Co-operatives Act 2009

 

 

 

Reprinted under the Reprints Act 1984 as

at 4 August 2017

Co-operatives Act 2009

Contents

Part 1 — Preliminary

Division 1 — Introductory

1.Short title2

2.Commencement2

3.Objects of this Act2

4.Terms used3

5A.Corresponding co‑operatives laws9

5B.Involvement in contraventions9

Division 2 — Qualified privilege

5.Qualified privilege10

Division 3 — The co‑operative principles

6.Co‑operative principles10

7.Interpretation to promote co‑operative principles12

Division 4 — Application of Corporations Act to co‑operatives

8.Terms used12

9.Excluded matter12

10.Applying the Corporations legislation to co‑operatives14

11.Modifications to applied provisions15

Part 2 — Formation

Division 1 — Introductory

12.Types of co‑operatives18

13.Distributing co‑operatives18

14.Non‑distributing co‑operatives18

15A.Provisions regarding Registrar’s approvals about numbers19

Division 2 — Formation meeting

15.Formation meeting20

Division 3 — Approval of disclosure statement and rules

16.Approval of disclosure statement21

17.Approval of rules24

Division 4 — Registration of proposed co‑operative

18.Application for registration of proposed co‑operative25

19.Registration of co‑operative27

20.Incorporation and certificate of registration27

Division 5 — Registration of an existing corporation

21.Existing corporation can be registered28

22.Formation meeting28

23.Application for registration29

24.Requirements for registration30

25.Transitional provision31

26.Certificate of registration31

27.Effect of registration32

Division 6 — Conversion of co‑operative

28.Conversion of co‑operative32

Division 7 — Reviews

29.Appeal against refusal to approve disclosure statement33

30.Appeal against refusal to approve draft rules33

31.Appeal against refusal to register33

32.Supreme Court’s powers on appeal33

Division 8 — General

33.Acceptance of money by proposed co‑operative34

34.Issue of duplicate certificate34

Part 3 — Legal capacity and powers

Division 1 — General powers

35.Effect of incorporation35

36.Power to form companies and enter into joint ventures35

Division 2 — Doctrine of ultra vires abolished

37.Interpretation35

38.Doctrine of ultra vires abolished36

39.Legal capacity36

40.Restrictions on co‑operatives in rules37

Division 3 — Persons having dealings with co‑operatives

41.Assumptions entitled to be made38

42.Assumptions38

43.Person who knows or ought to know is not entitled to make assumptions39

44.Lodgment of documents not to constitute constructive knowledge40

45.Effect of fraud40

Division 4 — Authentication and execution of documents and confirmation of contracts

46.Common seal41

47.Official seal41

48.Authentication need not be under seal41

49.Co‑operative may authorise person to execute deed41

50.Execution under seal42

51.Contractual formalities42

52.Other requirements as to consent or sanction not affected42

Division 5 — Pre‑registration contracts

53.Contracts before registration43

54.Person may be released from liability but is not entitled to indemnity44

55.This Division replaces other rights and liabilities44

Part 4 — Membership

Division 1 — General

56.Becoming a member45

57.Members of co‑operative group45

58.Qualification for membership and transitional provision46

59.Membership may be joint46

60.Members under 18 years of age47

61.Representatives of corporations47

62.Notification of shareholders and shareholdings47

63.Circumstances in which membership ceases: all co‑operatives48

64.Additional circumstances in which membership ceases: co‑operatives with share capital49

65.Carrying on business with too few members49

Division 2 — Rights and liabilities of members

66.Rights of membership not exercisable until registered etc.50

67.Liability of members to co‑operative50

68.Co‑operative to make information available to person intending to become a member51

69A.False copies of documents52

69.Entry fees and regular subscriptions53

70.Members etc. may be required to deal with co‑operative53

71.Fines payable by members54

72.Charge and set off of co‑operative55

73.Repayment of shares on resignation or expulsion55

Division 3 — Death of member

74.Terms used57

75.Transfer of share or interest on death of member57

76.Transfer of small shareholdings and interests on death58

77.Value of shares and interests58

78.Co‑operative protected59

Division 4 — Disputes involving members

79.Grievance procedure59

80.Application to Supreme Court59

Division 5 — Oppressive conduct of affairs

81.Interpretation60

82.Application of Division60

83.Who may apply for court order60

84.Orders that Supreme Court may make61

85.Basis on which Supreme Court makes orders62

86.Winding‑up need not be ordered if oppressed members prejudiced63

87.Application of winding‑up provisions63

88.Changes to rules63

89.Copy of order to be lodged with Registrar63

Division 6A — Inspection of books

90A.Order for inspection of books of co‑operative64

90B.Ancillary orders65

90C.Disclosure of information acquired in inspection65

90D.Co‑operative may allow member to inspect books66

Division 6 — Proceedings on behalf of a co‑operative by members and others

90.Bringing, or intervening in, proceedings on behalf of a co‑operative66

91.Applying for and granting leave67

92.Substitution of another person for the person granted leave67

93.Effect of ratification by members68

94.Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave69

95.General powers of Supreme Court69

96.Power of Supreme Court to make costs order70

Part 5 — Rules

97.Effect of rules71

98.Content of rules71

99.Purchase and inspection of copy of rules72

100.False copies of rules72

101.Model rules72

102.Rules can only be altered in accordance with this Act73

103.Approval of certain alterations of rules73

104.Alteration by special resolution75

105.Alteration by resolution of board75

106.Alteration does not take effect until registered75

107.Appeal against refusal to approve alteration76

108.Appeal against refusal to register76

109.Supreme Court’s powers on appeal76

Part 6 — Active membership

Division 1 — Definitions

110.Term used: active membership resolution77

111.What is active membership77

112.What are active membership provisions and resolutions77

Division 2 — Rules to contain active membership provisions

113.Number of primary activities required78

114.Rules to contain active membership provisions78

115.Factors and considerations for determining primary activities etc.78

116.Active membership provisions: distributing co‑operatives79

117.Regular subscription: active membership of non‑distributing co‑operative79

Division 3 — Active membership resolutions

118.Notice of meeting80

119.Eligibility of directors to vote on proposal at board meeting80

Division 4 — Cancellation of membership of inactive or missing members

120.Cancellation of membership of inactive or missing member80

121.Share to be forfeited if membership cancelled81

122.Failure to cancel membership — offence by director81

123.Deferral of forfeiture by board82

124.Cancellation of membership prohibited in certain circumstances82

125.Notice of intention to cancel membership83

126.Order of Supreme Court against cancellation83

127.Repayment of amounts due because of cancelled membership84

128.Interest on deposits, debentures and CCUs86

129.Repayment of deposits and redemption of debentures and CCUs87

130.Register of cancelled memberships88

Division 5 — Entitlements of former members of distributing co‑operatives

131.Application of Division88

132.Former shareholders to be taken to be shareholders for certain purposes88

133.Entitlements of former shareholders on mergers etc.89

134.Set off of amounts repaid etc. on forfeited shares91

135.Regulations may exempt co‑operatives from provisions92

Part 7 — Shares

Division 1 — Nature of share

136.Nature of share in co‑operative93

Division 2 — Disclosure requirements for distributing co‑operatives

137A.Registration of current disclosure statement93

137B.Restrictions on advertising and publicity: shares94

137.Disclosure to intending shareholders in distributing co‑operative95

139.Exemptions for disclosure statements96

Division 3A — Compensation for defective disclosure

140A.Contravention leading to right to recover loss or damage97

140B.Right to recover for loss or damage resulting from contravention97

140C.Due diligence defence98

140D.General defences99

Division 3 — Issues of shares

140.Shares — general100

142.Minimum paid up amount100

143.Shares not to be issued at a discount101

144.Issue of shares at a premium101

145.Joint ownership of shares101

146.Members may be required to take up additional shares102

147.Bonus share issues103

148.Restrictions on bonus shares103

149.Notice about bonus shares104

Division 4A — Provisions applying to particular share subscriptions

150A.Term used: disclosure statement105

150B.Application of this Division105

150C.Application money to be held on trust105

150D.Minimum subscription condition must be fulfilled before issue or transfer106

150E.Repayment of money if disclosure statement condition not met106

Division 4 — Disclosure and registration of interests in shares

150.Direction to disclose107

151.Disclosure by member of relevant interests and instructions108

152.Registration as trustee etc. on death of owner of shares109

153.Registration as administrator of estate on incapacity of shareholder109

154.Registration as Official Trustee in Bankruptcy110

155.Liabilities of person registered as trustee or administrator110

156.Notice of trusts in register of members111

157.No notice of trust except as provided by this Division111

Division 5 — Sale or transfer of shares

158.Sale or transfer of shares111

159.Transfer on death of member112

160.Restriction on total shareholding112

161.Transfer not effective until registered112

162.Non‑members become members on registration112

Division 6 — Repurchase of shares

163.Purchase and repayment of shares112

164.Deposit, debentures or CCUs instead of payment when share repurchased114

165.Cancellation of shares115

Part 8 — Voting and meetings

Division 1 — Voting entitlements

166.Application of Part to voting116

167.Voting116

168.Voting by proxy116

169.Control of the right to vote117

170.Effect of disposal of shares on voting rights117

171.Effect of relevant share and voting interests on voting rights117

172.Rights of representatives118

173.Other rights and duties of members not affected by ineligibility to vote118

174.Vote of disentitled member to be disregarded118

Division 2 — Resolutions

175.Decisions to be by ordinary resolution119

176.Ordinary resolutions119

177.Special resolutions119

178.How majority obtained is ascertained120

179.Declaration of passing of special resolution120

180.Effect of special resolution120

181.Lodgment of special resolution121

182.Decision of Registrar on application to register special resolution121

Division 3 — Resolution by circulated document

183.Application of Division 3122

184.Resolution by circulation of document — fewer than 50 members122

Division 4 — Postal ballots

185.Postal ballots123

186.Special postal ballots124

187.When a special postal ballot required125

188.Holding of postal ballot on requisition125

189.Expenses involved in postal ballots on requisition126

Division 5 — Meetings

190.Annual general meetings127

191.Special general meetings128

192.Notice of meetings128

193.Quorum at meetings128

194.Decision at meetings128

195.Calling of general meeting on requisition129

196.Minutes130

197A.Auditor entitled to notice and other communications131

197B.Auditor’s right to be heard at general meetings131

197C.Questions and comments by members on co‑operative management at annual general meeting132

197D.Questions by members of auditors at annual general meeting132

Part 9 — Management and administration of co‑operatives

Division 1 — The Board

197.Board of directors134

198.Election of directors134

199.Qualification of directors136

201.Meeting of the board of directors136

202.Transaction of business outside meetings137

203.Alternate directors138

204.Delegation by board138

205.Removal from and vacation of office138

206A.Removal from office by resolution139

Division 2A — Disqualification from managing co‑operatives

206B.Offence for disqualified person to manage co‑operative141

206C.Automatic disqualification for offences142

206D.Extension of period of automatic disqualification143

206E.Court’s power of disqualification: contravention of civil penalty provision143

206F.Court’s power of disqualification: insolvency and non‑payment of debts144

206G.Court’s power of disqualification: repeated contraventions of law145

206H.Registrar’s power of disqualification146

206I.Registrar’s power to give permission147

206J.Court’s power to grant leave147

Division 2 — Secretary

206.Secretary148

207A.Responsibility of secretary148

Division 3 — Duties and liabilities of directors, officers and employees

207.Care and diligence: civil obligations149

208.Good faith: civil obligations150

209.Use of position: civil obligations150

210.Use of information: civil obligations151

211.Good faith, use of position and use of information: criminal offences151

212.Other duties and liabilities not affected152

213.Application of Corporations Act concerning indemnities and insurance for officers and auditors153

214.Application of Corporations Act provisions concerning officers of co‑operatives153

Division 4 — Restrictions on directors and officers

215.Directors’ remuneration154

216.Certain financial accommodation to officers prohibited154

217.Financial accommodation to directors and associates155

218.Restriction on directors of certain co‑operatives selling land to co‑operative157

219.Management contracts158

Division 5 — Declaration of interests

220.Declaration of interest158

221.Declarations to be recorded in minutes160

222.Division does not affect other laws or rules160

223.Certain interests need not be declared161

Division 7 — Registers, books and returns

230.Registers to be kept by co‑operatives161

231.Location of registers162

232.Inspection of registers etc.163

233.Use of information on registers165

234.Notice of appointment etc. of directors and officers166

236.List of members to be provided at request of Registrar166

237.Special return to be given at request of Registrar167

Division 8 — Name and registered office

238.Name to include certain matter167

239.Use of abbreviations168

240.Name to appear on business documents etc.169

241.Change of name of co‑operative170

242.Restriction on use of word “co‑operative” or similar words171

243.Registered office of co‑operative171

Part 10A — Financial reports and audit

Division 1 — Preliminary

244A.Terms used173

244B.General modifications to applied provisions of the Corporations Act Chapter 2M174

Division 2 — Financial records

244C.Obligation to keep financial records174

244D.Language requirements175

244E.Physical format175

244F.Place where records are kept176

244G.Director access177

Division 3 — Annual financial reports and directors’ reports generally

244H.Who has to prepare annual financial reports and directors’ reports178

244I.Small co‑operative: direction by members178

244J.Small co‑operative: direction by Registrar179

Division 4 — Annual financial reports

244K.Contents of annual financial report180

244L.Compliance with accounting standards and regulations182

244M.True and fair view182

244N.Audit of financial report183

244O.Application of Corporations Act to co‑operatives with quoted securities: declaration about financial statements by certain officers184

Division 5 — Annual directors’ reports

244P.Annual directors’ report184

244Q.Annual directors’ report: general information185

244R.Annual directors’ report: specific information187

244S.Application of Corporations Act to co‑operatives with quoted securities: additional information to be provided in annual directors’ report191

Division 6 — Half‑year financial report and directors’ report

244T.Application of Corporations Act to co‑operatives that are disclosing entities: half‑year financial reports and directors’ reports191

Division 7 — Audit and auditor’s report

244U.Application of Corporations Act: audit and auditor’s report191

Division 8 — Annual financial reporting to members

244V.Annual financial reporting to members192

244W.Deadline for reporting to members195

244X.Member’s choices for annual financial information196

244Y.Consideration of reports at annual general meeting197

244ZA.Application of Corporations Act: additional reporting by debenture issuers197

Division 9 — Lodging reports and returns with Registrar

244ZB.Lodgment of annual returns with Registrar198

244ZC.Lodgment of financial reports etc. with Registrar198

244ZD.Lodgment of half‑year reports with Registrar199

244ZE.Registrar’s power to require lodgment200

244ZF.Relodgment if financial report or directors’ reports amended after lodgment200

Division 10 — Special provisions about consolidated financial statements

244ZG.Application of Corporations Act: special provisions about consolidated financial statements201

Division 11 — Financial years and half years

244ZH.Financial year201

244ZI.Half‑year202

Division 12 — Auditors

Subdivision 1 — General provisions relating to auditors

244ZJ.Application of Corporations Act: auditors202

Subdivision 2 — Appointment of auditors

244ZK.Appointment of auditor of small co‑operative203

244ZL.Initial appointment of auditor of large co‑operative204

244ZM.Annual appointment at annual general meeting of auditor of large co‑operative to fill vacancy205

244ZN.Appointment by directors or annual general meeting of auditor of large co‑operative to fill casual vacancy208

244ZO.Appointment to replace auditor removed from office208

244ZP.Registrar to be notified of appointment of auditor209

244ZQ.Registrar may appoint auditor of large co‑operative if auditor removed but not replaced210

244ZR.Registrar’s general power to appoint auditor of large co‑operative211

244ZS.Restrictions on Registrar’s powers to appoint auditor of large co‑operative211

244ZT.Remaining auditors may act during vacancy212

244ZU.Nomination of auditor212

244ZV.Auditor’s consent to appointment213

Subdivision 3 — Removal and resignation of auditors

244ZW.Removal and resignation of auditors214

244ZX.Effect of winding‑up on office of auditor217

Subdivision 4 — Auditors’ fees and expenses

244ZY.Fees and expenses of auditors217

Subdivision 5 — Protection of auditors

244ZZA. Protection of auditors217

Division 13 — Accounting and auditing standards

244ZZB. Accounting and auditing standards218

244ZZC. Interpretation of accounting and auditing standards219

Division 14 — Exemptions and modifications

244ZZD. Exemptions: individual co‑operatives219

244ZZE. Exemptions: classes of co‑operatives220

244ZZF. Exemptions: criteria for exemptions for individual co‑operatives or classes of co‑operatives221

244ZZG. Exemptions: non‑auditor members and former members of audit firms, and former employees of audit companies222

244ZZH. Exemptions: classes of non‑auditor members223

244ZZI.Exemptions: criteria for exemptions for non‑auditor members etc.224

244ZZJ.Exemptions from regulations224

244ZZK. Registrar’s power to modify the operation of section 324DA of Corporations Act225

244ZZL. Auditor to notify co‑operative of declaration227

244ZZM. Amendment, suspension or revocation of exemption227

Division 15 — Miscellaneous

244ZZN. Disclosure by directors228

244ZZO. Contravention by directors of a provision of this Part228

Part 10 — Funds and property

Division 1 — Power to raise money

244.Meaning of obtaining financial accommodation229

245.Fund raising to be in accordance with Act and regulations229

246.Limits on deposit taking229

247.Members etc. not required to see to application of money229

248.Registrar’s directions about fundraising230

249.Subordinated debt230

250.Application of Corporations Act to issues of debentures231

252.Disclosure statement232

253A.Restrictions on advertising and publicity234

253B.Application money to be held on trust234

253.Approval of board for transfer of debentures235

254.Application of Corporations Act: reissue of redeemed debentures235

255.Compulsory loan by member to co‑operative235

256.Interest payable on compulsory loan237

Division 2 — Co‑operative capital units

257.General nature of co‑operative capital units238

258.Priority of CCU’s on winding‑up239

259.Financial accommodation provisions apply to issue of CCUs239

260.CCUs to be issued to non‑members239

261.Minimum requirements for rules concerning CCUs239

262.CCUs not to be issued unless terms of issue approved by Registrar240

263.Directors’ duties concerning CCUs241

264.Redemption of CCUs241

265.Capital redemption reserve242

266.Issue of shares in substitution for redemption242

Division 3 — Charges

267.Registration of charges243

Division 4 — Receivers and other controllers of property of co‑operatives

268.Receivers and other controllers of property of co‑operatives243

Division 5 — Disposal of surplus from activities

269.Retention of surplus for benefit of co‑operative243

270.Application for charitable purposes or members’ purposes243

271.Distribution of surplus or reserves to members244

272.Application of surplus to other persons245

Division 6 — Acquisition and disposal of assets

273.Acquisition and disposal of assets246

Part 11 — Restrictions on the acquisition of interests in co‑operatives

Division 1 — Restrictions on share and voting interests

274.Application of Part248

275.Notice required to be given of voting interest248

276.Notice required to be given of substantial share interest248

277.Requirements for notices249

278.Maximum permissible level of share interest249

279.Transitional provision250

280.Shares to be forfeited to remedy contravention250

281.Powers of board in response to suspected contravention251

282.Powers of Supreme Court in relation to contravention252

283.Co‑operative to notify Registrar of interest over 20%252

284.Co‑operative to keep register253

285.Unlisted companies to provide list of shareholders etc.253

286.Excess share interest not to affect loan liability254

287.Extent of operation of Division254

288.Registrar may grant exemption from Division254

Division 2 — Restrictions on certain share offers

289.Share offers to which Division applies255

290.Requirements to be satisfied before offer can be made256

291.Some offers totally prohibited if they discriminate256

292.Offers to be submitted to board first256

293.Announcements of proposed takeovers concerning proposed company257

294.Additional disclosure requirements for offers involving conversion to company259

295.Consequences of prohibited offer259

296.Registrar may grant exemptions259

Part 12 — Merger, transfer of engagements, winding‑up

Division 1 — Mergers and transfers of engagements

297.Application of Division261

298.Mergers and transfers of engagements of local co‑operatives261

299.Requirements before application can be made261

300.Disclosure statement required261

301.Making an application263

302.Approval of merger263

303.Approval of transfer of engagements264

304.Transfer of engagements by direction of Registrar264

Division 2 — Transfer of incorporation

305.Application for transfer265

306.Requirements before application can be made266

307.Meaning of new body and transfer267

308.New body ceases to be registered as co‑operative267

309.Transfer not to impose greater liability etc.267

310.Effect of new certificate of registration268

311.New body must give copy of new certificate of registration or incorporation to Registrar269

312.New body is a continuation of the co‑operative269

Division 3 — Winding‑up and deregistration

313.Methods of winding‑up269

314.Winding‑up on Registrar’s certificate269

315.Method of deregistration270

316.Application of Corporations Act to winding‑up and deregistration270

317.Restrictions on voluntary winding‑up271

318.Start of members’ voluntary winding‑up272

319.Distribution of surplus: non‑distributing co‑operatives272

320.Liquidator — vacancy may be filled by Registrar273

321.Review of liquidator’s remuneration273

322.Liability of member to contribute in a winding‑up where shares forfeited etc.273

Division 4 — Administration

Subdivision 1 — Introductory

323A.Operation of this Division274

Subdivision 2 — Administration under Corporations Act

323.Application of Corporations Act to administration of co‑operative275

324A.Appointment of administrator by Registrar in case of insolvency276

Subdivision 3 — Administration: alternative procedure

324B.Operation of this Division276

324.Appointment of administrator277

325.Effect of appointment of administrator277

326.Revocation of appointment278

327.Expenses of administration279

328.Liabilities arising from administration279

329.Additional powers of Registrar280

330.Stay of proceedings281

331.Administrator to report to Registrar281

Division 6 — Effect of merger etc. on property, liabilities etc.

332.How this Division applies to a merger281

333.How this Division applies to a transfer of engagements282

334.How this Division applies to a transfer of incorporation282

335.Effect of merger etc. on property, liabilities etc.282

Division 7 — Miscellaneous

336.Grounds for winding‑up, transfer of engagements, appointment of administrator284

337.Application of Corporations Act for insolvent co‑operatives285

Part 13 — Arrangements and reconstructions

Division 1 — General requirements

338.Requirements for binding compromise or arrangement288

339.Supreme Court ordered meeting of creditors289

340.Registrar to be given notice and opportunity to make submissions289

341.Results of 2 or more meetings290

342.Persons disqualified from administering compromise etc.290

343.Application of Schedule 4 to person appointed291

344.Application of Corporations Act to person appointed291

345.Copy of order to be attached to rules291

346.Directors to arrange for reports292

347.Power of Supreme Court to restrain further proceedings292

348.Supreme Court need not approve compromise or arrangement takeovers293

Division 2 — Explanatory statements

349.Explanatory statement required to accompany notice of meeting etc.293

350.Requirements for explanatory statement295

351.Contravention of Division: offence by co‑operative295

Division 3 — Facilitating reconstructions and mergers

352.Provisions for facilitating reconstructions and mergers296

Division 4 — Acquisition of shares of dissenting shareholders

353.Terms used298

354.Schemes and contracts to which Division applies298

355.Acquisition of shares pursuant to notice to dissenting shareholder299

356.Restrictions when excluded shares exceed 10%300

357.Remaining shareholders may require acquisition300

358.Transfer of shares pursuant to compulsory acquisition301

359.Disposal of consideration for shares compulsorily acquired302

Division 5 — Miscellaneous

360.Notification of appointment of scheme manager303

361.Power of Supreme Court to require reports303

362.Effect of out‑of‑jurisdiction compromise or arrangement304

363.Jurisdiction to be exercised in harmony with Corporations Act jurisdiction304

364.Registrar may appear etc.304

Part 14 — Participating co‑operatives

Division 1 — Introductory

366.What constitutes carrying on business305

368.Excluded matter305

Division 2 — Participating co‑operatives carrying on business in this State

369.Operation of participating co-operatives in this State307

370.Authorisation to carry on business307

371.Registration under Companies (Co‑operative) Act 1943308

372.Existing foreign co‑operatives308

375.Name of participating co-operative308

376.When participating co-operative not authorised to carry on business309

377.Withdrawal of authority to carry on business309

378.Appeal against Registrar’s decision under s. 377(5)310

379.Application of Act and regulations to participating co‑operatives311

Division 3 — General

380A.False copies of rules of participating co‑operative311

380B.False copies of documents of participating co‑operatives312

380C.Restrictions on advertising and publicity: shares in participating co‑operatives313

380D.Restrictions on advertising and publicity: debentures or CCUs in participating co‑operatives314

380E.Registrar’s directions about participating co‑operative obtaining financial accommodation315

380.Name and place of origin to appear on business and other documents of participating co‑operative316

381.Supply of information to participating Registrars317

384.Functions conferred on Registrar under corresponding co‑operatives law317

385A.Registrar may exempt participating co‑operatives317

Division 4 — Winding‑up of participating co-operatives in this State

385.Winding‑up to relate to State activities318

386.Supreme Court may order winding‑up318

387.Application of Corporations Act to winding-up of participating co-operatives319

388.Outstanding property of participating co-operatives320

Division 5 — Mergers and transfers of engagements affecting participating co‑operatives

389.Terms used320

390.Authority for merger or transfer of engagements321

391.Requirements before application can be made321

392.Disclosure statement required322

393.Making an application323

394.Approval of merger324

395.Approval of transfer of engagements325

396.Effect of merger or transfer of engagements326

397.Division applies instead of certain other provisions of this Act327

Part 15 — Supervision and protection of co‑operatives

Division 1A — Examining a person about a co‑operative

398A.Application of Corporations Act: court‑directed examinations329

Division 1 — Supervision and inspection

398.Terms used329

399.Co-operative includes subsidiaries, participating co-operatives and co-operative ventures330

400.Appointment of inspectors330

401.Registrar and investigators have functions of inspectors330

402.Inspector’s identity card330

403.Production or display of inspector’s identity card331

404.Powers of inspector331

405.Inspector’s appointment conditions332

406.Entry of place332

407.Consent to entry332

408.Inspectors may require certain persons to appear, answer questions and produce documents334

409.Powers of inspectors on place entered335

410.Functions of inspectors in relation to relevant documents335

411.Protection from incrimination336

412.Warrants336

413.Warrants: applications made other than in person337

414.Entry with warrant339

415.General powers after entering places339

416.Power to seize evidence340

417.Receipt for seized things341

418.Return of seized things341

419.Power to require name and address342

420.False or misleading statements343

421.Power to require production of documents343

422.False or misleading documents343

423.Obstruction of inspectors344

424.Copies or extracts of records to be admitted in evidence345

425.Privilege345

Division 2 — Inquiries

426.Terms used346

427.Appointment of investigators347

428.Powers of investigators348

429.Examination of involved person349

430.Privilege349

431.Offences by involved person350

432.Offences relating to documents351

433.Record of examination351

434.Report of investigator352

435.Proceedings following inquiry353

436.Admission of investigator’s report as evidence354

437.Costs of inquiry354

Division 3 — Prevention of fraud etc.

438.Falsification of books355

439.Fraud or misappropriation356

440.Offering or paying commission357

441.Accepting commission357

442.False statements in loan application etc.357

Division 4 — Miscellaneous powers of the Registrar

443.Application for special meeting or inquiry358

444.Holding of special meeting358

445.Expenses of special meeting or inquiry359

446.Power to hold special inquiry into co‑operative359

447.Special meeting following inquiry359

448.Information and evidence360

449.Extension or abridgment of time360

450.Power of Registrar to intervene in proceedings360

Part 16 — Administration of this Act

Division 1 — The Registrar

451.Registrar of Co‑operatives362

452.Deputy Registrar and other staff362

453.Delegation by Registrar363

454.Registers to be kept by Registrar363

455.Keeping of registers364

456.Disposal of records by Registrar364

457.Inspection of registers365

458.Approvals by Registrar366

459.Lodgment of documents366

460.Way of lodging366

461.Power of Registrar to refuse to register or reject documents367

Division 2 — Protection from liability

462.Particular persons protected from liability367

Division 3 — Evidence

463.Certificate of registration368

464.Certificate evidence368

465.Records kept by co‑operatives369

466.Minutes369

467.Official certificates370

468.The Registrar and proceedings370

469.Rules370

470.Registers370

Part 17 — Legal proceedings and other matters

Division 1 — Offences, enforcement and remedies

475.Notice to be given of conviction for offence371

476.Secrecy371

477.False or misleading statements374

478.Further offence for continuing failure to do required act375

479.Civil remedies375

480A.Order against person concerned with co‑operative376

480.Injunctions377

481A.Undertakings379

481B.Offence of contravention of undertaking380

481C.Enforcement order on application with consent of person giving undertaking380

481D.Enforcement orders after contravention of undertaking381

481E.Copy of undertaking382

481F.Registration of undertakings382

481G.Double jeopardy383

481H.Time limit for starting proceedings for offence383

481I.Authorisation to start proceedings for offence384

481.Proceedings for recovery of fine or penalty imposed by rules384

Division 2 — Civil consequences of contravening civil penalty provisions

482A.Terms used384

482B.Declarations of contravention385

482C.Declaration of contravention is conclusive evidence386

482D.Pecuniary penalty orders386

482E.Compensation orders387

482F.Who may apply for a declaration or order387

482G.Time limit for application for a declaration or order388

482H.Civil evidence and procedural rules for declarations and civil penalty orders388

482I.Civil proceedings after criminal proceedings388

482J.Criminal proceedings during civil proceedings389

482K.Criminal proceedings after civil proceedings389

482L.Evidence given in proceedings for penalty not admissible in criminal proceedings390

482M.Relief from liability for contravention of civil penalty provision390

Division 3 — Miscellaneous

482N.Power to grant relief392

482O.Irregularities394

482P.Civil proceedings not to be stayed396

482Q.Standard of proof397

Part 18 — General

482.Co‑operative ceasing to exist398

483.Service of documents on co‑operative398

484.Service on member of co‑operative399

485.Reciprocal arrangements400

486.Translations of documents401

487.Disclosure statements401

488.Approval of forms401

489A.Approvals to be in writing402

489.Regulation making power402

490.Companies (Co‑operative) Act 1943 repealed402

491.Co‑operative and Provident Societies Act 1903 repealed402

Part 19 — Transitional and savings provisions

Division 1 — Preliminary

492.Terms used403

493.Interpretation Act 1984 not affected403

494.Transitional regulations403

Division 2 — Prohibition on registration under former Act

495.Prohibition on registration under Companies (Co‑operative) Act 1943 or Co‑operative and Provident Societies Act 1903404

Division 3 — Transfer to incorporation under this Act

496.Co‑operative companies and registered societies to register under this Act405

497.Decision of Registrar to register co‑operative company or registered society406

Division 4 — General transitional provisions

498.Special resolutions, applications to the Court and court orders407

499.Inspections or inquiry407

500.Acquisition of shares of shareholders dissenting from scheme or contract approved by majority408

501.Transitional provisions about active members409

Division 5 — Pending incorporation, reconstruction or winding‑up

502.Pending incorporation409

503.Pending reconstruction409

504.Pending wind‑up410

Schedule 1 — Matters for which rules must make provision

1.Requirements for all co‑operatives411

2.Additional matters: co‑operatives with share capital412

3.Additional matters: non‑distributing co‑operatives413

Schedule 2 — Relevant interests, associates, related bodies

Division 1 — Relevant interests

1.Terminology used in this Schedule415

2.Basic rules: relevant interests415

3.Control of corporation having power in relation to a share415

4.Control of 20% of voting power in corporation having power in relation to a share416

5.Deemed relevant interest in advance of performance of agreement that will give rise to a relevant interest416

6.Control of corporation having a relevant interest by virtue of clause 5417

7.Matters not affecting application of Division417

8.Corporation may have a relevant interest in its own shares418

9.Exclusions: money lenders418

10.Exclusions: certain trustees418

11.Exclusions: instructions to securities dealer to dispose of share419

12.Exclusions: honorary proxies419

13.Exclusions: holders of prescribed offices419

14.Prescribed exclusions419

15.Effect of Schedule419

16.Relevant interest: corporation other than co‑operative420

Division 2 — Associates

17.Effect of Part420

18.Associates of a corporation420

19.Matters relating to voting rights420

20.General421

21.Exclusions422

Division 3 — Related corporations

22.Related corporations422

Schedule 3 — Registration etc. of charges

Division 1 — Preliminary

1.Terms used423

2.Application to charges referred to in clause 17424

3.Lodgment of documents424

Division 2A — Schedule ceases to have effect except as otherwise provided

4A.Terms used424

4B.Effect of Schedule at and after registration commencement time425

4C.Refusal to exercise registration functions425

4D.Priority between registrable charges426

Division 2 — Registration

Subdivision 1 — Charges

4.Charges to which the Schedule applies426

5.Excluded charges427

6.Personal chattels427

7.Book debts428

8.Crops or stock428

9.Deposit of documents of title428

10.Charges on land or fixtures on land429

11.Where other property is also charged429

12.Effect of failure to lodge or give notice or document429

Subdivision 2 — Notice of charge

13.Lodgment of notice of charge and copy of instrument, and transitional provision429

14.Series of debentures431

15.Operation of priority provisions in respect of issue of debentures431

16.Discounts431

17.Acquisition of property subject to charge432

Subdivision 3 — Registration

18.Register of Co‑operative Charges433

19.Registration of documents relating to charge433

20.Provisional registration if stamp duty not paid434

21.Provisional registration if required particulars not supplied435

22.Effect of provisional registration436

23.If 2 or more charges relate to the same property437

24.Registration of assignment or variation of charge437

25.Standard time for the purposes of this Subdivision437

Subdivision 4 — Certain charges void against liquidator or administrator

26.Terms used438

27.Certain charges void against liquidator or administrator438

28.Certain varied charges void against liquidator or administrator439

29.Supreme Court may extend required period440

30.Certain later charges void441

31.Effect of provisions on purchaser in good faith441

Subdivision 5 — Certain charges in favour of persons void

32.Terms used442

33.Charges in favour of certain persons void in certain cases442

34.Supreme Court may give leave for enforcement of charge443

35.Certain transactions excluded443

Subdivision 6 — Assignment, variation or satisfaction of charges

36.Assignment and variation of charges444

37.Satisfaction of, and release of property from, charges445

Subdivision 7 — General

38.Lodgment of notices446

39.Lodgment offences446

40.Co‑operative to keep documents relating to charges446

41.Co‑operative to keep register, and transitional provision447

42.Certificates448

43.Power of Supreme Court to rectify register of charges449

44.Registrar may exempt from compliance with certain requirements of Division449

Division 3 — Order of priority

Subdivision 1 — General

45.Terms used450

46.Priorities of charges451

Subdivision 2 — Priority rules

47.General priority rules in relation to registered charges452

48.General priority rule in relation to unregistered charges453

49.Special priority rules453

Schedule 4 — Receivers, and other controllers, of property of co‑operatives

1.Terms used456

2.Application of Schedule457

3.Persons not to act as receivers457

4.Supreme Court may declare whether controller is validly acting458

5.Liability of controller459

6.Liability of controller under pre‑existing agreement about property used by co‑operative460

7.Powers of receiver461

8.Controller’s duty of care in exercising power of sale463

9.Supreme Court may authorise managing controller to dispose of property despite prior charge463

10.Receiver’s power to carry on co‑operative’s business during winding‑up465

11.Controller’s duties in relation to financial institution accounts and financial records466

12.Managing controller to report within 2 months about co‑operative’s affairs466

13.Reports by receiver467

14.Supervision of controller468

15.Controller may apply to Supreme Court470

16.Power of Supreme Court to fix receiver’s remuneration470

17.Controller has qualified privilege in certain cases471

18.Notification of matters relating to controller471

19.Statement that receiver appointed or other controller acting473

20.Officers to report to controller about co‑operative’s affairs473

21.Controller may require reports475

22.Controller may inspect books476

23.Lodging controller’s accounts476

24.Payment of certain debts, out of property subject to floating charge, in priority to claims under charge478

25.Enforcement of controller’s duty to make returns480

26.Supreme Court may remove controller for misconduct481

27.Supreme Court may remove redundant controller481

28.Effect of clauses 26 and 27482

Schedule 6 — Modifications to Corporations Act

Division 1 — Modifications to Corporations Act provisions applying under section 316

1A.Modifications to winding‑up and deregistration provisions: co‑operatives483

Division 2 — Modifications to Corporations Act provisions applying under section 387

1.Modifications to winding‑up provisions: participating co‑operatives485

Notes

Compilation table488

Defined terms

 

 

Crest

Reprinted under the Reprints Act 1984 as

at 4 August 2017

Co-operatives Act 2009

An Act to provide a legislative framework for the formation, registration and management of co‑operatives and for related purposes.

Part 1 — Preliminary

Division 1 — Introductory

1.Short title

This is the Co-operatives Act 2009 1.

2.Commencement

This Act comes into operation as follows —

(a)sections 1 and 2 — on the day after assent day 1;

(b)the rest of the Act, other than sections 490 and 491, and Part 20 Divisions 1 and 3 — on a day fixed by proclamation;

(c)sections 490 and 491, and Part 20 Division 3 — on the last day of the period of 2 years after the day fixed under paragraph (b);

(d)Part 20 Division 1 — on the day that Co‑operative Bulk Handling Limited becomes registered under this Act.

3.Objects of this Act

The objects of this Act are to —

(a)enable the formation, registration and operation of co‑operatives; and

(b)promote co‑operative philosophy, principles, practices and objectives; and

(c)protect the interests of co‑operatives, their members and the public in the operations and activities of co‑operatives; and

(d)ensure that the directors of co‑operatives are accountable for their actions and decisions to the members of co‑operatives; and

(e)encourage and facilitate self‑management by co‑operatives at all levels; and

(f)encourage the development, integration and strengthening of co‑operatives at local, regional, national and international levels by supporting and fostering State and national peak organisations and co‑operative instrumentalities.

4.Terms used

(1)In this Act —

active member has the meaning given to that term in section 111;

active membership provision has the meaning given to that term in section 112;

agreement means an agreement, arrangement or understanding —

(a)whether formal or informal or partly formal and partly informal; and

(b)whether written or oral or partly written and partly oral; and

(c)whether or not having legal or equitable force and whether or not based on legal or equitable rights;

alter, in relation to the rules of a co‑operative, includes to add to, substitute or rescind;

associate has the meaning given to that term in Schedule 2 Division 2;

board means the board of directors of a co‑operative and in circumstances where a person or committee is exercising a power of the board delegated under the rules of a co‑operative, includes that person or committee;

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, in relation to a co‑operative or a participating co‑operative, has the same meaning as it has in the Corporations Act Part 1.2 Division 3 in relation to a company;

CCU means a co‑operative capital unit as defined in section 257(1);

chief executive officer, of a co‑operative or a subsidiary of a co‑operative, means the principal executive officer of the co‑operative or subsidiary for the time being, by whatever name called, and whether or not that officer is a director or the secretary;

constitution, of a co‑operative, includes the articles of association, memorandum, rules and other constituent documents;

co‑operative means a body registered under this Act as a co‑operative;

co‑operative group means a co‑operative that has a membership as described in section 57;

corporation has the meaning given to that term in the Corporations Act;

Corporations Act means the Commonwealth Corporations Act 2001;

corresponding co‑operatives law means a law of another jurisdiction declared under section 5A to be a corresponding co‑operatives law;

debenture means a document issued by a co‑operative that evidences or acknowledges indebtedness of the co‑operative in respect of money that is or may be deposited with or lent to the co‑operative, whether constituting a charge on property of the co‑operative or not, and includes a unit of a debenture, except that it does not include —

(a)a cheque, order for the payment of money or bill of exchange; or

(b)a promissory note having a face value of not less than $50 000; or

(c)any other document of a class that is prescribed by the regulations as exempt from this definition;

deed of arrangement means a deed of company arrangement in force under the Corporations Act Part 5.3A as that Part applies under this Act or a deed of that type as varied and in force from time to time;

department means the department of the Public Service principally assisting the Minister in the administration of this Act;

deposit taking co‑operative means a co‑operative that is permitted under section 246 to accept money on deposit;

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 means a co‑operative as described in section 13;

eligible member means a person considered by the board of a co‑operative to be eligible to become a member of that co‑operative;

financial records includes —

(a)invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers;

(b)documents of prime entry;

(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;

financial report means an annual financial report or a half‑year financial report prepared under the Corporations Act Chapter 2M;

financial services business has the meaning given to that term in the Corporations Act section 761A;

financial services licensee has the meaning given to that term in the Corporations Act section 761A;

financial statements means annual financial statements under the Corporations Act section 295 or half‑year financial statements applying under the Corporations Act section 303;

financial year has the meaning given in section 244ZH;

half‑year has the meaning given in section 244ZI;

inspector means a person appointed as an inspector under Part 15;

involved, in a contravention, has the meaning given in section 5B;

jurisdiction means a State or Territory;

large co‑operative means a co‑operative that is not a small co‑operative;

legal practitioner means an Australian legal practitioner within the meaning of that term in the Legal Profession Act 2008 section 3;

model rules means the model rules prescribed by the regulations under section 101;

mortgage includes lien, charge or other security over property;

non‑distributing co‑operative means a co‑operative as described in section 14;

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;

participating co‑operative means a body that is registered and incorporated under, and is subject to, a corresponding co‑operatives law;

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;

primary activity, of a co‑operative, means an activity stated in the rules of the co‑operative to be a primary activity of the co‑operative;

quoted security means a security that is quoted on a prescribed financial market (as defined in the Corporations Act section 9);

Registrar means the Registrar of Co‑operatives under section 451;

related corporation has the meaning given to that term in Schedule 2 Division 3;

relevant interest in —

(a)a right to vote has the meaning given to that term in Schedule 2 Division 1 clause 2(1); and

(b)a share has the meaning given to that term in Schedule 2 Division 1 clause 2(2);

rules, of a co‑operative, means the rules of the co‑operative for the time being applying under this Act;

seal, of a co‑operative, means the common seal or official seal of the co‑operative;

share means share in the share capital of a co‑operative;

small co‑operative means a co‑operative of a class or description prescribed by the regulations;

subsidiary has the meaning given to that term in the Corporations Act;

surplus, in relation to a co‑operative, means the excess of income over expenditure after making proper allowance for taxation expense, for depreciation in value of the property of the co‑operative and for future contingencies;

transfer day, for a particular transferred co‑operative, means the day on which that co‑operative became registered under this Act;

transferred co‑operative means a co‑operative that immediately before the commencement of this Act was registered as a co‑operative company under the Companies (Co‑operative) Act 1943 or as a registered society under the Co‑operative and Provident Societies Act 1903.

(2)A reference in this Act to the Corporations Act or a provision of the Corporations Act applying under this Act (or a part of this Act) is a reference to that Act or provision to the extent that it is declared to apply to a matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 as a law of this State.

[Section 4 amended: No. 7 of 2016 s. 4.]

5A.Corresponding co‑operatives laws

The regulations may declare a law of another jurisdiction that substantially corresponds to this Act to be a corresponding co‑operatives law for the purposes of this Act.

[Section 5A inserted: No. 7 of 2016 s. 5.]

5B.Involvement in contraventions

For the purposes of this Act, 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.

[Section 5B inserted: No. 7 of 2016 s. 5.]

Division 2 — Qualified privilege

5.Qualified privilege

(1)If this Act provides that a person has qualified privilege for an act, matter or thing, the person, in relation to the act, matter or thing —

(a)has qualified privilege in proceedings for defamation; and

(b)is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person.

(2)In subsection (1) —

malice includes ill‑will to the person concerned or any other improper motive.

(3)Neither this section nor a provision of this Act that provides as mentioned in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as a defendant in proceedings, or an action, for defamation.

Division 3 — The co‑operative principles

6.Co‑operative principles

The co‑operative principles are the principles set out in the following Table.

Table of co‑operative principles

Principle

1.

Voluntary and open membership

A co‑operative is a voluntary organisation, open to all persons able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

2.

Democratic member control

A co‑operative is a democratic organisation controlled by its members, who actively participate in setting policies and making decisions. Members serving as elected representatives are accountable to the membership. In co‑operatives other than co‑operative groups members have equal voting rights (one member, one vote). Co‑operative groups are organised in a democratic manner.

3.

Member economic participation

Members contribute equitably to, and democratically control, the capital of their co‑operative. Usually, at least part of that capital is the common property of the co‑operative. Usually, members receive limited compensation, if any, for capital subscribed as a condition of membership. Members of a co‑operative allocate surplus to be used for any or all of the purposes of —

(a)developing the co‑operative, possibly by setting up reserves, at least part of which are indivisible; and

(b)benefiting members in proportion to their transactions with the co‑operative; and

(c)supporting other activities approved by the membership.

4.

Autonomy and independence

A co‑operative is an autonomous, self‑help organisation controlled by its members. If a co‑operative enters into agreements with other organisations, including governments, or raises capital from external sources, it does so on terms that ensure democratic control by its members and maintain its autonomy.

5.

Education, training and information

A co‑operative provides education and training for its members, elected representatives, managers and employees so they can contribute effectively to the development of the co‑operative. A co‑operative informs the general public, particularly young people and opinion leaders, about the nature and benefits of co‑operatives.

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

Co‑operatives, while focusing on member needs, work for the sustainable development of their communities through policies accepted by their members.

7.Interpretation to promote co‑operative principles

In the interpretation of a provision of this Act, a construction that would promote co‑operative principles is to be preferred to a construction that would not promote co‑operative principles.

Division 4 — Application of Corporations Act to co‑operatives

8.Terms used

In this Division —

company has the meaning given to that term in the Corporations Act section 9;

Corporations legislation means the Corporations legislation to which the Corporations Act Part 1.1A applies;

excluded Corporations legislation provision means any provision of the Corporations legislation that does not apply to co‑operatives as a law of the Commonwealth.

9.Excluded matter

(1)A co‑operative is declared to be an excluded matter for the purposes of the Corporations Act section 5F in relation to the whole of the Corporations legislation other than to the extent specified in subsection (2).

(2)Subsection (1) does not exclude the application of the following provisions of the Corporations legislation to co‑operatives to the extent that the provisions would otherwise be applicable to them —

(a)provisions relating to a matter that the regulations provide is not to be excluded from the operation of the Corporations legislation;

(b)provisions relating to the role of a co‑operative in the formation of a company;

(c)provisions relating to the registration of a co‑operative as a company under the Corporations Act Chapter 5B;

(d)provisions relating to substantial shareholdings, by or involving a co‑operative, in a company;

(e)provisions conferring or imposing functions on a co‑operative as a member, or former member, of a corporation;

(f)provisions relating to dealings by a co‑operative in financial products of a corporation, other than financial products of the co‑operative itself;

(g)provisions conferring or imposing functions on a co‑operative in its dealings with a corporation, not being dealings in financial products of the co‑operative;

(h)provisions relating to financial products of a co‑operative, other than shares in, CCUs in, debentures of or deposits with a 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.

(3)To remove doubt it is declared that subsection (1) does not operate to exclude the operation of the following provisions of the Corporations Act, except in relation to shares in, CCUs in, debentures of, or deposits with, a co‑operative —

(a)Part 1.2A;

(b)Chapter 2L;

(c)Chapter 6CA;

(d)Chapter 6D;

(e)Part 7.10.

(4)If a co‑operative is directed by an order of the Supreme Court under section 84(i) to become registered as a company under the Corporations Act, the provisions referred to in subsection (2)(c) apply to the extent necessary for the co‑operative to be registered as a company under Chapter 5B of that Act.

[Section 9 amended: No. 7 of 2016 s. 198.]

10.Applying the Corporations legislation to co‑operatives

(1)The regulations may declare a matter relating to co‑operatives or participating co‑operatives to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to any excluded Corporations legislation provision or provisions, with any modifications that are specified in the declaration.

(2)Without limiting subsection (1), any such regulations may —

(a)specify modifications to the definitions and other interpretative provisions of the Corporations legislation relevant to any excluded Corporations legislation provision that is the subject of the declaration; and

(b)provide for ASIC to exercise a function under any excluded Corporations legislation provision that is the subject of the declaration, but only if —

(i)ASIC is to exercise the function under an agreement referred to in section 11(8) or (9A)(b) of the new ASIC Act; and

(ii)ASIC is authorised to exercise that function under section 11 of the new ASIC Act;

and

(c)specify that a reference to ASIC in an excluded Corporations legislation provision that is the subject of the declaration is to be a reference to another person; and

(d)identify an excluded Corporations legislation provision to which the declaration relates by reference to the provision as in force at a particular time; and

(e)specify a court (other than the Supreme Court) to exercise a function conferred on a court or the Court by an excluded Corporations legislation provision to which the declaration relates.

(3)Words and expressions used in this section and also in the Corporations (Ancillary Provisions) Act 2001 Part 3 have the same meanings in this section as they have in that Part.

[Section 10 amended: No. 7 of 2016 s. 6.]

11.Modifications to applied provisions

(1)If a provision of this Act or the regulations declares a matter to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 (the declaratory provision) in relation to any provisions of the Corporations legislation (the applied provisions), the declaratory provision is taken to specify the following modifications —

(aa)a reference in the applied provisions to a corporation, company or public company is to be read as a reference to a co‑operative;

(ab)a reference in the applied provisions to ASIC is to be read as a reference to the Registrar;

(a)a reference in the applied provisions to articles or a memorandum of association or a constitution or replaceable rules is to be read as a reference to rules;

(b)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 Act;

(c)a reference in the applied provisions to the Gazette is to be read as a reference to the Western Australian Government Gazette;

(d)a reference in the applied provisions to the Commonwealth is to be read as a reference to this State;

(ea)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 177 of this Act;

(eb)a reference in the applied provisions to shareholders is to be read as a reference to members;

(ec)a reference in the applied provisions (including the Corporations Act section 311) to “a contravention of this Act” is to be read as including a reference to a contravention of this Act;

(ed)despite paragraph (aa), a reference in the applied provisions to a company that is the auditor of a company is to be read as a reference to a company that is the auditor of a co‑operative;

(ee)a statement in the applied provisions that an offence based on a particular provision is an offence of strict liability is to be read as a statement that, despite The Criminal Code section 23B(2), it is immaterial for the purposes of that provision that any event occurred by accident;

(ef)a reference in the applied provisions to “prescribed” is to be read as a reference to “approved by the Registrar” and, without limitation, a reference to a prescribed form is to be read as a reference to a form approved by the Registrar;

(eg)a reference in the applied provisions to regulations is to be read as a reference to regulations made under this Act;

(eh)the applied provisions are to be read as if all notes were deleted;

(e)any of the applied provisions that are not relevant to co‑operatives or participating co‑operatives or that are incapable of application to co‑operatives or participating co‑operatives are to be ignored;

(f)modifications prescribed under a regulation under subsection (2).

(2)The regulations may prescribe the modifications that are necessary or desirable for the effective operation of the applied provisions.

[Section 11 amended: No. 7 of 2016 s. 7.]

Part 2 — Formation

Division 1 — Introductory

[Heading inserted: No. 7 of 2016 s. 8.]

12.Types of co‑operatives

(1)A body may be registered under this Act as a co‑operative.

(2)A co‑operative may be either —

(a)a distributing co‑operative; or

(b)a non‑distributing co‑operative.

13.Distributing co‑operatives

(1)A distributing co‑operative must have a share capital.

(2)A distributing co‑operative is a co‑operative whose rules allow it to give returns or distributions on surplus or share capital.

(3)A distributing co‑operative must have a membership of —

(a)for a co‑operative group, 2 or more co‑operatives; and

(b)for 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)(b)(i) may be given in relation to a particular co‑operative or class of co‑operatives.

[Section 13 amended: No. 7 of 2016 s. 9.]

14.Non‑distributing co‑operatives

(1)A non‑distributing co‑operative is a co‑operative whose rules prohibit it 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 a share capital.

(3)A non‑distributing co‑operative must have a membership of —

(a)for a co‑operative group, 2 or more co‑operatives; and

(b)for 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)(b)(i) may be given in relation to a particular co‑operative or class of co‑operatives.

[Section 14 amended: No. 7 of 2016 s. 10.]

15A.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 13(3)(b)(i) or 14(3)(b)(i);

(b)an approval concerning the number of persons required to hold the formation meeting of a co‑operative under section 15(3)(b);

(c)an approval concerning the number of members required to sign the application for registration of a proposed co‑operative under section 18(1)(c)(ii);

(d)an approval concerning the minimum number of members for a co‑operative to continue to carry on business under section 65(3)(b).

(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.

[Section 15A inserted: No. 7 of 2016 s. 11.]

Division 2 — Formation meeting

15.Formation meeting

(1)Before a proposed co‑operative, other than an existing corporation, can be registered, a formation meeting must be held in accordance with this section.

(2)At the formation meeting —

(a)a person must act as chairman, and a person must be specified to act as secretary; and

(b)a disclosure statement approved under section 16 must be presented to the meeting 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 16(2B);

and

(c)the proposed rules of the co‑operative approved under section 17 in respect of the proposed co‑operative, must be agreed to by two‑thirds of the eligible members attending the meeting; and

(d)the eligible members attending the meeting must sign the application for membership; and

(e)the eligible members attending the meeting must elect the first directors of the proposed co‑operative in accordance with the proposed rules; and

(f)the eligible members attending the meeting 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.

(3)The formation meeting must be held by —

(a)for a co‑operative group, not less than 2 suitably qualified co‑operatives; and

(b)for 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.

(4)For the purposes of subsection (3), a person or a co‑operative is suitably qualified to be a member if —

(a)there are reasonable grounds to believe the person or co‑operative will be an active member of the proposed co‑operative; and

(b)for an individual, the person has attained the age of 18; and

(c)the person satisfies any other requirements for membership set out in the proposed rules.

(5)Each co‑operative forming a proposed co‑operative group may be represented at the formation meeting by one person.

[Section 15 amended: No. 7 of 2016 s. 12.]

Division 3 — Approval of disclosure statement and rules

16.Approval of disclosure statement

(1)A draft disclosure statement of a proposed distributing co‑operative must be submitted to the Registrar at least 35 days (or a shorter period the Registrar may allow in a particular case) before the formation meeting is due to be held.

(2A)If the Registrar so directs under subsection (2B), a draft disclosure statement of a proposed non‑distributing co‑operative must be submitted to the Registrar by the time specified in the direction.

(2B)The Registrar may by written notice direct that —

(a)a draft disclosure statement of a proposed non‑distributing co‑operative must be submitted to the Registrar by the time specified in the direction, being a time before the formation meeting is due to be held; and

(b)a disclosure statement approved under this section must be presented to the formation meeting for the co‑operative.

(2)A draft disclosure statement submitted under subsection (1) or (2A) must be accompanied by a written statement specifying the date on which the formation meeting is due to be held.

(3)A draft disclosure statement of a proposed distributing co‑operative submitted under subsection (1) must contain the information necessary to ensure that eligible 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 pre‑registration contractual obligations of the co‑operative under Part 3 Division 5; and

(g)any other information that the Registrar directs.

(4A)A draft disclosure statement of a proposed non‑distributing co‑operative submitted under subsection (2A) must contain the information that the Registrar directs to be included.

(4)A draft disclosure statement submitted under subsection (1) or (2A) cannot include a statement purporting to be made by an expert or to be based on a statement made by an expert unless —

(a)the expert has given, and has not withdrawn, the expert’s written consent to the submission of the disclosure statement with the statement included in the form and context in which it is included; and

(b)there appears in the disclosure statement a statement that the expert has given, and has not withdrawn, the expert’s consent.

(5)The Registrar may, in respect of a draft disclosure statement submitted under subsection (1) or (2A) —

(a)approve the draft statement as submitted; or

(b)amend the draft statement, or require a stated 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 statement; or

(e)require the person submitting the disclosure statement to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b), (c) or (d).

(6)The Registrar may approve a disclosure statement submitted under subsection (1) or (2A) with or without conditions.

(7)Subject to subsection (8), the Registrar approves of a disclosure statement submitted under subsection (1) or (2A) 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 a disclosure statement as submitted to the Registrar under subsection (1) or (2A) unless at least 5 days before the date specified in the written statement submitted under subsection (2), the Registrar gives written notice to the person who submitted the draft statement that the Registrar —

(a)has approved an amended or different disclosure statement; or

(b)is still considering the matter; or

(c)refuses to approve the disclosure statement.

(9)If the Registrar approves an amended or different disclosure statement, or refuses to approve a disclosure statement, the Registrar must give the person who submitted the draft statement written notice of the reasons for doing so.

[Section 16 amended: No. 7 of 2016 s. 13.]

17.Approval of rules

(1)A draft of the rules proposed for the co‑operative (including active membership provisions in accordance with Part 6) must be submitted to the Registrar at least 35 days (or a shorter period the Registrar may allow in a particular case) before the formation meeting is due to be held.

(2)The draft rules submitted under subsection (1) must be accompanied by a written statement specifying the date on which the formation meeting is due to be held.

(3)The proposed rules must —

(a)be in accordance with section 98; and

(b)be in a form that may reasonably be approved.

(4)The Registrar may —

(a)approve the proposed rules as submitted; or

(b)approve different proposed rules to those submitted; or

(c)refuse to approve the proposed 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 proposed rules by giving written notice of that approval to the person who submitted the proposed rules to the Registrar.

(6)The Registrar is taken to have approved the proposed rules as submitted to the Registrar unless at least 5 days before the date specified in the written statement submitted under subsection (2), the Registrar gives written notice to the person who submitted the proposed rules that the Registrar —

(a)has approved different proposed rules to those submitted; or

(b)is still considering the matter; or

(c)refuses to approve the proposed rules.

(7)If the Registrar approves different rules to those submitted, or refuses to approve proposed rules, the Registrar must give the person who submitted the proposed rules notice of the reasons for doing so.

[Section 17 amended: No. 7 of 2016 s. 14.]

Division 4 — Registration of proposed co‑operative

18.Application for registration of proposed co‑operative

(1)An application for registration as a co‑operative, other than an application by a corporation under Division 5, must —

(a)be made in the form approved by the Registrar; and

(b)be accompanied by the fee prescribed by the regulations; and

(c)be signed by —

(i)for a co‑operative group, at least 2 directors elected at the formation meeting; and

(ii)for 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)a copy of the proposed rules, certified in writing by the chairman and secretary for the formation meeting to have been agreed to at the formation meeting in accordance with section 15(2)(c); and

(ii)in the case of a proposed distributing co‑operative, or a proposed non‑distributing co‑operative that is the subject of a direction under section 16(2B) — a copy of the disclosure statement, certified in writing by the chairman and secretary for the formation meeting to have been presented to that meeting as required by section 15(2)(b); and

(iii)a statement listing the name, address, occupation and place and date of birth of each person elected at the formation meeting in accordance with section 15(2)(e) to be a director of the proposed co‑operative and containing a certificate signed by the chairman and secretary verifying that those persons were elected; and

(iv)a certificate signed by the chairman and secretary verifying that a specified person is the person authorised under section 15(2)(f); and

(v)any other particulars that the Registrar may require.

(2)The application must be lodged 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.

[Section 18 amended: No. 7 of 2016 s. 15.]

19.Registration of co‑operative

(1)When 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 satisfied that the requirements referred to in subsection (2) have been met.

(2)The requirements for registration of a co‑operative under this Division are that —

(a)the proposed rules of the proposed co‑operative must be those approved by the Registrar under section 17; and

(b)the requirements of this Act must have been complied with in relation to the proposed co‑operative and compliance must be likely to continue; and

(c)the proposed co‑operative must be designed to function in accordance with the co‑operative principles or, if it is not designed to function entirely in accordance with the co‑operative principles, the Registrar must be satisfied that there are special reasons why the co‑operative should be registered under this Act; and

(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.

20.Incorporation and certificate of registration

(1)The incorporation of the co‑operative takes effect on the registration of the co‑operative.

(2)On the registration of the co‑operative, the Registrar must issue a certificate of registration.

Division 5 — Registration of an existing corporation

21.Existing corporation can be registered

A corporation may apply to the Registrar to be registered as a co‑operative under this Act, if the corporation is —

(a)incorporated or registered or deemed to be registered under the Corporations Act; or

(b)incorporated or registered under any other Act relating to the incorporation or registration of bodies corporate.

22.Formation meeting

(1)Before applying for registration as a co‑operative, a corporation must pass a resolution approving of —

(a)the proposed registration; and

(b)any alterations of its existing constitution necessary to enable the corporation to comply with this Act; and

(c)the proposed rules of the proposed co‑operative approved under section 17, including active membership provisions in accordance with Part 6.

(2)At the meeting to pass the resolution, a disclosure statement approved under section 16 must be presented to the 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 16(2B).

(3)A resolution under this section must have been passed by a two‑thirds majority of eligible members present at the meeting.

[Section 22 amended: No. 7 of 2016 s. 16.]

23.Application for registration

(1)An application for registration under this Division must be —

(a)in the form approved by the Registrar; and

(b)accompanied by the fee prescribed by the regulations; and

(c)accompanied by —

(i)a written declaration, signed no more than 28 days before the application for registration by the directors or the 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 form approved by the Registrar 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 constitution of the corporation in force at the date of the application; and

(iv)2 copies of the proposed rules of the co‑operative, certified in writing by the directors or the committee of management to have been approved under section 22(1) by resolution; and

(v)in the case of a proposed distributing co‑operative, or a proposed non‑distributing co‑operative that is the subject of a direction under section 16(2B) — a copy of the disclosure statement presented to the meeting held under section 22, certified in writing by the directors or committee of management of the corporation to have been presented to that meeting; 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 existing corporation; and

(viii)a statement setting out the connection that the proposed co‑operative would have to this State; and

(ix)a statement of the address of the co‑operative’s registered office or proposed registered office; and

(x)any other particulars that the Registrar may require.

[(2)deleted]

[Section 23 amended: No. 7 of 2016 s. 17.]

24.Requirements for registration

(1)When an application is made for registration as a co‑operative under this Division, the Registrar must register the corporation as a co‑operative under this Act and register its rules under this Act if the Registrar is satisfied that the requirements for registration of the co‑operative have been met.

(2)The requirements for registration as a co‑operative under this Division are as follows —

(a)the proposed rules of the proposed co‑operative must be the proposed rules approved by the Registrar under section 17;

(b)the requirements of this Act must have been complied with in relation to the proposed co‑operative and compliance must be likely to continue;

(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 State.

(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 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 Act, 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.

[Section 24 amended: No. 7 of 2016 s. 18.]

25.Transitional provision

(1)This section applies to a corporation that, on registration under this Division, will be a transferred co‑operative.

(2)Section 24(4) to (6) does not apply to the corporation.

(3)If the Registrar decides to register the corporation, the Registrar must ensure that the corporation ceases to be registered under the old Act.

26.Certificate of registration

(1)On the registration of a corporation as a co‑operative, the Registrar must —

(a)issue a certificate of registration to the corporation; and

(b)publish notice of the issue of the certificate in the Gazette.

(2)The corporate name of a corporation registered as a co‑operative is the name approved by the Registrar, as specified in the certificate of registration issued by the Registrar.

27.Effect of registration

(1)The corporation is taken to be incorporated under this Act on its registration.

(2)Except as expressly provided in this Act, the registration and incorporation of the corporation as a co‑operative does not prejudice any right of a member in respect of 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 which 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

28.Conversion of co‑operative

(1)A co‑operative may, by alteration 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 alteration 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 alteration to members of the co‑operative.

(3A)An alteration 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 103.

(3)An alteration of the rules for the conversion of a co‑operative must be approved by special resolution passed by means of a special postal ballot.

(4)The Registrar may, by order published in the Gazette, exempt a co‑operative or class of co‑operatives from the requirements of subsection (3).

(5)An exemption may be granted unconditionally or subject to conditions.

[Section 28 amended: No. 7 of 2016 s. 19.]

Division 7 — Reviews

29.Appeal against refusal to approve disclosure statement

The person who submitted a draft disclosure statement to the Registrar under this Act may appeal to the Supreme Court against a failure of the Registrar to approve the statement.

30.Appeal against refusal to approve draft rules

The person who submitted draft rules to the Registrar under this Act may appeal to the Supreme Court against a failure of the Registrar to approve the rules.

31.Appeal against refusal to register

The applicant for registration of a proposed co‑operative under this Part may appeal to the Supreme Court against a failure of the Registrar to register the co‑operative.

32.Supreme Court’s powers on appeal

The Supreme Court may make any order it considers appropriate to dispose of an appeal under this Division.

Division 8 — General

33.Acceptance of money by proposed co‑operative

(1)A proposed co‑operative that, or a person on a proposed co‑operative’s behalf 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.

Penalty for this subsection: a fine of $6 000.

(2)If a co‑operative is not registered within the period of 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.

Penalty for this subsection: a fine of $6 000.

[Section 33 amended: No. 7 of 2016 s. 20 and 200.]

34.Issue of duplicate certificate

The Registrar must issue a duplicate certificate of registration if —

(a)the Registrar is satisfied that the original certificate is lost or destroyed; and

(b)the fee prescribed by the regulations is paid.

Part 3 — Legal capacity and powers

Division 1 — General powers

35.Effect of incorporation

As a corporation, a co‑operative —

(a)has perpetual succession; and

(b)has a common seal; and

(c)may sue and be sued in its corporate name; and

(d)subject to this Act, 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.

36.Power to form companies and enter into joint ventures

Without limiting any other provision of this Act, 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 abolished

37.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.

38.Doctrine of ultra vires abolished

(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 that the co‑operative’s officers and members give effect to the provisions of the co‑operative’s rules relating to the primary activities or powers of the co‑operative.

(2)This Division is to be construed and have effect in accordance with subsection (1).

39.Legal capacity

(1)A co‑operative has, both within and outside this State, the legal capacity of an individual.

(2)Without limiting subsection (1), a co‑operative has, both within and outside this State, power —

(a)to issue and allot fully or partly paid shares in the co‑operative; and

(b)to issue debentures of, and CCUs in, 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 charge on 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 State; and

(g)to do any other act that it is authorised to do by any other law, including a law of a place outside this State.

(3)Subsections (1) and (2) have effect in relation to a co‑operative —

(a)if the co‑operative’s rules contain an express or implied restriction on, or an express or implied prohibition of, the exercise by the co‑operative of any of its powers, despite that restriction or prohibition; and

(b)if the rules of the co‑operative contain a provision stating the objects of the co‑operative, despite that fact.

(4)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.

[Section 39 amended: No. 7 of 2016 s. 198.]

40.Restrictions on co‑operatives in rules

(1)A co‑operative’s rules may contain an express restriction on, or an express prohibition of, the exercise by the co‑operative of a power of the co‑operative.

(2)The exercise of a power or the doing of an act in contravention of subsection (1) is not invalid merely because of the contravention.

(3)A co‑operative’s rules may set out the object of that co‑operative.

(4)The exercise of a power or the doing of an act in contravention of subsection (3) is not invalid merely because of the contravention.

Division 3 — Persons having dealings with co‑operatives

41.Assumptions entitled to be made

(1)A person is entitled to make the assumptions in section 42 in relation to —

(a)dealings with a co‑operative; and

(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 is entitled to assume a matter, the co‑operative or anyone referred to in subsection (1)(b) is not entitled to assert in proceedings in relation to the dealings that the matter is incorrect.

42.Assumptions

(1)A person may assume that the co‑operative’s rules 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 officer of the co‑operative —

(a)has been properly appointed; and

(b)has authority to exercise the powers and perform the duties customarily exercised or performed by a director or officer 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 properly appointed; and

(b)has authority to exercise the powers and to 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 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.

(5)A person may assume that a document has been duly 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 the secretary of the co‑operative.

(6)A person may assume that a document has been duly executed by the co‑operative if —

(a)the co‑operative’s seal appears to have been fixed to the document in accordance with Division 4; and

(b)the fixing of the seal 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 the secretary of the co‑operative.

(7)A person may assume that the officers and agents of the co‑operative properly perform their duties to the co‑operative.

43.Person who knows or ought to know is not entitled to 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’s connection or relationship with the co‑operative is such that the person ought to know that the assumption is not correct.

44.Lodgment of documents not to constitute constructive knowledge

(1)A person is not considered to have knowledge of a co‑operative’s rules, any of the contents of a co‑operative’s rules, 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 lodged with the Registrar;

(b)the rules, the document or the particulars are referred to in any other document that has been lodged with the Registrar, or lodged with a person under a previous law corresponding to a provision of this Act.

[(2)deleted]

(3)Despite subsection (1), a member of a co‑operative is taken to have knowledge of the rules of the co‑operative.

[Section 44 amended: No. 42 of 2011 s. 38.]

45.Effect of fraud

(1)A person’s entitlement under this Division to make an assumption is not affected merely by the fact that a person —

(a)has acted or is acting fraudulently in relation to the dealing or 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 is not entitled to make an assumption if the person has actual knowledge of the fraudulent action or forgery referred to in subsection (1).

Division 4 — Authentication and execution of documents and confirmation of contracts

46.Common seal

A document or proceeding requiring authentication by a co‑operative may be authenticated under the common seal of the co‑operative.

47.Official seal

(1)A co‑operative may, if authorised by its rules, have, for use in place of its common seal outside the State where its common seal is kept, one or more official seals, each of which must be a facsimile of the common seal of the co‑operative with the addition on its face of the name of every place where it is to be used.

(2)The person affixing an official seal must, in writing signed by the person, certify on the document to which it is affixed the date on which and the place at which it is affixed.

(3)A document sealed with an official seal is taken to be sealed with the common seal of the co‑operative.

48.Authentication need not be under seal

A document or proceeding requiring authentication by a co‑operative may be authenticated by the signature of two people, one of whom is a director of the co‑operative and one of whom is a director or the secretary of the co‑operative and need not be authenticated under the seal of the co‑operative.

49.Co‑operative may authorise person to execute deed

(1)A co‑operative may, by writing under its common seal, empower a person, either generally or in relation to a specified matter, as its agent or attorney (authorised attorney) to execute deeds on its behalf.

(2)A deed signed by an authorised attorney on behalf of the co‑operative and under the seal of the attorney, or under the appropriate official seal of the co‑operative, binds the co‑operative and has effect as if it were under the common seal of the co‑operative.

(3)The authority of an authorised attorney, as between the co‑operative and a person dealing with the attorney, continues during the period, if any, specified in the instrument conferring the authority or, if no period is specified, until notice of the revocation or termination of the authority of the attorney has been given to the person dealing with the attorney.

50.Execution under seal

A contract or other document executed, or purporting to have been executed, under the seal of a co‑operative is not invalid merely because a person attesting the affixing of the seal was in any way, whether directly or indirectly, interested in the contract or other document or in the matter to which the contract or other document relates.

51.Contractual formalities

(1)So far as concerns the formalities of making, varying or discharging a contract, a person acting under the express or implied authority of a co‑operative may make, vary or discharge a contract in the name of, or on behalf of, the co‑operative as if that contract were made, varied or discharged by an individual.

(2)The making, varying or discharging of a contract under subsection (1) is effectual in law and binds the co‑operative and other parties to the contract.

(3)This section does not prevent a co‑operative from making, varying or discharging a contract under its seal.

52.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

53.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, 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 the co‑operative is not registered, or the 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 that it thinks just in the circumstances, including ordering the co‑operative —

(a)to pay all or part of the damages that the person is liable to pay; or

(b)to transfer property that 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.

54.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 is not entitled to recover damages under section 53 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 respect of the person’s liability under this Division even if the person was acting, or purporting to act, as trustee for the co‑operative.

55.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 4 — Membership

Division 1 — General

56.Becoming a member

(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 person under 18 years of age may be admitted as a member of the co‑operative unless the rules of the co‑operative provide otherwise.

(4)A corporation is not, merely because it is a corporation, disqualified from being a member of a co‑operative unless the co‑operative’s rules 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 in accordance with its rules.

57.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 State; 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.

58.Qualification for membership and transitional provision

(1)Subject to subsection (3), a person is not qualified to be admitted to membership of a co‑operative unless —

(a)there are reasonable grounds for believing that 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)explain the consequences of failing to be or ceasing to be an active member.

(3)A person who was a member of a co‑operative immediately before that co‑operative became a transferred co‑operative is qualified to be admitted to membership of the co‑operative despite the absence of reasonable grounds for believing that the person will be an active member of the co‑operative.

59.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.

60.Members under 18 years of age

(1)A member of a co‑operative is not entitled to avoid any obligation or liability as a member under any contract, deed or other document entered into as a member on any ground relating to minority.

(2)A person under 18 years of age is not competent to hold an office in a co‑operative.

(3)A member of a co‑operative who is under 18 years of age is entitled to vote.

(4)This section applies only to individuals.

61.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)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.

(3)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.

62.Notification of shareholders and shareholdings

On the request of the board of directors of the co‑operative, a corporation that is a corporate member must provide the board of directors 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.

Penalty: a fine of $2 000.

63.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 Act —

(a)if the member’s membership is cancelled under Part 6;

(b)if the member is expelled or resigns in accordance with 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 death;

(e)if the contract of membership is rescinded on the ground of misrepresentation or mistake;

(f)in the case of a member that is a corporation, if the body is deregistered.

(2)On the death of a member, the member’s estate remains liable under section 67 as the member until the member’s personal representative or some other person is registered in the member’s place.

64.Additional circumstances in which membership ceases: co‑operatives with share capital

In the case of a co‑operative that has a share capital, in addition to the circumstances in section 63, a member ceases to be a member in each of the following circumstances —

(a)the member’s total shareholding is transferred to another person in accordance with the rules of the co‑operative, and the transferee is registered as holder;

(b)the member’s total shareholding is forfeited in accordance with this Act or the rules of the co‑operative;

(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 purchaser is registered as holder;

(d)the member’s total shareholding is purchased by the co‑operative in accordance with this Act;

(e)the amount paid up to the stated nominal value on the member’s shares is repaid to the member in accordance with the rules of the co‑operative.

65.Carrying on business with too few members

(1)A person who is a director of a co‑operative commits an offence if the person knowingly allows the co‑operative to continue to carry on business with fewer than the minimum number of members for more than 28 days after the number of members falls below the minimum number.

Penalty for this subsection: a fine of $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)for a co‑operative group, 2; or

(b)for any other co‑operative, 5, or if a lesser number is approved by the Registrar, the approved number.

(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 —

(a)in a form approved by the Registrar; and

(b)before the period to be extended ends.

[Section 65 amended: No. 7 of 2016 s. 21 and 200.]

Division 2 — Rights and liabilities of members

66.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 as a member in the register of members, directors and shares referred to in section 230(1)(a); and

(b)the member has made a payment to the co‑operative for membership or acquired a share or interest that is provided for in the rules of the co‑operative.

(2)The board of a co‑operative must ensure that the name of a person admitted to membership is recorded as a member in the register of members, directors and shares within 28 days after the person is admitted to membership.

Penalty for this subsection: a fine of $2 000.

[Section 66 amended: No. 7 of 2016 s. 200.]

67.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 Division.

(2)A member of a co‑operative with a 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 a 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.

68.Co‑operative to make information available to person intending 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 and eligible to do so —

(a)a consolidated copy of the rules of the co‑operative; and

(b)a copy of all special resolutions applicable to the member and passed by the members of the co‑operative since its last annual general meeting, except special resolutions providing for an alteration 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 10A.

(2A)The board of a co‑operative may comply with subsection (1) in relation to a person by giving the person a notice stating any or all of the following —

(a)that the person may request to inspect the documents referred to in subsection (1) at an office of the co‑operative nominated by the person;

(b)that the person may request to be sent an electronic copy of the documents referred to in subsection (1) by an electronic means nominated by the person;

(c)that the documents referred to in subsection (1) are available on a website and specifying the direct address on the website where the documents may be accessed.

(2)If a person who has received notice under this section makes a request referred to in subsection (2A)(a) or (b), the co‑operative must comply with that request.

[Section 68 amended: No. 7 of 2016 s. 22.]

69A.False copies of documents

(1)A person who, in purported compliance with section 68 —

(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 most recent financial information reported to members of the co‑operative under Part 10A;

and

(b)knows, or ought to know that, in a material respect, it is not a true copy of the resolution or information; and

(c)does not indicate to that person that it is not a true copy,

is guilty of an offence.

Penalty for this subsection: a fine of $1 000.

(2)A person who, in purported compliance with section 68 —

(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 most recent financial information reported to members of the co‑operative under Part 10A;

and

(b)knows, or ought to know that, in a material respect, it is not a true copy of the resolution or information; and

(c)does not indicate to that person that it is not a true copy,

is guilty of an offence.

Penalty for this subsection: a fine of $1 000.

[Section 69A inserted: No. 7 of 2016 s. 23.]

69.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 those fees and subscriptions on a person ceasing to be a member.

(2)The calculation of the amount of a particular member’s regular subscription may be based on the amount of business the member does with the co‑operative.

(3)A co‑operative must give a person intending to become a member written notice of entry fees or regular subscriptions payable by the member to the co‑operative.

(4)A person who becomes a member of a co‑operative is not liable to pay entry fees or regular subscriptions except —

(a)those fees or subscriptions of which the person was given written notice before becoming a member; and

(b)any regular subscriptions that may be imposed in accordance with the rules and of which the member has been given notice.

70.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 specified 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 specified dealings with the co‑operative for a fixed period.

(3)In particular, the provisions of the rules 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)An amount required to be paid to the co‑operative as liquidated damages is, for the purposes of section 72, a debt payable by the member to the co‑operative.

(5)A contract authorised by this section is binding on the co‑operative and all other parties even though, but for this Act, the contract would be invalid as being in restraint of trade.

(6)Rules authorised by this section are authorised even though, but for this section, the rules might be invalid as being in restraint of trade.

71.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 of the co‑operative so provide.

(2)A fine imposed under subsection (1) cannot exceed the maximum fine fixed by the rules in accordance with section 98.

(3)A fine cannot 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 that, in accordance with the rules of the co‑operative, is payable to the member from the co‑operative, for produce so delivered.

72.Charge and set off of co‑operative

(1)A co‑operative has, in relation to a debt payable by a member or former member to the co‑operative, a charge 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 charge created by this section may be enforced by the appropriation by the co‑operative of the thing that is subject to the charge, but only after at least 7 days notice has been given to the member or former member.

(4)Any share in respect of which capital has been so appropriated must be cancelled.

73.Repayment of shares on resignation or expulsion

(1)When a member resigns from a co‑operative or is expelled from a co‑operative under its rules, the co‑operative must —

(a)within 12 months after the date of resignation or expulsion, repay to the former member an amount (the repayable amount) made up of the amount paid up to the stated nominal value of the shares held by the member at the resignation or expulsion date, less any amount owed by the member to the co‑operative at the resignation or expulsion date under the rules of the co‑operative or any contract or otherwise; or

(b)in the case of a transferred co‑operative the rules of which state how to calculate the repayable amount owing to a former member at the time of resignation or expulsion, within 3 years after the date of resignation or expulsion, repay to the former member an amount in accordance with those rules; or

(c)within 12 months after the date of resignation or expulsion, 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 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, subject to the requirements of section 128 as to interest on the deposit;

(c)the co‑operative may issue debentures or CCUs to the former member in satisfaction of the amount.

(3)If the balance sheet of the co‑operative last issued before the resignation or expulsion of a member of the co‑operative disclosed a loss or deficiency or a significant change in the financial position or prospects of the co‑operative is subsequently reported prior to the resignation or expulsion, the paid up value of the member’s shares may, for the purposes of calculating the repayable amount, be reduced as described in subsection (4).

(4)The paid up value of the member’s shares may be reduced 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 resignation or expulsion of the member.

(5)Shares for which capital has been repaid under subsection (1)(a) or applied under subsection (1)(c) must be cancelled.

[Section 73 amended: No. 7 of 2016 s. 198.]

Division 3 — Death of member

74.Terms used

In this Division —

interest, of a deceased member in a co‑operative, includes —

(a)the member’s membership; and

(b)any credit balance due 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;

transfer, of an interest, includes the payment of money.

75.Transfer of share or interest on death of member

Subject to sections 76, 158(2) and 159, on the death of a member, 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)the person that the deceased’s personal representative specifies in an application made to the co‑operative within 3 months after the death of the member.

[Section 75 amended: No. 7 of 2016 s. 24.]

76.Transfer of small shareholdings and interests on death

(1)Subject to sections 158(2) and 159, if the total value of a deceased member’s shares or interest in a co‑operative is less than $10 000 (or such other amount as may be prescribed), the board may, on the basis of such evidence as it considers sufficient, transfer the shares or interest in accordance with whichever of the following paragraphs is appropriate —

(a)if the member or person 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 or person;

(b)if the member or person 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 that grant.

(2)A transfer cannot 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.

[Section 76 amended: No. 7 of 2016 s. 25.]

77.Value of shares and interests

The value of the shares or interest of a deceased member must be determined for the purposes of this Division in accordance with the rules of the co‑operative.

78.Co‑operative protected

Any transfer of property made by the board of a co‑operative in accordance with this Division is valid and effectual against any demand made on the co‑operative by any other person.

Division 4 — Disputes involving members

79.Grievance procedure

(1)The rules of a co‑operative must set out a grievance procedure for dealing with any dispute under the rules —

(a)between a member and another member; and

(b)between 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 section and section 80 —

member includes any person who was a member not more than 6 months before the dispute occurred.

80.Application to Supreme Court

(1)The Supreme Court may, on the application of a member of a co‑operative, or a 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 Supreme Court may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if the Court is of the opinion 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.

Division 5 — Oppressive conduct of affairs

81.Interpretation

In this Division, a reference to a member of a co‑operative includes, in the case of a co‑operative that has a share capital, a reference to a person to whom a share in the co‑operative has been transmitted by will or by operation of law.

82.Application of Division

This Division does not apply in respect of anything done under Part 6.

83.Who may apply for court order

The following persons may apply to the Supreme Court for an order under this Division —

(a)the Registrar;

(b)a member who believes that the affairs of the co‑operative are being conducted in a way that is —

(i)oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii)contrary to the interests of the members as a whole;

(c)a member who believes that an act or omission, or a proposed act or omission, by or on behalf of the co‑operative, or a resolution, or a proposed resolution, of members, was or would be —

(i)oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member; or

(ii)contrary to the interests of the members as a whole.

84.Orders that Supreme Court may make

On application under this Division, the Supreme Court may make any order that it considers appropriate including (without being limited to) one or more of the following orders —

(a)an order that the Registrar appoint an administrator of the co‑operative;

(b)an order that the co‑operative be wound‑up;

(c)an order for regulating the conduct of affairs of the co‑operative in the future;

(d)an order for the repayment of the member’s shares in accordance with the provisions of this Act for repayment of share capital;

(e)an order for the purchase of the shares of any member by the co‑operative and for the reduction accordingly of the co‑operative’s capital;

(f)an order directing the co‑operative to institute, prosecute, defend or discontinue specified proceedings, or authorising a member or members of the co‑operative to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the co‑operative;

(g)an order appointing a receiver or a receiver and manager of property of the co‑operative;

(h)an order restraining a person from engaging in specified conduct or from doing a specified act or thing;

(i)an order directing a co‑operative to become registered as a company under the Corporations Act;

(j)an order requiring a person to do a specified act or thing;

(k)an order as to costs;

(l)an order making alterations to the rules of the co‑operative.

[Section 84 amended: No. 7 of 2016 s. 26.]

85.Basis on which Supreme Court makes orders

The Supreme Court may make an order under this Division if it considers that —

(a)the affairs of a co‑operative are being conducted in a way that is —

(i)oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member (the oppressed member), whether or not in the capacity of a member; or

(ii)contrary to the interests of the members as a whole;

or

(b)an act or omission, or a proposed act or omission, by or on behalf of a co‑operative, or a resolution, or a proposed resolution, of members of a co‑operative, was or would be —

(i)oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member (the oppressed member), whether or not in the capacity of a member; or

(ii)contrary to the interests of the members as a whole.

86.Winding‑up need not be ordered if oppressed members prejudiced

The Supreme Court need not make an order under this Division for the winding‑up of a co‑operative if the Court considers that the winding‑up of the co‑operative would unfairly prejudice an oppressed member or unfairly prejudice the members as a whole.

[Section 86 amended: No. 7 of 2016 s. 27.]

87.Application of winding‑up provisions

If an order that a co‑operative be wound‑up is made under this Division, the provisions of this Act relating to the winding‑up of co‑operatives apply, with any changes that are necessary, as if the order had been made on an application filed in the Supreme Court by the co‑operative.

88.Changes to rules

(1)If an order under this Division makes an alteration to the rules of a co‑operative —

(a)the alteration has effect as if it had been properly made by special resolution of the co‑operative; and

(b)the co‑operative cannot (despite any other provisions of this Act) without the leave of the Supreme Court make any further alteration to the rules inconsistent with the provisions of the order.

(2)On receiving a copy of an order altering the rules of a co‑operative the Registrar must register the alteration.

89.Copy of order to be lodged with Registrar

An applicant for an order under this Division must lodge an office copy of the order with the Registrar within 14 days after it is made.

Penalty: a fine of $1 000.

Division 6A — Inspection of books

[Heading inserted: No. 7 of 2016 s. 28.]

90A.Order for inspection of books of co‑operative

(1)On application by a member of a co‑operative, the Supreme Court may make an order —

(a)authorising the applicant to inspect books of the co‑operative; or

(b)authorising another person (whether a member or not) to inspect books of the co‑operative on the applicant’s behalf.

(2)A person who —

(a)is granted leave under section 91; or

(b)applies for leave under that section; or

(c)is eligible to apply for leave under that section,

may apply to the Supreme Court for an order under subsection (3).

(3)On application, the Supreme Court may make an order authorising —

(a)the applicant to inspect books of the co‑operative; or

(b)another person to inspect books of the co‑operative on the applicant’s behalf.

(4)The Supreme Court may make the order only if it is satisfied that —

(a)the applicant is acting in good faith; and

(b)the inspection is to be made for a purpose connected with —

(i)applying for leave under section 91; or

(ii)bringing or intervening in proceedings with leave under that section.

(5)A person authorised to inspect books under this section may make copies of the books unless the Supreme Court orders otherwise.

[Section 90A inserted: No. 7 of 2016 s. 28.]

90B.Ancillary orders

If the Supreme Court makes an order under section 90A, the court may make any other orders it considers appropriate, including either or both of the following —

(a)an order limiting the use that a person who inspects books may make of information obtained during the inspection;

(b)an order limiting the right of a person who inspects books to make copies in accordance with section 90A(5).

[Section 90B inserted: No. 7 of 2016 s. 28.]

90C.Disclosure of information acquired in inspection

(1)A person who inspects books on behalf of an applicant under section 90A must not disclose information obtained during the inspection.

Penalty for this subsection: a fine of $500.

(2)Subsection (1) does not apply to the extent that the disclosure is to —

(a)the Registrar; or

(b)the applicant.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 90C inserted: No. 7 of 2016 s. 28.]

90D.Co‑operative may allow member to inspect books

(1)The board of a co‑operative, or the co‑operative by resolution passed at a general meeting, may authorise a member to inspect books of the co‑operative.

(2)Subsection (1) does not apply to —

(a)minutes of board meetings; or

(b)minutes of meetings of committees to which the board’s functions have been delegated under section 204(1).

[Section 90D inserted: No. 7 of 2016 s. 28.]

Division 6 — Proceedings on behalf of a co‑operative by members and others

90.Bringing, or intervening in, proceedings on behalf of a co‑operative

(1)A person may bring proceedings on behalf of a co‑operative, or intervene in proceedings to which a co‑operative is a party for the purpose of taking responsibility on behalf of the co‑operative for those proceedings, or for a particular step in those proceedings (for example, compromising or settling them), if —

(a)the person is —

(i)a member, former member, or person entitled to be registered as a member, of the co‑operative or of a related corporation; or

(ii)an officer or former officer of the co‑operative; or

(iii)the Registrar;

and

(b)the person is acting with leave granted under section 91.

(2)Proceedings brought on behalf of a co‑operative may be brought in the co‑operative’s name.

91.Applying for and granting leave

(1)A person referred to in section 90(1)(a) may apply to the Supreme Court for leave to bring, or to intervene in, proceedings.

(2)The Supreme Court may grant the application if it is satisfied that —

(a)it is probable that the co‑operative will not itself bring the proceedings, or properly take responsibility for them, or for a step in them; and

(b)the applicant is acting in good faith; and

(c)it is in the best interests of the co‑operative that the applicant be granted leave; and

(d)if the applicant is applying for leave to bring proceedings, there is a serious question to be tried; and

(e)either —

(i)at least 14 days before making the application, the applicant gave written notice to the co‑operative of the intention to apply for leave and of the reasons for applying; or

(ii)it is appropriate to grant leave even if subparagraph (i) is not satisfied.

92.Substitution of another person for the person granted leave

(1)Any of the following persons may apply to the Supreme Court for an order that they be substituted for a person to whom leave has been granted under section 91 —

(a)a member, former member, or person entitled to be registered as a member, of the co‑operative or a related corporation;

(b)an officer, or former officer, of the co‑operative;

(c)the Registrar.

(2)The application may be made whether or not the other person has already brought the proceedings or made the intervention.

(3)The Supreme Court may make the order if it is satisfied that —

(a)the applicant is acting in good faith; and

(b)in all the circumstances, it is appropriate to make the order.

(4)An order substituting one person for another person has the effect that —

(a)the grant of leave is taken to have been made in favour of the substituted person; and

(b)if the other person has already brought the proceedings or intervened, the substituted person is taken to have brought those proceedings or to have made that intervention.

93.Effect of ratification by members

(1)A ratification or approval of conduct by members of a co‑operative —

(a)does not prevent a person from bringing or intervening in proceedings with leave under section 91 or from applying for leave under that section; and

(b)does not have the effect that proceedings brought or intervened in with leave under section 91 must be decided in favour of the defendant, or that an application for leave under that section must be refused.

(2)The Supreme Court may take into account a ratification or an approval of the conduct by members of a co‑operative in deciding what order or judgment (including as to damages) to make in proceedings brought or intervened in with leave under section 91 or in relation to an application for leave under that section.

(3)In taking a ratification or approval into account under subsection (2), the Supreme Court may have regard to —

(a)how well‑informed about the conduct the members were when deciding whether to ratify or approve that conduct; and

(b)whether the members who ratified or approved the conduct were acting for proper purposes.

94.Leave to discontinue, compromise or settle proceedings brought, or intervened in, with leave

Proceedings brought, or intervened in, with leave cannot be discontinued, compromised or settled without the leave of the Supreme Court.

95.General powers of Supreme Court

(1)The Supreme Court may make any order, and give any direction, that it thinks just in relation to proceedings brought or intervened in with leave, or in relation to an application for leave, including —

(a)interim orders; and

(b)directions about the conduct of the proceedings, including requiring mediation; and

(c)an order directing the co‑operative, or an officer of the co‑operative, to do, or not to do, any act; and

(d)an order appointing an independent person to investigate, and report to the Supreme Court, on —

(i)the financial affairs of the co‑operative; or

(ii)the facts or circumstances that gave rise to that cause of action the subject of the proceedings; or

(iii)the costs incurred in the proceedings and the person granted leave.

(2)A person appointed by the Supreme Court under subsection (1)(d) is entitled, on giving reasonable notice to the co‑operative, to inspect and make copies of any books of the co‑operative for any purpose connected with their appointment.

96.Power of Supreme Court to make costs order

At any time, the Supreme Court may, in relation to proceedings brought or intervened in with leave under section 91 or an application for leave under that section, make any orders it thinks just about the costs of the person who applied for or was granted leave, of the co‑operative or of any other party to the proceedings or application, including an order requiring indemnification for costs.

Part 5  Rules

97.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 secretary and the chief executive officer 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 that person.

98.Content of rules

(1)The rules of a co‑operative must state or otherwise make provision for the matters specified in Schedule 1.

(2)The rules must be divided into paragraphs numbered consecutively.

(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 prescribed under section 101 as in force at a particular time.

(5)The rules may provide for the co‑operative to impose a fine, payable to the co‑operative, on a member for an infringement of the rules.

(6)If the rules provide for the imposition of a fine, the rules must specify the maximum fine that may be imposed on a member.

(7)The maximum fine fixed by the rules cannot be more than an amount prescribed by the regulations as the maximum fine.

(8)The rules may contain other provisions not inconsistent with this Act.

[Section 98 amended: No. 7 of 2016 s. 29.]

99.Purchase and inspection of copy of rules

(1)A 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 cannot be more than the fee prescribed by the regulations for obtaining a copy of the rules from the Registrar.

(3)A person is entitled to obtain from the Registrar a copy of the rules of a co‑operative on payment of the fee prescribed by the regulations.

100.False copies of rules

(1)A person who gives 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 alterations of rules, other than those which have been duly registered, representing that they are binding on the members of the co‑operative is guilty of an offence.

Penalty for this subsection: a fine of $1 000.

(2)A person who alters any of the rules of a co‑operative after they have been registered and circulates them representing that they have been duly registered when they have not been is guilty of an offence.

Penalty for this subsection: a fine of $1 000.

[Section 100 amended: No. 7 of 2016 s. 200.]

101.Model rules

(1)The regulations may prescribe model rules.

(2)The model rules may make provision for any matter for which the rules of a co‑operative may make provision.

102.Rules can only be altered in accordance with this Act

The rules of a co‑operative cannot be altered except in accordance with this Act.

103.Approval of certain alterations of rules

(1A)This section applies to —

(a)an alteration of rules referred to in subsection (1B); and

(b)an alteration of rules referred to in section 28(3A) relating to the conversion of a non‑distributing co‑operative to a distributing co‑operative.

(1B)The Registrar may, by order published in the Gazette, specify for the purposes of this section classes of alterations 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.

(1)A proposed alteration of the rules of a co‑operative to which this section applies must be approved by the Registrar before the resolution altering the rules is passed by the co‑operative or the board of the co‑operative.

(2)A draft of the proposed alteration must be submitted to the Registrar at least 21 days (or a shorter period the Registrar may allow in a particular case) before —

(a)the notice of the proposed special resolution altering the rules is due to be given to the members by the co‑operative; or

(b)the resolution is due to be passed by the board of the co‑operative.

(3)The proposed alteration submitted under subsection (2) must be accompanied by a written statement specifying the date on which the notice is due to be given to members or the resolution is due to be passed by the board, as the case may be.

(4)The proposed alteration must —

(a)be in accordance with section 98; and

(b)be made in a form approved by the Registrar; and

(c)be accompanied by a statement setting out the reasons for the alteration.

(5)The Registrar may —

(a)approve the proposed alteration as submitted; or

(b)approve a different alteration to that submitted; or

(c)refuse to approve the proposed alteration; or

(d)require the co‑operative to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b) or (c).

(6)Subject to subsection (7), the Registrar approves a proposed alteration by giving written notice of the approval to the co‑operative.

(7)The Registrar is taken to have approved a proposed alteration as submitted to the Registrar unless at least 5 days before the date specified in the written statement submitted under subsection (3), the Registrar gives written notice to the co‑operative that the Registrar —

(a)has approved a different alteration to that submitted; or

(b)has refused to approve the proposed alteration; or

(c)is still considering the matter.

(8)If the Registrar approves a different alteration to that submitted, or refuses to approve a proposed alteration, the Registrar must give the co‑operative written notice of the reasons for doing so.

[Section 103 amended: No. 7 of 2016 s. 30.]

104.Alteration by special resolution

The rules of a co‑operative must be altered by special resolution unless this Act provides otherwise.

105.Alteration by resolution of board

(1)The rules of a co‑operative may be altered by a resolution passed by the board if the alteration does no more than give effect to a requirement, restriction or prohibition imposed under the authority of this Act.

(2)If the rules of a co‑operative are altered under this section, the co‑operative must cause the alteration to be notified in writing to its members as soon as practicable after the alteration takes effect and in any event not later than the day when notice is given to the members of the next annual general meeting of the co‑operative after the alteration takes effect.

106.Alteration does not take effect until registered

(1)An alteration 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 alteration must —

(a)be made in a form approved by the Registrar; and

(b)be made within 28 days, or a shorter or longer period prescribed by the regulations, after the resolution to alter the rules is passed; and

(c)be accompanied by a consolidated copy of the rules of the co‑operative, including the alteration.

(3)The Registrar must register the alteration unless —

(a)the Registrar is satisfied that the alteration is contrary to this Act; or

(b)the Registrar has other reasonable cause to refuse to register the alteration.

(4)A certificate of registration of an alteration 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 in favour of any guarantor of that advance, evidence that the alteration in the rules was properly made.

107.Appeal against refusal to approve alteration

A co‑operative may appeal to the Supreme Court against a failure of the Registrar to approve an alteration of its rules.

108.Appeal against refusal to register

A co‑operative may appeal to the Supreme Court against a failure of the Registrar to register an alteration of its rules.

109.Supreme Court’s powers on appeal

The Supreme Court may make any order it considers appropriate to dispose of an appeal under section 107 or 108.

Part 6 — Active membership

Division 1 — Definitions

110.Term used: active membership resolution

In this Part —

active membership resolution has the meaning given in section 112(2).

111.What is active membership

For the purposes of this Act, a member of a co‑operative is an active member of the co‑operative if the member —

(a)uses or supports an activity of, or maintains a relationship or an arrangement with, the co‑operative, for carrying on a primary activity of the co‑operative, in the way and to the extent that the rules of the co‑operative provide is sufficient to establish active membership; or

(b)maintains any other relationship or arrangement with the co‑operative for carrying on a primary activity of the co‑operative that the regulations provide is sufficient to establish active membership.

112.What are active membership provisions and resolutions

(1)Active membership provisions in the rules of a co‑operative are provisions in the rules that state —

(a)which of the activities of the co‑operative are the primary activities of the co‑operative; and

(b)the way in which and the extent to which a member of the co‑operative must use or support an activity of, or maintain a relationship or an arrangement with, the co‑operative for carrying on a primary activity of the co‑operative, in order to establish active membership of the co‑operative.

(2)An active membership resolution is a resolution that would, if given effect to, make or amend active membership provisions in the rules of a co‑operative.

Division 2 — Rules to contain active membership provisions

113.Number of primary activities required

A co‑operative must have at least one primary activity.

114.Rules to contain active membership provisions

The board of a co‑operative must ensure that the rules of the co‑operative contain active membership provisions in accordance with this Part.

115.Factors and considerations for determining primary activities etc.

(1)The board of a co‑operative must ensure that the relevant factors and considerations are taken into account in deciding —

(a)which of the activities of a co‑operative are its primary activities; and

(b)the way and extent to which a member is required to use or support an activity of, or maintain a relationship or an arrangement with, a co‑operative, for carrying on a primary activity of the co‑operative, in order to establish active membership of the co‑operative.

(2)The relevant factors and considerations are —

(a)the primary activity or, if more than one, the primary activities taken together must form the basic purpose for which the co‑operative exists and a significant contribution to the business of the co‑operative; and

(b)the way and extent of the required utilisation, support, relationship or arrangement should be reasonable when considered in relation to the activities of the co‑operative as a whole; and

(c)any other factors and considerations that are prescribed by the regulations.

(3)The regulations may —

(a)provide for the matters to be taken into account in deciding whether an activity makes a significant contribution to the business of the co‑operative; and

(b)specify minimum percentages of turnover, minimum amounts of income or minimum amounts of business necessary to constitute that significant contribution.

(4)Nothing in this section limits the right of active members other than the board of the co‑operative to propose an active membership resolution.

116.Active membership provisions: distributing co‑operatives

The only active membership provisions that are permitted to be contained in the rules of a distributing co‑operative are —

(a)provisions requiring a member to use an activity of the co‑operative for carrying on a primary activity specified in the provisions to establish active membership; and

(b)any other active membership provisions that the Registrar may approve.

117.Regular subscription: active membership of non‑distributing co‑operative

(1)Active membership provisions for a non‑distributing co‑operative may provide that the payment of a regular subscription by a member of the co‑operative, to be applied to a primary activity of the co‑operative, is sufficient to establish active membership of the co‑operative.

(2)A member of a co‑operative who would, on payment of the subscription, be an active member of a co‑operative is taken to be an active member until the subscription is payable.

Division 3 — Active membership resolutions

118.Notice of meeting

(1)At least 21 days notice must be given to members of a co‑operative of a meeting at which an active membership resolution is to be proposed.

(2)The notice must, in addition to the other matters required under this Act to be stated —

(a)contain the full text of the proposed resolution; and

(b)contain a copy of section 120.

119.Eligibility of directors to vote on proposal at board meeting

If the board of a co‑operative is meeting to consider a proposal to submit an active membership resolution to a meeting of the co‑operative all the directors are eligible to vote on that proposal at the meeting of the board.

Division 4 — Cancellation of membership of inactive or missing members

120.Cancellation of membership of inactive or missing member

(1)In this section —

required period, in relation to a co‑operative, means —

(a)3 years; or

(b)a shorter period if specified in the rules of the co‑operative.

(2)Subject to subsection (3), sections 123 and 124, the board of a co‑operative must declare the membership of a member cancelled if —

(a)the whereabouts of the member are not presently known to the co‑operative and have not been known to the co‑operative for at least the required period before that time; or

(b)the member is not presently an active member of the co‑operative and has not been an active member of the co‑operative at any time during the required period immediately before that time.

(3)Subsection (2) applies to a member only if he or she was a member of the co‑operative throughout the required period.

(4)Whether a member was an active member at a particular time in the past is to be decided by reference to the active membership provisions in force at that time.

(5)The board’s declaration under this section has the effect of cancelling the membership concerned.

(6)A person may apply to the Supreme Court for an order under section 126 in relation to the cancellation of the person’s membership under this section.

121.Share to be forfeited if membership cancelled

(1)If a co‑operative has a share capital, the board of the co‑operative must declare the shares of a member to be forfeited at the same time as the member’s membership is cancelled under section 120.

(2)The board’s declaration has the effect of forfeiting the shares concerned.

(3)Nothing in this section affects the operation of section 127.

122.Failure to cancel membership — offence by director

If the board of a co‑operative fails to cancel the membership of a member as required by this Part, a director of the co‑operative who did not use all due diligence to prevent the failure commits an offence.

Penalty: a fine of $2 000.

123.Deferral of forfeiture by board

(1)The board of a co‑operative may by resolution defer cancellation of a member’s membership for a period of up to 12 months (the deferral period) —

(a)if the board has reasonable grounds to believe that a member has ceased to be an active member because of unusual circumstances that prevent the member fulfilling his or her active membership obligations; or

(b)if —

(i)the board thinks that during the deferral period an active membership resolution may be put to the members of the co‑operative; and

(ii)the effect of the resolution would be relevant to the question of whether the member is an active member.

(2)The board of the co‑operative must review the resolution to defer within the deferral period to determine if a further resolution should be made under subsection (1).

124.Cancellation of membership prohibited in certain circumstances

Unless the regulations otherwise provide, the board of a co‑operative must not declare the membership of a member to be cancelled under this Part —

(a)if the co‑operative is insolvent; or

(b)if the co‑operative is under administration under the Corporations Act Part 5.3A as applying under this Act; or

(c)if a compromise or an arrangement is being administered in relation to the co‑operative; or

(d)if the co‑operative is in the course of being wound‑up; or

(e)if an appointment of a receiver, whether or not a receiver and manager, of any property of the co‑operative is in force; or

(f)if the co‑operative has, for the purposes of being registered as a company under the Corporations Act, lodged with the Registrar a copy of the entry made in the minute book of the co‑operative under section 185; or

(g)in other circumstances as may be prescribed by the regulations.

125.Notice of intention to cancel membership

(1)Unless subsection (2) applies, the board of a co‑operative must ensure that notice of its intention to declare the membership of a member to be cancelled is given to the member not less than 28 days prior to the day of the cancellation.

(2)Notice is not required to be given under this section if —

(a)the member’s whereabouts are unknown to the co‑operative; or

(b)the amount required to be repaid to the member in relation to the cancelled membership, whether because of the cancellation of shares or otherwise, does not exceed the amount prescribed by the regulations, or if an amount is not prescribed, $100.

126.Order of Supreme Court against cancellation

(1)If the Supreme Court is satisfied that the cancellation of a member’s membership under section 120 was or would be unreasonable, the Court may, on application by the member or former member, by order direct that the membership should not have been cancelled or should not be cancelled.

(2A)An application for an order can only be made within 6 months after —

(a)notice of the board’s intention to declare the membership to be cancelled is given to the member under section 125(1); or

(b)if notice was not required as referred to in section 125(2) — the cancellation takes effect.

(2)While an order is in force under this section —

(a)the membership concerned is not required to be cancelled and any shareholding of the member is not required to be forfeited; and

(b)the person whose membership was cancelled is entitled to be reinstated as a member of the co‑operative with all the rights and entitlements, including any shareholding, attaching to or arising from the former membership.

(3)Reinstatement of a member under this section is to be effected in accordance with the directions of the Supreme Court.

[Section 126 amended: No. 7 of 2016 s. 31.]

127.Repayment of amounts due because of cancelled membership

(1)If the membership of a member of a co‑operative is cancelled under this Part, the co‑operative must —

(a)within 12 months after the date of cancellation, repay to the former member an amount (the repayable amount) made up of the amount paid up to the stated nominal value of the shares forfeited by the member at the time of cancellation less any amount owed by the member to the co‑operative at that time under the rules of the co‑operative or any contract or otherwise; or

(b)in the case of a transferred co‑operative the rules of which state how to calculate the repayable amount owing to a former member at the time of cancellation of membership, within 3 years after the date of cancellation, repay to the former member an amount in accordance with those rules; or

(c)within 12 months after the date of cancellation, apply the repayable amount under subsection (2) if —

(i)the board considers that 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 of the following ways —

(a)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, subject to the requirements of section 128 as to interest on the deposit;

(b)the co‑operative may issue debentures or CCUs to the former member in satisfaction of the amount;

(c)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.

(3)If the balance sheet of the co‑operative last issued before the cancellation of a member’s membership disclosed a loss or deficiency or a significant change in the financial position or prospects of the co‑operative is subsequently reported prior to the loss or deficiency, the paid up value of the member’s shares may, for the purposes of calculating the repayable amount, be reduced as described in subsection (4).

(4)The paid up value of the member’s shares may be reduced 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 at the time of cancellation.

(5)If the former member is subsequently readmitted to membership, any amount held by the co‑operative under this section must, if the member so requests, be applied towards the cost of admission to membership, including any subscription for share capital.

(6)Despite subsection (2)(c), if —

(a)the co‑operative cannot, after taking all reasonable action, find the former member; and

(b)the payment due is less than the amount prescribed by the regulations, or if an amount is not prescribed, $100,

the co‑operative may appropriate the payment as a donation to the co‑operative.

[Section 127 amended: No. 7 of 2016 s. 198.]

128.Interest on deposits, debentures and CCUs

(1)This section applies when —

(a)the amount payable to a former member under section 73 or 127 is applied as a deposit with the co‑operative; or

(b)the co‑operative allots or issues debentures or CCUs to the former member in satisfaction of that amount.

(2)The deposit, debenture or CCU bears interest during any period —

(a)in the case of 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 determined, 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 determined in relation to the share capital of the co‑operative, at the rate that the board of the co‑operative considers reasonable;

or

(b)in the case of a co‑operative without share capital, at the rate that the board of the co‑operative considers reasonable; or

(c)if the rules provide for a rate to be payable that is higher than the rate applicable under paragraph (a) or (b), at that higher rate.

(3)A former member may agree to the rate of interest being less than that which would otherwise be payable under this section and may agree to no interest being paid.

(4)The following provisions of the Corporations Act, as applied by section 250 of this Act, do not apply to an allotment or issue of debentures or CCUs under this section —

(a)Chapter 2L;

(b)Chapter 6D.

[Section 128 amended: No. 7 of 2016 s. 198.]

129.Repayment of deposits and redemption of debentures and CCUs

(1)A deposit, debenture or CCU to which an amount payable to a former member is applied under this Division or section 73(2) is to be repaid or redeemed, as the case may be, as soon as repayment or redemption would not, in the opinion of the board, adversely affect the financial position of the co‑operative.

(2)The deposit, debenture or CCU must in any case be repaid or redeemed within 10 years, or within any shorter period that the rules of the co‑operative may require, after cancellation of the member’s membership.

[Section 129 amended: No. 7 of 2016 s. 198.]

130.Register of cancelled memberships

A co‑operative must keep a register stating the particulars, as prescribed by the regulations, of persons whose membership has been cancelled under this Part.

Division 5 — Entitlements of former members of distributing co‑operatives

131.Application of Division

(1)This Division only applies to distributing co‑operatives.

(2)Sections 132, 133 and 134 apply to a distributing co‑operative only to the extent that they are not inconsistent with rules of the co‑operative that were in effect immediately before the commencement of the Co‑operatives Amendment Act 2016 section 32.

[Section 131 amended: No. 7 of 2016 s. 32.]

132.Former shareholders to be taken to be shareholders for certain purposes

(1)Even though a person’s shares in a co‑operative have been forfeited under this Part, the person is to be taken to be the holder of shares in the co‑operative (the same in all respects as those that were forfeited) for the following purposes —

(a)the entitlements of a shareholder in relation to the purchase of shares in the co‑operative pursuant to an offer described in section 289(1)(a), (b) or (c) or the purchase of all the shares in the co‑operative, if the offer or purchase occurs within 2 years after the person’s shares were forfeited;

(b)the entitlement of a shareholder when the co‑operative becomes registered as a company if the relevant special resolution under section 306 is passed within 2 years after the person’s shares were forfeited;

(c)the entitlement of a shareholder to a distribution of surplus in a winding‑up of the co‑operative that commences within 2 years after the person’s shares were forfeited.

(2)Subsection (1)(a) does not apply to —

(a)an offer described in section 289(1)(a) or (c) that is made by another co‑operative; or

(b)the purchase of all the shares in the co‑operative by another co‑operative.

(3)Subsection (1)(c) does not apply if the winding‑up is for the purposes of a merger under Part 12 Division 1.

(4)For the removal of doubt, it is declared that the entitlement under subsection (1)(a) of a person whose shares have been forfeited does not include an entitlement to vote on any matter.

(5)This section does not apply to a forfeited shareholding in a co‑operative if section 133 operates to require that forfeited shareholding to be regarded as a forfeited shareholding in another co‑operative.

[Section 132 amended: No. 7 of 2016 s. 33.]

133.Entitlements of former shareholders on mergers etc.

(1)This section applies when a person’s shares in a co‑operative (the original co‑operative) are forfeited under this Part and within 2 years after that forfeiture —

[(a)deleted]

(b)another co‑operative (the new co‑operative) is created as a result of a merger under Part 12 Division 1 involving the original co‑operative; or

(c)the engagements of the original co‑operative are transferred to another co‑operative (the new co‑operative) under Part 12 Division 1.

(2)A person referred to in subsection (1) is, for the purposes of the operation of section 132, and the further operation of this section, taken to have held shares in the new co‑operative and as having had those shares in the new co‑operative forfeited under this Part when the person’s shares in the original co‑operative were forfeited.

(3)The extent of the forfeited shareholding in the new co‑operative is determined as follows —

(a)if the entitlement of active members of the original co‑operative in the circumstances concerned is solely an entitlement to be allotted shares in the new co‑operative, the forfeited shareholding in the new co‑operative is the shareholding to which the person would have been entitled had the person’s shares in the original co‑operative not been forfeited;

(b)in any other case, the forfeited shareholding in the new co‑operative is the shareholding that is the same in all respects as the forfeited shareholding in the original co‑operative.

(4)The determination under subsection (3)(a) of the person’s shareholding in the new co‑operative must be made —

(a)solely on the basis of the person’s shareholding in the original co‑operative when the shares were forfeited or, in a further operation of this section in respect of the person, when the person was first to be regarded as having a forfeited shareholding in the original co‑operative; and

(b)without regard to any additional shareholding in the original co‑operative to which the person would have become entitled had the shares not been forfeited, whether as a result of any bonus share issue or otherwise.

[Section 133 amended: No. 7 of 2016 s. 34.]

134.Set off of amounts repaid etc. on forfeited shares

(1)If a person has an entitlement because of the operation of section 133, the entitlement operates to end any liability of the co‑operative —

(a)to repay to the person under section 127 any amount for the forfeited shares concerned; or

(b)in respect of a deposit held by the co‑operative, or debentures allotted or issued to the person, or CCUs issued under section 127 for the forfeited shares concerned, except a liability to pay interest that is payable but unpaid.

(2)If an amount has been repaid to a person under section 127 or 129, the amount repaid is to be set off against any entitlement of the person under section 132 for the forfeited shares concerned.

(3)If the amount repaid cannot be set off against the entitlement because the entitlement is not, or is only partly, an entitlement to money, the entitlement is lost unless the person pays to the co‑operative the amount repaid to the person and does so within the period required under subsection (4).

(4)If the circumstances referred to in subsection (3) arise, the co‑operative concerned must —

(a)give written notice of the matter by post to the person concerned at the person’s address last known to the co‑operative, specifying a period of not less than 28 days after the notice is given during which any amount repaid must be paid to the co‑operative; and

(b)publish a general notice to that effect in a newspaper circulating generally in the district in which the registered office of the co‑operative is situated.

[Section 134 amended: No. 7 of 2016 s. 198.]

135.Regulations may exempt co‑operatives from provisions

The regulations may exempt a co‑operative from a provision of this Division.

Part 7 — Shares

Division 1 — Nature of share

136.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 Act 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 respect of 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

[Heading inserted: No. 7 of 2016 s. 35.]

137A.Registration of current disclosure statement

(1)A distributing co‑operative must take all reasonable steps to ensure that it has a current disclosure statement in accordance with this section registered with the Registrar.

Penalty for this subsection: a fine of $1 000.

(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 disclosure statement approved by the Registrar under section 16 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 lodge a new disclosure statement with the Registrar for registration 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.

Penalty for this subsection: a fine of $1 000.

(6)A disclosure statement lodged under subsection (5) is taken to be registered with the Registrar.

[Section 137A inserted: No. 7 of 2016 s. 36.]

137B.Restrictions on advertising and publicity: shares

(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 registered with the Registrar under section 137A.

Penalty for this subsection: a fine of $1 000.

(2)Subsection (1) applies in relation to shares in a distributing co‑operative only if the shares are offered, or intended to be offered, 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 business of —

(a)publishing a newspaper or a 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 that subsection.

(4)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 137B inserted: No. 7 of 2016 s. 36.]

137.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 4 must be given before the person becomes bound to acquire the shares.

(3)The board of a co‑operative may comply with subsection (1) in relation to a person by giving the person a notice stating any or all of the following —

(a)that the person may request to inspect the statement and information referred to in subsection (1) at an office of the co‑operative nominated by the person;

(b)that the person may request to be sent an electronic copy of the statement and information referred to in subsection (1) by an electronic means nominated by the person;

(c)that the statement and information referred to in subsection (1) are available on a website and specifying the direct address on the website where the documents may be accessed.

(4)If a person who has received notice under this section makes a request referred to in subsection (3)(a) or (b), the co‑operative must comply with that request.

[Section 137 inserted: No. 7 of 2016 s. 37.]

[138.Deleted: No. 7 of 2016 s. 37.]

139.Exemptions for disclosure statements

(1)The Registrar may, by order published in the Gazette, exempt a co‑operative or a 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 granted unconditionally or subject to conditions.

[Section 139 amended: No. 7 of 2016 s. 38.]

Division 3A — Compensation for defective disclosure

[Heading inserted: No. 7 of 2016 s. 39.]

140A.Contravention leading to right to recover loss or damage

(1)A co‑operative contravenes this subsection if —

(a)a disclosure statement is given to a person under section 137; and

(b)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 that is required to be contained in the statement by or under this Act;

and

(c)the misleading or deceptive statement or the omission is materially adverse from the point of view of the person to whom it is given.

(2)A co‑operative contravenes this subsection if —

(a)a disclosure statement is given to a person under section 137; and

(b)the disclosure statement is not current (as referred to in section 137A(4)).

[Section 140A inserted: No. 7 of 2016 s. 39.]

140B.Right to recover for loss or damage resulting from contravention

(1)A person who suffers loss or damage because of a contravention of section 140A(1) or (2) in relation to a co‑operative may recover the amount of the loss or damage from a person referred to in a paragraph of subsection (2) 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.

(2)For the purposes of subsection (1) —

(a)the co‑operative is liable for loss or damage caused by any contravention of section 140A(1) or (2) in relation to the disclosure statement; and

(b)each director of the co‑operative is liable for loss or damage caused by any contravention of section 140A(1) or (2) in relation to the disclosure statement; and

(c)a person named in the disclosure statement with their consent as having made a statement (see section 487) —

(i)that is included in the disclosure statement; or

(ii)on which a statement in the disclosure statement is based,

is liable for loss or damage caused by the inclusion of the statement in the disclosure statement; and

(d)a person who is involved in the contravention of section 140A(1) or (2) is liable for loss or damage caused by that contravention.

(3)Any action under subsection (1) may begin at any time within 6 years after the day on which the cause of the action arose.

(4)This Division does not affect any liability that a person has under any other written law.

[Section 140B inserted: No. 7 of 2016 s. 39.]

140C.Due diligence defence

(1)A person is not liable under this Division in relation to a contravention of section 140A(1) 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 140A(1) 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 140A(2) 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.

[Section 140C inserted: No. 7 of 2016 s. 39.]

140D.General defences

(1)A person is not liable under this Division in relation to a contravention of section 140A(1) 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 140A(2) if the person proves that they were not aware of the circumstance or event that caused the disclosure statement to cease to be current.

[Section 140D inserted: No. 7 of 2016 s. 39.]

Division 3 — Issues of shares

140.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 which is to be specified in the rules of the co‑operative.

(3)A co‑operative may have more than one class of shares provided the shareholding and the rights of shareholders comply with the co‑operative principles.

(4)Subject to this Part and Part 4, shares must not be issued to a non‑member.

[141.Deleted: No. 7 of 2016 s. 40.]

142.Minimum paid up amount

(1)A share in a co‑operative other than a transferred co‑operative 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 Act.

(3)This section does not apply to a bonus share issued under section 147 or 271.

143.Shares not to be issued at a discount

A co‑operative must not issue shares at a discount.

144.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 any 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 those dividends are satisfied by the issue of shares to members of the co‑operative;

(d)in writing off the expenses incurred in establishing the co‑operative;

(e)in providing for the premium payable on redemption of shares, debentures or CCUs.

[Section 144 amended: No. 7 of 2016 s. 198.]

145.Joint ownership of shares

A share may be held by 2 or more persons jointly, unless the rules of the co‑operative provide otherwise.

146.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.

(3)A proposal to require a member to take up or subscribe for additional shares must —

(a)be accompanied by a disclosure statement, approved 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 specified 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 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 in accordance with 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)Sections 16 (except subsection (3)) and 29 apply to the approval of a disclosure statement under this section with any necessary changes and in particular as if any reference in section 16 to a formation meeting were a reference to the special resolution.

(7)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 144(4)(a), 147 or 271(2).

[Section 146 amended: No. 7 of 2016 s. 41.]

147.Bonus share issues

(1)In addition to section 271(2) 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.

148.Restrictions on bonus shares

Bonus shares issued under section 147 may be issued in accordance with the rules of the co‑operative, 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 one year cannot be more than 20%, or another percentage prescribed by the regulations, of the nominal value of the issued share capital of the co‑operative immediately before the date of issue of the bonus shares.

149.Notice about bonus shares

Notice of the meeting or postal ballot at which a resolution is to be proposed as a special resolution for the purpose of approving a bonus share issue 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 12 months before the date of the notice by a person prescribed by the regulations or a person having qualifications prescribed by the 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 such director and 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 that no circumstances are known to them as to why the issue should not take place.

Division 4A — Provisions applying to particular share subscriptions

[Heading inserted: No. 7 of 2016 s. 42.]

150A.Term used: disclosure statement

In this Division —

disclosure statement means a disclosure statement, of any type, under this Act.

[Section 150A inserted: No. 7 of 2016 s. 42.]

150B.Application of this Division

This Division applies in relation to shares in a co‑operative only if the shares are offered to persons who are not shareholders in the co‑operative.

[Section 150B inserted: No. 7 of 2016 s. 42.]

150C.Application money to be held on trust

(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 the shares are issued or transferred or the money is returned to the applicants.

Penalty for this subsection: a fine of $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.

Penalty for this subsection: a fine of $2 500, or imprisonment for 6 months, or both.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (1) and (2) that any event occurred by accident.

[Section 150C inserted: No. 7 of 2016 s. 42.]

150D.Minimum subscription condition must be fulfilled before issue or transfer

(1)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 from members, or persons eligible to become members, of the co‑operative; 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.

(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 securities as underwriter is taken to have applied for those shares.

[Section 150D inserted: No. 7 of 2016 s. 42.]

150E.Repayment of money if disclosure statement condition not met

(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 from members, or persons eligible to become members, of the co‑operative; 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.

Penalty for this subsection: a fine of $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)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 150E inserted: No. 7 of 2016 s. 42.]

Division 4 — Disclosure and registration of interests in shares

[Heading inserted: No. 7 of 2016 s. 43.]

150.Direction to disclose

The board of a co‑operative may direct a person to disclose matters as described in section 151 if the person is —

(a)a member of the co‑operative; or

(b)a person named in a disclosure made in response to a previous direction under this section as having a relevant interest in, or having given instructions about, shares in the co‑operative.

151.Disclosure by member of relevant interests and instructions

(1)A person given a direction under section 150 must, unless subsection (2) applies, disclose to the board —

(a)full details of the person’s relevant interest in the shares of the co‑operative (the relevant shares) and of the circumstances that gave rise to the interest; and

(b)the name and address of each other person who has a relevant interest in the relevant shares together with full details of —

(i)the nature and extent of the interest; and

(ii)the circumstances that gave 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,

together with full details of those instructions, including the date or dates on which they were given.

Penalty for this subsection: a fine of $1 000.

(2)A matter referred to in subsection (1)(b) or (c) need only be disclosed to the extent to which the matter is ascertainable by the person required to make the disclosure.

(3A)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

(3)The disclosure must be made within the period of 5 days after the person is given the direction, unless within that period the person applies in writing to the Registrar for an exemption from compliance with the direction.

(4)The Registrar may, in writing, exempt a person from complying with a direction if the Registrar believes the direction is unjustified.

(5)If the Registrar refuses to give an exemption under subsection (4), the disclosure required by the direction must be made within the period of 5 days after the person receives written notice of that refusal.

(6A)A person does not have to comply with a direction if the person proves that the giving of the direction is vexatious.

(6)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, prescribed by the regulations.

[Section 151 amended: No. 7 of 2016 s. 44.]

152.Registration as trustee etc. 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 that 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 that estate.

153.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 State or Territory 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 that 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 that share, be registered as the holder of the share as administrator of the estate of the incapable person.

154.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 (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.

155.Liabilities of person registered as trustee or administrator

(1)A person registered under section 152, 153 or 154 is, while so registered, subject to the same liabilities in relation to the share as those 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.

156.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, directors and shares referred to in section 230(1)(a) in a way that identifies the shares as being held under the trust.

157.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 5 —  Sale or transfer of shares

158. Sale or transfer of shares

(1)A share in a co‑operative cannot be sold or transferred except —

(a)in accordance with Part 4 Division 3 and section 159, on the death of a member; 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 that the person will be an active member of the co‑operative; or

(d)in accordance with Part 11 Division 2.

(2)A share in a co‑operative cannot be sold or transferred except in accordance with the rules of the co‑operative.

159.Transfer on death of member

(1)Despite sections 75 and 76, on the death of a member, the member’s share in the co‑operative may be transferred to a person other than an administrator or executor with the consent of the board of the co‑operative.

(2)The board may only give its consent under subsection (1) if there are reasonable grounds for believing that the person will be an active member of the co‑operative.

160.Restriction on total shareholding

The board of a co‑operative must not consent under section 158(1)(c) to the issue, sale or transfer of a share if, as a result of the issue, sale or transfer, the nominal value of the shares held by the purchaser or transferee would be more than the maximum permissible level of share interest applying under section 278.

161.Transfer not effective until registered

A transferor of a share remains the holder of the share until the transferee is noted as the holder of the share in the register of members, directors and shares referred to in section 230(1)(a).

162.Non‑members become members on registration

Where a share in a co‑operative is transferred to a non‑member under this Part or Part 4, the transferee becomes a member of the co‑operative on the transferee being noted as a member in the register of members, directors and shares referred to in section 230(1)(a).

Division 6 — Repurchase of shares

163.Purchase and repayment of shares

(1)The rules of a co‑operative may authorise the co‑operative to —

(a)purchase any share of a member in the co‑operative at the request of the member; and

(b)repay to a member, with the member’s consent, all or any part of the amount paid up to the stated nominal value 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 an amount paid up to the stated nominal value 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 that financial year; and

(b)the amount of any additional share capital of the co‑operative subscribed for during 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 on 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 undertaking of the co‑operative; or

(b)in accordance with the rules of the co‑operative.

(5A)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.

(5)This section does not apply if the member has resigned or has been expelled from the co‑operative or the member’s membership has been otherwise cancelled.

[Section 163 amended: No. 7 of 2016 s. 45.]

164.Deposit, 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)in the case of 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 that 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)in the case of 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 that the board of the co‑operative considers reasonable;

or

(b)in the case of a co‑operative without share capital, at the rate that the board of the co‑operative considers reasonable; or

(c)if the rules 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 or redeemed, as the case may be, as soon as repayment or redemption 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 or redeemed within 10 years (or within any shorter period that the rules of the co‑operative require) after the repurchase of the shares concerned.

[Section 164 amended: No. 7 of 2016 s. 198.]

165.Cancellation of shares

(1)A co‑operative must cancel any share purchased by or forfeited to the co‑operative in accordance with this Act or the rules of the co‑operative.

(2)Any shares held by a co‑operative in itself at the time the co‑operative is registered under this Act are cancelled under this section.

Part 8 — Voting and meetings

Division 1 — Voting entitlements

166.Application of Part to voting

The provisions of this Part applying to voting apply to voting on all resolutions.

167.Voting

(1)The right to vote attaches to membership and not shareholding.

(2)Except as provided in subsections (3) and (4), each member has only one vote at a meeting of the co‑operative.

(3)If its rules so provide, a member of a co‑operative group may have the number of votes (up to 5) at a general meeting that is specified in the rules.

(4)If the rules so provide, the chairman has a casting vote at a board meeting or general meeting.

(5)In the case of joint membership —

(a)the joint members have only one vote between them; and

(b)that vote may be exercised, subject to the grant of a proxy or power of attorney, only by the joint member determined in accordance with the rules.

168.Voting by proxy

(1)If the rules so provide, voting may be by proxy at a general meeting.

(2)The instrument of proxy may state the way in which a proxy is to vote on a particular resolution.

(3)The proxy must vote in the way authorised by an instrument of proxy referred to in subsection (2).

(4)The rules of a co‑operative may limit the number of persons for whom a person may act as a proxy on the same question.

(5)A person cannot exercise more than one proxy vote during a vote on the same question unless the vote is conducted by poll demanded under section 194.

169.Control of the right to vote

(1)Subject to subsection (3), a person must not directly or indirectly control the exercise of the right to vote of a member.

Penalty for this subsection: a fine of $6 000, or imprisonment for 6 months, or both.

(2)If a person controls the exercise of the right to vote of a member at a meeting of a co‑operative —

(a)the vote of the member is invalid; and

(b)if the person is a member, the vote of the person is invalid.

(3)Nothing in this section prevents —

(a)the exercise of a vote by means of a proxy or power of attorney; or

(b)a director controlling the vote of a corporate member; or

(c)an agreed purchaser controlling a member’s vote pending settlement.

[Section 169 amended: No. 7 of 2016 s. 46.]

170.Effect of disposal of shares on voting rights

A member of a co‑operative cannot vote if the member has sold or transferred, or disposed of the beneficial interest in, the member’s shares, or has agreed to do so.

171.Effect of relevant share and voting interests on voting rights

(1)Subject to subsection (3) and section 167(5), a member of a co‑operative cannot vote if another person, whether or not a member of the co‑operative, has a relevant interest in any share held by the member or in the right to vote of the member.

(2)A member who cannot vote because of this section may apply to the Registrar to review the matter.

(3)The Registrar may order that the member may vote if the Registrar is satisfied in the circumstances of the case that loss of the right to vote would be unjust or unreasonable, and the order of the Registrar has effect accordingly.

[Section 171 amended: No. 7 of 2016 s. 47.]

172.Rights of representatives

A person appointed under this Act to represent a member of a co‑operative —

(a)is deemed to receive any notice of meetings given to the member represented; and

(b)is entitled to exercise the same rights to vote as the member represented.

173.Other rights and duties of members not affected by ineligibility to vote

A provision of this Act that disentitles a member of a co‑operative to vote, either generally or in relation to a particular matter, does not affect any other right, entitlement, obligation or duty of the member as a member.

174.Vote of disentitled member to be disregarded

Any vote cast by or on behalf of a member of a co‑operative when not entitled to vote must be disregarded.

Division 2 — Resolutions

175.Decisions to be by ordinary resolution

Unless this Act or the rules of the co‑operative provide otherwise, every question for decision by a co‑operative must be decided by ordinary resolution.

176.Ordinary resolutions

An ordinary resolution is a resolution of a co‑operative that is passed by a simple majority at a general meeting of the co‑operative or in a postal ballot of members.

177.Special resolutions

(1)A special resolution is a resolution of a co‑operative that is passed —

(a)by a two‑thirds majority at a general meeting of members; or

(b)by a two‑thirds majority in a postal ballot, other than a special postal ballot, of members; or

(c)by a three‑quarters majority in a special postal ballot of members.

(2)A special resolution may be passed by a postal ballot only if the rules of the co‑operative allow, or this Act requires, the special resolution to be passed by postal ballot, including a special postal ballot.

(3)A resolution is not taken to have been passed as a special resolution unless not less than 21 days notice has been given to the members of the co‑operative stating —

(a)the intention to propose the special resolution; and

(b)the reasons for proposing the special resolution; and

(c)the effect of the special resolution being passed.

178.How majority obtained is ascertained

(1)A resolution is passed by a particular majority at a meeting if that majority of the members of the co‑operative who, being entitled to do so, vote in person or, if proxies are allowed, by proxy at the meeting vote in favour of the resolution.

(2)A resolution is passed by a particular majority in a postal ballot if that majority of the members of the co‑operative who, being entitled to do so, cast formal votes in the postal ballot vote in favour of the resolution.

179.Declaration of passing of special resolution

(1)At a meeting of a co‑operative for the purpose of passing a special resolution, a declaration by the chairman of the meeting that the resolution has been passed as a special resolution is evidence of that fact.

(2)A declaration by the returning officer for a postal ballot to pass a special resolution that the resolution has been passed as a special resolution is evidence of that fact.

(3)Subsection (1) does not apply if a poll is taken at the meeting of the co‑operative.

180.Effect of special resolution

(1)A special resolution, other than a special resolution required to be passed by special postal ballot, has effect from the date that it is passed.

(2)A special resolution relating to anything for which a special resolution is required to be passed by special postal ballot has no effect until it is registered under section 182(1).

(3)Subsection (2) and sections 181 and 182 do not apply to a special resolution altering the rules of a co‑operative.

[Section 180 amended: No. 7 of 2016 s. 48.]

181.Lodgment of special resolution

(1)A co‑operative must lodge 2 copies of each special resolution passed by the co‑operative with the Registrar in accordance with this section for registration.

Penalty for this subsection: a fine of $2 000.

(2)The copies must —

(a)be lodged within 28 days after the passing of a special resolution or a longer period allowed by the Registrar; and

(b)be signed by a director, the secretary of the co‑operative or another authorised representative of the co‑operative; and

(c)be accompanied by the lodgment fee prescribed by the regulations.

(3)A co‑operative and an officer of the co‑operative must not knowingly fail to lodge the required copies under this section.

Penalty for this subsection: a fine of $2 000.

(4)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 181 amended: No. 7 of 2016 s. 49 and 200.]

182.Decision of Registrar on application to register special resolution

(1)If the Registrar is satisfied that the co‑operative has complied with this Act, and that a special resolution passed by special postal ballot is not contrary to this Act, the Registrar must register the special resolution.

(2)If the Registrar considers that the effect of a special resolution lodged for registration would be in contravention of this Act or any other law, the Registrar —

(a)may refuse to register the special resolution; and

(b)must give written notice to the co‑operative that the special resolution —

(i)in the case of a special resolution referred to in section 180(2), has no effect; and

(ii)in any other case, has no effect as from the date that it was passed.

(3)A certificate of registration of a special resolution given by the Registrar is, in favour of any person advancing money to the co‑operative on the faith of the certificate or in favour of any guarantor of that advance, evidence that the resolution was properly passed.

Division 3 — Resolution by circulated document

183.Application of Division 3

This Division applies to a resolution of a co‑operative, including a resolution appointing an officer or auditor or approving of or agreeing to any act, matter or thing, if —

(a)the co‑operative has fewer than 50 members; and

(b)the resolution is required or permitted under this Act or the rules of the co‑operative to be passed at a general meeting of the co‑operative.

184.Resolution by circulation of document — fewer than 50 members

(1)If all the members of a co‑operative have signed a document that sets out the terms of a resolution and contains a statement that they are in favour of the resolution, the resolution is taken to have been passed at a general meeting of the co‑operative.

(2)The meeting is taken to have been held —

(a)if all the members signed the document on the one day, on that day and at the time the document was signed by the last member to sign; or

(b)if the members signed the document on different days, on the day, and at the time, the document was signed by the last member to sign.

(3)The document need not exist as a single document, but may exist in the form of 2 or more documents in identical terms.

(4)The document is taken to constitute a minute of the general meeting.

(5)Anything attached to the document and signed by the members signing the document is taken to have been laid before the co‑operative at the general meeting.

(6)The document is signed by all members of a co‑operative only if the document is signed by each person who was a member of the co‑operative at the time the document was signed by the last member to sign.

(7)Nothing in this section affects or limits any rule of law about the effectiveness of the assent of a member of a co‑operative given to a document, or to an act, matter or thing, otherwise than at a general meeting of the co‑operative.

Division 4 — Postal ballots

185.Postal ballots

(1)A postal ballot may be held as provided by the rules of the co‑operative and must be conducted in the way prescribed by the regulations.

(2)On the declaration by the returning officer of the result of the ballot, the secretary of the co‑operative must make an entry in the minute book of the co‑operative showing —

(a)the number of formal votes cast in favour of the proposal concerned; and

(b)the number of formal votes cast against the proposal; and

(c)the number of informal votes cast.

[Section 185 amended: No. 7 of 2016 s. 50.]

186.Special postal ballots

(1)A special postal ballot is a postal ballot that is conducted as required by this section.

(2)The ballot cannot be held less than 21 days after notice of the ballot is given to members so as to enable sufficient time for a meeting to discuss the proposal that is the subject of the ballot to be convened and held (whether by the board or on the requisition of members).

(3)The co‑operative must send to each member, along with any other material required to be sent in connection with the postal ballot, a disclosure statement approved by the Registrar and containing information about —

(a)the financial position of the co‑operative; and

(b)the interests of the directors of the co‑operative in the proposal with which the ballot is concerned, including any interests of the directors in another organisation concerned in the proposal; and

(c)any compensation or consideration to be paid to officers or members of the co‑operative in connection with the proposal; and

(d)any other matters as the Registrar directs.

(4)If required by the Registrar, the disclosure statement is to be accompanied by a report, made by an independent person approved by the Registrar, about any matters that the Registrar directs.

(5)Sections 16 (except subsection (3)) and 29 apply to the approval of a disclosure statement under this section with any necessary changes and in particular as if any reference in section 16 to a formation meeting were a reference to the notice of the special postal ballot.

187.When a special postal ballot required

In addition to any requirement of this Act, the rules of a co‑operative must require a special postal ballot to be conducted for the purpose of passing a special resolution in relation to any of the following matters relating to the co‑operative —

(a)conversion of —

(i)a share capital co‑operative to a non‑share capital co‑operative or vice versa; or

(ii)a distributing co‑operative to a non‑distributing co‑operative or vice versa;

(b)transfer of incorporation;

(c)an acquisition or disposal of assets referred to in section 273;

(d)the maximum permissible level of share interest in the co‑operative;

(e)takeover;

(f)merger;

(g)transfer of engagements;

(h)members’ voluntary winding‑up;

(i)a requirement for members to take up or subscribe for additional shares;

(j)a requirement for members to lend money to the co‑operative.

[Section 187 amended: No. 7 of 2016 s. 51.]

188.Holding of postal ballot on requisition

(1)The board of a co‑operative must conduct a postal ballot, including a special postal ballot, for the passing of a special resolution on the written requisition of such number of members who together are able to cast at least 20%, or any lesser percentage specified in the rules of the co‑operative, of the total number of votes able to be cast at a meeting of the co‑operative.

(2)The following provisions apply to a requisition for a postal ballot —

(a)it must state —

(i)the proposed special resolution to be voted on; and

(ii)the reasons for the making of the special resolution; and

(iii)the effect of the special resolution being passed;

(b)it must be signed by the requisitioning members, and may consist of several documents in like form each signed by one or more of the requisitioning members;

(c)it must be served on the co‑operative by being lodged at the registered office of the co‑operative.

(3)The postal ballot must be conducted as soon as practicable and in any case must be conducted within 2 months after the requisition is served.

(4)If the special resolution for which the requisitioned postal ballot is conducted is not passed, the co‑operative may recover the expenses of the postal ballot from the members who requisitioned the postal ballot as a debt due to the co‑operative.

(5)The members’ liability under subsection (4) is joint and several.

[Section 188 amended: No. 17 of 2014 s. 19.]

189.Expenses involved in postal ballots on requisition

(1)All reasonable expenses incurred by a co‑operative in and in connection with preparing for and holding a special postal ballot are to be considered to constitute the expenses of the postal ballot for the purposes of section 188(4).

(2)Those expenses include (but are not limited to) the following expenses —

(a)the cost of obtaining expert advice, including legal and financial advice, and of commissioning expert reports;

(b)costs attributable to the use of staff of the co‑operative in connection with preparing for and holding the ballot;

(c)the cost of producing, printing and posting the ballot papers and other material associated with the ballot;

(d)the cost of convening and holding a meeting under section 186(2) at the request of the members who requisitioned the postal ballot.

Division 5 — Meetings

190.Annual general meetings

(1)In the case of a co‑operative registered under Part 2 Division 4, the first annual general meeting of the co‑operative must be held within 18 months after registration under this Act.

(2)In the case of a co‑operative registered under Part 2 Division 5, the first annual general meeting of the co‑operative must be held within 18 months after the last annual general meeting held by that co‑operative before it was registered under this Act.

(3)The second or any later annual general meeting of a co‑operative must be held within —

(a)5 months after the close of the financial year of the co‑operative; or

(b)a further time that may be allowed by the Registrar or is prescribed by the regulations.

(4)An annual general meeting is to be held in addition to any other meetings held by a co‑operative in a year.

(5)A co‑operative commits an offence if it does not hold an annual general meeting as required by this section.

Penalty for this subsection: a fine of $1 000.

(6)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (5) that any event occurred by accident.

[Section 190 amended: No. 7 of 2016 s. 52.]

191.Special general meetings

A special general meeting of a co‑operative may be called at any time by the board of the co‑operative.

192.Notice of meetings

The board must give each member at least 14 days notice of each general meeting.

193.Quorum at meetings

(1)The quorum for a meeting of a co‑operative must be specified in the rules.

(2)An item of business cannot be transacted at a meeting of a co‑operative unless a quorum of members entitled to vote is present during the transaction of that item.

194.Decision at meetings

(1)Unless subsection (4) requires it to be determined by a poll, a question for decision at a general meeting is to be determined by a show of hands.

(2)A proxy may exercise only one vote on a question determined by a show of hands.

(3)A proxy may exercise more than one vote on a question determined by a poll, unless the rules of the co‑operative restrict the number of votes that a proxy may exercise.

(4)A question is to be determined by a poll if —

(a)5 members, present in person at the meeting or represented at the meeting by a proxy, demand the poll; or

(b)the chairman directs that the question will be determined by poll.

(5)In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded may exercise a casting vote if the rules so provide.

[Section 194 amended: No. 7 of 2016 s. 53.]

195.Calling of general meeting on requisition

(1)The board of a co‑operative must convene a general meeting of the co‑operative on the written requisition of such number of members who together are able to cast at least 20% (or any lesser percentage specified in the rules of the co‑operative) of the total number of votes able to be cast at a meeting of the co‑operative.

(2)The following provisions apply to a requisition for a general meeting —

(a)it must state the objects of the meeting;

(b)it must be signed by the requisitioning members, and may consist of several documents in like form each signed by one or more of the requisitioning members;

(c)it must be served on the co‑operative by being lodged at the registered office of the co‑operative.

(3)The meeting must be called and held as soon as practicable and in any case must be held within 2 months after the requisition is served.

(4)If the board does not call a meeting within 35 days after a requisition is served, the following provisions apply —

(a)the requisitioning members, or any of them representing at least half their total voting rights, may call the meeting in the same way as nearly as possible as meetings are called by the board;

(b)for that purpose they may request the co‑operative to supply a written statement setting out the names and addresses of the persons entitled when the requisition was served to receive notice of general meetings of the co‑operative;

(c)the board must send the requested statement to the requisitioning members within 7 days after the request for the statement is made;

(d)the meeting called by the requisitioning members must be held not later than 3 months after the requisition is served;

(e)any reasonable expenses incurred by the requisitioning members because of the board’s failure to call the meeting must be paid by the co‑operative;

(f)any amount required to be paid by the co‑operative under paragraph (e) must be retained by the co‑operative out of any money due from the co‑operative by way of fees or other remuneration in respect of their services to such of the directors as were in default.

196.Minutes

(1)Minutes of —

(a)each general meeting; and

(b)each meeting of the board; and

(c)each meeting of a committee to which the board’s functions have been delegated under section 204(1),

must be entered in the appropriate books within one month after the meeting.

(2A)A co‑operative must ensure that minutes of a meeting are signed within a reasonable time after the meeting by one of the following —

(a)the chairman of the meeting;

(b)the chairman of the next meeting.

(2)The minutes of each general meeting must be available for inspection by members.

(3)Minutes must be kept in the English language.

[Section 196 amended: No. 7 of 2016 s. 54.]

197A.Auditor entitled to notice and other communications

(1)A co‑operative must give its auditor —

(a)notice of a general meeting in the same way that a member of the co‑operative is entitled to receive notice; and

(b)any other communications relating to the general meeting that a member of the co‑operative is entitled to receive.

Penalty for this subsection: a fine of $500.

(2)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 197A inserted: No. 7 of 2016 s. 55.]

197B.Auditor’s right to be heard at general meetings

(1)A co‑operative’s auditor is entitled to attend any general meeting of the co‑operative.

(2)The auditor is entitled to be heard at the meeting on any part of the business of the meeting that concerns the auditor in the capacity of auditor.

(3)The auditor is entitled to be heard even if —

(a)the auditor retires at the meeting; or

(b)the meeting passes a resolution to remove the auditor from office.

(4)The auditor may authorise a person in writing as the auditor’s representative for the purpose of attending and speaking at any general meeting.

[Section 197B inserted: No. 7 of 2016 s. 55.]

197C.Questions and comments by members on co‑operative management at annual general meeting

(1)The chairman of an annual general meeting of a co‑operative must allow a reasonable opportunity for the members as a whole at the meeting to ask questions about or make comments on the management of the co‑operative.

Penalty for this subsection: a fine of $500.

(2)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 197C inserted: No. 7 of 2016 s. 55.]

197D.Questions by members of auditors at annual general meeting

(1)If a co‑operative’s auditor or their representative is at the meeting, the chairman of an annual general meeting of the co‑operative must —

(a)allow a reasonable opportunity for the members as a whole at the meeting to ask the auditor or the auditor’s representative questions relevant to —

(i)the conduct of the audit; and

(ii)the preparation and content of the auditor’s report; and

(iii)the accounting policies adopted by the co‑operative in relation to the preparation of the financial statements; and

(iv)the independence of the auditor in relation to the conduct of the audit;

and

(b)allow a reasonable opportunity for the auditor or their representative to answer written questions submitted to the auditor.

Penalty for this subsection: a fine of $500.

(2)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

(3)If —

(a)the co‑operative’s auditor or their representative is at the meeting; and

(b)the auditor has prepared a written answer to a written question submitted to the auditor,

the chairman of the annual general meeting may permit the auditor or their representative to table the written answer to the written question.

(4)The co‑operative must make the written answer tabled under subsection (3) reasonably available to members as soon as practicable after the annual general meeting.

Penalty for this subsection: a fine of $500.

[Section 197D inserted: No. 7 of 2016 s. 55.]

Part 9 — Management and administration of co‑operatives

Division 1 — The Board

197.Board of directors

(1)Subject to this Act and the rules of the co‑operative, the business of a co‑operative is to be managed by a board of directors.

(2A)The board must consist of at least 3 directors (not counting alternates of directors) and at least 2 of the directors must be ordinarily resident in Australia.

(2)The board of directors may exercise all the powers of the co‑operative that are not, by this Act or the rules of the co‑operative, required to be exercised by the co‑operative in a general meeting or by postal ballot.

(3)The acts of a director are valid despite any defect that may afterwards be discovered in his or her appointment or qualification.

[Section 197 amended: No. 7 of 2016 s. 56.]

198.Election of directors

(1)Except as provided in subsections (2), (3) and (4), the directors of a co‑operative are to be elected in the manner specified in the rules of the co‑operative.

(2)The first directors of —

(a)a co‑operative formed under this Act are to be elected at its formation meeting; and

(b)a co‑operative that was a corporation incorporated under another Act are to be the directors in office at the date of registration under this Act.

(3)If authorised by the rules of the co‑operative, a board of directors may —

(a)appoint a person to fill a casual vacancy in the office of a director until the next annual general meeting; or

(b)appoint an employee of the co‑operative, or a person qualified as provided by the rules, to be a director of the co‑operative until the next annual general meeting.

(4)A resolution passed at a general meeting of a co‑operative electing 2 or more directors is void unless —

(a)the meeting previously resolved that the nominations for election could be voted on together; and

(b)no votes were cast against that previous resolution.

(5)Subsection (4) does not affect —

(a)a resolution to appoint directors by an amendment to the co‑operative’s rules; or

(b)a ballot or poll to elect 2 or more directors if the ballot or poll does not require members voting for one candidate to vote for another specific candidate.

(6)For the purposes of subsection (5), a ballot or poll does not require a member to vote for a candidate merely because the member is required to express a preference among individual candidates in order to cast a valid vote.

(7)A nomination for election or appointment to the office of a director must give details of the qualifications and experience of the person nominated.

(8)Unless this Act or the rules of a co‑operative provides otherwise, a director is eligible for re‑election at the end of his or her term of office.

[Section 198 amended: No. 7 of 2016 s. 57.]

199.Qualification of directors

(1)In this section —

member director means a director who is a person qualified to be a director under subsection (2)(a).

(2)A person is not qualified to be a director of a co‑operative unless the person is —

(a)a member of the co‑operative or a representative of a corporation that is a member of the co‑operative; or

(b)an employee of the co‑operative or a person qualified as provided by the rules.

(3)The majority of directors must be member directors.

(4)Subsection (3) does not prevent the rules of a co‑operative requiring that a greater number of directors than a majority must be member directors.

[200.Deleted: No. 7 of 2016 s. 58.]

201.Meeting of the board of directors

(1)In this section —

independent director means a director who is an employee of the co‑operative or a person qualified as provided by the rules;

member director has the meaning given to that term in section 199(1).

(2)Meetings of the board of directors must be held at least once every 3 months and may be held as often as may be necessary.

(3)A meeting of the board of directors may be called by a director giving notice individually to every other director.

(4)The board of directors may hold meetings, or allow directors to take part in its meetings by telephone, video link, or another form of communication that allows reasonably contemporaneous and continuous communication between the directors taking part in the meeting.

(5)A quorum of a meeting of the board of directors is 50% of the number of directors or a greater number of directors specified in the rules of the co‑operative.

(6)For a quorum, the member directors must outnumber the independent directors by at least one, or, if a greater number is stated in the rules of the co‑operative, the greater number.

(7)The chairman of the board may be elected either by the board or at a general meeting of the co‑operative, and is to be elected, hold office, and retire, and may be removed from office, as provided by the rules of the co‑operative.

202.Transaction of business outside meetings

(1)The board of a co‑operative may, if it considers appropriate, transact any of its business by the circulation of papers among all of the directors of the board.

(2)A resolution in writing approved in writing by a majority of the directors of the board is taken to be a decision of the board.

(3)Separate copies of a resolution of the board may be signed by the directors if the wording of the resolution and approval is identical in each copy.

(4)For the purpose of approving a resolution under this section, the chairman of the board and each director have the same voting rights as they have at an ordinary meeting of the board.

(5)The resolution is approved when the last director required for the majority signs.

(6)A resolution of a board must be recorded in the minutes of the meetings of the board within 28 days after the resolution is approved.

(7)Papers may be circulated among directors of the board for the purposes of this section by facsimile or other transmission of the information in the papers concerned.

203.Alternate directors

The rules of a co‑operative may provide for an alternate director to be appointed to act in the place of a director who is absent from a meeting of the board.

204.Delegation by board

(1)If authorised by the rules of a co‑operative, the board of the co‑operative may, by resolution, delegate the board’s powers, other than this power of delegation, specified in the resolution to —

(a)a director; or

(b)a committee of 2 or more directors; or

(c)a committee of members of the co‑operative; or

(d)a committee of members of the co‑operative and other persons if members form the majority of persons on the committee; or

(e)a committee of directors and other persons.

(2)The board may, by resolution, revoke wholly or in part a delegation under this section.

(3)A function, the exercise of which has been delegated under this section, may be exercised from time to time in accordance with the terms of the delegation while the delegation remains unrevoked.

(4)A delegation under this section may be made subject to conditions or limitations as to the exercise of any of the functions delegated, or as to time or circumstance.

(5)Despite any delegation under this section, the board may continue to exercise all or any of the functions delegated.

205.Removal from and vacation of office

(1)The directors hold office and must retire, and may be removed from office, as provided by the rules of the co‑operative.

(2)A director vacates office in the circumstances, if any, provided in the rules of the co‑operative and in any of the following cases —

(a)if the director is a disqualified person under section 206B;

(b)if the director absents himself or herself from 3 consecutive ordinary meetings of the board without its leave;

(c)if the director resigns the office of director by written notice given by the director to the co‑operative;

(d)if the director is removed from office under section 206A;

(e)if the person ceases to hold the qualification by reason of which the person was qualified to be a director;

(f)if an administrator of the co‑operative’s affairs is appointed under Part 12 Division 4.

[Section 205 amended: No. 7 of 2016 s. 59.]

206A.Removal from office by resolution

(1)A co‑operative may by ordinary resolution remove a director from office despite anything in —

(a)the rules of the co‑operative; or

(b)an agreement between the co‑operative and the director; or

(c)an agreement between any or all members of the co‑operative and the director.

(2)Notice of intention to move the resolution must be given to the co‑operative at least 2 months before the meeting is to be held.

(3)However, subject to subsection (4), if the co‑operative calls a meeting after the notice of intention is given under subsection (2), the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.

(4)At least 21 days notice must be given of a meeting of the members of the co‑operative at which a resolution will be moved —

(a)to remove a director from office; or

(b)to appoint a director in place of a director removed from office.

(5)The co‑operative must give the director a copy of the notice as soon as practicable after it is received.

Penalty for this subsection: a fine of $500.

(6)The director is entitled to put his or her case to members by —

(a)giving the co‑operative a written statement for circulation to members (see subsections (7) and (8)); and

(b)speaking to the motion at the meeting.

(7)The co‑operative must circulate the written statement to members by —

(a)sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or

(b)if there is not time to comply with paragraph (a) — having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on.

Penalty for this subsection: a fine of $500.

(8)The director’s statement does not have to be circulated to members if it is more than 1 000 words long or defamatory.

(9)If a person is appointed to replace a director removed under this section, the time at which —

(a)the replacement director; or

(b)any other director,

is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director.

(10)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (5) and (7) that any event occurred by accident.

[Section 206A inserted: No. 7 of 2016 s. 60.]

Division 2A — Disqualification from managing co‑operatives

[Heading inserted: No. 7 of 2016 s. 61.]

206B.Offence for disqualified person to manage co‑operative

(1)A person is a disqualified person in relation to a co‑operative if the person —

(a)is disqualified from managing corporations under the Corporations Act Part 2D.6; or

(b)is disqualified from managing co‑operatives under this Division; or

(c)is disqualified from managing co‑operatives under a corresponding co‑operatives law; or

(d)is the auditor of the co‑operative or a business partner, employee or employer of the auditor.

(2)A disqualified person in relation to a co‑operative must not —

(a)act as a director of the co‑operative; or

(b)directly or indirectly take part in, or be concerned with, the management of the co‑operative.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(3)It is a defence to an offence arising under this section if the person had permission or leave —

(a)in the case of an offence arising in relation to subsection (1)(a) — to manage corporations granted under the Corporations Act section 206G and as referred to in section 206G(1)(a) of that Act; or

(b)in any case — to manage co‑operatives given or granted under either section 206I or 206J,

and their conduct was within the terms of that permission or leave.

[Section 206B inserted: No. 7 of 2016 s. 61.]

206C.Automatic disqualification for offences

(1)A person who has been convicted of an offence under this Act or a corresponding co‑operatives law is disqualified from managing co‑operatives during the period of 5 years after the conviction or, if sentenced to imprisonment, after his or her release from prison.

(2)A person who has, whether before or after the commencement of the Co‑operatives Amendment Act 2016 section 61, been convicted of an offence under a previous law of this or any other jurisdiction relating to co‑operatives is disqualified from managing co‑operatives during the period of 5 years after the conviction or, if sentenced to imprisonment, after his or her release from prison.

(3)In proceedings for an offence arising under this Division in relation to this section, a certificate by an authority prescribed by the regulations stating that a person has been convicted of an offence under a stated law on a stated date is evidence the person was convicted of that offence on that date.

(4)In proceedings for an offence arising under this Division in relation to this section, a certificate by an authority prescribed by the regulations stating that a person was released from prison on a stated date is evidence the person was released from prison on that date.

[Section 206C inserted: No. 7 of 2016 s. 61.]

206D.Extension of period of automatic disqualification

(1)This section applies if a person is disqualified from managing co‑operatives on being convicted of an offence under the Corporations Act, this Act, a corresponding co‑operatives law, or a previous law of this or any other jurisdiction relating to co‑operatives.

(2)On application by the Registrar, the Supreme Court may extend the period of disqualification by up to an additional 15 years.

(3)The Registrar must apply —

(a)before the period of disqualification begins; or

(b)before the end of the first year of the disqualification.

(4)The Registrar may apply only once in relation to the disqualification.

(5)In determining whether an extension is justified (and if so, for how long), the Supreme Court may have regard to any matters that the court considers appropriate.

[Section 206D inserted: No. 7 of 2016 s. 61.]

206E.Court’s power of disqualification: contravention of civil penalty provision

(1)On application by the Registrar, the Supreme Court may disqualify a person from managing co‑operatives for a period that the court considers appropriate if —

(a)a declaration is made under section 482B that the person has contravened a civil penalty provision; and

(b)the court is satisfied that the disqualification is justified.

(2)In determining whether the disqualification is justified, the court may have regard to —

(a)the person’s conduct in relation to the management, business or property of any corporation; and

(b)any other matters that the court considers appropriate.

[Section 206E inserted: No. 7 of 2016 s. 61.]

206F.Court’s power of disqualification: insolvency and non‑payment of debts

(1)On application by the Registrar, the Supreme Court may disqualify a person from managing co‑operatives for up to 20 years if —

(a)within the last 7 years, the person has been an officer of 2 or more entities (being co‑operatives or other corporations) when they have failed; and

(b)the court is satisfied that —

(i)the manner in which the entity was managed was wholly or partly responsible for the entity failing; and

(ii)the disqualification is justified.

(2)For the purposes of subsection (1), an entity fails if —

(a)a court orders the entity to be wound up because the court is satisfied that it is insolvent; or

(b)the entity enters into voluntary liquidation and creditors are not fully paid or are unlikely to be fully paid; or

(c)the entity executes a deed of arrangement and creditors are not fully paid or are unlikely to be fully paid; or

(d)the entity ceases to carry on business and creditors are not fully paid or are unlikely to be fully paid; or

(e)a levy of execution against the entity is not satisfied; or

(f)a receiver, receiver and manager, or provisional liquidator is appointed in relation to the entity; or

(g)the entity enters into a compromise or arrangement with its creditors; or

(h)the entity is wound up and a liquidator lodges a report about the entity’s inability to pay its debts.

(3)In determining whether the disqualification is justified, the Supreme Court may have regard to —

(a)the person’s conduct in relation to the management, business or property of any entity; and

(b)any other matters that the court considers appropriate.

[Section 206F inserted: No. 7 of 2016 s. 61.]

206G.Court’s power of disqualification: repeated contraventions of law

(1)In this section —

co‑operatives legislation means this Act or a corresponding co‑operatives law.

(2)On application by the Registrar, the Supreme Court may disqualify a person from managing co‑operatives for the period that the court considers appropriate if —

(a)the person —

(i)has at least twice been an officer of a co‑operative that has contravened co‑operatives legislation while they were an officer of the co‑operative and each time the person has failed to take reasonable steps to prevent the contravention; or

(ii)has at least twice contravened co‑operatives legislation while they were an officer of a co‑operative; or

(iii)has been an officer of a body corporate and has done something that would have contravened section 207 or 208 if the body corporate had been a co‑operative;

and

(b)the court is satisfied that the disqualification is justified.

(3)In determining whether the disqualification is justified, the Supreme Court may have regard to —

(a)the person’s conduct in relation to the management, business or property of any entity; and

(b)any other matters that the court considers appropriate.

[Section 206G inserted: No. 7 of 2016 s. 61.]

206H.Registrar’s power of disqualification

(1)The Registrar may disqualify a person from managing co‑operatives for up to 5 years if —

(a)within 7 years immediately before the Registrar gives a notice under paragraph (b)(i) —

(i)the person has been an officer of 2 or more co‑operatives; and

(ii)while the person was an officer, or within 12 months after the person ceased to be an officer of those co‑operatives, each of the co‑operatives was wound up and a liquidator lodged a report about the co‑operative’s inability to pay its debts;

and

(b)the Registrar has given the person —

(i)a notice in the form approved by the Registrar requiring them to demonstrate why they should not be disqualified; and

(ii)an opportunity to be heard on the question;

and

(c)the Registrar is satisfied that the disqualification is justified.

(2)If the Registrar disqualifies a person from managing co‑operatives under this section, the Registrar must serve a notice on the person advising them of the disqualification.

(3)The notice must be in the form approved by the Registrar.

(4)The disqualification takes effect from the time when a notice referred to in subsection (2) is served on the person.

[Section 206H inserted: No. 7 of 2016 s. 61.]

206I.Registrar’s power to give permission

(1)The Registrar may give a person whom the Registrar has disqualified from managing co‑operatives under this Division written permission to manage a particular co‑operative or co‑operatives.

(2)The permission may be expressed to be subject to conditions and limitations determined by the Registrar.

(3)A person must comply with any condition or limitation subject to which permission is given.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

[Section 206I inserted: No. 7 of 2016 s. 61.]

206J.Court’s power to grant leave

(1)A person who is disqualified from managing co‑operatives may apply to the Supreme Court for leave to manage —

(a)co‑operatives; or

(b)a particular class of co‑operatives; or

(c)a particular co‑operative,

except where the person was disqualified by the Registrar under section 206H.

(2)The person must lodge a notice with the Registrar at least 21 days before commencing the proceedings.

(3)The notice must be in the form approved by the Registrar.

(4)The order granting leave may be expressed to be subject to conditions or limitations determined by the Supreme Court.

(5)The person must lodge with the Registrar a copy of any order granting leave within 14 days after the order is made.

(6)On application by the Registrar, the Supreme Court may revoke the leave.

(7)An order revoking leave under subsection (6) does not take effect until it is served on the person.

(8)A person must comply with any condition or limitation subject to which leave is granted.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(9)This section does not apply to a person who is disqualified from managing co‑operatives because of section 206B(1)(d).

[Section 206J inserted: No. 7 of 2016 s. 61.]

Division 2 — Secretary

206.Secretary

(1)A co‑operative must have a secretary.

(2)The board of the co‑operative is to appoint the secretary.

(3)The board may appoint a person to act as the secretary during the absence or incapacity of the secretary.

(4)A person is not qualified to be appointed as, or to act as, the secretary unless the person is an adult who ordinarily lives in Australia .

207A.Responsibility of secretary

The secretary of a co‑operative must take all reasonable steps to ensure that the co‑operative does not contravene a provision of this Act that is prescribed by the regulations for the purposes of this section.

Penalty: a fine of $500.

[Section 207A inserted: No. 7 of 2016 s. 62.]

Division 3 — Duties and liabilities of directors, officers and employees

207.Care and diligence: civil obligations

(1)In this section —

business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the co‑operative.

(2)A director or other officer of a co‑operative must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they —

(a)were a director or officer of a co‑operative in the co‑operative’s circumstances; and

(b)occupied the office held by, and had the same responsibilities within the co‑operative as, the director or officer.

Note for this subsection:

This is a civil penalty provision (see section 482A).

(3)A director or other officer of a co‑operative who makes a business judgment is taken to meet the requirements of subsection (2), and their equivalent duties at common law and in equity in respect of the judgment, if they —

(a)make the judgment in good faith for a proper purpose (taking into account the co‑operative principles where relevant and other relevant matters); and

(b)do not have a material personal interest in the subject matter of the judgment; and

(c)inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and

(d)rationally believe that the judgment is in the best interests of the co‑operative.

(4)The director’s or officer’s belief that the judgment is in the best interests of the co‑operative is a rational one unless the belief is one that no reasonable person in their position would hold.

[Section 207 inserted: No. 7 of 2016 s. 63.]

208.Good faith: civil obligations

(1)A director or other officer of a co‑operative must exercise their powers and discharge their duties —

(a)in good faith in the best interests of the co‑operative; and

(b)for a proper purpose.

Note for this subsection:

This is a civil penalty provision (see section 482A).

(2)A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note for this subsection:

This is a civil penalty provision (see section 482A).

[Section 208 inserted: No. 7 of 2016 s. 63.]

209.Use of position: civil obligations

(1)A director, secretary, other officer or employee of a co‑operative must not improperly use their position to —

(a)gain an advantage for themselves or someone else; or

(b)cause detriment to the co‑operative.

Note for this subsection:

This is a civil penalty provision (see section 482A).

(2)A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note for this subsection:

This is a civil penalty provision (see section 482A).

[Section 209 inserted: No. 7 of 2016 s. 63.]

210.Use of information: civil obligations

(1)A person who obtains information because they are, or have been, a director or other officer or employee of a co‑operative must not improperly use the information to —

(a)gain an advantage for themselves or someone else; or

(b)cause detriment to the co‑operative.

Note for this subsection:

This is a civil penalty provision (see section 482A).

(2)The duty under subsection (1) continues after the person stops being a director or other officer or employee of the co‑operative.

(3)A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note for this subsection:

This is a civil penalty provision (see section 482A).

[Section 210 inserted: No. 7 of 2016 s. 63.]

211.Good faith, use of position and use of information: criminal offences

(1)A director or other officer of a co‑operative commits an offence if they are reckless, or are intentionally dishonest, and fail to exercise their powers and discharge their duties —

(a)in good faith in the best interests of the co‑operative; or

(b)for a proper purpose.

Penalty for this subsection: a fine of $200 000, or imprisonment for 5 years, or both.

(2)A director, other officer or employee of a co‑operative commits an offence if they use their position dishonestly —

(a)with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the co‑operative; or

(b)recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the co‑operative.

Penalty for this subsection: a fine of $200 000, or imprisonment for 5 years, or both.

(3)A person who obtains information because they are, or have been, a director or other officer or employee of a co‑operative commits an offence if they use the information dishonestly —

(a)with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the co‑operative; or

(b)recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the co‑operative.

Penalty for this subsection: a fine of $200 000, or imprisonment for 5 years, or both.

[Section 211 inserted: No. 7 of 2016 s. 63.]

212.Other duties and liabilities not affected

(1)Sections 207 to 211 —

(a)have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a co‑operative; and

(b)do not prevent the commencement of civil proceedings for a breach of duty or in respect of a liability referred to in paragraph (a).

(2)This section does not apply to section 207(1), (3) and (4) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of section 207(2).

[Section 212 inserted: No. 7 of 2016 s. 63.]

213.Application of Corporations Act concerning indemnities and insurance for officers and auditors

A co‑operative is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act sections 199A, (except 199A(2)(b)), 199B and 199C, subject to the following modifications —

[(a), (b)deleted]

(c)a reference to section 183 is to be read as a reference to section 210 of this Act;

(d)a reference to section 182 is to be read as a reference to section 209 of this Act;

(e)any other modifications, within the meaning of the Corporations (Ancillary Provisions) Act 2001 Part 3, that are prescribed by the regulations.

[Section 213 amended: No. 7 of 2016 s. 64.]

214.Application of Corporations Act provisions concerning officers of co‑operatives

A co‑operative is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act Parts 5.8 and 5.8A, subject to the following modifications —

(a)section 589(2) and (3) are taken to be deleted;

(b)a reference in section 592(1)(a) to 23 June 1993 is to be read as a reference to 1 September 2010;

[(c)deleted]

(d)any other modifications, within the meaning of the Corporations (Ancillary Provisions) Act 2001 Part 3, that are prescribed by the regulations.

[Section 214 amended: No. 7 of 2016 s. 65.]

Division 4 — Restrictions on directors and officers

215.Directors’ remuneration

A director of a co‑operative must not receive remuneration for services as a director other than fees, concessions and other benefits that are approved at a general meeting of the co‑operative.

Penalty: a fine of $24 000, or imprisonment for 2 years, or both.

[Section 215 amended: No. 7 of 2016 s. 66.]

216.Certain financial accommodation to officers prohibited

(1)An officer of a co‑operative who is not a director of the co‑operative must not obtain financial accommodation from the co‑operative other than —

(a)with the approval of a majority of the directors; or

(b)under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(2)For the purposes of this section, financial accommodation is taken to be obtained by an officer of a co‑operative if it is obtained by —

(a)a proprietary company in which the officer is a shareholder or director; or

(b)a trust of which the officer is a trustee or beneficiary; or

(c)a trust of which a corporation is trustee if the officer is a director or other officer of the corporation.

(3)A co‑operative must not give financial accommodation to an officer of the co‑operative if —

(a)by giving the financial accommodation, the officer would contravene this section; and

(b)the co‑operative knows or should reasonably know of the contravention.

Penalty for this subsection: a fine of $50 000.

[Section 216 amended: No. 7 of 2016 s. 67 and 200.]

217.Financial accommodation to directors and associates

(1)In this section —

associate of a director means —

(a)the director’s spouse (or de facto partner); or

(b)a person when acting in the capacity of trustee of a trust under which —

(i)the director or director’s spouse (or de facto partner) has a beneficial interest; or

(ii)a corporation mentioned in paragraph (c) has a beneficial interest;

or

(c)a corporation if —

(i)the director or director’s spouse (or de facto partner) has a material interest in shares in the corporation; and

(ii)the nominal value of the shares is not less than 10% of the nominal value of the issued share capital of the corporation.

(2)For the purposes of this section, a person has a material interest in a share in a corporation if —

(a)the person has power to withdraw the share capital subscribed for the share or to exercise control over the withdrawal of the share capital; or

(b)the person has power to dispose of or to exercise control over the disposal of the share; or

(c)the person has power to exercise or to control the exercise of any right to vote conferred on the holder of the share.

(3)A co‑operative must not provide financial accommodation to a director, or to a person the co‑operative knows or should reasonably know is an associate of a director, unless the accommodation is —

(a)approved under subsection (4); or

(b)given under a scheme approved under subsection (4); or

(c)provided on terms no more favourable to the director or associate than the terms on which it is reasonable to expect the co‑operative would give if dealing with the director or associate at arm’s length in the same circumstances.

Penalty for this subsection: a fine of $50 000.

(4)For the purposes of subsection (3)(a) and (b), financial accommodation or a scheme is approved if —

(a)it is approved by a resolution passed at a general meeting; and

(b)the full details of the accommodation or scheme were made available to members at least 21 days before the meeting.

(5)A director or an associate of a director must not obtain financial accommodation given in contravention of subsection (3).

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(6)For the purposes of this section, a concessional rate of interest for a borrower from a co‑operative is a normal term only if the borrower is entitled to the concession by being a member of a class of borrowers from the co‑operative specified in its rules as being entitled to the concession.

(7)If a director of a co‑operative or an associate of a director accepts in payment of a debt owed by a member of the co‑operative to the director or associate, any proceeds of financial accommodation provided to the member by the co‑operative, this section has effect as if the financial accommodation has been provided to the director or associate.

(8)In this section, a reference to —

(a)the provision of financial accommodation to a director or an associate of a director; or

(b)the obtaining of financial accommodation by a director or an associate of a director; or

(c)a debt owed to a director or an associate of a director,

includes a reference to a provision of financial accommodation to, or an obtaining of financial accommodation by, the director or associate, or a debt owed to the director or associate, jointly with another person.

[Section 217 amended: No. 7 of 2016 s. 68 and 200.]

218.Restriction on directors of certain co‑operatives selling land to co‑operative

A director of a co‑operative the primary activity of which is or includes the acquisition of land in order to settle or retain people on the land, must not sell land to the co‑operative except under a special resolution of the co‑operative.

Penalty: a fine of $24 000, or imprisonment for 2 years, or both.

[Section 218 amended: No. 7 of 2016 s. 69.]

219.Management contracts

(1)In this section —

management contract means a contract or other arrangement under which —

(a)a person who is not an officer of the co‑operative agrees to perform the whole, or a substantial part, of the functions of the co‑operative, whether under the control of the co‑operative or not; or

(b)a co‑operative agrees to perform the whole or a substantial part of its functions —

(i)in a particular way; or

(ii)in accordance with the directions of any person; or

(iii)subject to specified restrictions or conditions.

(2)A co‑operative must not enter into a management contract unless that contract has first been approved by special resolution.

(3)A management contract entered into in contravention of subsection (2) is void.

Division 5 — Declaration of interests

220.Declaration of interest

(1)A director of a co‑operative who is or becomes in any way (whether directly or indirectly) interested in a contract, or proposed contract with the co‑operative must declare the nature and extent of the interest to the board of directors under this section.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(2)In the case of a proposed contract, the declaration must be made —

(a)at the meeting of the board at which the question of entering into the contract is first considered; or

(b)if the director was not at that time interested in the proposed contract, at the next meeting of the board held after the director becomes interested in the proposed contract.

(3)If a director becomes interested in a contract with the co‑operative after it is made, the declaration must be made at the next meeting of the board held after the director becomes interested in the contract.

(4)For the purposes of this section, a general written notice given to the board by a director to the effect that the director —

(a)is a member of a specified entity; and

(b)is to be regarded as interested in any contract that may, after the giving of the notice, be made with the entity,

is a sufficient declaration.

(5)A director of a co‑operative who holds an office or has an interest in property whereby, whether directly or indirectly, duties or interests might be created that could conflict with the director’s duties or interests as director must, under subsection (6), declare at a meeting of the board of directors the fact and the nature, character and extent of the conflict.

Penalty for this subsection: a fine of $24 000, or imprisonment for 2 years, or both.

(6)A declaration required by subsection (5) in relation to holding an office or having an interest must be made by a person —

(a)if the person holds the office or has the interest when he or she becomes a director, at the first meeting of the board held after —

(i)the person becomes a director; or

(ii)the relevant facts as to holding the office or having the interest come to the person’s knowledge,

whichever is the later; or

(b)if the person starts to hold the office or acquires the interest after the person becomes a director, at the first meeting of the board held after the relevant facts as to holding the office or having the interest come to the person’s knowledge.

(7)If a director has made a declaration under this section, then unless the board determines otherwise, the director cannot —

(a)be present during any deliberation of the board in relation to the matter; or

(b)take part in any decision of the board in relation to the matter.

(8)For the purposes of the making of a determination of the board under subsection (7) in relation to a director who has made a declaration under this section, the director cannot —

(a)be present during any deliberation of the board for the purpose of making the determination; or

(b)take part in the making by the board of the determination.

[Section 220 amended: No. 7 of 2016 s. 70.]

221.Declarations to be recorded in minutes

Every declaration under this Division is to be recorded in the minutes of the meeting at which it was made.

222.Division does not affect other laws or rules

Except as provided in section 223, this Division is in addition to, and does not limit, the operation of a law or a provision in the rules of the co‑operative restricting a director from having an interest in contracts with the co‑operative or from holding offices or possessing properties involving duties or interests in conflict with his or her duties or interests as director.

223.Certain interests need not be declared

The interest in a contract or proposed contract that a director is required by this Division to declare does not include an interest in —

(a)a contract or proposed contract for a purchase of goods and services by the director from the co‑operative; or

(b)a lease of land to the director by the co‑operative; or

(c)a contract or proposed contract for the sale of commodities or animals by the director to the co‑operative; or

(d)a contract or proposed contract that, under the rules of the co‑operative, may be made between the co‑operative and a member; or

(e)a contract or proposed contract of a class of contracts prescribed by the regulations,

but only if the contract is made in good faith, in the ordinary course of the business of the co‑operative, and on the terms that are usual and proper in similar dealings between the co‑operative and its members.

[Division 6 (s. 224‑229) deleted: No. 7 of 2016 s. 71.]

Division 7 — Registers, books and returns

[Heading inserted: No. 7 of 2016 s. 72.]

230.Registers to be kept by co‑operatives

(1)A co‑operative must keep the following registers in accordance with this section —

(a)a register of members, directors and shares, if any;

(b)a register of loans to, securities given by, debentures and CCUs issued by and deposits received by the co‑operative;

(c)a register of names of persons who have given loans or deposits to, or who hold securities given by, or who hold debentures or CCUs issued by the co‑operative;

(d)a register of loans made by or guaranteed by the co‑operative, and of any securities taken by the co‑operative;

(e)a register of holders of CCUs, in accordance with section 257(4);

[(f)deleted]

(g)a register of memberships cancelled under Part 6, in accordance with section 130;

(h)a register of notifiable interests, in accordance with section 284;

[(i)deleted]

(j)other registers prescribed by the regulations.

Penalty for this subsection: a fine of $2 000.

(2)The registers must be kept in the way, and contain the particulars, specified by this Act or prescribed by the regulations.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 230 amended: No. 42 of 2011 s. 39; No. 7 of 2016 s. 73 and 200.]

231.Location of registers

(1)A register kept under this Division must be kept at —

(a)the co‑operative’s registered office; or

(b)an office at the co‑operative’s principal place of business; or

(c)an office, whether of the co‑operative or of someone else, where the work involved in maintaining the register is done; or

(d)another office approved by the Registrar.

(2)The office must be in this State.

(3)The co‑operative must lodge with the Registrar a notice of the address at which the register is kept within 28 days after the register is —

(a)established at an office that is not the co‑operative’s registered office; or

(b)moved from one office to another.

232.Inspection of registers etc.

(1)A co‑operative must have at the office where the registers are kept and available during all reasonable hours for inspection by a member free of charge the following —

(a)a copy of this Act and the regulations;

(b)a current copy of the rules of the co‑operative and any order under section 345;

(c)a copy of the minutes of each general meeting of the co‑operative;

(d)a copy of the most recent annual return of the co‑operative under section 244ZB;

(ea)a copy of the most recent financial information reported to members of the co‑operative under Part 10A;

(e)the register of directors, members and shares;

(f)the register of names of persons who have given loans or deposits to or hold securities, debentures or CCUs given or issued by the co‑operative;

(g)other registers prescribed by the regulations.

(2)If a register is not kept on a computer, the person may inspect the register itself.

(3)If the register is kept on a computer, the person may inspect a hard copy of the information on the register unless the person and the co‑operative agree that the person can access the information by computer.

(4)A member is entitled to make a copy of entries in a register specified in subsection (1) and to do so free of charge unless the rules of the co‑operative require a fee to be paid, in which case on payment of the required fee.

(5)The fee required by the rules cannot be more than the fee prescribed for a copy of any entry in the register.

(6)A co‑operative must —

(a)permit a member to inspect a document or make a copy of a document that the member is entitled to inspect or make under this section; and

(b)give the member all reasonable assistance to inspect the document or make the copy.

Penalty for this subsection: a fine of $2 000.

(7)A co‑operative must have at the place where the registers are kept and available during all reasonable hours for inspection by any person such documents in relation to the co‑operative as are prescribed.

Penalty for this subsection: a fine of $2 000.

(8)The rules of a co‑operative may provide for the availability or non‑availability for inspection by members of —

(a)minutes of board meetings; and

(b)minutes of meetings of committees to which the board’s functions have been delegated under section 204(1).

(9)Minutes referred to in subsection (8) are not available for inspection by members otherwise than in accordance with rules referred to in that subsection.

[Section 232 amended: No. 7 of 2016 s. 74 and 200.]

233.Use of information on registers

(1)A person must not —

(a)use information about a person obtained from a register kept under this Division to contact or send material to the person; or

(b)disclose information of that kind knowing that the information is likely to be used to contact or send material to the person,

unless that use or disclosure of the information is —

(c)relevant to the holding of the directorship, membership, shares, loans, securities, debentures, CCUs or deposits concerned or the exercise of the rights attaching to them; or

(d)approved by the board; or

(e)necessary to comply with a requirement of this Act.

(2)A person who contravenes subsection (1) is liable to compensate anyone else who suffers loss or damage because of the contravention.

(3)A person who makes a profit from a contravention of subsection (1) owes a debt to the co‑operative.

(4)The amount of the debt is the amount of the profit.

(5)The use or disclosure of information referred to in subsection (1)(a) or (b) in the circumstances referred to in subsection (1)(c), (d) or (e) is authorised by this Act.

[Section 233 amended: No. 7 of 2016 s. 75.]

234.Notice of appointment etc. of directors and officers

(1)A co‑operative must give notice to the Registrar in accordance with this section of the appointment of a person as a director, chief executive officer or secretary of the co‑operative and of the cessation of the appointment.

Penalty for this subsection: a fine of $2 000.

(2)The notice must —

(a)be in the form approved by the Registrar; and

(b)be given within 28 days after the appointment or cessation of appointment; and

(c)state the particulars, prescribed by the regulations, of the appointment or cessation of appointment.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 234 amended: No. 7 of 2016 s. 76.]

[235.Deleted: No. 7 of 2016 s. 77.]

236.List of members to be provided at request of Registrar

(1)A co‑operative must, at the written request of the Registrar, send to the Registrar, within the time and in the way that the Registrar specifies, a full list of the members of the co‑operative and of each subsidiary of the co‑operative, together with the particulars with regard to those members that the Registrar specifies in the request.

Penalty for this subsection: a fine of $2 000.

(2)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (1) that any event occurred by accident.

[Section 236 amended: No. 7 of 2016 s. 78 and 200.]

237.Special return to be given at request of Registrar

(1)The Registrar may, by direction in writing, require a co‑operative to give to the Registrar a special return in the form, within the time, and relating to the subject matter, specified by the Registrar.

(2)The co‑operative must comply with a direction under subsection (1).

Penalty for this subsection: a fine of $2 000.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (2) that any event occurred by accident.

[Section 237 amended: No. 7 of 2016 s. 79 and 200.]

Division 8 — Name and registered office

238.Name to include certain matter

(1)The name of a co‑operative may consist of words, numbers or a combination of both.

(2)The name of a co‑operative must include the word “Co‑operative” or “Cooperative” or the abbreviation “Co‑op”.

(3)Subject to subsection (4) the word “Limited” or the abbreviation “Ltd” must be the last word of the name.

(4)The Registrar may approve the registration of a co‑operative without “Limited” or the abbreviation “Ltd” in its name, or alter the registration of a co‑operative by omitting “Limited” or the abbreviation “Ltd” from its name, if its constitution —

(a)requires the co‑operative to pursue charitable purposes only and to apply its income in promoting those purposes; and

(b)prohibits the co‑operative making distributions to its members and paying fees to its directors; and

(c)requires the directors to approve all other payments the co‑operative makes to directors.

(5)The co‑operative must notify the Registrar as soon as practicable if any of those requirements or prohibitions in its constitution are not complied with or if its constitution is modified to remove any of those requirements or prohibitions.

Penalty for this subsection: a fine of $2 000.

(6)The Registrar may at any time by notice in writing to the co‑operative revoke an approval under subsection (4) but only after giving the co‑operative an opportunity to make submissions to the Registrar on the matter.

(7)A corporation that is formed or incorporated under an Act other than this Act must not register under the other Act by a name that includes the word “Co‑operative” or “Cooperative” or the abbreviation “Co‑op”.

Penalty for this subsection: a fine of $2 000.

(8)The Registrar cannot register as the name of a co‑operative a name that contains anything a regulation declares is an unsuitable name, unless the Minister is satisfied the name is suitable for registration in the circumstances of a particular case.

(9)The regulations may exempt or provide for the exemption of specified entities or kinds of entities from subsection (7).

[Section 238 amended: No. 7 of 2016 s. 80 and 200.]

239.Use of abbreviations

A description of a co‑operative is not inadequate or incorrect merely because of one or more of the following —

(a)the use of the abbreviation “Co‑op” instead of the word “Co‑operative” or “Cooperative” in the co‑operative’s name;

(b)the use of the abbreviation “Ltd” instead of the word “Limited” in the co‑operative’s name;

(c)the use of the symbol “&” instead of the word “and” in the co‑operative’s name;

(d)the use of any of those words instead of the corresponding abbreviation or symbol in the co‑operative’s name;

(e)the use of any abbreviation or elaboration of the name of the co‑operative that is approved in a particular case or for a particular purpose by the Registrar in writing.

240.Name to appear on business documents etc.

(1)In this section —

business document, of a co‑operative, means a document that is issued, signed or endorsed by or on behalf of the co‑operative and is —

(a)a business letter, statement of account, invoice or order for goods or services; or

(b)a bill of exchange, promissory note, cheque or other negotiable instrument; or

(c)a receipt or letter of credit issued by the co‑operative; or

(d)a document belonging to a class prescribed by the regulations as a class of business document.

(2)A co‑operative must ensure its name appears in legible characters —

(a)on each seal of the co‑operative; and

(b)in all its business documents.

Penalty for this subsection: a fine of $2 000.

(3)An officer of a co‑operative or a person on its behalf must not —

(a)use any seal of the co‑operative; or

(b)sign or authorise to be signed on behalf of the co‑operative a business document of the co‑operative,

in or on which the co‑operative’s name does not appear in legible characters.

Penalty for this subsection: a fine of $2 000.

(4)A director of a co‑operative must not knowingly authorise or permit a contravention of this section.

Penalty for this subsection: a fine of $2 000.

(5)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (2) that any event occurred by accident.

[Section 240 inserted: No. 7 of 2016 s. 81.]

241.Change of name of co‑operative

(1)A co‑operative may by special resolution change its name to a name approved by the Registrar.

(2)A change of name must be advertised as prescribed by the regulations.

(3)A change of name does not take effect until —

(a)the Registrar has noted the change on the certificate of registration of the co‑operative; or

(b)the certificate of registration is surrendered to the Registrar and a replacement certificate of registration is issued in the new name.

(4)A change of name by a co‑operative does not affect —

(a)the identity of the co‑operative; or

(b)the exercise of a right, or the enforcement of an obligation, by or against the co‑operative or a person; or

(c)the continuation of legal proceedings by or against the co‑operative.

(5)Legal proceedings that might have been continued or started by or against the co‑operative in its former name may be continued or started by or against the co‑operative in its new name.

(6)The Registrar may refuse to approve a change of name if the Registrar thinks the new name is unsuitable.

(7)The Registrar may direct a co‑operative to change its name if the Registrar considers the name is likely to be confused with the name of a corporation or a registered business name.

(8)A co‑operative that is given a direction under subsection (7) must comply with the direction.

Penalty for this subsection: a fine of $500.

(9)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (8) that any event occurred by accident.

[Section 241 amended: No. 7 of 2016 s. 82.]

242.Restriction on use of word “co‑operative” or similar words

(1)A person other than a co‑operative must not trade, or carry on business, under a name or title containing the word “Co‑operative” or “Cooperative” or the abbreviation “Co‑op” or words importing a similar meaning.

Penalty for this subsection: a fine of $2 000.

(2)The regulations may exempt or provide for the exemption of specified entities or kinds of entities from subsection (1).

[Section 242 amended: No. 7 of 2016 s. 83 and 200.]

243.Registered office of co‑operative

(1)A co‑operative must have a registered office.

Penalty for this subsection: a fine of $2 000.

(2)A co‑operative must, at the premises of its registered office, publicly and conspicuously display a notice stating the name of the co‑operative and identifying the premises as its registered office.

Penalty for this subsection: a fine of $2 000.

(3)Within 28 days after changing the address of its registered office, a co‑operative must give the Registrar written notice of the new address.

Penalty for this subsection: a fine of $2 000.

(4)The Registrar may, by order published in the Gazette, exempt a small co‑operative, a class of small co‑operatives or all small co‑operatives from subsection (2).

(5)An exemption may be granted unconditionally or subject to conditions.

(6)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (1), (2) and (3) that any event occurred by accident.

[Section 243 amended: No. 7 of 2016 s. 84 and 200.]

Part 10A — Financial reports and audit

[Heading inserted: No. 7 of 2016 s. 85.]

Division 1 — Preliminary

[Heading inserted: No. 7 of 2016 s. 85.]

244A.Terms used

(1)In this Part —

accounting standard has the meaning given in section 244ZZB;

audit means —

(a)an audit conducted for the purposes of this Act; or

(b)a review of a financial report conducted for the purposes of this Act;

auditing standard has the meaning given in section 244ZZB;

consolidated entity means a co‑operative together with all the entities it is required by the accounting standards to include in consolidated financial statements;

directors’ declaration has the meaning given in section 244K(4);

financial report means an annual financial report or a half‑year financial report prepared by the co‑operative under this Part (and see section 244K);

financial statements has the meaning given in section 244K(2);

notes to the financial statements has the meaning given in section 244K(3).

(2)Terms used in this Part have the same meaning as they have in the Corporations Act and in particular in Chapter 2M of the Corporations Act.

(3)Without limiting subsection (2), a reference in this Part to an entity that a co‑operative controls is a reference to an entity that the co‑operative controls within the meaning of the Corporations Act section 50AA.

[Section 244A inserted: No. 7 of 2016 s. 85.]

244B.General modifications to applied provisions of the Corporations Act Chapter 2M

If a provision of this Part declares a matter to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 (the declaratory provision) in relation to any provisions of the Corporations legislation (the applied provisions), the declaratory provision is taken to specify the following modifications —

(a)a reference in the applied provisions to a listed company is to be read as a reference to a co‑operative;

(b)a reference in the applied provisions to a small proprietary company is to be read as a reference to a small co‑operative;

(c)any other modifications, within the meaning of the Corporations (Ancillary Provisions) Act 2001 Part 3, that are prescribed by the regulations.

[Section 244B inserted: No. 7 of 2016 s. 85.]

Division 2 — Financial records

[Heading inserted: No. 7 of 2016 s. 85.]

244C.Obligation to keep financial records

(1)A co‑operative must keep written financial records that —

(a)correctly record and explain its transactions and financial position and performance; and

(b)would enable true and fair financial statements to be prepared and audited.

Penalty for this subsection: a fine of $2 500.

(2)The obligation to keep financial records of transactions extends to transactions undertaken as trustee.

(3)The co‑operative must retain the financial records for 7 years after the transactions covered by the records are completed.

Penalty for this subsection: a fine of $2 500.

(4)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (1) and (3) that any event occurred by accident.

[Section 244C inserted: No. 7 of 2016 s. 85.]

244D.Language requirements

(1)The financial records may be kept in any language.

(2)A co‑operative must ensure that an English translation of financial records not kept in English is made available within a reasonable time to a person who —

(a)is entitled to inspect the records; and

(b)asks for the English translation.

Penalty for this subsection: a fine of $2 500.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (2) that any event occurred by accident.

[Section 244D inserted: No. 7 of 2016 s. 85.]

244E.Physical format

(1)A co‑operative must ensure that, if financial records are kept in electronic form, they are to be convertible into hard copy.

Penalty for this subsection: a fine of $2 500.

(2)If financial records are kept in electronic form, the co‑operative must ensure that a hard copy is made available within a reasonable time to a person who is entitled to inspect the records.

Penalty for this subsection: a fine of $2 500.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (1) and (2) that any event occurred by accident.

[Section 244E inserted: No. 7 of 2016 s. 85.]

244F.Place where records are kept

(1)A co‑operative may decide where to keep the financial records.

(2)If financial records about particular matters are kept outside the State, the co‑operative must ensure that sufficient written information about those matters is kept in the State to enable true and fair financial statements to be prepared.

Penalty for this subsection: a fine of $2 500.

(3)If financial records about particular matters are kept outside the State, the co‑operative must give the Registrar written notice in the form approved by the Registrar of the place where the information is kept.

Penalty for this subsection: a fine of $2 500.

(4)The Registrar may direct a co‑operative to produce specified financial records that are kept outside the State.

(5)The co‑operative must comply with a direction under subsection (4).

Penalty for this subsection: a fine of $2 000.

(6)A direction under subsection (4) must —

(a)be in writing; and

(b)specify a place in the State where the records are to be produced (the place must be reasonable in the circumstances); and

(c)specify a day (at least 14 days after the day on which the direction is given) by which the records are to be produced.

(7)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (2), (3) and (5) that any event occurred by accident.

[Section 244F inserted: No. 7 of 2016 s. 85.]

244G.Director access

(1)A director of a co‑operative has a right of access to the financial records at all reasonable times.

(2)On application by a director, the Supreme Court may authorise a person to inspect the financial records on the director’s behalf.

(3)A person authorised to inspect records may make copies of the records unless the Supreme Court orders otherwise.

(4)The Supreme Court may make any other orders it considers appropriate, including either or both of the following —

(a)an order limiting the use that a person who inspects the records may make of information obtained during the inspection;

(b)an order limiting the right of a person who inspects the records to make copies in accordance with subsection (3).

[Section 244G inserted: No. 7 of 2016 s. 85.]

Division 3 — Annual financial reports and directors’ reports generally

[Heading inserted: No. 7 of 2016 s. 85.]

244H.Who has to prepare annual financial reports and directors’ reports

(1)A large co‑operative must prepare a financial report and a directors’ report in accordance with this Part for each financial year.

(2)A small co‑operative must prepare a financial report and a directors’ report if and as directed under section 244I or 244J.

(3)A small co‑operative that is not the subject of a direction under either section 244I or 244J —

(a)is not required to prepare reports in accordance with this Part; and

(b)must comply with the requirements (if any) of the regulations regarding the preparation and provision of reports to members.

[Section 244H inserted: No. 7 of 2016 s. 85.]

244I.Small co‑operative: direction by members

(1)Members with at least 5% of the votes in a small co‑operative may give the co‑operative a direction to —

(a)prepare a financial report or directors’ report or both for a financial year in accordance with all or specified requirements of this Part; and

(b)report to members in accordance with the direction.

(2)The small co‑operative must comply with the direction.

Penalty for this subsection: a fine of $1 000.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (2) that any event occurred by accident.

(4)The direction must be —

(a)signed by all members giving the direction; and

(b)made no later than 12 months after the end of the financial year concerned.

(5)The direction may specify all or any of the following —

(a)that the financial report does not have to comply with some or all of the accounting standards;

(b)that a directors’ report or a part of that report need not be prepared in accordance with this Part;

(c)that the financial report is to be audited or reviewed.

(6)If the direction specifies that the financial report is to be audited or reviewed, the direction may specify that the audit or review is to be conducted —

(a)in accordance with the Corporations Act Part 2M.3 Division 3 (as applying under section 244U); or

(b)in accordance with requirements prescribed by the regulations.

(7)The direction must specify the date by which the co‑operative must report to members.

(8)The date must be a reasonable one in view of the nature of the direction.

(9)Despite anything else in this Part, the date by which the small co‑operative is to report to members is the date specified in the direction.

[Section 244I inserted: No. 7 of 2016 s. 85.]

244J.Small co‑operative: direction by Registrar

(1)The Registrar may give a small co‑operative a direction to comply with all or specified requirements of this Division and Divisions 4, 5, 7, 8, 9 and 10 for a financial year (including any requirement that is expressed to apply to a large co‑operative).

(2)The small co‑operative must comply with the direction.

Penalty for this subsection: a fine of $1 000.

(3)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsection (2) that any event occurred by accident.

(4)The direction may specify any or all of the matters referred to in section 244I(5) or (6).

(5)The direction may be general or may specify the particular requirements that the co‑operative is required to comply with.

(6)The direction must specify the date by which the co‑operative must report to members under section 244V or lodge documents with the Registrar under section 244ZC, as the case requires.

(7)The date specified in a direction must be a reasonable one in view of the nature of the direction.

(8)The direction must —

(a)be in writing; and

(b)specify the financial year concerned; and

(c)be made no later than 6 years after the end of that financial year.

(9)Despite anything else in this Part, the date by which the small co‑operative is to report to members or lodge documents with the Registrar is the date specified in the direction.

[Section 244J inserted: No. 7 of 2016 s. 85.]

Division 4 — Annual financial reports

[Heading inserted: No. 7 of 2016 s. 85.]

244K.Contents of annual financial report

(1)The financial report for a financial year consists of —

(a)the financial statements for the year; and

(b)the notes to the financial statements; and

(c)the directors’ declaration about the statements and notes.

(2)The financial statements for the year are —

(a)the financial statements in relation to the entity that are required by the accounting standards; and

(b)if the accounting standards require financial statements in relation to a consolidated entity — the financial statements in relation to the consolidated entity required by the accounting standards.

(3)The notes to the financial statements are —

(a)disclosures required by the regulations; and

(b)notes required by the accounting standards; and

(c)any other information necessary to give a true and fair view (see section 244M).

(4)The directors’ declaration is a declaration by the directors —

(a)whether, in the directors’ opinion, there are reasonable grounds to believe that the co‑operative will be able to pay its debts as and when they become due and payable; and

(b)whether, in the directors’ opinion, the financial statements and notes are in accordance with this Act, including —

(i)section 244L; and

(ii)section 244M;

and

(c)if the co‑operative has quoted securities — that the directors have been given the declarations required by the Corporations Act section 295A (as applying under section 244O).

(5)The directors’ declaration must —

(a)be made in accordance with a resolution of the directors; and

(b)specify the date on which the declaration is made; and

(c)be signed by a director.

[Section 244K inserted: No. 7 of 2016 s. 85.]

244L.Compliance with accounting standards and regulations

(1)The financial report for a financial year must comply with the accounting standards.

(2)However, a small co‑operative’s financial report does not have to comply with particular accounting standards if —

(a)the report is prepared in response to a direction under section 244I or 244J; and

(b)the direction specifies that the report does not have to comply with those accounting standards.

(3)The financial report must comply with any further requirements in the regulations.

[Section 244L inserted: No. 7 of 2016 s. 85.]

244M.True and fair view

(1)The financial statements and notes for a financial year must give a true and fair view of —

(a)the financial position and performance of the co‑operative; and

(b)if consolidated financial statements are required — the financial position and performance of the consolidated entity.

(2)This section does not affect the obligation under section 244L for a financial report to comply with accounting standards.

[Section 244M inserted: No. 7 of 2016 s. 85.]

244N.Audit of financial report

(1)A large co‑operative must have the financial report for a financial year audited in accordance with the Corporations Act Part 2M.3 Division 3 (as applying under section 244U) and obtain an auditor’s report.

(2)A small co‑operative’s financial report for a financial year does not have to be audited if —

(a)the report is prepared in response to a direction under section 244I or 244J; and

(b)the direction did not ask for the financial report to be audited.

(3)If a small co‑operative’s financial report for a financial year is prepared in response to a direction under section 244I or 244J and the direction asked for the financial report to be audited —

(a)in accordance with the Corporations Act Part 2M.3 Division 3 (as applying under section 244U); or

(b)in some other specified manner,

the co‑operative must have the financial report audited as directed and obtain an auditor’s report.

(4)If a small co‑operative’s financial report for a financial year is prepared in response to a direction under section 244I or 244J and the direction asked for the financial report to be audited without specifying the manner in which the audit is to be conducted, the co‑operative must have the financial report audited in accordance with the Corporations Act Part 2M.3 Division 3 (as applying under section 244U) and obtain an auditor’s report.

[Section 244N inserted: No. 7 of 2016 s. 85.]

244O.Application of Corporations Act to co‑operatives with quoted securities: declaration about financial statements by certain officers

A co‑operative with quoted securities is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act section 295A.

[Section 244O inserted: No. 7 of 2016 s. 85.]

Division 5 — Annual directors’ reports

[Heading inserted: No. 7 of 2016 s. 85.]

244P.Annual directors’ report

(1)A co‑operative must prepare a directors’ report for each financial year.

(2)The directors’ report must include —

(a)the general information required by —

(i)section 244Q; and

(ii)for co‑operatives with quoted securities — the Corporations Act section 299A (as applying under section 244S);

and

(b)the specific information required by —

(i)section 244R; and

(ii)for co‑operatives with quoted securities —the Corporations Act section 300 and 300A (as applying under section 244S);

and

(c)a copy of the auditor’s declaration under the Corporations Act section 307C (as applying under section 244U) in relation to the audit for the financial year.

(3)If the financial report for a financial year includes additional information under section 244K(3)(c) (information included to give a true and fair view of financial position and performance), the directors’ report for the financial year must also —

(a)set out the directors’ reasons for forming the opinion that the inclusion of that additional information was necessary to give the true and fair view required by section 244M; and

(b)specify where that additional information can be found in the financial report.

(4)The directors’ report must —

(a)be made in accordance with a resolution of the directors; and

(b)specify the date on which the report is made; and

(c)be signed by a director.

(5)A small co‑operative does not have to comply with subsection (1) for a financial year if —

(a)it is preparing financial statements for that year in response to a direction under section 244I or 244J; and

(b)the direction specified that a directors’ report need not be prepared.

[Section 244P inserted: No. 7 of 2016 s. 85.]

244Q.Annual directors’ report: general information

(1)The directors’ report for a financial year must —

(a)contain a review of operations during the year of the entity reported on and the results of those operations; and

(b)give details of any significant changes in the entity’s state of affairs during the year; and

(c)state the entity’s principal activities during the year and any significant changes in the nature of those activities during the year; and

(d)give details of any matter or circumstance that has arisen since the end of the year that has significantly affected, or may significantly affect —

(i)the entity’s operations in future financial years; or

(ii)the results of those operations in future financial years; or

(iii)the entity’s state of affairs in future financial years;

and

(e)refer to likely developments in the entity’s operations in future financial years and the expected results of those operations; and

(f)if the entity’s operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory — give details of the entity’s performance in relation to environmental regulation.

(2)The entity reported on is —

(a)the co‑operative (if consolidated financial statements are not required); or

(b)the consolidated entity (if consolidated financial statements are required).

(3)The directors’ report may omit material that would otherwise be included under subsection (1)(e) if it is likely to result in unreasonable prejudice to —

(a)the co‑operative; or

(b)if consolidated financial statements are required — the consolidated entity or any entity (including the co‑operative) that is part of the consolidated entity.

(4)If material is omitted, the directors’ report must say so.

[Section 244Q inserted: No. 7 of 2016 s. 85.]

244R.Annual directors’ report: specific information

(1)The directors’ report for a financial year must include details of —

(a)dividends or distributions paid to members during the year; and

(b)dividends or distributions recommended or declared for payment to members, but not paid, during the year; and

(c)the name of each person who has been a director of the co‑operative at any time during or since the end of the year and the period for which they were a director; and

(d)the name of each person who —

(i)is an officer of the co‑operative at any time during the year; and

(ii)was a partner in an audit firm, or a director of an audit company, that is an auditor of the co‑operative for the year; and

(iii)was such a partner or director at a time when the audit firm or the audit company undertook an audit of the co‑operative;

and

(e)options that are —

(i)granted over unissued shares or unissued interests during or since the end of the year; and

(ii)granted to any of the directors or any of the 5 most highly remunerated officers of the co‑operative (other than the directors); and

(iii)granted to them as part of their remuneration (see subsections (4) to (6)); and

(f)unissued shares or interests under option as at the day the report is made (see subsections (4) and (6)); and

(g)shares or interests issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests (see subsections (4) and (7)); and

(h)indemnities given and insurance premiums paid during or since the end of the year for a person who is or has been an officer or auditor (see subsections (8) and (9)).

(2)Details do not have to be included in the directors’ report under this section if they are included in the co‑operative’s financial report for the financial year.

(3)If subsection (2) is relied on to not include in the directors’ report for a financial year details that would otherwise be required to be included in that report under the Corporations Act section 300(11B) or (11C)(b) (as applying under section 244S), that report must specify, in the section headed “Non‑audit services”, where those details may be found in the co‑operative’s financial report for the financial year.

(4)Subsections (1)(e) to (g) cover —

(a)options over unissued shares and interests of the co‑operative; and

(b)if consolidated financial statements are required — options over unissued shares and interests of any entity forming part of the consolidated entity.

(5)The details of an option granted are —

(a)the entity granting the option; and

(b)the name of the person to whom the option is granted; and

(c)the number and class of shares or interests over which the option is granted.

(6)The details of unissued shares or interests under option are —

(a)the entity that will issue shares or interests when the options are exercised; and

(b)the number and classes of those shares or interests; and

(c)the issue price, or the method of determining the issue price, of those shares or interests; and

(d)the expiry date of the options; and

(e)any rights that the option holders have under the options to participate in any share issue or interest issue of the co‑operative or any other entity.

(7)The details of shares or interests issued as a result of the exercise of an option are —

(a)the entity issuing the shares or interests; and

(b)the number of shares or interests issued; and

(c)if the entity has different classes of shares or interests — the class to which each of those shares or interests belongs; and

(d)the amount unpaid on each of those shares or interests; and

(e)the amount paid, or agreed to be considered as paid, on each of those shares or interests.

(8)The directors’ report for a co‑operative must include details of —

(a)any indemnity that is given to a current or former officer or auditor against a liability, or any relevant agreement under which an officer or auditor may be given an indemnity of that kind; and

(b)any premium that is paid, or agreed to be paid, for insurance against a current or former officer’s or auditor’s liability for legal costs.

(9)The details required under subsection (8) are —

(a)for an officer — their name or the class of officer to which they belong or belonged; and

(b)for an auditor — their name; and

(c)the nature of the liability; and

(d)for an indemnity given — the amount the co‑operative paid and any other action the co‑operative took to indemnify the officer or auditor; and

(e)for an insurance premium — the amount of the premium.

(10)The directors’ report need not give details of the nature of the liability covered by, or the amount of the premium payable under, a contract of insurance to the extent that the disclosure of those details is prohibited by the insurance contract.

(11)The report for a co‑operative must also include details of —

(a)each directors’ qualifications, experience and special responsibilities; and

(b)the number of meetings of the board of directors held during the year and each director’s attendance at those meetings; and

(c)the number of meetings of each board committee held during the year and each director’s attendance at those meetings; and

(d)the qualifications and experience of each person who is the secretary of the co‑operative as at the end of the year.

(12)The report for a co‑operative must also include the following details of any application for leave under Part 4 Division 6 made in respect of the co‑operative —

(a)the applicant’s name;

(b)a statement as to whether leave was granted.

(13)The report for a co‑operative must also include the following details of any proceedings that a person has brought or intervened in on behalf of the co‑operative with leave under Part 4 Division 6 —

(a)the person’s name;

(b)the names of the parties to the proceedings;

(c)sufficient information to enable members to understand the nature and status of the proceedings (including the cause of action and any orders made by the court).

[Section 244R inserted: No. 7 of 2016 s. 85.]

244S.Application of Corporations Act to co‑operatives with quoted securities: additional information to be provided in annual directors’ report

A co‑operative with quoted securities is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act section 299A, 300(11) to (11E) and 300A.

[Section 244S inserted: No. 7 of 2016 s. 85.]

Division 6 — Half‑year financial report and directors’ report

[Heading inserted: No. 7 of 2016 s. 85.]

244T.Application of Corporations Act to co‑operatives that are disclosing entities: half‑year financial reports and directors’ reports

A co‑operative that is a disclosing entity is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act Part 2M.3 Division 2.

[Section 244T inserted: No. 7 of 2016 s. 85.]

Division 7 — Audit and auditor’s report

[Heading inserted: No. 7 of 2016 s. 85.]

244U.Application of Corporations Act: audit and auditor’s report

A co‑operative is declared to be an applied Corporations legislation matter for the purposes of the Corporations (Ancillary Provisions) Act 2001 Part 3 in relation to the Corporations Act Part 2M.3 Division 3, subject to the following modifications —

(a)a reference in section 308(3AA) to a company limited by guarantee is to be read as a reference to a small co‑operative;

(b)a reference in section 311(5) to section 344 is to be read as a reference to section 244ZZO of this Act.

[Section 244U inserted: No. 7 of 2016 s. 85.]

Division 8 — Annual financial reporting to members

[Heading inserted: No. 7 of 2016 s. 85.]

244V.Annual financial reporting to members

(1)A large co‑operative must report to members for a financial year by providing either of the following in accordance with subsection (5) or (9) —

(a)all of the following reports —

(i)the financial report for the year;

(ii)the directors’ report for the year;

(iii)the auditor’s report on the financial report;

(b)a concise report for the year that complies with subsection (3).

Penalty for this subsection: a fine of $1 000.

(2)Subject to any direction under section 244I or 244J, a small co‑operative must provide financial reports to members for a financial year that comply with any requirements prescribed by the regulations.

Penalty for this subsection: a fine of $1 000.

(3)A concise report of a large co‑operative for a financial year consists of —

(a)a concise financial report for the year drawn up in accordance with accounting standards applying for the purposes of this paragraph; and

(b)the directors’ report for the year; and

(c)a statement by the auditor —

(i)that the financial report has been audited; and

(ii)whether, in the auditor’s opinion, the concise financial report complies with the accounting standards applying for the purposes of paragraph (a);

and

(d)a copy of any qualification in, and of any statements included in the emphasis of matter section of, the auditor’s report on the financial report; and

(e)a statement that the report is a concise report and that the full financial report and auditor’s report will be sent to the member free of charge if the member asks for them.

(4)If the accounting standards applying for the purposes of subsection (3)(a) require a discussion and analysis to be included in a concise financial report —

(a)the auditor must report on whether the discussion and analysis complies with the requirements that the accounting standards lay down for the discussion and analysis; and

(b)the auditor does not otherwise need to audit the statements made in the discussion and analysis.

(5)A co‑operative may provide the reports, or a concise report, for a financial year by doing all of the following —

(a)sending, to each member who has made the election referred to in subsection (6)(a) —

(i)a hard copy of the reports or the concise report; or

(ii)if the member has elected to receive the reports, or the concise report, as an electronic copy in accordance with subsection (6)(c) — an electronic copy of the reports, or the concise report;

(b)making a copy of the reports, or the concise report, readily accessible on a website;

(c)directly notifying, in writing, all members who did not make the election referred to in subsection (6)(a) that the copy is accessible on the website, and specifying the direct address on the website where the reports, or the concise report, may be accessed.

(6)For the purposes of subsection (5)(a), a co‑operative must, on at least one occasion, directly notify in writing each member that —

(a)the member may elect to receive, free of charge, a copy of the reports for each financial year, or a copy of the concise report for each financial year; and

(b)if the member does not so elect — the member may access the reports, or the concise report, on a specified website; and

(c)if the member does so elect and the co‑operative offers to send the report either as a hard copy or an electronic copy — the member may elect to receive the copy as either a hard copy or an electronic copy.

Penalty for this subsection: a fine of $1 000.

(7)An election made under subsection (6) is a standing election for each financial year until the member changes the member’s election.

(8)A member may, for the purposes of subsection (5)(c) or (6), be notified by electronic means only if the member has previously nominated that means as one by which the member may be notified.

(9)A co‑operative may provide the reports, or the concise report, by sending each member —

(a)a hard copy of the reports or the concise report; or

(b)an electronic copy of the reports, or the concise report, if the member has nominated that means as one by which the member may be sent the reports or the concise report.

(10)A co‑operative is not required to provide the reports, or the concise report, to a member who has made a request under section 244X(1)(a).

(11)Despite The Criminal Code section 23B(2), it is immaterial for the purposes of subsections (1), (2) and (6) that any event occurred by accident.

[Section 244V inserted: No. 7 of 2016 s. 85.]

244W.Deadline for reporting to members

(1)A large co‑operative that is not a disclosing entity must report to members under section 244V within 5 months after the end of the financial year.

(2)A large co‑operative that is a disclosing entity must report to members under section 244V on or before the earlier of —

(a)the day that is 21 days before the next annual general meeting of the co‑operative; or

(b)5 months after the end of the financial year.

Note for this subsection:

This is a civil penalty provision (see section 482A).

(3)A small co‑operative that is required to report to members under section 244V must do so on or before the day that is 14 days before the next annual general meeting of the co‑operative.

[Section 244W inserted: No. 7 of 2016 s. 85.]

244X.Member’s choices for annual financial information

(1)A member may request the co‑operative —