, exempt a co-operative or class of co-operatives from any or all of the provisions of this Division.

(2) An exemption under subsection (1) may be given only if the Registrar is satisfied that compliance with the requirement would be inappropriate in the circumstances or would impose an unreasonable burden.

(3) An exemption may be given unconditionally or subject to conditions.

72 Contravention leading to right to recover for loss or damage

72 Contravention leading to right to recover for loss or damage

(cf Corporations Act s 728)

A co-operative contravenes this section if a disclosure statement is given to a person under section 70 and—

(a) there is—

(i) a misleading or deceptive statement in the disclosure statement or in any application form or document that accompanies the disclosure statement; or

(ii) an omission from the disclosure statement of material or information required to be contained in the statement by or under this Law;

and the misleading or deceptive statement or the omission is materially adverse from the point of view of the person to whom it is given; or

(b) the disclosure statement is not current (as referred to in section 70 (1)).

73 Right to recover for loss or damage resulting from contravention

73 Right to recover for loss or damage resulting from contravention

(cf Corporations Act s 729)

(1) A person who suffers loss or damage because of a contravention of section 72 in relation to a co-operative may recover the amount of the loss or damage from a person referred to in a following paragraph if the loss or damage is one that the paragraph makes the person liable for, even if the person did not commit, and was not involved in, the contravention—

(a) the co-operative is liable for loss or damage caused by any contravention of section 72 in relation to the disclosure statement;

(b) each director of the co-operative is liable for loss or damage caused by any contravention of section 72 in relation to the disclosure statement;

(c) a person named in the disclosure statement with their consent as having made a statement (see section 615)—

(i) that is included in the disclosure statement; or

(ii) on which a statement made in the disclosure statement is based;

is liable for loss or damage caused by the inclusion of the statement in the disclosure statement;

(d) a person who is involved in the contravention of section 72 is liable for loss or damage caused by that contravention.

(2) An action under subsection (1) may begin at any time within 6 years after the day on which the cause of action arose.

(3) This Division does not affect any liability that a person has under any other law.

Note—

Section 9 defines “involved” in a contravention.

74 Due diligence defence

74 Due diligence defence

(cf Corporations Act s 731)

(1) A person is not liable under this Division in relation to a contravention of section 72 because of a misleading or deceptive statement if the person proves they—

(a) made all inquiries (if any) that were reasonable in the circumstances; and

(b) after doing so, believed on reasonable grounds that the statement was not misleading or deceptive.

(2) A person is not liable under this Division in relation to a contravention of section 72 because of an omission from a disclosure statement in relation to a particular matter or particular information if the person proves they—

(a) made all inquiries (if any) that were reasonable in the circumstances; and

(b) after doing so, believed on reasonable grounds that there was no omission from the statement in relation to that matter or information.

(3) A person is not liable under this Division in relation to a contravention of section 72 because a disclosure statement is not current if the person proves they—

(a) made all inquiries (if any) that were reasonable in the circumstances; and

(b) after doing so, believed on reasonable grounds that the statement was current.

75 General defences

75 General defences

(cf Corporations Act s 733)

(1) A person is not liable under this Division in relation to a contravention of section 72 because of a misleading or deceptive statement in, or an omission from, a disclosure statement if the person proves that they placed reasonable reliance on information given to them by—

(a) if the person is a body—someone other than a director, employee or agent of the body; or

(b) if the person is an individual—someone other than an employee or agent of the individual.

(2) For the purposes of subsection (1), a person is not the agent of a body or individual merely because they perform a particular professional or advisory function for the body or individual.

(3) A person is not liable under this Division in relation to a contravention of section 72 because a disclosure statement is not current if the person proves that they were not aware of the circumstance or event that caused the statement to cease to be current.

76 Shares—general

76 Shares—general

(1) The share capital of a co-operative varies in amount according to the nominal value of shares from time to time subscribed.

(2) Shares are to be of a fixed amount that must be specified in the rules of the co-operative.

(3) A co-operative may have more than one class of shares if the shareholding and the rights of shareholders comply with the co-operative principles.

(4) Subject to this Part and Part 2.5, shares must not be issued to a non-member.

77 Minimum number of shares to be subscribed for

77 Minimum number of shares to be subscribed for

(1) A member of a co-operative with share capital must subscribe for such minimum number of shares (if any) as may be required by the rules of the co-operative.

(2) The minimum number may be determined by reference to the use made by the member of the co-operative or in any other manner specified in the rules of the co-operative.

(3) An amendment of the rules of the co-operative as to the minimum number of shares to be subscribed for does not operate to require an existing member of the co-operative to subscribe for additional shares, but an existing member is not prevented from agreeing to subscribe for additional shares.

(4) This section does not affect section 82.

78 Minimum paid up amount

78 Minimum paid up amount

(1) A share must not be allotted unless at least 10% of the nominal value of the share has been paid.

(2) Any balance unpaid for shares at the time of allotment must be paid in a way specified in the rules of the co-operative or permitted by this Law.

(3) This section does not apply to a bonus share issued under section 83 or 357.

(4) This section does not affect shares issued before the commencement of this section in this jurisdiction if the Co-operatives National Law Act of this jurisdiction so provides.

79 Shares not to be issued at a discount

79 Shares not to be issued at a discount

A co-operative must not issue shares at a discount.

80 Issue of shares at a premium

80 Issue of shares at a premium

(1) A distributing co-operative may issue shares at a premium.

(2) A premium may be in the form of cash or other valuable consideration.

(3) If a distributing co-operative issues shares for which it receives a premium, an amount equal to the total amount or value of the premiums on the shares must be transferred to a share premium account.

(4) The share premium account is to be treated as paid-up share capital of the distributing co-operative and may be applied in one or more of the following ways—

(a) in paying up unissued shares to be issued to members of the co-operative as fully paid bonus shares;

(b) in paying up, in whole or in part, the balance unpaid on shares previously issued to members of the co-operative;

(c) in the payment of dividends, if the dividends are satisfied by the issue of shares to members of the co-operative;

(d) in writing off the preliminary expenses of the co-operative;

(e) in providing for the premium payable on redemption of shares, debentures or CCUs.

81 Joint ownership of shares

81 Joint ownership of shares

A share may be held by 2 or more persons jointly, unless the rules of the co-operative otherwise provide.

82 Members may be required to take up additional shares

82 Members may be required to take up additional shares

(1) The board of a distributing co-operative may require a member to take up or subscribe for additional shares under a proposal approved by a special resolution of the co-operative passed by a special postal ballot.

(2) The board of a distributing co-operative may deduct amounts in payment for additional shares from money payable to members for dealings with the co-operative, under a proposal approved by a special resolution of the co-operative passed by a special postal ballot.

(3) A proposal to require a member to take up or subscribe for additional shares must—

(a) be accompanied by a disclosure statement, registered by the Registrar, that explains the purpose for which the funds raised by the issue of the additional shares are to be used; and

(b) clearly show the total number of additional shares to be issued and the basis on which the shares are to be apportioned among members; and

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

(4) A proposal to deduct amounts in payment for additional shares from amounts payable to members for their dealings with the distributing co-operative must clearly show—

(a) the basis on which the deductions are to be made; and

(b) the time and way of making those deductions.

(5) A proposal approved under this section is binding on—

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

(b) all persons who become members of the distributing co-operative after that date and before the total number of shares to be issued under the proposal has been issued.

(6) The requirements in respect of a proposal to take up additional shares under subsection (3) do not apply to the issue of bonus shares under section 80 (4) (a), 83 or 357.

83 Bonus share issues

83 Bonus share issues

(1) A distributing co-operative may issue bonus shares to members of the co-operative if the assets of the co-operative—

(a) have been sold at a profit; or

(b) have been revalued at a greater value than that disclosed before the revaluation in the books of the co-operative.

(2) This section does not apply if the assets were acquired for resale at a profit.

84 Restrictions on bonus shares

84 Restrictions on bonus shares

Bonus shares may be issued under section 83 subject to the following restrictions—

(a) each issue must have been approved by a special resolution of the co-operative;

(b) they are to be issued as fully paid-up shares with no payment required to be made by a member of the co-operative to whom they are issued;

(c) they are to be issued only for shares of the same class of shares that are fully paid-up as at the date of issue of the bonus shares;

(d) the total nominal value of bonus shares issued by a co-operative in any period of 12 months must not be more than 20%, or another percentage prescribed under the National Regulations, of the nominal value of the issued share capital of the co-operative immediately before the date of issue of the bonus shares.

85 Notice about bonus shares

85 Notice about bonus shares

Notice of the meeting or postal ballot at which a resolution is to be proposed as a special resolution to approve a bonus share issue under section 83 must be accompanied by—

(a) a statement of the value of the assets concerned as disclosed in the books of the co-operative before the sale or revaluation; and

(b) if the issue arises from, or partly from, a sale of assets—a statement of the price for which the assets were sold; and

(c) if the issue arises from, or partly from, a revaluation of assets—a certificate of value of the assets, being a certificate given in relation to a valuation made not more than one year before the date of the notice by—

(i) a person prescribed by the National Regulations; or

(ii) a person having qualifications prescribed by the National Regulations; and

(d) particulars of acquisitions of shares in the co-operative made within the 3 years immediately preceding the date of the notice by or on behalf of each of its directors and his or her spouse or de facto partner and the father, mother, children, brothers and sisters of each director and each spouse or de facto partner; and

(e) a certificate signed by 2 directors of the co-operative stating that to the best of their knowledge and belief the issue of bonus shares would not be imprudent and no circumstances are known to them as to why the issue should not take place.

86 Definition

86 Definition

In this Division—

disclosure statement means a disclosure statement, of any type, under this Law.

87 Application of this Division

87 Application of this Division

This Division applies in relation to shares in a co-operative only if—

(a) the shares are offered to persons who are not shareholders in the co-operative; or

(b) the invitation is made to persons who are not shareholders in the co-operative.

88 Application money to be held on trust

88 Application money to be held on trust

(cf Corporations Act s 722)

(1) If a person offers shares for issue or sale under a disclosure statement, the person must hold—

(a) all application money received from people applying for shares under the disclosure statement; and

(b) all other money paid by them on account of the shares before they are issued or transferred;

in trust under this section for the applicants until—

(c) the shares are issued or transferred; or

(d) the money is returned to the applicants.

Maximum penalty—$2,500 or imprisonment for 6 months, or both.

(2) If the application money needs to be returned to an applicant, the person must return the money as soon as practicable.

Maximum penalty—$2,500 or imprisonment for 6 months, or both.

(3) An offence based on subsection (1) or (2) is an offence of strict liability.

89 Minimum subscription condition must be fulfilled before issue or transfer

89 Minimum subscription condition must be fulfilled before issue or transfer

(cf Corporations Act s 723 (2))

If a disclosure statement for an offer of shares states that the shares will not be issued or transferred unless—

(a) applications for a minimum number of the shares are received; or

(b) a minimum amount is raised;

the person making the offer must not issue or transfer any of the shares until that condition is satisfied. For the purpose of working out whether the condition has been satisfied, a person who has agreed to take securities as underwriter is taken to have applied for those shares.

Note 1—

Under section 88, the application money must be held in trust until the issue or transfer of the shares.

Note 2—

This section prevents the issue or transfer of the shares not only to those who apply for them in response to the disclosure statement but also to those who do not need to apply for them (for example, because they are to take the securities under an underwriting agreement).

90 Repayment of money if disclosure statement condition not met

90 Repayment of money if disclosure statement condition not met

(cf Corporations Act s 724 (1) (a), (1A) and (2) (a))

(1) If—

(a) a person offers shares under a disclosure statement; and

(b) the disclosure statement states (expressly or impliedly) that it is a condition that the shares will not be issued or transferred unless—

(i) applications for a minimum number of the shares are received; or

(ii) a minimum amount is raised; and

(c) that condition is not satisfied within 4 months after the date of the disclosure statement;

the person must repay the money received by the person in respect of any applications for the shares made under the disclosure statement that have not resulted in an issue or transfer of the shares.

Maximum penalty—$2,500 or imprisonment for 6 months, or both.

(2) For the purpose of working out whether a condition referred to in subsection (1) has been satisfied, a person who has agreed to take shares as underwriter is taken to have applied for those shares.

(3) An offence based on subsection (1) is an offence of strict liability.

91 Direction to disclose

91 Direction to disclose

(cf Corporations Act s 672A (1))

The board of a co-operative may direct—

(a) a member of the co-operative; or

(b) a person named in a previous disclosure under section 92 as having a relevant interest in, or having given instructions about, shares in the co-operative;

to make the disclosure required by section 92.

92 Disclosure by member of relevant interests and instructions

92 Disclosure by member of relevant interests and instructions

(cf Corporations Act s 672B)

(1) A person given a direction under section 91 must disclose in writing to the board of the co-operative giving the direction—

(a) full details of their own relevant interest in the shares and of the circumstances that give rise to that interest; and

(b) the name and address of each other person who has a relevant interest in any of the shares together with full details of—

(i) the nature and extent of the interest; and

(ii) the circumstances that give rise to the other person’s interest; and

(c) the name and address of each person who has given the person instructions about—

(i) the acquisition or disposal of the shares; or

(ii) the exercise of any voting or other rights attached to the shares; or

(iii) any other matter relating to the shares or interests;

together with full details of those instructions (including the date or dates on which they were given).

Maximum penalty—$1,000 or imprisonment for 3 months, or both.

(2) However, a matter referred to in subsection (1) (b) or (c) need be disclosed only to the extent to which it is known to the person required to make the disclosure.

(3) An offence based on subsection (1) is an offence of strict liability.

(4) A defendant bears an evidential burden in relation to the matter in subsection (2).

(5) The disclosure must be made within 5 business days after—

(a) the person is given the direction; or

(b) if the person applies for an exemption under subsection (6) from complying with the direction and the Registrar refuses to grant the exemption—the Registrar notifies the person of the Registrar’s decision on the application.

(6) The Registrar may, by designated instrument, exempt a person from complying with a direction if the Registrar believes the direction is unjustified.

(7) The person does not have to comply with a direction given by the co-operative if the person proves that the giving of the direction is vexatious.

(8) A board that receives information from a person acting on a direction given to the person by the board must pay to the person the fee (if any)—

(a) prescribed by the National Regulations, except to the extent paragraph (b) applies; or

(b) prescribed by the local regulations.

93 Registration as trustee, executor or administrator on death of owner of shares

93 Registration as trustee, executor or administrator on death of owner of shares

(1) A trustee, executor or administrator of the estate of a dead person who was the registered holder of a share in a co-operative may be registered as the holder of the share as trustee, executor or administrator of the estate.

(2) A trustee, executor or administrator of the estate of a dead person who was entitled in equity to a share in a co-operative may, with the consent of the co-operative and of the registered holder of the share, be registered as the holder of the share as trustee, executor or administrator of the estate.

94 Registration as administrator of estate on incapacity of shareholder

94 Registration as administrator of estate on incapacity of shareholder

(1) This section applies to a person (the appointed person) who is appointed under a law of a jurisdiction relating to the administration of the estates of persons who, through mental or physical infirmity, are incapable of managing their affairs, to administer the estate of another person (the incapable person).

(2) If the incapable person is the registered holder of a share in a co-operative, the appointed person may be registered as the holder of the share as administrator of the estate of the incapable person.

(3) If the incapable person is entitled in equity to a share in a co-operative, the appointed person may, with the consent of the co-operative and of the registered holder of the share, be registered as the holder of the share as administrator of the estate of the incapable person.

95 Registration as Official Trustee in Bankruptcy

95 Registration as Official Trustee in Bankruptcy

(1) This section applies when a share in a co-operative that is the property of a bankrupt vests by force of the Bankruptcy Act 1966 of the Commonwealth in the Official Trustee in Bankruptcy.

(2) If the bankrupt is the registered holder of the share, the official trustee may be registered as the holder of the share as the Official Trustee in Bankruptcy.

(3) If the bankrupt is entitled in equity to the share, the official trustee may, with the consent of the co-operative and of the registered holder of the share, be registered as the holder of the share as the Official Trustee in Bankruptcy.

96 Liabilities of person registered as trustee or administrator

96 Liabilities of person registered as trustee or administrator

(1) A person registered under section 93, 94 or 95 is, while so registered, subject to the same liabilities in relation to the share as the liabilities to which the person would have been subject if the share had remained, or had been, registered in the name of the dead person, the incapable person or the bankrupt.

(2) The person registered is subject to no other liabilities in relation to the share.

97 Notice of trusts in register of members

97 Notice of trusts in register of members

Shares held by a trustee under a particular trust may, with the consent of the co-operative, be marked in the register of members in a way that identifies the shares as being held under the trust.

98 No notice of trust except as provided by this Division

98 No notice of trust except as provided by this Division

Except as provided in this Division—

(a) no notice of a trust, whether express, implied or constructive, is to be entered on a register or be receivable by the Registrar; and

(b) no liabilities are affected by anything done under this Division; and

(c) nothing done under this Division affects a co-operative with notice of a trust.

99 Sale or transfer of shares

99 Sale or transfer of shares

A share in a co-operative cannot be sold or transferred except—

(a) on the death of a member—under Division 8; or

(b) to a person appointed to administer the estate of a shareholder under a law relating to the administration of the estates of persons who, through mental or physical infirmity, are incapable of managing their affairs; or

(c) with the consent of the board—to any person, if there are reasonable grounds for believing the person will be an active member of the co-operative.

100 Sale or transfer of shares to be subject to rules

100 Sale or transfer of shares to be subject to rules

(1) A share in a co-operative cannot be sold or transferred except under the rules of the co-operative.

(2) Without limiting subsection (1), a share in a co-operative cannot be sold or transferred to 2 or more persons jointly if the rules of the co-operative do not (either generally or in the circumstances of the particular case) allow the share to be held jointly.

101 Transfer not effective until registered

101 Transfer not effective until registered

The transfer (by sale or otherwise) of a share in a co-operative is not effective until the transfer is registered and the name of the transferee is entered in the register of members in respect of the share.

Division 8 Transfer of shares and other interests on death of member

Division 8 Transfer of shares and other interests on death of member

102 Meaning of “interest”

102 Meaning of “interest”

In this Division—

interest, of a deceased member, in a co-operative, includes—

(a) the member’s membership; and

(b) any credit balance payable to the member; and

(c) any loan from or to, or deposit with, the co-operative; and

(d) any surplus arising on the sale by the co-operative as mortgagee of any property mortgaged by the deceased to the co-operative.

103 Transfer of shares and other interests on death of member

103 Transfer of shares and other interests on death of member

(1) On the death of a member of a co-operative, the board must transfer the deceased member’s share or interest in the co-operative to—

(a) the personal representative of the deceased member; or

(b) one or more persons that the deceased’s personal representative specifies in an application for transfer made to the co-operative within 3 months after the death of the member.

(2) On the death of a member of a co-operative, the member’s share or interest in the co-operative cannot be transferred to a person other than the personal representative of the deceased member except with the consent of the board of the co-operative.

(3) The board—

(a) in the case of an application referred to in subsection (1) (b)—must give its consent under subsection (2) to the transfer of the deceased member’s share or interest in the co-operative, unless the board reasonably believes the only transferee or each transferee will not be an active member of the co-operative; or

(b) in any other case—may give its consent under subsection (2) only if the board reasonably believes the only transferee or each transferee will be an active member of the co-operative.

(4) The board must not give its consent under subsection (2) to the transfer of a share if, because of the transfer, the nominal value of the shares held by the transferee would be more than—

(a) 20% of the nominal value of the share capital of the co-operative; or

(b) if a lower percentage is specified in the rules of the co-operative—that lower percentage of the nominal value of the share capital of the co-operative.

(5) This section has effect subject to section 100.

104 Transfer of small shareholdings and interests on death

104 Transfer of small shareholdings and interests on death

(1) If the total value of a deceased member’s shares or interest in a co-operative is less than $10,000 (or a higher amount prescribed by the National Regulations), the board may, on the basis of evidence that it considers sufficient, transfer the shares or interest under whichever of the following paragraphs is appropriate—

(a) if the member dies testate—to the person who appears to the board to be entitled to the shares or interest under the will of the deceased member;

(b) if the member dies intestate—to any person who appears to the board to be entitled to obtain a grant of administration of the estate of the deceased, and that person must then hold the shares or interest on the same trusts as if he or she had obtained the grant.

(2) A transfer must not be made under this section after evidence has been produced to the co-operative of the grant of letters of administration of the estate, or probate of the will, of the deceased member.

(3) This section has effect subject to section 100.

(4) In this section—

transfer of an interest includes the payment of money.

105 Value of shares and interests

105 Value of shares and interests

The value of the shares or interest of a deceased member must be decided, for the purposes of this Division, under the rules of the co-operative.

106 Co-operative protected

106 Co-operative protected

Any transfer of property made by the board of a co-operative under this Division is valid and effectual against any demand made on the co-operative by any other person.

Division 9 Repurchase of shares

Division 9 Repurchase of shares

107 Purchase and repayment of shares

107 Purchase and repayment of shares

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

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

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

(2) The amount paid by a co-operative under this section in purchasing shares or repaying any amount paid up on shares, or both, in any financial year of the co-operative must not be more than the total of—

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

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

(3) The members of a co-operative may, by special resolution, exempt a co-operative from the operation of subsection (2) in relation to a particular financial year, either unconditionally or subject to conditions.

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

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

(b) under the rules of the co-operative.

(5) A co-operative must not purchase shares or repay amounts paid up on shares if—

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

(b) the co-operative is insolvent.

(6) This section does not apply if the member has been expelled or has resigned from the co-operative or the member’s membership has been otherwise cancelled under Part 2.6.

108 Deposits, debentures or CCUs instead of payment when share repurchased

108 Deposits, debentures or CCUs instead of payment when share repurchased

(1) If a co-operative repurchases a share of a member, the co-operative may instead of paying the purchase price to the member—

(a) for a deposit-taking co-operative—apply the amount as an interest-bearing deposit by the member with the co-operative; or

(b) allot or issue debentures or CCUs of the co-operative to the member in satisfaction of the amount.

(2) Subsection (1) applies only if—

(a) the board considers payment of the repurchase price would adversely affect the financial position of the co-operative; or

(b) the board and the member so agree.

(3) The deposit, debenture or CCU bears interest during any period—

(a) for a co-operative with share capital—

(i) at the rate (or, if there is more than one rate, at the higher or highest rate) of dividend payable for that period on the share capital of the co-operative; or

(ii) if the rate of dividend payable for that period has not been decided—at the rate (or the higher or highest rate) payable for the immediately preceding period for which a rate has been decided; or

(iii) if a rate of dividend has never been decided for the share capital of the co-operative—at the rate the board of the co-operative considers reasonable; or

(b) for a co-operative without share capital—at the rate the board of the co-operative considers reasonable; or

(c) if the rules of the co-operative provide for a rate to be payable that is higher than the rate applicable under paragraph (a) or (b)—at the higher rate.

(4) The deposit, debenture or CCU must be repaid to the member as soon as repayment would not, in the opinion of the board, adversely affect the financial position of the co-operative.

(5) The deposit, debenture or CCU must in any case be repaid within 10 years (or within any shorter period the rules of the co-operative require) after the repurchase of the shares concerned.

109 Cancellation of shares

109 Cancellation of shares

A co-operative must cancel any share purchased by or forfeited to the co-operative under this Law or the rules of the co-operative.

110 Becoming a member of co-operative

110 Becoming a member of co-operative

(1) On the registration of a co-operative, the persons who signed the application for registration become members of the co-operative.

(2) Other persons may be admitted as members of the co-operative as provided by its rules.

(3) A minor may be admitted as a member of the co-operative unless the rules of the co-operative otherwise provide.

(4) A corporation is not (merely because it is a corporation) disqualified from being a member of a co-operative unless the rules of the co-operative provide that corporations are disqualified from being members.

(5) If 2 or more co-operatives merge, the members of the merged co-operative are—

(a) the members of the merging co-operatives; and

(b) other persons admitted as members of the merged co-operative under its rules.

111 Members of co-operative group

111 Members of co-operative group

(1) The members of a co-operative group are—

(a) the co-operatives by which the co-operative group is formed; and

(b) any other co-operative, admitted to membership in accordance with the rules of the co-operative group; and

(c) any other corporation or other body admitted to membership in accordance with subsection (2).

(2) A corporation or other body, not being a co-operative, may be admitted to membership of the co-operative group if—

(a) it is incorporated or registered under any other law, whether or not a law of this jurisdiction; and

(b) in the opinion of the board of the co-operative group, it is designed to function in accordance with co-operative principles; and

(c) it is eligible to be admitted to membership in accordance with the rules of the co-operative group.

112 Qualification for membership

112 Qualification for membership

(1) A person is not qualified to be admitted to membership of a co-operative unless—

(a) there are reasonable grounds for believing the person will be an active member of the co-operative; and

(b) the person is otherwise eligible under the rules of the co-operative.

(2) The rules of a co-operative must contain provisions that—

(a) impose a duty on all persons who become members to be active members; and

(b) set out the consequences of failing to be, or ceasing to be, an active member.

113 Membership may be joint

113 Membership may be joint

Membership of a co-operative may be individual and, unless the rules of the co-operative provide otherwise, may be joint.

114 Minors

114 Minors

(1) A member of a co-operative is not entitled to avoid any obligation or liability as a member under a contract, deed or other document entered into as a member on any ground relating to minority.

(2) A minor is not competent to hold any office in a co-operative.

(3) A member of a co-operative who is a minor is not entitled to vote, but this does not apply to joint membership of a co-operative except where all the joint members are minors.

(4) This section applies only to individuals.

115 Representatives of corporations

115 Representatives of corporations

(1) If a corporation is a member of a co-operative, it may by instrument served on the co-operative appoint a person to represent it in relation to its membership.

(2) A corporation must not appoint a person to represent the corporation as a member of a co-operative if the person is currently a member of the co-operative or a representative of another corporation member.

Maximum penalty—$1,000.

(3) The power to appoint a representative is subject to any restriction imposed by the rules of the co-operative as to the entitlement of a person to represent a corporation.

(4) A person is not qualified to be appointed the representative of a company that is not a listed corporation (within the meaning of the Corporations Act) unless the person is an officer, member or employee of the company.

116 Notification of shareholders and shareholdings

116 Notification of shareholders and shareholdings

On the request of the board of a co-operative, a corporation that is a member of the co-operative must provide the board of the co-operative with—

(a) a list of the names of all the shareholders of the corporation and the number of shares held by each shareholder; or

(b) in the case of a corporation without share capital—a list of the members of the corporation;

within 7 days of the request.

Maximum penalty—$2,000.

117 Circumstances in which membership ceases—all co-operatives

117 Circumstances in which membership ceases—all co-operatives

(1) A person ceases to be a member of a co-operative in each of the following circumstances and as otherwise provided by this Law—

(a) if the member’s membership is cancelled under Part 2.6;

(b) if the member is expelled or resigns under the rules of the co-operative;

(c) if—

(i) the individual member becomes bankrupt or the corporate member becomes insolvent; or

(ii) the member’s property becomes subject to control under the law relating to bankruptcy;

unless provision is made to the contrary in the rules of the co-operative;

(d) on the death of the member;

(e) if the contract of membership is rescinded on the ground of misrepresentation or mistake;

(f) for a member that is a corporation—if the corporation is deregistered.

(2) On the death of a member, the member’s estate remains liable as the member until the member’s personal representative or some other person is registered in the member’s place.

118 Additional circumstances in which membership ceases—co-operatives with share capital

118 Additional circumstances in which membership ceases—co-operatives with share capital

In the case of a co-operative that has share capital, in addition to the circumstances in section 117, a member ceases to be a member if—

(a) the member’s total shareholding is transferred to another person under the rules of the co-operative and the name of the transferee is entered in the register of members in respect of the shareholding; or

(b) the member’s total shareholding is forfeited under this Law or the rules of the co-operative; or

(c) the member’s total shareholding is sold by the co-operative under a power conferred by the rules of the co-operative, and the name of the purchaser is entered in the register of members in respect of the shareholding; or

(d) the member’s total shareholding is purchased by the co-operative under this Law; or

(e) the amount paid up on the member’s shares is repaid to the member under the rules of the co-operative.

119 Carrying on business with too few members

119 Carrying on business with too few members

(1) A person who is a director of a co-operative must not knowingly allow the co-operative to continue to carry on business with fewer than the minimum number of members allowed (under subsection (3)) for more than 28 days after the number of members falls below that minimum number.

Maximum penalty—$2,000.

(2) Each person who is found guilty of an offence under subsection (1) is also liable to satisfy all obligations of the co-operative incurred after the 28 days referred to in subsection (1), and may be sued without any other member being joined in the action.

(3) The minimum number of members allowed is—

(a) in the case of a co-operative group—2 co-operatives; or

(b) in the case of any other co-operative—

(i) if a lesser number than 5 is approved by the Registrar—that number of active members; or

(ii) otherwise—5 active members.

Note—

See section 20 for composite approvals.

(4) The Registrar may, by written notice, extend and further extend in a particular case the period of 28 days referred to in subsection (1).

(5) An application for an extension must be made in the approved form before the period to be extended ends.

120 Rights of membership not exercisable until registered etc

120 Rights of membership not exercisable until registered etc

(1) A member of a co-operative is not entitled to exercise any rights of membership until—

(a) the member’s name appears in the register of members; and

(b) the member has made any payment to the co-operative for membership or acquired any share or interest that is provided for in the rules of the co-operative.

(2) A co-operative must ensure the name of a person admitted to membership is recorded in the register of members within 28 days after the person is admitted to membership.

Maximum penalty (for subsection (2)): $2,000.

121 Liability of members to co-operative

121 Liability of members to co-operative

(1) A member of a co-operative is not, as a member, under any personal liability to the co-operative, except as provided by this section.

(2) A member of a co-operative with share capital is liable to the co-operative for the amount (if any) unpaid on the shares held by the member together with any charges payable by the member to the co-operative as required by the rules of the co-operative.

(3) A member of a co-operative without share capital is liable to the co-operative for any charges payable by the member to the co-operative as required by the rules of the co-operative.

(4) This section does not affect a liability that a member of a co-operative may have to the co-operative in respect of—

(a) any trade or other business conducted by the member with the co-operative; or

(b) any fines imposed on the member by the co-operative.

122 Co-operative to give information to person intending or applying to become a member

122 Co-operative to give information to person intending or applying to become a member

(1) The board of a co-operative must give each person intending or applying to become a member of the co-operative—

(a) a consolidated copy of the rules of the co-operative; and

(b) a copy of all special resolutions that would apply to the prospective member passed by the members of the co-operative, except special resolutions providing for an amendment of the rules of the co-operative; and

(c) a copy of the most recent financial information reported to members of the co-operative under Part 3.3.

(2) The board of a co-operative may comply with subsection (1)—

(a) by—

(i) giving the person notice that the documents referred to in subsection (1) may be inspected by the person at the registered office of the co-operative and at each other office of the co-operative in or outside this jurisdiction, including outside Australia; and

(ii) making the documents available for inspection in person; or

(b) if the person has elected to receive the documents as an electronic copy—by sending the person an electronic copy of the documents; or

(c) if the person did not make the election—by directly notifying, in writing, that the documents are accessible on the website and specifying the direct address on the website where the documents may be accessed.

Note—

A direct address may be specified, for example, by specifying the URL of the documents.

123 False copy of documents

123 False copy of documents

(1) A person who, in purported compliance with section 122—

(a) gives a person intending or applying to become a member of a co-operative a document as a copy of—

(i) a special resolution of the co-operative; or

(ii) the last annual report of the co-operative; and

(b) knows or ought to know that, in a material respect, it is not a true copy of the resolution or report; and

(c) does not indicate to that person that it is not a true copy;

is guilty of an offence.

Note—

Section 58 deals with false copies of rules.

(2) A person who, in purported compliance with section 122—

(a) makes available for inspection by a person intending or applying to become a member of a co-operative a document as a copy of—

(i) a special resolution of the co-operative; or

(ii) the last annual report of the co-operative; and

(b) knows or ought to know that, in a material respect, it is not a true copy of the resolution or report; and

(c) does not indicate to that person that it is not a true copy;

is guilty of an offence.

Maximum penalty—$1,000.

124 Entry fees and regular subscriptions

124 Entry fees and regular subscriptions

(1) The rules of a co-operative may—

(a) require the payment by members of entry fees and regular subscriptions; and

(b) provide for the repayment of the fees and subscriptions on a person’s ceasing to be a member.

(2) The calculation of the amount of a particular member’s regular subscription may be based on the value of business the member does with the co-operative or on profits earned by the co-operative on business done by the member with the co-operative.

(3) A co-operative must give to any person intending or applying to become a member written notice of entry fees or regular subscriptions payable by a member to the co-operative.

(4) A person who becomes a member of the co-operative is not liable to pay entry fees or regular subscriptions except—

(a) the fees or subscriptions of which the person was given written notice before becoming a member; and

(b) any regular subscriptions that are imposed in accordance with the rules of the co-operative and of which the member has been given notice.

125 Members etc may be required to deal with co-operative

125 Members etc may be required to deal with co-operative

(1) The rules of a co-operative may contain provisions that require a member to have stated dealings with the co-operative for a fixed period and to enter into a contract for that purpose.

(2) A co-operative may, if authorised by its rules, make a contract with a member containing provisions that require the member to have stated dealings with the co-operative for a fixed period.

(3) In particular, the provisions of the rules of the co-operative or a contract may require a member—

(a) to sell products through or to the co-operative; or

(b) to obtain supplies or services through or from the co-operative; or

(c) to pay to the co-operative a stated amount as liquidated damages for any failure to comply with a requirement authorised by this section.

(4) Any amount required to be paid to the co-operative as liquidated damages is, for the purposes of section 127, a debt payable by the member to the co-operative and is accordingly subject to that section.

(5) A contract authorised by this section is binding on the co-operative and all other parties even though, apart from this Law, the contract would be invalid as being in restraint of trade.

(6) Rules authorised by this section are authorised even though, apart from this section, the rules might be invalid as being in restraint of trade.

126 Fines payable by members

126 Fines payable by members

(1) A co-operative may impose a fine on a member for an infringement of the rules of the co-operative if the rules so provide.

(2) A fine imposed under subsection (1) must not be more than the maximum fine fixed by the rules of the co-operative.

(3) A fine must not be imposed unless—

(a) notice of intention to impose the fine and the reason for it has been given to the member; and

(b) the member has been given a reasonable opportunity to appear before the board in person (with or without witnesses), or to send to the board a written statement, to show cause why the fine should not be imposed.

(4) The co-operative may set-off the whole or any part of the fine against an amount payable to the member for produce delivered by the member to the co-operative, but no part of the fine is to be set-off against any advance payable to the member from the co-operative under the rules of the co-operative against produce so delivered.

127 Lien and set-off

127 Lien and set-off

(1) A co-operative has, in relation to any debt payable by a member or former member to the co-operative, a lien on each of the following—

(a) the share or interest in the capital and the credit balance and deposits of the member or former member;

(b) any rebate, bonus, dividend or interest payable to the member or former member;

(c) any entry fees and regular subscriptions required to be repaid to a member when the member ceases to be a member.

(2) The co-operative may set-off any amount paid on account of that share or other thing, or any amount credited or payable to the member or former member, in or towards payment of the debt.

(3) The lien created by this section may be enforced by the appropriation by the co-operative of the thing that is subject to the lien, but only after at least 7 days notice has been given to the member or former member.

(4) Any share in relation to which capital has been so appropriated must be cancelled.

128 Repayment of shares on expulsion or resignation

128 Repayment of shares on expulsion or resignation

(1) When a member is expelled or resigns from a co-operative under its rules, the co-operative must, within one year after the day of expulsion or resignation—

(a) repay to the former member an amount (the repayable amount) made up of the amount paid up on the shares held by the member at the day of expulsion or resignation, less any amount owed by the member to the co-operative at the day of expulsion or resignation under the rules of the co-operative or any contract or otherwise; or

(b) apply the repayable amount under subsection (2) if—

(i) the board considers repayment would adversely affect the financial position of the co-operative; or

(ii) the board and the former member agree.

(2) The repayable amount may be applied in one or more of the following ways—

(a) the co-operative may appropriate the amount as a donation to the co-operative, but only if the former member consents in writing to the donation;

(b) if the co-operative is a deposit-taking co-operative—the co-operative may apply the amount as a deposit by the former member with the co-operative;

(c) the co-operative may allot or issue debentures or CCUs of the co-operative to the former member in satisfaction of the amount.

(3) If the balance sheet of the co-operative last issued before the expulsion or resignation of a member of the co-operative disclosed a loss or deficiency, there must be a proportionate reduction in the capital to be repaid to the member.

(4) That reduction must be by an amount that bears to the amount of the loss or deficiency so disclosed the same proportion as the number of shares held by the member bore to the total number of shares held by all members of the co-operative as at the date of expulsion or resignation of the member.

(5) Shares for which capital has been repaid must be cancelled.

Note—

Section 163 deals with repayment of amounts owing because of cancelled membership. Sections 164 and 165 deal with interest on, and repayment of, deposits, debentures and CCUs referred to in this section.

129 Grievance procedure

129 Grievance procedure

(1) The rules of a co-operative must set out a grievance procedure for dealing with any dispute under the rules between—

(a) a member and another member; or

(b) a member and the co-operative.

(2) A member may appoint any person to act on behalf of the member in the grievance procedure.

(3) The grievance procedure must allow for natural justice to be applied.

(4) In this Division—

member includes any person who was a member not more than 6 months before the dispute occurred.

130 Application to designated tribunal

130 Application to designated tribunal

(1) The designated tribunal may, on the application of a member or the co-operative, make an order declaring and enforcing—

(a) the rights or obligations of members of the co-operative between themselves; or

(b) the rights or obligations of the co-operative and any member between themselves.

(2) An order may be made under this section whether or not a right of a proprietary nature is involved and whether or not the applicant has an interest in the property of the co-operative.

(3) The designated tribunal may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if it considers that—

(a) the issue raised in the application is trivial; or

(b) having regard to the importance of the issue, the nature of the co-operative, any other available method of resolving the issue, the costs involved, lapse of time, acquiescence or any other relevant circumstance, it was unreasonable to make the application; or

(c) the unreasonable or improper conduct of a party—

(i) has been responsible for the making of the application; or

(ii) has added to the cost of the proceedings.

131 Interpretation—extended meaning of “member”

131 Interpretation—extended meaning of “member”

In this Division—

member, in relation to a co-operative that has share capital, includes a person to whom a share in the co-operative has been transmitted by will or by operation of law.

132 Application of Division

132 Application of Division

This Division does not apply to anything done under Part 2.6.

133 Application for order

133 Application for order

The following persons may apply to the Supreme Court for an order under this Division—

(a) the Registrar;

(b) a member who believes the affairs of the co-operative are being conducted in a way that is—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii) contrary to the interests of the members as a whole;

(c) a member who believes an act or omission, or a proposed act or omission, by or on behalf of the co-operative, or a resolution, or a proposed resolution, of members, was or would be—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii) contrary to the interests of the members as a whole.

134 Orders

134 Orders

On application under this Division, the Supreme Court may make any order it considers appropriate including (without being limited to) one or more of the following orders—

(a) an order that the Registrar appoint an administrator of the co-operative;

(b) an order that the co-operative be wound up;

(c) an order for regulating the conduct of affairs of the co-operative in the future;

(d) an order for the repayment of the member’s shares under the provisions of this Law for repayment of share capital;

(e) an order for the purchase of the shares of any member by the co-operative and for the reduction accordingly of the co-operative’s capital;

(f) an order directing the co-operative to institute, prosecute, defend or discontinue stated proceedings, or authorising a member or members of the co-operative to institute, prosecute, defend or discontinue stated proceedings in the name and on behalf of the co-operative;

(g) an order appointing a receiver or a receiver and manager of property of the co-operative;

(h) an order restraining a person from engaging in stated conduct or from doing a stated act or thing;

(i) an order directing a co-operative to become registered as a company under the Corporations Act;

(j) an order requiring a person to do a stated act or thing;

(k) an order as to costs;

(l) an order making amendments to the rules of the co-operative.

135 Basis on which orders made

135 Basis on which orders made

The Supreme Court may make an order under this Division if it considers that—

(a) the affairs of a co-operative are being conducted in a way that is—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member (an oppressed member), whether or not in the capacity of a member; or

(ii) contrary to the interests of the members as a whole; or

(b) an act or omission, or a proposed act or omission, by or on behalf of a co-operative, or a resolution, or a proposed resolution, of members, was or would be—

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member (an oppressed member), whether or not in the capacity of a member; or

(ii) contrary to the interests of the members as a whole.

136 Winding up need not be ordered if members unfairly prejudiced by order

136 Winding up need not be ordered if members unfairly prejudiced by order

The Supreme Court need not make an order under this Division for the winding up of a co-operative if it considers the winding up of the co-operative would unfairly prejudice an oppressed member or unfairly prejudice the members as a whole.

137 Application of winding up provisions

137 Application of winding up provisions

If an order that a co-operative be wound up is made under this Division, the provisions of this Law relating to the winding up of co-operatives apply, with any modifications that are necessary, as if the order had been made on an application filed in the Supreme Court by the co-operative.

138 Changes to rules

138 Changes to rules

(1) If an order under this Division makes any amendment of the rules of a co-operative—

(a) the amendment has effect as if it had been properly made by special resolution of the co-operative; and

(b) the co-operative must not (despite any other provisions of this Law), without the leave of the Supreme Court, make any further amendment of the rules inconsistent with the provisions of the order.

(2) On receiving a copy of an order amending the rules of a co-operative the Registrar must register the amendment.

139 Copy of order to be filed with Registrar

139 Copy of order to be filed with Registrar

An applicant for an order under this Division must file an office copy of the order with the Registrar within 14 days after it is made.

Maximum penalty—$1,000.

140 Order for inspection of books of co-operative

140 Order for inspection of books of co-operative

(cf Corporations Act s 247A)

(1) On application by a member of a co-operative, the Supreme Court may make an order—

(a) authorising the applicant to inspect books of the co-operative; or

(b) authorising another person (whether a member or not) to inspect books of the co-operative on the applicant’s behalf.

(2) A person authorised to inspect books may make copies of the books unless the Supreme Court orders otherwise.

(3) A person who—

(a) is granted leave under section 580; or

(b) applies for leave under that section; or

(c) is eligible to apply for leave under that section;

may apply to the Supreme Court for an order under this section.

(4) On application, the Supreme Court may make an order authorising—

(a) the applicant to inspect books of the co-operative; or

(b) another person to inspect books of the co-operative on the applicant’s behalf.

(5) The Supreme Court may make the order only if it is satisfied that—

(a) the applicant is acting in good faith; and

(b) the inspection is to be made for a purpose connected with—

(i) applying for leave under section 580; or

(ii) bringing or intervening in proceedings with leave under that section.

(6) A person authorised to inspect books may make copies of the books unless the Supreme Court orders otherwise.

141 Ancillary orders

141 Ancillary orders

(cf Corporations Act s 247B)

If the Supreme Court makes an order under section 140, the court may make any other orders it considers appropriate, including either or both of the following—

(a) an order limiting the use that a person who inspects books may make of information obtained during the inspection;

(b) an order limiting the right of a person who inspects books to make copies in accordance with section 140 (2).

142 Disclosure of information acquired in inspection

142 Disclosure of information acquired in inspection

(cf Corporations Act s 247C)

(1) A person who inspects books on behalf of an applicant under section 140 must not disclose information obtained during the inspection.

Maximum penalty—$500.

(2) Subsection (1) does not apply to the extent that the disclosure is to—

(a) the Registrar; or

(b) the applicant.

(3) An offence based on subsection (1) is an offence of strict liability.

(4) A defendant bears an evidential burden in relation to the matter in subsection (2).

143 Co-operative or directors may allow member to inspect books

143 Co-operative or directors may allow member to inspect books

(cf Corporations Act s 247D)

The board of a co-operative, or the co-operative by a resolution passed at a general meeting, may authorise a member to inspect books of the co-operative.

144 Meaning of “primary activity”

144 Meaning of “primary activity”

A primary activity of a co-operative is an activity specified in the rules of the co-operative as a primary activity of the co-operative.

145 Meaning of “active member”

145 Meaning of “active member”

A member of a co-operative is an active member of the co-operative if the member—

(a) uses or supports an activity of, or maintains a relationship or an arrangement with, the co-operative, for carrying on a primary activity of the co-operative, in the way and to the extent the rules of the co-operative provide; or

(b) maintains any other relationship or arrangement with the co-operative for carrying on a primary activity of the co-operative that the National Regulations provide.

146 Meaning of “active membership provisions and resolutions”

146 Meaning of “active membership provisions and resolutions”

(1) Active membership provisions in the rules of a co-operative are provisions in the rules that state—

(a) which of the activities of the co-operative are the primary activities of the co-operative; and

(b) the way in which, and the extent to which, a member of the co-operative must use or support an activity of, or maintain a relationship or arrangement with, the co-operative, for carrying on a primary activity of the co-operative, to establish active membership of the co-operative.

(2) An active membership resolution is a resolution that would, if given effect to, make or amend active membership provisions in the rules of a co-operative.

147 Number of primary activities required

147 Number of primary activities required

A co-operative must have at least one primary activity.

148 Rules to contain active membership provisions

148 Rules to contain active membership provisions

The board of a co-operative must ensure the rules of the co-operative contain active membership provisions under this Part.

149 Factors and considerations for deciding primary activities and other matters

149 Factors and considerations for deciding primary activities and other matters

(1) The board of a co-operative must ensure the relevant factors and considerations are taken into account in deciding—

(a) which of the activities of a co-operative are its primary activities; and

(b) the way and extent to which a member is required to use or support an activity of, or maintain a relationship or arrangement with, a co-operative, for carrying on a primary activity of the co-operative, to establish active membership of the co-operative.

(2) The relevant factors and considerations are—

(a) the primary activity or (if more than one) the primary activities taken together must form the basic purpose for which the co-operative exists and a significant contribution to the business of the co-operative; and

(b) the way and extent of required utilisation, support, relationship or arrangement should be reasonable when considered in relation to the activities of the co-operative as a whole; and

(c) any other factors and considerations prescribed by the National Regulations.

(3) The National Regulations may—

(a) provide for the things to be taken into account in deciding whether an activity makes a significant contribution to the business of the co-operative; and

(b) state minimum percentages of turnover, minimum amounts of income or minimum amounts of business necessary to constitute that significant contribution.

(4) Factors and considerations may be prescribed by the National Regulations so as to apply to co-operatives generally or to a specified class of co-operatives.

(5) Nothing in this section limits the right of active members other than the board of the co-operative to propose an active membership resolution.

150 Active membership provisions—distributing co-operatives

150 Active membership provisions—distributing co-operatives

The only active membership provisions that may be contained in the rules of a distributing co-operative are—

(a) provisions requiring a member to use an activity of the co-operative for carrying on a primary activity stated in the provisions to establish active membership; and

(b) any other active membership provisions the Registrar may approve.

151 Active membership provisions—non-distributing co-operatives—regular subscriptions

151 Active membership provisions—non-distributing co-operatives—regular subscriptions

(1) Active membership provisions for a non-distributing co-operative may include a provision to the effect that the payment of a regular subscription by a member of the co-operative, to be applied to a primary activity of the co-operative, is sufficient to establish active membership of the co-operative.

(2) A member of a non-distributing co-operative who would, on payment of the subscription, be an active member of the co-operative is taken to be an active member until the subscription is payable.

152 Notice of meeting

152 Notice of meeting

(1) At least 21 days notice must be given to members of a co-operative of a meeting at which an active membership resolution is to be proposed.

(2) The notice must, in addition to the other matters required to be stated—

(a) state whether the member is eligible to vote on the resolution; and

(b) state the full text of the proposed resolution; and

(c) contain a copy of section 156.

(3) If the notice to a member states that he or she is not eligible to vote on a resolution, the member may, after endeavouring to settle the matter with the co-operative, apply to the Registrar for a decision as to the member’s eligibility.

(4) The Registrar may decide the matter, on the information available to the Registrar, by direction in writing to the co-operative and the member.

(5) The Registrar’s decision as to eligibility has effect but only if given before the meeting concerned is due to be held.

153 Eligibility to vote on active membership resolution

153 Eligibility to vote on active membership resolution

The only members of a co-operative who are eligible to vote on an active membership resolution when the rules of the co-operative do not contain active membership provisions are the members who would be active members if the resolution had already taken effect.

154 Eligibility of directors to vote on proposal at board meeting

154 Eligibility of directors to vote on proposal at board meeting

If the board of a co-operative is meeting to consider a proposal to submit an active membership resolution to a meeting of the co-operative, all the directors are eligible to vote on that proposal at the meeting of the board of directors.

155 Other entitlements of members not affected

155 Other entitlements of members not affected

A provision of this Division that renders a member of a co-operative ineligible to vote on a resolution does not affect any other right, entitlement, obligation or duty of the member as a member.

156 Cancellation of membership of inactive member

156 Cancellation of membership of inactive member

(1) Subject to sections 159 and 160, the board of a co-operative must declare the membership of a member cancelled if—

(a) the whereabouts of the member are not presently known to the co-operative and have not been known to the co-operative for at least the required period before that time; or

(b) the member is not presently an active member of the co-operative and has not been an active member of the co-operative at any time during the required period immediately before that time.

(2) This section applies to a member only if he or she was a member of the co-operative throughout the required period.

(3) The question of whether a member was an active member at a particular time in the past is to be decided as if the active membership provisions concerned had been in force at that time.

(4) The board’s declaration under this section has the effect of cancelling the membership concerned.

(5) A person may apply for an order under section 162 in relation to the cancellation of the person’s membership under this section.

(6) In this section—

the required period, in relation to a co-operative, means—

(a) 3 years; or

(b) if a shorter period is stated in the rules of the co-operative—that period.

157 Shares to be forfeited if membership cancelled

157 Shares to be forfeited if membership cancelled

(1) If a co-operative has share capital, the board of the co-operative must declare the shares of a member to be forfeited at the same time as the member’s membership is cancelled under section 156.

(2) The board’s declaration has the effect of forfeiting the shares concerned.

(3) Nothing in this section affects the operation of section 163.

158 Failure to cancel membership—offence by director

158 Failure to cancel membership—offence by director

If the board of a co-operative fails to cancel the membership of a member as required by this Part, a director of the co-operative who did not use all due diligence to prevent the failure commits an offence.

Maximum penalty—$2,000.

159 Deferral of cancellation by board

159 Deferral of cancellation by board

(1) The board of a co-operative may by resolution defer cancellation of a member’s membership for up to one year—

(a) if the board has reasonable grounds to believe a member has ceased to be an active member because of unusual circumstances that prevent the member fulfilling his or her active membership obligations; or

(b) if—

(i) the board thinks that during the deferral period an active membership resolution may be put to the members of the co-operative; and

(ii) the effect of the resolution would be relevant to the question of whether the member is an active member.

(2) The board of the co-operative must review the resolution to defer within the deferral period to decide if a further resolution should be made under subsection (1).

160 Cancellation of membership prohibited in certain circumstances

160 Cancellation of membership prohibited in certain circumstances

(1) Unless the National Regulations otherwise provide, the board of a co-operative must not declare the membership of a member to be cancelled under this Part—

(a) if the co-operative is insolvent; or

(b) if the co-operative is under administration under Part 5.3A of the Corporations Act as applying under this Law; or

(c) if a compromise or an arrangement is being administered in relation to the co-operative; or

(d) if the co-operative is in the course of being wound up; or

(e) if an appointment of a receiver (whether or not a receiver and manager) of any property of the co-operative is in force; or

(f) if the co-operative has, for the purpose of being registered as a company under the Corporations Act, filed with the Registrar a copy of the entry made in the minutes of the co-operative.

(2) The National Regulations may provide that the board of a co-operative must not declare the membership of a member to be cancelled under this Part in other circumstances that may be prescribed.

161 Notice of intention to cancel membership

161 Notice of intention to cancel membership

(1) The board of a co-operative must ensure that not less than 28 days notice of its intention to declare the membership of a member to be cancelled is given to the member.

(2) Notice is not required to be given under this section if—

(a) the member’s whereabouts are unknown to the co-operative; and

(b) the amount required to be repaid to the member in relation to the cancelled membership (whether because of the cancellation of shares or otherwise) is not more than $100 (or any other amount prescribed by the National Regulations).

(3) Notice may be given by publication of a notice in a newspaper in the district in which the registered office of the co-operative is situated if—

(a) the member’s whereabouts are unknown to the co-operative; and

(b) the amount required to be repaid to the member in relation to the cancelled membership (whether because of the cancellation of shares or otherwise) is more than the applicable amount under subsection (2) (b).

162 Order against cancellation

162 Order against cancellation

(1) If the designated tribunal is satisfied the cancellation of a member’s membership under section 156 was or would be unreasonable, the tribunal may, on application by the member or former member, direct that the membership should not have been cancelled or should not be cancelled.

(2) An application for an order may be made only within 6 months after—

(a) notice of the board’s intention to declare the membership to be cancelled is given to the member under section 161 (1) or is first published under section 161 (3); or

(b) if notice was not required as referred to in section 161 (2)—the cancellation takes effect.

(3) While an order is in force under this section—

(a) the membership concerned is not required to be cancelled and any shareholding of the member is not required to be forfeited; and

(b) the person whose membership was cancelled is entitled to be reinstated as a member of the co-operative with all the rights and entitlements (including any shareholding) attaching to or arising from the former membership.

(4) Reinstatement of a member under this section is to be effected under the directions of the designated tribunal.