343Compulsory loan by member to co-operative

343 Compulsory loan by member to co-operative

343 Compulsory loan by member to co-operative

(1) A co-operative may, by levy, require its members to lend money, with or without security, to the co-operative, in accordance with a proposal approved by special resolution of the co-operative passed by a special postal ballot.

(2) The term of the loan cannot be for more than 7 years or any shorter period prescribed in the National Regulations.

(3) The proposal must—

(a) be accompanied by a disclosure statement, approved by the Registrar, explaining the purpose for which the money raised by the co-operative under the proposal is to be used and including the other information the Registrar directs; and

(b) clearly show the total amount of the loan to be raised by the co-operative and the basis on which the money required to be lent by each member is to be calculated; and

(c) be accompanied by a statement informing the member that the member may inform the board by notice on or before the date of closing of the ballot for the special postal ballot that the member resigns on the registration of the special resolution.

(4) If the proposal allows, the board of the co-operative may, under the terms of the proposal, deduct the money required to be lent by a member to the co-operative from money payable from the co-operative to the member for his or her dealings with the co-operative.

(5) A proposal to deduct money referred to in subsection (4) must, in addition, clearly show—

(a) the basis on which the money is to be deducted; and

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

(6) When the special resolution is registered, the proposal is binding on—

(a) all members of the co-operative at the date of 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 co-operative after the date and before the total amount of the loan to be raised under the proposal has been raised.

(7) A draft disclosure statement must be submitted to the Registrar before notice of the ballot is given to members.