There are three steps to registering a new co-operative under the Co-operatives National Law (NSW) (the CNL):
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, model rules are available. NSW Fair Trading’s Registry Services has developed a template disclosure statement for completion by distributing co-operatives.
Prospective members, directors and employees can prepare these documents, however the services of an accountant or solicitor may be required.
A co-operative’s rules describe the way in which the group organises its activities. A co-operative’s rules describe the way in which the group organises its activities.
They must contain certain matters required by Schedule 1 of the Co-operatives National Law including:
|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 the primary activities of the proposed co-operative and what members need to do to support an activity of the co-operative or to maintain a relationship with with co-operative.|
Distributing co-operatives must prepare a disclosure statement so prospective members know the nature and extent of their financial involvement or liability as a co-operative member. It outlines:
The draft rules and disclosure statement for a distributing co-operative should be submitted to Registry Services for approval along with the Application to approve co-operative name, rules and formation disclosure statement (form C1). Registry Services will:
On receipt of the Application to register a co-operative form together with the approved rules and disclosure statement, arrange the formation meeting and notify prospective members of the meeting details. At least five prospective members must attend the meeting. Before the meeting you need to:
A formation meeting is held to approve the rules, elect the first directors and to authorise the application for registration of the co-operative. The following business should take place at the meeting.
Elect a chairperson to run the meeting and a secretary to keep a written record of the meeting.
Any disclosure statement approved by the Registrar must be presented to the meeting.
Discuss the contents of the rules and disclosure statement to make sure the rules are acceptable to the prospective members.
If prospective members want to change the rules, the Registrar 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 submitting them for approval and before the meeting itself.
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.|
Vote to elect the co-operative’s board of directors according to the co-operative’s rules.
Each member at the meeting needs to complete the Application for membership form. These application forms must be kept for the co-operative’s records.
Authorise someone to liaise with Registry Services to complete the registration process.
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.
At least five persons who are qualified to be active members of the co-operative must sign the Application to register a co-operative form.
Within two months of the formation meeting, send the following to Registry Services:
Registry Services will then:
PO Box 22
154 Russell Street
Bathurst NSW 2795
Tel: 6333 1400
Freecall: 1800 502 042
Fax: 6333 1444
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