It is intended that the Co-operatives National Law Act of this jurisdiction may provide that this Law or specified provisions of this Law do not apply to specified bodies or specified classes of bodies.
624 Savings and transitional provisions
Schedule 3 contains savings and transitional provisions.
Schedule 1 Matters for which rules of co-operative must make provision
(Section 56 of this Law)
1 Requirements for all co-operatives
The rules of a co-operative must set out or make provision for each of the following:
(a) the name of the co-operative;
(b) active membership provisions;
(c) the mode and conditions of admission to membership, and the payment to be made, or the share or interest to be acquired, before rights of membership are exercised;
(d) the rights and liabilities of members, and of the estates of deceased members, and the rights and liabilities of representatives of members under bankruptcy or mental incapacity;
(e) the circumstances in which members may be expelled or suspended, and the rights and liabilities of expelled and suspended members;
(f) the circumstances in which membership ceases;
(g) the charges or subscriptions payable by a member to the co-operative;
(h) the circumstances in which fines and forfeitures may be imposed on members of the co-operative, and the amount of the fines, being not more than the maximum amount prescribed by the National Regulations;
(i) the grievance procedures for settling disputes between the co-operative and any of its members as defined in section 129, or between a member and another member;
(j) the restrictions (if any) on the powers of the co-operative and the board;
(k) the number of directors, the qualification of directors, the way of electing, remunerating and removing directors and filling a vacancy, the period for which directors are to hold office, whether directors are to retire by rotation or otherwise, and the holding of annual elections;
(l) the quorum for and the procedure at meetings of the board;
(m) the device, custody and use of the seal of the co-operative;
(n) how the funds of the co-operative are to be managed, and in particular the mode of drawing and signing cheques, drafts, bills of exchange, promissory notes, and other negotiable instruments for the co-operative;
(o) the custody of securities belonging to the co-operative;
(p) how debentures may be transferred;
(q) the date on which the financial year of the co-operative ends;
(r) the preparation of financial reports of the co-operative, the provision of those reports to members of the co-operative, and whether and how those reports are to be audited or reviewed;
(s) how a loss that may result from the transactions of the co-operative is to be provided for;
(t) the procedure for calling general and special meetings, the requisite notices of meetings, and the quorum for meetings, of the co-operative;
(u) the procedure at meetings of the co-operative, including the following:
(i) the rights of members in voting at meetings;
(ii) the way of voting;
(iii) the majority necessary for carrying resolutions, and any special majority in addition to that required under this Law necessary for carrying specified resolutions;
(v) the method of conducting postal ballots (including special postal ballots), including the following:
(i) the sending and filing of information and votes by fax or electronic means;
(ii) the way of voting;
(iii) the majority necessary for carrying resolutions, and any special majority in addition to that required under this Law necessary for carrying specified resolutions;
(w) the way of amending the rules;
(x) how the co-operative may be wound up;
(y) a matter prescribed by the National Regulations for the purposes of this clause;
(z) other matters that appear necessary or desirable to the co-operative.
2 Additional matters—co-operatives with share capital
In addition to the matters specified in clause 1, the rules of a co-operative with share capital must set out or make provision for each of the following:
(a) the nominal value of each share in the co-operative;
(b) the amount of the contingent liability (if any) attaching to shares;
(c) the terms on which shares, not including bonus shares, but including shares (if any) with a contingent liability attached to them are to be issued;
(d) the periodic subscriptions by which or the manner in which shares are to be paid for;
(e) for a distributing co-operative—how any surplus may be distributed;
(f) the allocation of a deficiency on the winding up of a co-operative;
(g) the forfeiture of shares on expulsion or on failure to pay any subscription or call, the extent to which members whose shares have been forfeited are to remain liable for any amount still unpaid for them, and the sale or cancellation of forfeited shares;
(h) how shares may be transferred;
(i) a matter prescribed by the National Regulations for the purposes of this clause.
In addition to the matters specified in clauses 1 and 2, the rules of a non-distributing co-operative must provide:
(a) that there must be no return or distribution of surplus or share capital to members other than the nominal value of shares (if any) at winding up; and
(b) for the way of distribution of the surplus property at winding up.
Schedule 2 Relevant interests, associates, and related corporations
(Section 4 of this Law)
Part 1 Relevant interests
1 Terminology used in this Part
(1) This clause applies for the purposes of this Part.
(2) Power to vote in relation to a right to vote is power to exercise, or to control the exercise of, the right to vote.
(3) A reference to power to dispose of a share includes a reference to power to exercise control over the disposal of the share.
(4) A reference to power or control includes a reference to power or control that is direct or indirect or is, or can be, exercised because of, by means of, in breach of, or by revocation of, trusts, agreements and practices, or any of them, whether or not they are enforceable.
(5) Power to vote in relation to a right to vote, or power to dispose of a share, that is exercisable by 2 or more persons jointly is taken to be exercisable by either or any of those persons.
(6) A reference to a controlling interest includes a reference to an interest that gives control.
2 Basic rules—relevant interests
(1) In this Law (unless otherwise provided), relevant interest has a meaning determined under this Part.
(2) A person who has power to vote in relation to a right to vote has a relevant interest in the right to vote.
(3) A person who has power to dispose of a share has a relevant interest in the share.
3 Control of corporation having power in relation to a share
If a corporation has, or is by this Part taken to have:
(a) power to vote in relation to a right to vote; or
(b) power to dispose of a share;
a person is taken for the purposes of this Part to have in relation to the right to vote or share the same power as the corporation has, or is taken to have, if:
(c) the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act under the directions, instructions or wishes of the person in relation to the exercise of the power referred to in paragraph (a) or (b); or
(d) the person has a controlling interest in the corporation.
4 Control of 20% of voting power in corporation having power in relation to a share
If a corporation or an associate of a corporation has, or is by this Part (other than this clause) taken to have:
(a) power to vote in relation to a right to vote; or
(b) power to dispose of a share;
a person is taken for the purposes of this Part to have in relation to the right to vote or share the same power as the corporation or associate has, or is taken to have, if:
(c) the person has; or
(d) an associate of the person has; or
(e) associates of the person together have; or
(f) the person and an associate or associates of the person together have;
power to vote in relation to the right to vote attached to not less than 20% of the voting shares in the corporation.
5 Deemed relevant interest in advance of performance of agreement that will give rise to a relevant interest
If:
(a) a person:
(i) has entered into an agreement with another person with respect to an issued share or right to vote in which the other person has a relevant interest; or
(ii) has a right enforceable against another person in relation to an issued share or right to vote in which the other person has a relevant interest, whether the right is enforceable presently or in the future and whether or not it is enforceable on the fulfilment of a condition; or
(iii) has an option granted by another person, or has granted to another person an option, with respect to an issued share or right to vote in which the other person has a relevant interest; and
(b) the first-mentioned person would have a relevant interest in the share or right to vote on performance of the agreement, enforcement of the right, or exercise of the option;
the first-mentioned person is taken for the purposes of this Part to have that relevant interest in the share or right to vote.
6 Control of corporation having a relevant interest by virtue of clause 5
If a corporation is taken under clause 5 to have a relevant interest in a share in or right to vote at meetings of a co-operative, a person is taken for the purposes of this Part to have a relevant interest in the share or right to vote if:
(a) the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act under the directions, instructions or wishes of the person in relation to the exercise of power to vote in relation to the right to vote or power to dispose of the shares; or
(b) the person has a controlling interest in the corporation; or
(c) the person has power to vote in relation to the right to vote attached to not less than 20% of the voting shares in the corporation.
7 Matters not affecting application of Part
(1) It is immaterial for the purposes of this Part whether or not power to vote in relation to a right to vote, or power to dispose of a share:
(a) is express or implied or formal or informal; or
(b) is exercisable by a person alone or jointly with another person or persons; or
(c) cannot be related to a particular share; or
(d) is, or can be made, subject to restraint or restriction.
(2) A relevant interest in a share or right to vote is not to be disregarded merely because of either or both of the following:
(a) its remoteness;
(b) how it arose.
8 Corporation may have a relevant interest in its own shares
A corporation may, by virtue of this Part, be considered to have a relevant interest in a share in or right to vote arising from membership of the corporation itself.
9 Exclusions—money-lenders
(a) the person’s ordinary business includes lending money; and
(b) the person has authority to exercise powers as the holder of the relevant interest only because of a security given for a transaction entered into in the ordinary course of business in connection with lending money, other than a transaction entered into with an associate of the person.
10 Exclusions—certain trustees
(a) the share or right is subject to a trust; and
(b) the person has the relevant interest as a trustee of the trust; and
(c) either:
(i) a beneficiary under the trust is taken under clause 5 to have a relevant interest in the share or right because the beneficiary has a presently enforceable and unconditional right referred to in clause 5 (b); or
(ii) the person is a bare trustee.
11 Exclusions—instructions to securities dealer to dispose of share
(a) the person’s ordinary business includes dealing in securities; and
(b) the person has authority to exercise powers as the holder of the relevant interest only because of instructions given to the person, by or on behalf of another person, to dispose of the share on the other person’s behalf in the ordinary course of the business.
12 Exclusions—honorary proxies
A relevant interest of a person in a share or right to vote is to be disregarded if the person has it only because of having been appointed, otherwise than for valuable consideration given by the person or an associate of the person, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation.
13 Exclusions—holders of prescribed offices
A relevant interest of a person in a share or right to vote is to be disregarded if the person has it because of holding an office prescribed by the National Regulations.
14 Prescribed exclusions
The National Regulations may provide that a relevant interest in a share is, in specified circumstances and subject to specified conditions (if any), to be disregarded for the purposes of a provision of this Law.
15 Effect of Schedule
(1) Nothing in this Schedule limits the generality of anything else in it.
(2) A person does not have a relevant interest in a share of a co-operative or a right to vote in relation to a co-operative except as provided in this Schedule.
16 Relevant interest—corporation other than co-operative
A reference in this Law (including this Schedule) to a relevant interest in a share of a corporation other than a co-operative or a right to vote in relation to a corporation other than a co-operative is to be construed under the Corporations Act.
Part 2 Associates
17 Effect of Part
(1) In this Law (unless otherwise provided), associate has a meaning determined under this Part.
(2) A person is not an associate of another person except as provided by this Part.
18 Associates of a corporation
The associates of a corporation include the following:
(a) a director or secretary of the corporation;
(b) a related corporation;
(c) a director or secretary of a related corporation.
19 Matters relating to voting rights
(1) If a reference to an associate of a person relates to:
(a) the extent of power to exercise, or to control the exercise of, the voting power attached to voting shares in or arising from membership of a corporation; or
(b) the person’s entitlement to shares in a corporation; or
(c) an offer to purchase shares to which Division 2 of Part 3.5 applies;
the reference includes a reference to another person with whom the person has entered into, or proposes to enter into, an agreement referred to in subclause (2).
(2) Subclause (1) applies to an agreement:
(a) because of which one of the persons referred to in subclause (1) has, or will have, power (even if it is in any way qualified):
(i) to exercise; or
(ii) to control, directly or indirectly, the exercise of; or
(iii) to influence substantially the exercise of;
any voting power attached to shares in the corporation; or
(b) for the purpose of controlling or influencing:
(i) the composition of the corporation’s board; or
(ii) the conduct of affairs of the corporation; or
(c) under which one of the persons:
(i) will or may acquire; or
(ii) may be required by the other to acquire;
shares in the corporation in which the other has a relevant interest; or
(d) under which one of the persons may be required to dispose of shares in the corporation in accordance with the other’s directions.
(3) Subclause (1) applies despite any other effect the agreement may have.
(4) In relation to a matter relating to shares in a corporation, a person may be an associate of the corporation and the corporation may be an associate of a person.
20 General
(1) A reference to an associate of a person includes a reference to:
(a) another person in concert with whom the person is acting or proposes to act; and
(b) another person who, under the National Regulations, is, for the purposes of the provision in which the reference occurs, an associate of the person; and
(c) another person with whom the person is or proposes to become associated, whether formally or informally, in any other way;
in relation to the matter to which the reference relates.
(2) If a person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, an act or thing, in order to become associated with another person as referred to in an applicable provision of this Part, a reference to an associate of the person includes a reference to the other person.
21 Exclusions
A person is not an associate of another person by virtue of clause 19 or 20 (1), or by virtue of clause 20 (2) as it applies in relation to clause 19 or 20 (1), merely because of one or more of the following:
(a) one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship;
(b) one, a client, gives specific instructions to the other, whose ordinary business includes dealing in securities, to acquire shares on the client’s behalf in the ordinary course of that business;
(c) one has made, or proposes to make, to the other an offer to which Division 2 of Part 3.5 applies, in relation to shares held by the other;
(d) one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation.
Part 3 Related corporations
22 Related corporations
For the purposes of this Law, a corporation is taken to be related to:
(a) another corporation that is its subsidiary; and
(b) another corporation of which it is a subsidiary; and
(c) another corporation if both it and that other corporation are subsidiaries of the same corporation.