Co-operatives are organisations that are owned, controlled and used by their members. They exists to deliver benefits to their members. They can be structured so that the profits are put back into the co-operative or distributed to members. Co-operatives are regulated and supervised by the Office of Fair Trading's Registry of Co-operatives and Associations.

The Registry of Co-operatives & Associations regulates two types of co-operative organisations. The first type are those registered under the Co-operatives Act 1992 and the second type are those registered under the Co-operative Housing & Starr-Bowkett Societies Act 1998.

The Office of Fair Trading, through the Registry of Co-operatives & Associations is committed to the development and growth of co-operatives.

The International Co-operative Alliance (ICA), an independent, non-government association established in 1895, which unites and represents co-operatives worldwide, has given the universally accepted definition of a co-operative as being:

“…an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”.

Co-operatives are people-centred businesses which are member-owned, member-controlled and member-used. They are distinguished from other forms of incorporation by their participative ownership, their democratic structure and their use of capital for mutual rather than individual benefit.

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Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Their members believe in the ethical values of honesty, openness, social responsibility and caring for others.

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The co-operative principles are guidelines by which co-operatives put their values into practice.

Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. Members have equal voting rights (one member, one vote).

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. They usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the co-operative; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

Co-operatives are autonomous, self-help organisations. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.

Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their 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.

While focusing on member needs, co-operatives work for the sustainable development of their communities through policies accepted by their members.

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A registered co-operative may carry out any activity or activities contained within its rules. These activities will reflect the nature of the co-operative's involvement in areas such as primary production, manufacturing, trading, community or social activity.

The extent of the operations of a co-operative depends on the support given to it by its members, whether this be by the amount of share capital subscribed, personal efforts as directors or other officers or by their own patronage of the co-operative.

One might ask, why join a co-operative?

Sometimes a task is bigger than the resources of the individual, but well within the reach of a group of persons with a common purpose who pool their resources. Co-operation provides strength by bringing together people with mutual aims.

Governments view co-operatives as ideal bodies to promote the well-being of the community by assisting individuals, families and groups of persons to cope more effectively with economic and social challenges confronting them.

Co-operatives are mutual organisations that provide a service, which any member can enjoy.

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There are practical similarities and differences between co-operatives and other kinds of organisations incorporated under New South Wales law. Differences arise from administrative and legal requirements created by adherence to the ethical ideas set out in the co-operative principles. Some key points of similarity and distinction are illustrated in the following comparison of characteristics of a co-operative registered under the Co-operatives Act 1992, a company registered under the Corporations Act 2001  and an association registered under the Associations Incorporation Act 1984.

All three kinds of organisations:

• have corporate status, that is, they have a legal existence separate from that of the members and the organisation may sue or be sued in its own name,
• may have limited liability, that is, in the event of winding up, a member will not be required to make good any losses of the organisation.

All organisations are required to comply with the laws under which they operate and there may be other important differences of significance to individual groups.

Download the Registry's Comparative table on legal entities for further information (in PDF format, size: 63k).

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For further information follow the links on the left of this page or contact the Registry:

The Registry of Co-operatives & Associations
154 Russell Street
PO Box 22
BATHURST NSW 2795

DX 3123 BATHURST

Telephone: (02) 6333 1400
Freecall: 1800 502 042 (outside Bathurst)
Fax: (02) 6333 1444
Email: registryinquiries@oft.commerce.nsw.gov.au

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