Div 7General

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. 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— (ii) prescribed by the local regulations. Part 2—Legal capacity and powers Division 1—General powers 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. Division 2—Doctrine of ultra vires not to apply 40—Interpretation (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 object (cf Corporations Act section 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. Division 3—Persons having dealings with co‑operatives 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 section 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). Division 4—Execution of documents 49—Execution of documents by co‑operative (cf Corporations Act section 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 section 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. Division 5—Pre‑registration contracts 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. Part 3—Rules Division 1—Rules of a co‑operative 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— (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— 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. 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 (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. Division 2—Model rules 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. Part 4—Shares Division 1—Nature of share 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. Division 2—Disclosure requirements for distributing co‑operatives 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. 69—Restrictions on advertising and publicity (cf Corporations Act section 734) 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. (2) Subsection (1) applies in relation to shares in a distributing co‑operative only if— (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— 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. 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 Chapter 2 Part 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. Division 3—Compensation for defective disclosure 72—Contravention leading to right to recover for loss or damage (cf Corporations Act section 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 section 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. 74—Due diligence defence (cf Corporations Act section 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— (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— (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— (b) after doing so, believed on reasonable grounds that the statement was current. 75—General defences (cf Corporations Act section 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. Division 4—Issue of shares 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 Chapter 2 Part 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), section 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. Division 5—Provisions applying to particular share subscriptions 86—Definition 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— 88—Application money to be held on trust (cf Corporations Act section 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. (2) If the application money needs to be returned to an applicant, the person must return the money as soon as practicable. 89—Minimum subscription condition must be fulfilled before issue or transfer (cf Corporations Act section 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. Under section 88, the application money must be held in trust until the issue or transfer of the shares. 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 section 724(1)(a), (1A) and (2)(a)) (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. (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. Division 6—Disclosure and registration of interests in shares 91—Direction to disclose (cf Corporations Act section 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 section 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). (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. (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)— 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. Division 7—Sale or transfer of shares 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.