338Disclosure statement

338 Disclosure statement

338 Disclosure statement

(1) This section applies to the issue of debentures of a co-operative if the issue is made—

(a) solely to members; or

(b) solely to members and employees of the co-operative;

but does not apply to the issue of debentures under section 108 (1), 128 (2) or 163 (2).

(2) Before issuing to a person debentures to which this section applies, a co-operative must—

(a) inform the person in writing that the person is entitled to receive a disclosure statement on request to the co-operative; and

(b) give the person a disclosure statement if the person requests it.

(3) The disclosure statement is a statement, approved by the Registrar, and containing the information that is reasonably necessary to enable a person to make an informed assessment of the financial prospects of the co-operative, including—

(a) the purpose for which the money raised by the co-operative by the issue of debentures is to be used; and

(b) the rights and liabilities attaching to the debentures; and

(c) the financial position of the co-operative; and

(d) the interests of the directors of the co-operative in the issue of the debentures; and

(e) compensation or consideration to be paid to officers or members of the co-operative in connection with the issue of debentures; and

(f) other matters the Registrar directs.

(4) A draft disclosure statement must be submitted to the Registrar at least 28 days (or the shorter period the Registrar may allow in a particular case) before the issue of debentures.

(5) Section 25 (except subsections (1), (2) and (3)) applies to a disclosure statement under this section with any necessary modifications, and in particular as if a reference in that section to a formation meeting were a reference to the issue of debentures.

(6) The Registrar may, by designated instrument, exempt a co-operative or class of co-operatives from complying with this section.