Registering a co-operative
Registration of a new co-operative under the Co-operatives Act 1992 is a 3 step process:
- The Act requires a set of rules and a disclosure statement be submitted to the Registrar for approval.
- Once this has occurred the proponents of the co-operative hold a formation meeting to formally adopt the rules and present the disclosure statement to prospective members.
- Registration occurs after the formation meeting when the Application for registration is submitted to the Registry.
Step 1 – rules and disclosure statement
Prior to registering a co-operative, it is important the group investigate the feasibility and legal requirements of the co-operative’s proposed activities.
To assist with the formation of a co-operative, the Registry has developed a set of rules and a standard disclosure statement. These may be downloaded from the Fair Trading website www.fairtrading.nsw.gov.au or by calling Registry Services on freecall 1800 502 042.
Prospective members, directors and employees can prepare these documents, however the services of an accountant or solicitor may be required.
Draft the rules
A co-operative’s rules describe the way in which the group organises its activities. They must include certain matters required by the Act. Some of these are listed below:
- the name (which must include the word ‘co-operative’ and end with ‘limited’)
- the primary activity
- active membership provisions
- rights and liabilities of members
- number of and qualifications for directors
- meeting procedures.
|IMPORTANT - Discuss the draft rules with prospective members and decide on any changes before submitting them to the Registry for formal approval. Of particular importance is the active membership rule which should set out precisely what members need to do to contribute to the co-operative and to maintain their membership.|
Draft the disclosure statement
The disclosure statement ensures that prospective members know the nature and extent of their financial involvement or liability as a member of the co-operative. It outlines areas such as the:
- purpose and main activity of the co-operative
- members involvement in the co-operative
- projected profit and loss
- names of prospective members and directors
- who will act as an auditor
- registered office and mailing address, and
- any other matter relevant to the co-operative.
Getting Registry approval
The draft rules and disclosure statement should be submitted to the Registry for approval at least 28 days before the formation meeting.
The Registry will then:
- send you an acknowledgement letter with the name of the person who will be reviewing your documents
- discuss any areas that need clarification
- confirm the co-operative’s proposed operating name
- forward the approved documents to be presented at your formation meeting
- forward an Application for registration form.
Step 2 – the formation meeting
Before the meeting
Once you have received the Application for registration and the approved rules and disclosure statement, arrange the formation meeting and let prospective members know.
You must have at least five prospective members attending the meeting.
Before the meeting you need to:
- prepare two copies of the approved rules for signing at the meeting
- prepare one copy of the disclosure statement for signing at the meeting
- have the Application for registration form ready for signing at the meeting
- make enough copies of the rules for everyone at the meeting or let them know how they can obtain them
- if possible, arrange for a Justice of the Peace to attend to sign the required documents
- copy the Application for membership form for the prospective members to complete. This form is contained in the Application for registration.
The formation meeting
A formation meeting is held to finalise the particulars of the co-operative. A description of what will take place at the meeting is discussed below:
Elect a chairperson and secretary
Elect a chairperson to run the meeting and a secretary to keep a written record of the meeting.
Vote on the rules
Discuss the contents of the rules and disclosure statement to make sure everyone understands them.
If prospective members want to change the rules, the Registry will need to approve these changes and another formation meeting will need to be held to accept the rules. You can avoid this by discussing the rules before the meeting.
If there are no changes to the rules, move that the co-operative be formed and the rules be adopted.
|IMPORTANT – Two-thirds of prospective members must vote to adopt the rules to become a co-operative.|
Elect the board of directors
Vote to elect the co-operative’s board of directors according to the co-operative’s rules.
Apply for membership
Each member at the meeting needs to complete the Application for membership form.
These application forms must be signed and witnessed and kept for the co-operative’s records.
Authorise a contact person
At the meeting, authorise someone to liaise with the Registry to complete the registration process.
Step 3 – apply to register your co–operative
Once you have voted to adopt the co-operative’s rules and disclosure statement, the chairperson and secretary of the formation meeting need to sign two copies of the rules certifying they are approved and the disclosure statement certifying it is approved.
To register the co-operative the following people need to sign the Application for registration form:
- the chairperson and secretary
- a Justice of the Peace, Notary Public Solicitor or Commissioner for Affidavits
- two directors and three members.
Within two months of the formation meeting, you need to send the Registry:
- the completed Application for registration form
- two copies of the rules signed by the chairperson and secretary of the formation meeting certifying that they are approved
- a copy of the disclosure statement signed by the chairperson and secretary of the formation meeting certifying that it was presented
- the list of the board of directors
- the application fee.
The Registry will then:
- register your co-operative
- send you a registration certificate with a copy of the registered rules.
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