Co-operatives National Law (ACT) Regulation 2017

The regulation introduces or imports several key concepts that practitioners need to understand.

Unsuitable name. The concept is defined solely by reference to the Registrar’s satisfaction that the name is likely to mislead. This is a lower threshold than “likely to deceive” used in some other Australian business naming regimes. The regulation gives no guidance on what constitutes misleading, leaving the Registrar wide discretion. The phrase “likely to mislead” could capture names that are factually accurate but create a false impression about the co-operative’s nature, membership, or regulatory status. Because the regulation does not specify any factors, the Registrar’s decisions would be reviewable only on administrative law grounds (e.g. unreasonableness or jurisdictional error).

Exempted corporations and persons. The categories in sections 6 and 7 are identical. They cover entities that already have a special statutory authorisation to use co-operative-like words, and a grandfather clause for any company or society formed or incorporated under an Act before 5 June 2003. This grandfather date is fixed to the commencement of the now-repealed Cooperatives Act 2002. Any entity incorporated after that date under an Act is not automatically exempt unless it falls within another exemption category or obtains a written exemption from the Registrar. The exemption categories also include a residual power for the Registrar to grant a written exemption, which would allow for case-by-case relief outside the statutory categories.

Prescribed legislation for transfer. Section 8 uses the word “prescribed” to identify the laws under which an entity may apply to transfer its incorporation or registration to a co-operative under section 403(b) of the CNL. The list is exhaustive: only the ACT Associations Incorporation Act, the Commonwealth CATSI Act, and Commonwealth legislation for building societies, credit unions, or friendly societies. There is no power to prescribe additional legislation by regulation amendment without a further amendment to this regulation. This limits the scope of entities that can use the transfer mechanism.

Old rules and new law. The transitional concept in section 10 distinguishes between “old rules” (the rules in force immediately before the commencement of the Act, section 3) and “new law” (defined as the Act, this regulation, the Co-operatives National Law (ACT), and the Co-operatives National Regulation (ACT)). The provision permits a co-operative to continue operating under its old rules, but with the clear supremacy of the new law in case of inconsistency. The deeming provisions for references to former requirements and the automatic updating of “trading” and “non-trading” to “distributing” and “non-distributing” are intended to avoid wholesale rule rewriting, though they may create interpretive difficulty where the old rules use terms that do not correspond exactly.

Reasonable time. Section 9(b) requires an application for an exemption to be made “a reasonable time before the event, or the occurrence of the matter, for which the exemption is sought.” The regulation does not define “reasonable time”, so it must be judged objectively by reference to the nature of the exemption and the circumstances. This ambiguity imposes a risk on applicants who may underestimate the lead time required. The Registrar likely has discretion to accept late applications, but the regulation does not provide for that.

The regulation directly affects several distinct groups.

Existing co-operatives registered under the Cooperatives Act 2002. Section 10 is specifically designed for them. They are permitted to continue operating under their old rules without immediately adopting new rules pursuant to the CNL. However, the supremacy clause means that any inconsistency is resolved against the old rules. Co-operatives must understand that their existing governance documents may contain provisions that are now overridden by the new law, and they must update their rule books to avoid legal uncertainty. The classification shift from “trading cooperative” to “distributing co-operative” and “non-trading cooperative” to “non-distributing co-operative” affects the entity’s categorisation under the new law, which in turn affects distribution rights, capital raising, and reporting obligations.

Corporations that are not co-operatives but wish to use the word ‘co-operative’ in their name. The regulation restricts the use of the term by any entity not registered as a co-operative under the CNL. The exemptions in sections 6 and 7 protect certain types of entities: building societies, credit unions, credit societies, friendly societies, and entities that were incorporated before 5 June 2003 under any Act. Any other corporation - for example, a proprietary company incorporated after 2003 that wants to include ‘co-op’ in its name - must apply to the Registrar for a written exemption under paragraph (e) of those sections. This creates a regulatory barrier to entry and gives the Registrar discretion that may be exercised inconsistently.

Entities seeking to transfer into co-operative form. Only those entities incorporated under the three prescribed categories in section 8 can use the transfer mechanism in section 403 of the CNL. For example, an incorporated association from New South Wales or a proprietary company under the Corporations Act 2001 (Cth) cannot transfer directly; they would have to convert first into an ACT incorporated association or another eligible entity. This affects the planning of restructures and demutualisations.

Applicants for exemptions. Any person or corporation seeking an exemption from the name restrictions in sections 220(4) or 225(1) of the CNL must comply with section 9. The requirement to apply in writing and “a reasonable time” before the event creates a procedural hurdle. Professional advisers need to advise clients to apply early and document the timing. The regulation does not specify a minimum timeframe, so what is reasonable will vary.

The Registrar. The regulation expands the Registrar’s powers and duties. The Registrar must form a state of satisfaction about whether a name is likely to mislead under section 5. The Registrar also has the power to grant written exemptions under sections 6(e) and 7(e), which involves evaluating applications under section 9. There is no statutory guidance on criteria for granting such exemptions, so the Registrar’s decisions may be challenged on procedural fairness grounds.

Regulatory compliance officers and accountants. They must ensure that any references in old rules to former requirements are correctly mapped to the new law, and that the entity’s classification as distributing or non-distributing is correctly applied for taxation and reporting purposes.

Duty to use suitable name. Co-operatives have a duty to ensure their name is not unsuitable under section 5. The duty is passive in that the Registrar must be satisfied the name is likely to mislead before action is taken, but the underlying obligation flows from the CNL that names must include “co-operative” or similar (section 220) and must not be unsuitable. The regulation provides the test for unsuitability.

Right to use ‘co-operative’ if exempt. The regulation confers a right on certain entities to use the word despite the general prohibition. The exemption is automatic for the five categories in sections 6(a)-(d) and 7(a)-(d), and discretionary for those granted a written exemption under paragraph (e). The right is not absolute; the Registrar may revoke a written exemption, though the regulation is silent on revocation.

Right to apply for exemption. Section 9 gives any person the right to apply for an exemption, but the Registrar is not obliged to grant it. The right is procedural rather than substantive. The requirement for written application imposes a minimal burden, but the “reasonable time” condition may be used to reject applications made too close to the event.

Right to continue under old rules. Section 10(1) gives existing co-operatives a right to continue operating under their old rules. This is a transitional right that is not time-limited; it continues indefinitely unless the co-operative voluntarily adopts new rules. However, the provisos in section 10(2) mean that the practical benefit of the right is limited because any inconsistency with the new law will override the old rules, and the old rules must be interpreted using the deeming provisions.

Duty to update references. Section 10(2)(b) and (c) imposes a deeming duty: references in old rules to former requirements must be read as references to substantially corresponding new law requirements, and references to trading/non-trading cooperatives become distributing/non-distributing. This is an interpretive duty on anyone reading the rules, and a practical duty on the co-operative to ensure its members and officers understand the updated meaning. Failure to do so could lead to disputes about the validity of decisions taken under misread rules.

Right to transfer under prescribed legislation. Section 8 does not itself confer a right to transfer; it merely prescribes the legislation that qualifies for an application under section 403 of the CNL. The substantive right to transfer is in the CNL itself. The regulation limits the scope of that right by defining which entities can use the transfer mechanism.

Duty to cooperate with exemption procedures. While not explicit, applicants for exemptions have a duty to provide sufficient information for the Registrar to make a decision. The regulation does not prescribe the content of the application, but the requirement that it be in writing implies the applicant must provide a clear request and supporting material.

The regulation itself does not create any direct penalties. Instead, it sets conditions and definitions that trigger penalty provisions in the primary law.

The most relevant enforcement mechanism is section 220(4) of the CNL, which makes it an offence for a corporation to register a name that includes ‘co-operative’ or similar words unless it is a co-operative or is exempted. Section 225(1) of the CNL similarly prohibits a person from using such words in business or trading activities without authorisation. The regulation provides the exemptions that remove liability. A person or corporation that does not fall within the exemptions and does not hold a written exemption from the Registrar would be in breach of those sections and liable for the penalties set out in the CNL.

Under the Legislation Act 2001 (ACT), section 133, the penalty unit value is $150 for an individual and $750 for a corporation at the republication date. The CNL itself may prescribe maximum penalty units for each offence. Practitioners must check the specific penalty provision in the CNL rather than the regulation. However, the regulation’s role in enforcement is critical: an entity that relies on an exemption must ensure it falls squarely within the statutory categories. If the Registrar later determines that the entity does not qualify, the entity may be prosecuted for the underlying offence. For example, a company that was incorporated before 5 June 2003 but has since changed its name to include ‘co-operative’ might still rely on the exemption, but if it was not originally formed under an Act (e.g. a company registered under the Corporations Act after 2003 could not rely on the pre-2003 grandfather unless it was actually formed before that date under an Act). Misclassification is a risk.

For the transitional provisions in section 10, there is no penalty for continuing to operate under old rules. However, if the old rules conflict with provisions of the new law that carry penalties (e.g., reporting requirements, distribution restrictions), the co-operative could be penalised for non-compliance with the new law despite operating under old rules. The supremacy clause in section 10(2)(a) ensures that the new law applies, so ignorance of the conflict is not a defence.

The omission of the prescribed fees provision (section 11 and schedule 1) by A2017-38 means there are no longer any fees set under this regulation for applications or exemptions. This removal eliminates a compliance cost but also reduces a potential avenue for cost recovery by the regulator. The effect is that any fees must be prescribed under the Co-operatives National Regulation (ACT) or the CNL itself.

Enforcement is ultimately the responsibility of the Registrar, who has the power to investigate breaches of the CNL and this regulation, and to issue directions or seek court orders. The regulation’s broad discretion for the Registrar under section 5 (unsuitable names) and sections 6(e)/7(e) (exemptions) means that enforcement decisions may be influenced by the Registrar’s interpretation of “likely to mislead” and the merits of exemption applications. There is no right of merits review in the regulation, so applicants would rely on judicial review.

The regulation sits within a layered legislative framework.

Co-operatives National Law (ACT) Act 2017. This is the enabling act that gives the regulation its force. The regulation is made under that Act, and section 3 of the regulation defines “new law” to include the Act as well as the regulation itself. The Act declares that the CNL (a schedule) applies as a law of the ACT, and this regulation supplements it.

Co-operatives National Law (ACT). This is the primary substantive law, set out in the schedule to the Act. The regulation cross-references several sections of the CNL: sections 220(5) and 220(7) (name restrictions), 225(2) (use of words), 403(b) (transfer of registration), and 621 (exemption procedures). The regulation effectively delegates to the Registrar the task of specifying unsuitable names and granting exemptions. The interplay means that compliance requires reference to both the CNL and this regulation, plus the Co-operatives National Regulation (ACT).

Co-operatives National Regulation (ACT). This is the companion regulation made under the CNL(ACT) Act. Section 5 of this regulation expressly references “the Co-operatives National Regulation (ACT), regulation 3.7” for unsuitable names. So the two regulations operate together. The national regulation likely contains more detailed provisions about name approval processes, while this ACT regulation adds the “likely to mislead” test and the exemptions.

Cooperatives Act 2002 (ACT) and Cooperatives Regulation 2003. These are repealed acts but remain relevant for the transitional provisions in section 10. Existing co-operatives formed under the old Act may continue to operate under their old rules, which are defined by reference to the rules in force immediately before the commencement of the Act (section 3 of the 2017 Act). The regulation provides the bridge between the old and new regimes. The deeming provisions in section 10(2) also interact with definitions in those repealed instruments.

Associations Incorporation Act 1991 (ACT). This is prescribed under section 8(a) as one of the legislations for transfer. The interaction is that an incorporated association under ACT law may transfer its incorporation to a co-operative under section 403 of the CNL. This allows associations to convert into co-operatives without first dissolving and re-registering. The regulation does not specify any conditions for the transfer beyond the association’s existence under that Act.

Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). Prescribed under section 8(b) as another pathway for transfer. This federal act covers Aboriginal and Torres Strait Islander corporations. An entity under that Act can apply to transfer to a co-operative under ACT law. This interaction is significant for Indigenous business structures that may wish to adopt the co-operative model.

Commonwealth legislation for building societies, credit unions, and friendly societies. Section 8(c) includes any Commonwealth legislation that provides for incorporation of these entities. This picks up the Banking Act 1959 (Cth) and the Life Insurance Act 1995 (Cth) specifically mentioned in sections 6 and 7, but also any other Commonwealth act that incorporates similar entities. This creates a link between the CNL regime and federal prudential regulation.

Legislation Act 2001 (ACT). This is the standard ACT interpretation act. Notes in the regulation refer to sections 127, 148, 155, and 156 of the Legislation Act. The dictionary note states that terms used in the regulation have the same meaning as in the Co-operatives National Law (ACT) Act 2017 (via section 148 of the Legislation Act). The regulation also adopts standard definitions such as “corporation” and “person” from the Legislation Act. The legal status of notes is clarified by reference to section 127.

Justice and Community Safety Legislation Amendment Act 2017 (No 3) (A2017-38). This amending act removed the fee provisions from the regulation. Practitioners must ensure they are not relying on old versions that include fees. The amendment also affected the commencement provisions of the regulation under section 2.

The Co-operatives National Law (ACT) Regulation 2017 was originally notified on the ACT legislation register on 28 April 2017 as SL2017-11. Sections 1 and 2 (commencement and name) commenced on the date of notification. The remaining sections commenced on 1 May 2017, as specified in section 2 and consistent with the commencement of the Co-operatives National Law (ACT) Act 2017 (A2017-8) on that date.

The regulation was amended by the Justice and Community Safety Legislation Amendment Act 2017 (No 3) (A2017-38), part 5, which was notified on 9 November 2017 and commenced on 16 November 2017. That amendment made two significant changes: it omitted section 11 (which originally prescribed fees) and omitted schedule 1 (which originally contained the prescribed fees). No replacement provisions were inserted. The effect is that this regulation no longer sets any fees. The regulation’s amendment history in endnote 4 records these omissions.

Additionally, the original section 2 (commencement) was omitted by operation of the Legislation Act 2001, section 89(4), which is a standard provision that removes commencement sections from republications once the law is fully in force. This is an editorial change, not a substantive one.

The republication history shows that the first republication (R1) was effective 1 May 2017 (the original commencement) and covered the period 1 May 2017 to 15 November 2017. The current republication (R2) is effective from 16 November 2017 and incorporates the amendments from A2017-38. The regulation has not been amended since 2017.

No other amendments have occurred. The regulation remains a relatively stable piece of subordinate legislation. The omission of the fees schedule may reflect a policy decision to centralise fee setting in the Co-operatives National Regulation (ACT) or elsewhere, or simply to remove redundant provisions. However, the source does not provide a reason. The absence of fees means that applying for an exemption under section 9 does not currently carry a direct cost, though the applicant bears the compliance burden of preparing the written application.

No litigation involving this regulation is mentioned anywhere in the source text. The endnotes, amendment history, and legislation history are silent on any court proceedings, determinations, or enforcement actions. The regulation is a procedural subordinate instrument and has been in force since May 2017 with only one minor amendment that removed fee schedules. It has generated no reported case law in the ACT courts, at least up to the republication date of 16 November 2017.

That said, the regulation could be relevant to litigation in several ways. The broader Co-operatives National Law (ACT) may have been the subject of disputes about name registrations, transfers, or the validity of exemptions, and this regulation would form part of the legal context. However, the source does not provide any such cases. Practitioners should not assume there is no litigation history in other jurisdictions, as the CNL is a national model law adopted variably by states and territories. The ACT regulation is specific to the ACT and may be cited in proceedings about the Registrar’s decisions on name suitability or exemption applications.

The test under section 5 - whether a name is likely to mislead - is a question of fact that could be litigated in judicial review proceedings if the Registrar rejects a name or orders a change. The Registrar’s written exemption power under sections 6(e) and 7(e) could also be challenged for unreasonable exercise or denial of procedural fairness. Section 9’s requirement for “reasonable time” could be litigated if an applicant’s exemption request is rejected as untimely. The transitional provisions in section 10 could give rise to disputes among members about the interpretation of old rules read in light of the new law, especially regarding the classification as distributing or non-distributing.

The absence of recorded litigation as at 2017 suggests either that the regulation has not been contentious, that disputes have been resolved administratively, or that the number of co-operatives in the ACT is small enough that no case has reached the courts. Nonetheless, as the co-operative sector grows, the regulation’s provisions may be tested.

Several features of this regulation could trap the unwary.

The “likely to mislead” test is entirely subjective. Section 5 gives the Registrar an unfettered discretion to decide that a name is unsuitable if the Registrar is satisfied it is likely to mislead. There is no guidance on what constitutes “likely” - it does not require actual deception, a pattern of complaints, or a specified degree of probability. The Registrar could decide that a name is unsuitable even if it is technically accurate, if it creates a misleading impression about the co-operative’s activities or membership structure. This gives the Registrar a powerful tool to reject names that the Registrar simply does not like, with limited grounds for appeal.

The grandfather date is fixed and immovable. Sections 6(c) and 7(c) exempt any company or society formed or incorporated under an Act before 5 June 2003. After that date, the exemption does not apply, even if the entity was formed under an Act at any later time. This means that a society incorporated under an Act in 2004 is not automatically exempt, regardless of how closely its structure mirrors a co-operative. Newer entities must rely on other categories or seek a written exemption. The fixed date also creates a potential future problem: as time passes, fewer entities will be eligible for the grandfathering, and the exemption category becomes less relevant.

Written exemption applications must be made “a reasonable time before” the event. Section 9(b) does not define “reasonable time”, and the nature of the event matters. An applicant seeking an exemption to use ‘co-operative’ in a new business name may need to apply weeks or months before the expected registration date. If the exemption is granted after the event, it might not operate retrospectively unless the Registrar allows it. The regulation does not provide for retrospective exemptions. This creates a compliance trap for businesses that launch a name before securing the exemption.

No right of review for exemption decisions. The regulation does not provide for internal merits review of the Registrar’s decision to grant or refuse a written exemption. Aggrieved applicants must rely on judicial review under the ACT Administrative Decisions (Judicial Review) Act or the common law. That is slower, more expensive, and may not provide a remedy on the merits.

The definition of “new law” in section 10 is broad but may not include other regulations. It includes “the Act, this regulation, the Co-operatives National Law (ACT), the Co-operatives National Regulation (ACT)”. Notably, it does not include any other regulations that might be made under the Act, such as future regulations amending these instruments. This could cause interpretive difficulty if later regulations are made that are not captured by the definition.

Transitional provisions require careful mapping. Section 10(2)(b) says a reference in old rules to a former requirement is to be read as a reference to the requirement in the new law that “substantially corresponds”. Practitioners must determine what corresponds. There may be no exact equivalent in the new law for some old provisions, leading to gaps. For example, if the old rules refer to a provision that was repealed and not replaced, the reference becomes dead. Directors and officers could be misled into believing an old rule still has effect.

The classification change from trading/non-trading to distributing/non-distributing is not always straightforward. A co-operative that was classified as “non-trading” under the old Act may not automatically be a “non-distributing” co-operative under the new law if the definitions differ. The regulation deems the reference but does not change the underlying substance of the classification. This could affect eligibility for certain tax concessions or regulatory exemptions that depend on the specific classification.

The transfer path is narrow. Section 8 only prescribes three types of legislation. If an entity is, say, a company limited by guarantee under the Corporations Act, it cannot use the transfer mechanism to become a co-operative under the CNL. It would have to wind up and re-register. This increases transaction costs and may discourage conversions. The regulation also does not allow analogous legislation from other states or territories to be accepted, which is a gap for multi-jurisdictional entities.

Compliance with this regulation involves several practical steps for different actors.

For co-operatives registered under the CNL(ACT). The primary compliance obligation is ensuring the co-operative’s name is not unsuitable under section 5. The Registrar will assess the name at registration and may require changes later if the name becomes misleading. Co-operatives should review their name periodically, especially if they expand into new activities that could make the name misleading. If the Registrar raises an objection, the co-operative should prepare a submission explaining why the name is not likely to mislead.

For existing co-operatives transitioning from the Cooperatives Act 2002. These co-operatives may continue under old rules, but they must ensure they are not relying on provisions that are inconsistent with the new law. Section 10(2)(a) makes the new law supreme. Practical compliance steps include: (a) conduct a gap analysis comparing each old rule provision against the corresponding new law; (b) identify any inconsistencies and either amend the old rules or prepare to follow the new law; (c) update internal documentation and member communications to reflect the reclassification from trading/distributing and non-trading/non-distributing; (d) ensure all references to former requirements are correctly interpreted using the substantial correspondence test; and (e) consider adopting a new set of rules under the CNL to avoid the complexity of the transitional interpretation. The longer a co-operative operates under old rules, the greater the risk of misalignment.

For corporations seeking to use ‘co-operative’ in their name without becoming a co-operative. They must fall within one of the exemption categories in section 6. If they do not, they must apply for a written exemption under section 6(e). The application under section 9 must be in writing and made a reasonable time before the intended use. Compliance steps: (a) confirm whether the entity qualifies for an automatic exemption (e.g. building society, friendly society, pre-2003 incorporation, authorised under an Act); (b) if not, prepare a written exemption application to the Registrar setting out the reasons why the use should be permitted; (c) lodge the application well in advance of any planned registration or marketing; (d) keep a copy of the written exemption if granted; and (e) if using the exemption for a trading name or descriptive material, also ensure compliance with section 225 by falling within the identical exemption categories in section 7.

For persons using ‘co-operative’ in an unincorporated business name. Section 225 applies to “a person”, which could include partnerships, sole traders, or unincorporated associations. The same exemption categories in section 7 apply. An unincorporated entity cannot rely on section 6 (which refers to “corporation”) unless it is a corporation. Compliance steps are similar: check eligibility and apply for exemption if necessary.

For entities seeking to transfer into a co-operative. First confirm that the entity is incorporated under one of the prescribed legislations in section 8: ACT Associations Incorporation Act, Commonwealth CATSI Act, or Commonwealth building society/credit union/friendly society legislation. If the entity is not under those laws, transfer under section 403 of the CNL is not available, and alternative conversion methods must be explored. For eligible entities, the application process under section 403 of the CNL applies, and this regulation does not impose additional requirements beyond ensuring the applicant is validly incorporated under the prescribed legislation.

For anyone applying for an exemption from the Registrar. Section 9 requires a written application. The application should clearly identify: (a) the applicant; (b) the exemption sought; (c) the event or matter triggering the need; (d) the timing of the event; and (e) justification for the exemption. The applicant must demonstrate that the application is made a reasonable time before the event. Documentation of the timeline is prudent. While the regulation does not prescribe a form, a clear and comprehensive application reduces the risk of rejection.

For compliance officers and legal advisers. Maintain a register of exemptions obtained and ensure renewals are sought if the exemption is time-limited. Monitor any future amendments to this regulation, particularly if fee provisions are reintroduced or the list of prescribed legislation for transfer is expanded. Train clients and entity officers on the restrictions on using ‘co-operative’ and the consequences of non-compliance. Given the penalty unit values ($150 for individuals, $750 for corporations per unit), the cost of non-compliance with the underlying CNL offence provisions could be substantial.

Finally, note that this regulation does not operate in isolation. Always check the current version of the Co-operatives National Law (ACT) Act 2017, the Co-operatives National Law (ACT) (the schedule), and the Co-operatives National Regulation (ACT) for any provisions that modify or expand the requirements here. The dictionary note confirms that definitions in the Act apply to the regulation, so start there.