Part 1
Introductory
Part 1 Introductory
Part 1.1 Introductory
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New South Wales act
This law adopts the national uniform co‑operative framework for use in New South Wales, setting the legal rules for forming, running and closing co‑operatives. It governs membership, governance, directors’ duties, financial reporting and dispute resolution.
It affects anyone involved with NSW co‑operatives—members, directors, managers, founders and regulators—and matters because it defines rights and obligations and makes cross‑border operation of co‑ops simpler under a common national scheme.
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Direct links to the current provisions in Co-operatives National Law (NSW).
Part 1.1 Introductory
2 Commencement
This Law commences in a jurisdiction as provided by the Co-operatives National Law Act of that jurisdiction.
3 Objects
The objects of this Law are—
(a) to enable the formation, registration and operation of co-operatives; and
(b) to promote co-operative philosophy, principles, practices and objectives; and
(c) to protect the interests of co-operatives, their members and the public in the operations and activities of co-operatives; and
(d) to ensure directors of co-operatives are accountable for their actions and decisions to the members of co-operatives; and
(e) to encourage and facilitate self-management by co-operatives at all levels; and
(f) to encourage the development, integration and strengthening of co-operatives at local, regional, national and international levels by supporting and fostering State, Territory and national peak organisations and co-operative instrumentalities.
4 Definitions
In this Law—
active member—see section 145.
active membership provisions—see section 146 (1).
active membership resolution—see section 146 (2).
agreement means an agreement, arrangement or understanding—
(a) whether formal or informal or partly formal and partly informal; or
(b) whether written or oral or partly written and partly oral; or
(c) whether or not having legal or equitable force and whether or not based on legal or equitable rights.
another jurisdiction means a State or Territory other than this jurisdiction.
approved form means a form approved under section 622.
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 of the Commonwealth.
Australian legal practitioner means a person who—
(a) is admitted to the legal profession under the law of a jurisdiction; and
(b) holds a current practising certificate under a law of a jurisdiction authorising the person to engage in legal practice.
authorised deposit-taking institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth.
board means the board of directors of a co-operative, and includes a person or committee exercising a power of the board delegated to the person or committee under the rules of the co-operative.
books includes—
(a) a register; and
(b) minutes; and
(c) any other record of information; and
(d) financial reports or financial records, however compiled, recorded or stored; and
(e) a document.
carry on business has the same meaning in relation to a co-operative or participating co-operative as it has under the Corporations Act in relation to a company.
Note—
Division 3 of Part 1.2 of the Corporations Act contains provisions relating to carrying on business.
CCU means a co-operative capital unit, as provided for by Division 2 of Part 3.4 (see section 345).
chief executive officer of a co-operative or a subsidiary of a co-operative means the chief executive officer of the co-operative or subsidiary for the time being (by whatever name called), and whether or not the officer is a director or the secretary.
civil penalty provision—see section 553.
compensation order—see section 553.
constituent documents of a corporation means the constitution of the corporation or any rules or other document constituting the corporation or governing its activities, and includes a memorandum or articles of association and replaceable rules or other rules.
co-operative means a body registered under this Law as applying under the Co-operatives National Law Act of this jurisdiction as a co-operative (including a co-operative group).
co-operative group means a co-operative that has a membership as described in section 111.
co-operative principles—see section 10.
Co-operatives National Law Act of a jurisdiction means the Act of that jurisdiction that applies this Law (whether with or without modification) as a law of that jurisdiction.
corporation includes—
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c) an unincorporated body that, under the law of its place of origin, may—
(i) sue or be sued; or
(ii) hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose;
but does not include—
(d) an exempt public authority (within the meaning of the Corporations Act); or
(e) a corporation sole.
Note—
A co-operative is a corporation within this definition.
Corporations Act means the Corporations Act 2001 of the Commonwealth or, where appropriate, that Act as applying under this Law as a law of this jurisdiction.
Corporations application legislation means—
(a) for a State—Part 3 of the Corporations (Ancillary Provisions) Act 2001 of that State; or
(b) for the Northern Territory—Part 4 of the Corporations Reform (Northern Territory) Act of that Territory; or
(c) for the Australian Capital Territory—the provisions of a law of that Territory that are declared by the Co-operatives National Law Act of that Territory to be the Corporations application legislation of that Territory;
unless a law of the State or Territory concerned provides otherwise.
Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act applies.
corresponding co-operatives law of another jurisdiction—see section 7.
de facto partner has the meaning given by the Acts Interpretation Act 1901 of the Commonwealth in relation to an Act of the Commonwealth.
debenture of a co-operative means a chose in action that includes an undertaking by the co-operative to repay as a debt money deposited with or lent to the co-operative. The chose in action may (but need not) include a security interest in property of the co-operative to secure repayment of the money. However, a debenture does not include—
(a) an undertaking to repay money deposited with or lent to the co-operative by a person if—
(i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and
(ii) the co-operative receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or
(b) an undertaking by an Australian authorised deposit-taking institution to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or
(c) an undertaking to pay money under—
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange; or
(d) an undertaking by a co-operative to pay money to a related corporation; or
(e) an undertaking to repay money that is prescribed by the regulations under the Corporations Act; or
(f) another document of a class prescribed by the National Regulations as exempt from this definition.
For the purposes of this definition, if a chose in action that includes an undertaking by a co-operative to pay money as a debt is offered as consideration for the acquisition of securities under an off-market takeover bid, or is issued under a compromise or arrangement under Part 4.4, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the co-operative.
deed of arrangement means a deed of arrangement executed by a co-operative under Part 5.3A of the Corporations Act as applying under this Law (see section 382 of this Law) or a deed of that type as varied and in force from time to time.
deposit-taking co-operative means a co-operative permitted under section 333 to accept money on deposit.
designated authority means (except in section 612) the person or body specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
designated instrument means an instrument or document—
(a) of the kind; and
(b) made, served or published in the manner (if any);
specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
Note—
Examples are an order in writing served on a person and a notice published in the Gazette.
designated tribunal means the court or tribunal specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
director of a co-operative includes—
(a) a person who occupies or acts in the position of a director or member of the board of a co-operative, whether or not the person is called a director and whether or not the person is validly appointed or properly authorised to act in the position; and
(b) a person under whose directions or instructions the directors or members of the board of directors of the co-operative are accustomed to act.
distributing co-operative—see section 18.
entity includes a person and an unincorporated body.
evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.
file includes lodge.
financial records includes—
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) working papers and other documents needed to explain—
(i) the methods by which financial statements are made up; and
(ii) adjustments to be made in preparing financial statements.
half-year—see section 296.
inactive member of a co-operative is a member of the co-operative who is not an active member of the co-operative.
inspector means a person appointed as an inspector under Part 6.4.
investigator means a person appointed under section 520 to hold an inquiry into the affairs of a co-operative.
involved in a contravention—see section 9.
jurisdiction means a State or Territory.
large co-operative means a co-operative that is not a small co-operative.
local Registrar means the Registrar for this jurisdiction.
local regulations means regulations made under the Co-operatives National Law Act of this jurisdiction, but does not include the National Regulations.
Ministerial Council means the MCCA as defined in the Australian Uniform Co-operative Laws Agreement, the parties to which are the States and Territories, and which came into force on 21 January 2012 (being the date when it has been executed by all the parties).
Note—
The Agreement includes the following definition—
“MCCA” means the Ministerial Council on Consumer Affairs which for the purposes of this Agreement comprises the members in accordance with Part VIII of this Agreement or such body as succeeds it or for the time being performs the functions carried out by the Ministerial Council on Consumer Affairs as set out in this Agreement.
model rules means model rules under Division 2 of Part 2.3.
modification, in relation to an applied Corporations legislation matter, means a modification or change (as the case may be) within the meaning of the Corporations application legislation of this jurisdiction.
mortgage includes a lien, charge or other security over property.
National Regulations means the Co-operatives National Regulations made under this Law, as referred to in section 612.
Note—
Jurisdictional legislation may provide for the application of the National Regulations in individual jurisdictions. Section 6 of this Law deals with the case where the National Regulations are not applied in a jurisdiction in that manner but are separately made for that jurisdiction.
non-distributing co-operative—see section 19.
NSW legislation website means the website with the URL of www.legislation.nsw.gov.au, or any other website, used by the Parliamentary Counsel of New South Wales to provide public access to the legislation of New South Wales.
officer of a co-operative or participating co-operative means—
(a) a director or secretary of the co-operative; or
(b) a person—
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the co-operative; or
(ii) who has the capacity to affect significantly the co-operative’s financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the co-operative are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the co-operative); or
(c) a receiver, or receiver and manager, of property of the co-operative; or
(d) an administrator of the co-operative; or
(e) an administrator of a deed of arrangement executed by the co-operative; or
(f) a liquidator of the co-operative; or
(g) a trustee or other person administering a compromise or arrangement made between the co-operative and someone else.
ordinary resolution—see section 238.
participating co-operative means a body that is registered and incorporated under, and is subject to, a corresponding co-operatives law of another jurisdiction.
participating jurisdiction means a jurisdiction in which a corresponding co-operatives law is in force.
participating Registrar means a person exercising the functions of a Registrar under a corresponding co-operatives law of another jurisdiction.
pecuniary penalty order—see section 553.
PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 of the Commonwealth and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1—
The Personal Property Securities Act 2009 of the Commonwealth applies to certain security interests in personal property. See the following provisions of that Act—
(a) section 8 (Interests to which this Act does not apply);
(b) section 12 (Meaning of security interest);
(c) Chapter 9 (Transitional provisions).
Note 2—
For the meaning of transitional security interest, see section 308 of the Personal Property Securities Act 2009 of the Commonwealth.
primary activity—see section 144.
prison includes a correctional centre or correctional complex.
public sector official has the meaning given by the Co-operatives National Law Act of this jurisdiction.
quoted security means a security that is quoted on a prescribed financial market (within the meaning of the Corporations Act).
receiver includes a receiver and manager.
Registrar for this jurisdiction has the meaning given by the Co-operatives National Law Act of this jurisdiction.
related (in the context of related corporations)—see Part 3 of Schedule 2.
relevant interest—see Part 1 of Schedule 2.
rules of a co-operative (otherwise than in the context of proposed rules or model rules) means the registered rules of the co-operative in force for the time being.
secretary of a co-operative means the person appointed under section 190 to be, or to act as, the secretary of the co-operative.
security interest means—
(a) a PPSA security interest; or
(b) a charge, lien or pledge.
serve includes give, send and similar terms.
small co-operative means a co-operative of a class or description prescribed by the National Regulations.
special postal ballot—see section 248.
special resolution—see section 239.
strict liability—see section 550.
subsidiary has the same meaning as it has in the Corporations Act.
Supreme Court means the Supreme Court of this jurisdiction.
surplus, in relation to a co-operative, means the excess of income over expenditure after making adequate allowance for taxation expense, for depreciation in value of the property of the co-operative and for future contingencies.
the Minister means—
(a) the Minister administering the Co-operatives National Law Act of this jurisdiction; or
(b) if different Ministers are administering that Act in different respects—the Minister administering the Act in the relevant respect; or
(c) if different Ministers are administering different portions of that Act—the Minister administering the relevant portion of the Act; or
(d) if paragraphs (b) and (c) do not apply and 2 or more Ministers are administering that Act or a portion of that Act—any one of the Ministers administering the Act or portion of the Act.
this jurisdiction—see the definition of that term in the Co-operatives National Law Act of each jurisdiction that adopts this Law.
5 Miscellaneous provisions relating to the interpretation of this Law (Schedule 4)
Schedule 4 contains miscellaneous provisions relating to the interpretation of this Law.
6 References to regulations where National Regulations are not applied
(1) This section applies where the Co-operatives National Law Act of a jurisdiction does not provide that the National Regulations apply as regulations for the purposes of this Law as applying in that jurisdiction.
(2) A reference in this Law as applying in that jurisdiction to National Regulations is taken to be a reference to regulations made under that Act that are the same or substantially the same as the National Regulations.
7 Corresponding co-operatives law
(1) This section determines what (if any) law of another jurisdiction is a corresponding co-operatives law for the purposes of this Law.
(2) If this Law applies as a law of the other jurisdiction (whether with or without modification), this Law as so applying is a corresponding co-operatives law for the purposes of this Law.
(3) If this Law does not apply as a law of the other jurisdiction, a law of the other jurisdiction is a corresponding co-operatives law for the purposes of this Law if the National Regulations declare that the law substantially corresponds to the provisions of this Law.
8 Co-operatives National Law Act of this jurisdiction
(1) It is intended that this Law will or may be supplemented by provisions of the Co-operatives National Law Act of this jurisdiction where an intention of supplementation (however expressed) is indicated in this Law, including provisions designating—
(a) a person or body to be a designated authority; or
(b) an instrument or document to be a designated instrument; or
(c) a court or tribunal to be a designated tribunal;
for the purposes of particular provisions of this Law.
Note—
Other provisions of this Law express the intention that the Co-operatives National Law Act of this jurisdiction will or may provide for particular matters.
(2) It is also intended that the National Regulations will or may be supplemented by provisions of the local regulations where an intention of supplementation is indicated in the National Regulations.
9 Involvement in contraventions
(cf Corporations Act s 79)
A person is involved in a contravention if, and only if, the person—
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced, whether by threats or promises or otherwise, the contravention; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or
(d) has conspired with others to effect the contravention.
10 Co-operative principles
The co-operative principles are the following principles—
1 Voluntary and open membership
Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2 Democratic member control
Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (1 member, 1 vote) and co-operatives at other levels are organised in a democratic way.
3 Member economic participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of the capital is usually the common property of the co-operative. They usually receive limited compensation (if any) on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes—
(a) developing the co-operative, possibly by setting up reserves, part of which at least would be indivisible;
(b) benefiting members in proportion to their transactions with the co-operative;
(c) supporting other activities approved by the membership.
4 Autonomy and independence
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5 Education, training and information
Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their co-operatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of co-operation.
6 Co-operation among co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7 Concern for the community
While focusing on member needs, co-operatives work for the sustainable development of their communities through policies accepted by their members.
Note—
The co-operative principles are those adopted by the International Co-operative Alliance.
11 Interpretation to promote co-operative principles
In the interpretation of a provision of this Law, a construction that would promote the co-operative principles is to be preferred to a construction that would not promote the co-operative principles.
Division 1 Exclusion of matters from the Corporations legislation
12 Excluded matter—co-operatives and participating co-operatives
(1) A co-operative and a participating co-operative are each declared to be an excluded matter for the purposes of section 5F of the Corporations Act in relation to the whole of the Corporations legislation other than to the extent specified in this section.
Note—
This section ensures that neither the Corporations Act nor Part 3 of the ASIC Act will apply in relation to a co-operative or participating co-operative, other than to the extent specified in this section. Section 5F of the Corporations Act provides that if a State or Territory law declares a matter to be an excluded matter in relation to the whole of the Corporations legislation other than to a specified extent, then that legislation will not apply, except to the specified extent, in relation to that matter in the State or Territory concerned. However, other provisions of this Part provide for the application of provisions of the Corporations legislation to co-operatives or participating co-operatives as laws of this jurisdiction.
(2) Subsection (1) does not exclude the application of the following provisions of the Corporations legislation to co-operatives or participating co-operatives to the extent that the provisions would otherwise be applicable to them—
(a) provisions relating to a matter that the National Regulations provide is not to be excluded from the operation of the Corporations legislation;
(b) provisions relating to the role of a co-operative or participating co-operative in the formation of a company;
(c) provisions relating to the registration of a co-operative as a company under Chapter 5B of the Corporations Act;
(d) provisions relating to substantial shareholdings, by or involving a co-operative or participating co-operative, in a company;
(e) provisions conferring or imposing functions on a co-operative or participating co-operative as a member, or former member, of a corporation;
(f) provisions relating to dealings by a co-operative or participating co-operative in financial products of a corporation, other than financial products of the co-operative or participating co-operative itself;
(g) provisions conferring or imposing functions on a co-operative or participating co-operative in its dealings with a corporation, not being dealings in financial products of the co-operative or participating co-operative;
(h) provisions relating to financial products of a co-operative, other than shares in, CCUs of, debentures of, or deposits with, a co-operative or participating co-operative;
(i) provisions relating to financial markets and participants in financial markets;
(j) provisions relating to financial services licensees whose licence covers dealing in, or providing advice about, financial products;
(k) provisions relating to carrying on a financial services business;
(l) provisions relating to financial statements, and audits of financial statements, of financial services licensees whose licence covers dealing in, or providing advice about, financial products;
(m) provisions relating to clients of financial services licensees whose licence covers dealing in, or providing advice about, financial products;
(n) provisions relating to registers of interests in financial products;
(o) provisions relating to powers of a court to cure procedural irregularities and to make other orders.
(3) To avoid doubt, it is declared that subsection (1) does not operate so as to exclude the operation of the following provisions of the Corporations Act, except in relation to shares in, CCUs issued by, debentures of, or deposits with, a co-operative or participating co-operative—
(a) Part 1.2A;
(b) Chapter 2L;
(c) Chapter 6CA;
(d) Chapter 6D;
(e) Part 7.10.
Division 2 Applied matters (applied Corporations legislation matters)
13 Applied Corporations legislation matters under this Law
(1) Other provisions of this Law declare matters to be applied Corporations legislation matters for the purposes of the Corporations application legislation of this jurisdiction in relation to provisions of the Corporations Act specified in those provisions.
(2) A declaration is made subject to any modifications specified in or in connection with the provision in which the declaration is made.
(3) Additionally, a declaration is also made subject to—
(a) any modifications applying under section 15; and
(b) any modifications prescribed by the National Regulations; and
(c) any necessary modifications.
Note 1—
The Corporations application legislation of this jurisdiction provides for the application of provisions of the Corporations Act and Part 3 of the ASIC Act as laws of this jurisdiction in respect of any matter declared by a law of this jurisdiction (whether with or without modification) to be an applied Corporations legislation matter for the purposes of the Corporations application legislation in relation to those Commonwealth provisions. The Corporations application legislation ensures that a declaration made for the purposes of that legislation only operates so as to apply a provision of the Corporations legislation to a matter as a law of this jurisdiction if that provision does not already apply to the matter as a law of the Commonwealth. If a provision referred to in a declaration already applies as a law of the Commonwealth, nothing in the declaration will affect its continued operation as a law of the Commonwealth.
Note 2—
The following Table indicates the location and subject matter of declarations made under other provisions of this Law.
Table
| Applied provisions of Corporations Act | Location of applied provisions in Corporations Act | Matter to which applied provision applies | Provision of this Law that makes the declaration | | Sections 111AA–111AX | Part 1.2A (Disclosing entities) | Debentures (and CCUs) of a co-operative | Section 337 | | Sections 283AA–283HB | Chapter 2L (Debentures) | Debentures (and CCUs) of a co-operative | Section 337 | | Section 295A | Part 2M.3, Division 1 (Annual financial reports and directors’ reports) | A co-operative with quoted securities | Section 277 | | Sections 299A–300A | Part 2M.3, Division 1 (Annual financial reports and directors’ reports) | A co-operative with quoted securities | Section 281 | | Sections 302–306 | Part 2M.3, Division 2 (Half-year financial report and directors’ report) | A co-operative that is a disclosing entity | Section 282 | | Sections 307–313 | Part 2M.3, Division 3 (Audit and auditor’s report) | A co-operative | Section 283 | | Section 315 (1) | Part 2M.3, Division 4 (Annual financial reporting to members) | A co-operative that is a disclosing entity | Section 285 | | Section 318 | Part 2M.3, Division 4 (Annual financial reporting to members) | A co-operative | Section 288 | | Sections 323–323C | Part 2M.3, Division 6 (Special provisions about consolidated financial statements) | A co-operative | Section 294 | | Sections 324AA–324DD (except section 324BD) | Part 2M.4 (Appointment and removal of auditors), Divisions 1–5 | A co-operative | Section 297 | | Sections 416–434G | Part 5.2 (Receivers, and other controllers, of property of corporations) | A co-operative | Section 393 | | Sections 435A–451D (except section 446B) | Part 5.3A (Administration of a company’s affairs with a view to executing a deed of company arrangement) | A co-operative | Section 382 | | Sections 459A–581 | Part 5.4 (Winding up in insolvency)Part 5.4A (Winding up by the court on other grounds)Part 5.4B (Winding up in insolvency or by the court)Part 5.5 (Voluntary winding up)Part 5.6 (Winding up generally) | The winding up of a co-operative | Section 444 | | Sections 465–489E | Part 5.4B (Winding up in insolvency or by the court) | The winding up or deregistration of participating co-operatives | Section 472 | | Sections 513–581 | Part 5.6 (Winding up generally) | The winding up or deregistration of participating co-operatives | Section 472 | | Section 536 | Part 5.6, Division 3 (Liquidators) | A person appointed to administer a compromise or arrangement | Section 420 | | Section 563AAA | Part 5.6, Division 6 (Proof and ranking of claims) | Debentures (and CCUs) issued by a co-operative to any of its members or employees | Section 342 | | Sections 588C–588Z | Part 5.7B (Recovering property or compensation for the benefit of creditors of insolvent company) | A co-operative | Section 451 | | Sections 589–596 | Part 5.8 (Offences) | A co-operative | Section 201 | | Sections 596AA–596AI | Part 5.8A (Employee entitlements) | A co-operative | Section 202 | | Sections 596A–597B | Part 5.9, Division 1 (Examining a person about a corporation) | A co-operative | Section 489 | | Sections 600A–600H | Part 5.9, Division 3 (Provisions applying to various kinds of external administration) | A co-operative | Section 382 | | Sections 601AA–601AH | Part 5A.1 (Deregistration) | The deregistration of a co-operative and a deregistered co-operative | Section 453 | | Sections 674–678 | Chapter 6CA (Continuous disclosure) | Debentures (and CCUs) of a co-operative | Section 337 | | Sections 700–742 | Chapter 6D (Fundraising) | Debentures (and CCUs) of a co-operative | Section 337 | | Sections 1040A–1045A | Part 7.10 (Market misconduct and other prohibited conduct relating to financial products and financial services) | Debentures (and CCUs) of a co-operative | Section 337 | | Sections 1339–1343A | Part 9.7 (Unclaimed property) | Anything paid or transferred to the Registrar under section 436 (2) | Section 436 (3) |
14 Applied Corporations legislation matters under the National Regulations
(1) The National Regulations may declare any matter relating to co-operatives or participating co-operatives to be an applied Corporations legislation matter for the purposes of the Corporations application legislation of this jurisdiction in relation to any provision of the Corporations legislation that does not apply of its own force to co-operatives or participating co-operatives (as the case may be).
(2) The declaration is made subject to any modifications specified in the provision in which the declaration is made.
(3) Additionally, the declaration is also made subject to—
(a) any modifications applying under section 15; and
(b) any modifications prescribed by the National Regulations; and
(c) any necessary modifications.
(4) The National Regulations may also provide that a specified provision of the Corporations legislation (with any applicable modifications) that is the subject of the declaration—
(a) operates to the exclusion of a specified provision of this Law; or
(b) prevails over a specified provision of this Law to the extent of any inconsistency.
15 Modifications to applied provisions
(1) This section applies in relation to any provisions of the Corporations legislation (the applied provisions) that are the subject of—
(a) a declaration under this Law, as referred to in section 13; or
(b) a declaration under the National Regulations, as referred to in section 14.
(2) For the purposes of sections 13 and 14, the following modifications apply—
(a) a reference in the applied provisions to a corporation, company or public company is to be read as a reference to a co-operative;
(b) a reference in the applied provisions to ASIC is to be read as a reference to the Registrar;
(c) a reference in the applied provisions to the court is to be read as a reference to the Supreme Court;
(d) a reference in the applied provisions to the Commonwealth is to be read as a reference to this jurisdiction;
(e) a reference in the applied provisions to articles or memorandum of association or constitution or replaceable rules is to be read as a reference to rules;
(f) a reference in the applied provisions to the Gazette is to be read as a reference to the Government Gazette of this jurisdiction;
(g) a reference in the applied provisions to “prescribed” is to be read as a reference to “approved by the designated authority”, and (without limitation) a reference to a prescribed form is to be read as a reference to an approved form within the meaning of this Law;
(h) a reference in the applied provisions to a special resolution is to be read as a reference to a special resolution referred to in section 239 of this Law;
(i) a cross-reference in the applied provisions to another provision of the Corporations Act is, if that cross-reference is not appropriate (because, for example, the provision cross-referred to is not among the applied provisions), to be read as a cross-reference to the equivalent provision of this Law;
(j) a reference in the applied provisions (including section 311 of the Corporations Act) to a “contravention of this Act” is to be read as including a reference to a contravention of this Law;
(k) a reference in the applied provisions to the regulations is to be read as a reference to the National Regulations or local regulations, as the case requires;
(l) all notes in the applied provisions are to be ignored;
(m) any of the applied provisions that are not relevant to co-operatives or that are incapable of application to co-operatives or participating co-operatives are to be ignored.
(3) Subsection (2) does not apply to the extent to which this Law or the National Regulations provide otherwise, whether expressly or by implication.
Division 3 Prescription by National Regulations of other matters dealt with by Corporations legislation
16 National Regulations may provide for matters dealt with by Corporations legislation
(1) The National Regulations may make provision, in relation to co-operatives, participating co-operatives or associated matters, for or with respect to any matter for which a provision of the Corporations legislation has effect in relation to companies or associated matters.
(2) A National Regulation made under subsection (1) may deal with a matter in a similar way as, or in a different way from, that in which the provision of the Corporations legislation has effect.
(3) Subsection (1) does not apply in relation to a provision of the Corporations legislation that applies of its own force or by operation of other provisions of this Law.
(4) Without limiting subsection (1) or (2), the National Regulations may confer jurisdiction on a court or tribunal to exercise any function conferred by the National Regulations made under subsection (1).
Note—
This section authorises the National Regulations to deal with a matter dealt with by Corporations legislation (with certain limitations) in a manner that does not involve the declaration of the matter to be an applied Corporations legislation matter. This procedure is contemplated by the Corporations application legislation of the various jurisdictions.
Part 2.1 Formation
17 Types of co-operatives
(1) A body may be registered under this Law as a co-operative.
(2) A co-operative may be either—
(a) a distributing co-operative; or
(b) a non-distributing co-operative.
18 Distributing co-operatives
(1) A distributing co-operative is a co-operative that is not prohibited from giving returns or distributions on surplus or share capital.
(2) A distributing co-operative must have share capital.
(3) A distributing co-operative must have a membership of—
(a) in the case of a co-operative group—2 or more co-operatives; or
(b) in the case of any other distributing co-operative—
(i) if a lesser number than 5 is approved by the Registrar—at least that number of active members; or
(ii) otherwise—5 or more active members.
(4) An approval under subsection (3) may be given in relation to a particular co-operative or class of co-operatives.
19 Non-distributing co-operatives
(1) A non-distributing co-operative is a co-operative that is prohibited from giving returns or distributions on surplus or share capital to members, other than the nominal value of shares (if any) at winding up.
(2) A non-distributing co-operative may or may not have share capital.
(3) A non-distributing co-operative must have a membership of—
(a) in the case of a co-operative group—2 or more co-operatives; or
(b) in the case of any other non-distributing co-operative—
(i) if a lesser number than 5 is approved by the Registrar—at least that number of active members; or
(ii) otherwise—5 or more active members.
(4) An approval under subsection (3) may be given in relation to a particular co-operative or class of co-operatives.
20 Provisions regarding Registrar’s approvals about numbers
(1) The Registrar may give one composite approval that operates as more than one of the following—
(a) an approval concerning the number of active members of a co-operative required under section 18 (3) or 19 (3);
(b) an approval concerning the number of persons required to hold the formation meeting of a co-operative under section 22 (2);
(c) an approval concerning the number of members required to sign the application for registration of a proposed co-operative under section 26 (1);
(d) an approval concerning the minimum number of members for a co-operative to continue to carry on business under section 119.
(2) A composite approval may be given in relation to—
(a) a particular co-operative or proposed co-operative; or
(b) a particular class of co-operatives or proposed co-operatives; or
(c) all co-operatives or proposed co-operatives.
(3) This section does not limit the power of the Registrar to give separate approvals under any of the relevant sections.
21 Formation meeting
(1) Before a proposed co-operative (other than an existing corporation) can be registered, a formation meeting must be held under this Division.
(2) Before a formation meeting can be held for a proposed co-operative, a draft of the proposed rules and a draft of the proposed formation disclosure statement must be approved by the Registrar in accordance with Division 3.
22 Requirements regarding formation meeting
(1) At the formation meeting for a proposed co-operative—
(a) the proposed rules of the co-operative approved under section 24 for the proposed co-operative, including active membership provisions, must be passed by two-thirds of the proposed members of the proposed co-operative attending the meeting; and
(b) in the case of—
(i) a proposed distributing co-operative; or
(ii) a proposed non-distributing co-operative that is the subject of a direction under section 23 (2) (a);
a formation disclosure statement approved under section 25 must be presented to the meeting; and
(c) the proposed members of the proposed co-operative must sign the application for membership; and
(d) the proposed members must elect the first directors of the proposed co-operative under the proposed rules; and
(e) the proposed members must authorise a person—
(i) to apply to the Registrar for registration of the proposed co-operative; and
(ii) to do anything necessary to have the proposed co-operative registered.
(2) The formation meeting must be held by—
(a) in the case of a co-operative group—not less than 2 co-operatives suitably qualified to be members of the proposed co-operative group; or
(b) in the case of any other co-operative—not less than 5 persons, or if a lesser number than 5 is approved by the Registrar not less than the approved number of persons, suitably qualified to be members of the proposed co-operative.
(3) For the purposes of subsection (2), a person (including a co-operative) is suitably qualified to be a member if—
(a) there are reasonable grounds to believe the person will be an active member of the proposed co-operative; and
(b) in the case of an individual—the person is an adult; and
(c) the person satisfies any other requirements for membership in the proposed rules.
(4) Each co-operative forming a proposed co-operative group may be represented at the formation meeting by one person.
(5) An approval under subsection (2) may be given in relation to a particular co-operative or class of co-operatives or to all co-operatives.
23 Submission of draft rules and draft formation disclosure statement
(1) The following documents must be submitted to the Registrar before the formation meeting—
(a) a draft of the rules proposed for the co-operative (including active membership provisions);
(b) in the case of—
(i) a distributing co-operative—a draft formation disclosure statement for the co-operative; or
(ii) a non-distributing co-operative—a draft formation disclosure statement for the co-operative if the Registrar so directs under subsection (2) (a);
(c) a written notice of intention to apply for registration as a co-operative.
(2) The Registrar may by written notice direct that—
(a) a draft formation disclosure statement for a proposed non-distributing co-operative must be submitted to the Registrar; and
(b) a formation disclosure statement approved under section 25 must be presented to the formation meeting for the co-operative.
(3) The notice under subsection (2) is to be given to the person who submitted notice of intention to apply for registration as a co-operative and must specify the time by which the draft formation disclosure statement must be submitted to the Registrar.
24 Provisions relating to and approval of rules
(1) This section applies to draft rules for a co-operative required to be submitted to the Registrar under section 23.
(2) The rules must—
(a) be in accordance with section 56; and
(b) be in a form that may reasonably be approved.
(3) If the rules do not make provision for any matter required by Schedule 1, the Registrar may approve the relevant provisions of the model rules as rules of the co-operative.
(4) The Registrar may—
(a) approve the rules as submitted; or
(b) approve different rules to those submitted; or
(c) refuse to approve the rules; or
(d) require the person submitting the draft rules to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b) or (c).
(5) Subject to subsection (6), the Registrar approves of the rules by giving written notice of the approval of the rules to the person who submitted the draft rules to the Registrar.
(6) The Registrar is taken to have approved the proposed rules (as submitted to the Registrar) at the end of the period of 28 days after they were submitted, unless before the end of that period the Registrar gives written notice to the person who submitted them that the Registrar—
(a) has approved different rules to those submitted; or
(b) is still considering the matter; or
(c) refuses to approve the proposed rules.
(7) The Registrar must give the person who submitted the proposed rules to the Registrar written notice of the reasons for acting under subsection (6) (a) or (c).
25 Provisions relating to and approval of formation disclosure statement
(1) This section applies to a draft formation disclosure statement for a co-operative required to be submitted to the Registrar under section 23.
(2) The draft formation disclosure statement for a distributing co-operative 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 estimated costs of formation; and
(b) the active membership provisions of the proposed co-operative; and
(c) the rights and liabilities attaching to shares in the proposed co-operative; and
(d) the capital required for the co-operative at the time of formation; and
(e) the projected income and expenditure of the co-operative for its first year of operation; and
(f) information about any contracts required to be entered into by the co-operative; and
(g) any other information that the Registrar directs to be included.
(3) The draft formation disclosure statement for a non-distributing co-operative must contain the information that the Registrar directs to be included.
(4) The Registrar may—
(a) approve the draft statement as submitted; or
(b) amend the draft, or require a specified amendment of the draft, and then approve the amended statement; or
(c) approve a different statement to that submitted; or
(d) refuse to approve the draft statement; or
(e) require the person submitting the draft statement to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b), (c) or (d).
(5) Approval may be given at any time before the formation meeting is held.
(6) Approval may be given with or without conditions.
(7) Subject to subsection (8), the Registrar approves of a formation disclosure statement by giving written notice of the approval of the statement to the person who submitted the draft statement to the Registrar.
(8) The Registrar is taken to have approved the formation disclosure statement (as submitted to the Registrar) at the end of the period of 28 days after the day it was submitted to the Registrar, unless before the end of that period the Registrar gives written notice to the person who submitted the draft statement that the Registrar—
(a) has approved a different formation disclosure statement to that submitted; or
(b) is still considering the matter; or
(c) refuses to approve the formation disclosure statement.
(9) The Registrar must give the person who submitted the draft statement to the Registrar written notice of the reasons for acting under subsection (8) (a) or (c).
Note—
Section 69 contains restrictions on advertising or publishing statements about an offer, or intended offer, of shares in a distributing co-operative unless a current formation disclosure statement relating to the shares is registered with or approved by the Registrar.
Division 4 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
(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
(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
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)
(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
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
(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
(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
(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
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
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
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
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
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
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
(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
(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
(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
(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
(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
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
(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
(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
(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
(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
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
(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
(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
This Division replaces any rights or liabilities anyone would otherwise have in relation to the pre-registration contract.
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
(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
(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
(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
The rules of a co-operative cannot be amended except under this Law.
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
The rules of a co-operative may only be amended by special resolution unless this Law otherwise provides.
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
(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
(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
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
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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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
A co-operative must not issue shares at a discount.
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
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
(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
(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
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
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
In this Division—
disclosure statement means a disclosure statement, of any type, under this Law.
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
(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
(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
(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
(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
(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
(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
(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
(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
(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
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
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
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
(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
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
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
(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
(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
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
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
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
(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
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
(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
(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
(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
Membership of a co-operative may be individual and, unless the rules of the co-operative provide otherwise, may be joint.
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
(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
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
(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
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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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
(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”
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
This Division does not apply to anything done under Part 2.6.
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1.1 Introductory
1 Citation
This Law may be cited as the Co-operatives National Law (NSW).
2 Commencement
This Law commences in a jurisdiction as provided by the Co-operatives National Law Act of that jurisdiction.
3 Objects
The objects of this Law are—
(a) to enable the formation, registration and operation of co-operatives; and
(b) to promote co-operative philosophy, principles, practices and objectives; and
(c) to protect the interests of co-operatives, their members and the public in the operations and activities of co-operatives; and
(d) to ensure directors of co-operatives are accountable for their actions and decisions to the members of co-operatives; and
(e) to encourage and facilitate self-management by co-operatives at all levels; and
(f) to encourage the development, integration and strengthening of co-operatives at local, regional, national and international levels by supporting and fostering State, Territory and national peak organisations and co-operative instrumentalities.
Part 1.2 Interpretation
4 Definitions
In this Law—
active member—see section 145.
active membership provisions—see section 146 (1).
active membership resolution—see section 146 (2).
agreement means an agreement, arrangement or understanding—
(a) whether formal or informal or partly formal and partly informal; or
(b) whether written or oral or partly written and partly oral; or
(c) whether or not having legal or equitable force and whether or not based on legal or equitable rights.
another jurisdiction means a State or Territory other than this jurisdiction.
approved form means a form approved under section 622.
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 of the Commonwealth.
Australian legal practitioner means a person who—
(a) is admitted to the legal profession under the law of a jurisdiction; and
(b) holds a current practising certificate under a law of a jurisdiction authorising the person to engage in legal practice.
authorised deposit-taking institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth.
board means the board of directors of a co-operative, and includes a person or committee exercising a power of the board delegated to the person or committee under the rules of the co-operative.
books includes—
(a) a register; and
(b) minutes; and
(c) any other record of information; and
(d) financial reports or financial records, however compiled, recorded or stored; and
(e) a document.
carry on business has the same meaning in relation to a co-operative or participating co-operative as it has under the Corporations Act in relation to a company.
Note—
Division 3 of Part 1.2 of the Corporations Act contains provisions relating to carrying on business.
CCU means a co-operative capital unit, as provided for by Division 2 of Part 3.4 (see section 345).
chief executive officer of a co-operative or a subsidiary of a co-operative means the chief executive officer of the co-operative or subsidiary for the time being (by whatever name called), and whether or not the officer is a director or the secretary.
civil penalty provision—see section 553.
compensation order—see section 553.
constituent documents of a corporation means the constitution of the corporation or any rules or other document constituting the corporation or governing its activities, and includes a memorandum or articles of association and replaceable rules or other rules.
co-operative means a body registered under this Law as applying under the Co-operatives National Law Act of this jurisdiction as a co-operative (including a co-operative group).
co-operative group means a co-operative that has a membership as described in section 111.
co-operative principles—see section 10.
Co-operatives National Law Act of a jurisdiction means the Act of that jurisdiction that applies this Law (whether with or without modification) as a law of that jurisdiction.
corporation includes—
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c) an unincorporated body that, under the law of its place of origin, may—
(i) sue or be sued; or
(ii) hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose;
but does not include—
(d) an exempt public authority (within the meaning of the Corporations Act); or
(e) a corporation sole.
Note—
A co-operative is a corporation within this definition.
Corporations Act means the Corporations Act 2001 of the Commonwealth or, where appropriate, that Act as applying under this Law as a law of this jurisdiction.
Corporations application legislation means—
(a) for a State—Part 3 of the Corporations (Ancillary Provisions) Act 2001 of that State; or
(b) for the Northern Territory—Part 4 of the Corporations Reform (Northern Territory) Act of that Territory; or
(c) for the Australian Capital Territory—the provisions of a law of that Territory that are declared by the Co-operatives National Law Act of that Territory to be the Corporations application legislation of that Territory;
unless a law of the State or Territory concerned provides otherwise.
Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act applies.
corresponding co-operatives law of another jurisdiction—see section 7.
de facto partner has the meaning given by the Acts Interpretation Act 1901 of the Commonwealth in relation to an Act of the Commonwealth.
debenture of a co-operative means a chose in action that includes an undertaking by the co-operative to repay as a debt money deposited with or lent to the co-operative. The chose in action may (but need not) include a security interest in property of the co-operative to secure repayment of the money. However, a debenture does not include—
(a) an undertaking to repay money deposited with or lent to the co-operative by a person if—
(i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and
(ii) the co-operative receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or
(b) an undertaking by an Australian authorised deposit-taking institution to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or
(c) an undertaking to pay money under—
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange; or
(d) an undertaking by a co-operative to pay money to a related corporation; or
(e) an undertaking to repay money that is prescribed by the regulations under the Corporations Act; or
(f) another document of a class prescribed by the National Regulations as exempt from this definition.
For the purposes of this definition, if a chose in action that includes an undertaking by a co-operative to pay money as a debt is offered as consideration for the acquisition of securities under an off-market takeover bid, or is issued under a compromise or arrangement under Part 4.4, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the co-operative.
deed of arrangement means a deed of arrangement executed by a co-operative under Part 5.3A of the Corporations Act as applying under this Law (see section 382 of this Law) or a deed of that type as varied and in force from time to time.
deposit-taking co-operative means a co-operative permitted under section 333 to accept money on deposit.
designated authority means (except in section 612) the person or body specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
designated instrument means an instrument or document—
(a) of the kind; and
(b) made, served or published in the manner (if any);
specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
Note—
Examples are an order in writing served on a person and a notice published in the Gazette.
designated tribunal means the court or tribunal specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used.
director of a co-operative includes—
(a) a person who occupies or acts in the position of a director or member of the board of a co-operative, whether or not the person is called a director and whether or not the person is validly appointed or properly authorised to act in the position; and
(b) a person under whose directions or instructions the directors or members of the board of directors of the co-operative are accustomed to act.
distributing co-operative—see section 18.
entity includes a person and an unincorporated body.
evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.
file includes lodge.
financial records includes—
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) working papers and other documents needed to explain—
(i) the methods by which financial statements are made up; and
(ii) adjustments to be made in preparing financial statements.
half-year—see section 296.
inactive member of a co-operative is a member of the co-operative who is not an active member of the co-operative.
inspector means a person appointed as an inspector under Part 6.4.
investigator means a person appointed under section 520 to hold an inquiry into the affairs of a co-operative.
involved in a contravention—see section 9.
jurisdiction means a State or Territory.
large co-operative means a co-operative that is not a small co-operative.
local Registrar means the Registrar for this jurisdiction.
local regulations means regulations made under the Co-operatives National Law Act of this jurisdiction, but does not include the National Regulations.
Ministerial Council means the MCCA as defined in the Australian Uniform Co-operative Laws Agreement, the parties to which are the States and Territories, and which came into force on 21 January 2012 (being the date when it has been executed by all the parties).
Note—
The Agreement includes the following definition—
“MCCA” means the Ministerial Council on Consumer Affairs which for the purposes of this Agreement comprises the members in accordance with Part VIII of this Agreement or such body as succeeds it or for the time being performs the functions carried out by the Ministerial Council on Consumer Affairs as set out in this Agreement.
model rules means model rules under Division 2 of Part 2.3.
modification, in relation to an applied Corporations legislation matter, means a modification or change (as the case may be) within the meaning of the Corporations application legislation of this jurisdiction.
mortgage includes a lien, charge or other security over property.
National Regulations means the Co-operatives National Regulations made under this Law, as referred to in section 612.
Note—
Jurisdictional legislation may provide for the application of the National Regulations in individual jurisdictions. Section 6 of this Law deals with the case where the National Regulations are not applied in a jurisdiction in that manner but are separately made for that jurisdiction.
non-distributing co-operative—see section 19.
NSW legislation website means the website with the URL of www.legislation.nsw.gov.au, or any other website, used by the Parliamentary Counsel of New South Wales to provide public access to the legislation of New South Wales.
officer of a co-operative or participating co-operative means—
(a) a director or secretary of the co-operative; or
(b) a person—
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the co-operative; or
(ii) who has the capacity to affect significantly the co-operative’s financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the co-operative are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the co-operative); or
(c) a receiver, or receiver and manager, of property of the co-operative; or
(d) an administrator of the co-operative; or
(e) an administrator of a deed of arrangement executed by the co-operative; or
(f) a liquidator of the co-operative; or
(g) a trustee or other person administering a compromise or arrangement made between the co-operative and someone else.
ordinary resolution—see section 238.
participating co-operative means a body that is registered and incorporated under, and is subject to, a corresponding co-operatives law of another jurisdiction.
participating jurisdiction means a jurisdiction in which a corresponding co-operatives law is in force.
participating Registrar means a person exercising the functions of a Registrar under a corresponding co-operatives law of another jurisdiction.
pecuniary penalty order—see section 553.
PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 of the Commonwealth and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1—
The Personal Property Securities Act 2009 of the Commonwealth applies to certain security interests in personal property. See the following provisions of that Act—
(a) section 8 (Interests to which this Act does not apply);
(b) section 12 (Meaning of security interest);
(c) Chapter 9 (Transitional provisions).
Note 2—
For the meaning of transitional security interest, see section 308 of the Personal Property Securities Act 2009 of the Commonwealth.
primary activity—see section 144.
prison includes a correctional centre or correctional complex.
public sector official has the meaning given by the Co-operatives National Law Act of this jurisdiction.
quoted security means a security that is quoted on a prescribed financial market (within the meaning of the Corporations Act).
receiver includes a receiver and manager.
Registrar for this jurisdiction has the meanin
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