The steps to registering a new co-operative under the Co-operatives National Law (NSW) (the CNL) are:
Step 1 - Rules, disclosure statement and name
Rules of the co-operative
Prepare draft rules and have them approved by the Registrar. Model rules for distributing and non-distributing co-operatives are available. For information on the Model rules and on the matters that must be included see Co-operatives rules page.
We recommend that you seek appropriate advice (e.g. financial or legal) regarding the proposed rules for a co-operative.
IMPORTANT - Discuss the draft rules with potential members and decide on any changes before submitting them to the Registry for formal approval. Special consideration needs to be given to the active membership rule which should set out what members need to do to support a primary activity of the co-operative or to maintain a relationship with the co-operative. See Co-operatives active membership page.
Prepare draft disclosure statement (if required)
Distributing co-operatives must prepare a disclosure statement for potential members.
Non-distributing co-operatives are not required to prepare a formation disclosure statement unless directed to do so by the Registrar. A disclosure statement will be required where the operations of the proposed co-operative may result in a significant financial risk to members or where other circumstances exist that warrant the preparation of a disclosure statement. Contact Registry Services for further information.
The formation disclosure statement must contain information necessary to ensure potential members understand the nature and extent of their financial involvement or liability as a member of the co-operative. The disclosure statement should address:
- the estimated costs of formation
- the active membership provisions of the proposed co-operative
- the rights and liabilities attached to shares in the proposed co-operative
- the capital required for the co-operative at the time of formation
- the projected income and expenditure of the co-operative for its first year of operation
- information about any contracts required to be entered into by the co-operative; and
- any other information that the Registrar directs to be included.
If the disclosure statement includes a statement or report by a person (eg. accountant or auditor) it must also state that the person has given, and not withdrawn, consent to the statement or report being included in the form and context in which it appears.
An example disclosure statement for formation (PDF, 189.23 KB) is available to assist in preparing the statement.
Financial or legal advice may be required to prepare the disclosure statement and rules.
Assistance may also be found through Co-op builder at www.farmingtogether.com.au under ‘Resources’. This resource provides an online template for the legal documents required for the formation of a distributing co-operative in Australia.
Naming the co-operative
The name of a co-operative must include the word ‘Co-operative’ or the abbreviation ‘Co-op’ or ‘Coop’ and must end with the word ‘Limited’ or ‘Ltd’.
The proposed co-operative name will be rejected if it is considered to be misleading or it is too similar to an existing co-operative, body corporate or business name.
You can check the names of existing organisations and business names on the Search ASIC registers.
Ensure the draft rules and any draft disclosure statement are submitted to NSW Fair Trading together with an Application to approve co-operative rules and formation disclosure statement (form C1) (PDF, 835.55 KB) well in advance of the proposed formation meeting.
Step 2 - The formation meeting
Once the rules and any disclosure statement have been approved, you must hold a formation meeting. At least five potential members must attend the meeting.
Before the meeting
- notify potential members* of the date, time and place of the formation meeting
- prepare two copies of the approved rules for signing
- prepare a copy of any disclosure statement for signing
- have the Application to register a co-operative (form C4) (PDF, 1341.07 KB) ready for signing
- ensure you have sufficient copies of the rules and disclosure statement for everyone attending
- prepare the Application for membership form for completion by potential members. Application forms should record the full name and address, number of shares and face value of shares (if any), amount paid on the shares and signature.
At the meeting
- ensure there are at least five persons present who are suitably qualified* to be a member of the proposed co-operative
- elect a chairperson to run the meeting
- elect a secretary to keep a written record of the meeting
- present any disclosure statement approved by the Registrar
- pass the proposed rules. Two–thirds of the proposed members attending the meeting must vote in favour of adopting the rules. If members want to change the rules, the Registrar will need to approve changes and another formation meeting must be held
- elect the first directors according to the co-operative’s rules
- proposed members sign the application for membership
- authorise someone to apply to Fair Trading and to do anything necessary to complete the registration process
- chairperson and secretary of the meeting sign two copies of the rules and any disclosure statement
- complete the Application to register a co-operative (form C4) (PDF, 1341.07 KB)
* A person is suitably qualified if:
- there are reasonable grounds to believe the person will be an active member of the proposed co-operative
- in the case of an individual – the person is an adult, and
- satisfies any other requirements for membership in the proposed rules
Step 3 - Apply to register the co-operative
Within two months of the formation meeting, send the following documents to Fair Trading:
- completed Application to register a co-operative (form C4) (PDF, 1341.07 KB)
- two copies of the rules signed by the chairperson and secretary of the formation meeting certifying that they were approved at the formation meeting
- copy of the disclosure statement, if any, signed by the chairperson and secretary of the formation meeting certifying that it was presented at the formation meeting
- the relevant application fee.
If approved, the Registrar will register the co-operative and issue a certificate of registration.
For further information please contact:
PO Box 22
Bathurst NSW 2795
Tel: 02 6333 1400
Freecall: 1800 502 042