422Directors to arrange for reports

422 Directors to arrange for reports

422 Directors to arrange for reports

(1) When a compromise or arrangement (whether or not for a scheme for the reconstruction of a co-operative or the merger of 2 or more co-operatives) has been proposed, the directors of the co-operative must—

(a) if a meeting of the members of the co-operative by resolution directs—instruct the accountants or Australian legal practitioners or both named in the resolution to report on the proposals and send their report or reports to the directors as soon as practicable; and

(b) make the report or reports available at the registered office of the co-operative for inspection by the members and creditors of the co-operative at least 7 days before the day of the meeting ordered by the Supreme Court or the holding of the special postal ballot, as appropriate.

(2) If this section is not complied with, each director of the co-operative commits an offence.

Maximum penalty—$2,000.

(3) An offence based on subsection (2) is an offence of strict liability.