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Cooperatives
Registering a cooperative

Trading Cooperative
Non Trading Cooperative
Register of Cooperatives

There are two types of cooperatives under the Cooperatives Act 1999 (the Act):

• Trading cooperatives - Must have share capital and at least five active members.  It can distribute part of the surplus of the cooperative to members by way of bonus shares, dividends or rebates.
• Non-trading cooperatives - Must have at least five active members, but must not distribute any surplus to members.  It may or may not issue shares to members.

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Registering as a Trading Cooperative

Prior to reading this information, you should determine that a trading cooperative (with a share capital) structure would suit your needs. Before holding a formation meeting there are several matters that need to be addressed including whether the proposed activity is likely to be financially workable.

Working through the Disclosure Statement may provide a useful method to assist you to clarify your ideas and determine what additional information you may need. In some ways the Disclosure Statement is like a summarised business plan providing information on aims, directors, management, assets, other resources and financing.

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Forming a Trading Cooperative

You should consider the following requirements when forming a trading cooperative:

1.  Required Number of Persons - You will need at least five (5) interested people.

2.  Documents to be lodged with Business Affairs  - Prepare the documents (listed below) in draft form and submit them to Business Affairs with the relevant forms, at least 28 days before the scheduled formation meeting.

The required documents are:

• a disclosure statement;
• Rules of the proposed cooperative; and
• related information.

3.  Submission of Documents - Complete the approved Submission for Approval of Draft Disclosure Statement and Application for Approval of Proposed Rules for a Cooperative  and, together with the respective prescribed fees and the draft documents, mail them to Business Affairs.

4.  Review by Business Affairs - Officers of Business Affairs will then review the draft documents.

5.  The Formation Meeting - If Business Affairs approves your documents you can hold your formation meeting with as many potential members as possible present. The legal minimum number required is five (5). (See paragraph 15(3)(c) of the Act).

Other requirements relating to the formation meeting, as set out in section 15, are:

• the disclosure statement must be presented to the meeting;
• the proposed rules must be passed by two-thirds of the proposed members attending the meeting;
• the proposed members must sign the Cooperative's application for membership, which must be in the form approved by Business Affairs;
• the proposed members must elect the first Directors of the proposed cooperative in accordance with the proposed rules; and
• the proposed members must authorise a person to apply to Business Affairs for registration of the proposed cooperative, and to do any act or thing necessary to have the proposed cooperative registered.

6.  After the Formation Meeting - The Application for Registration accompanied by the Statement Listing Director's Details  must be lodged with Business Affairs, with the prescribed fee, within two (2) months after closure of the formation meeting or within the extended period that Business Affairs may allow. (See section 18(2) of the Act).

7.  Registration - Once registered, Business Affairs will issue a certificate of registration to the cooperative.

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Disclosure Statement

One of the requirements that must be met before an application to register a trading cooperative is made, is to present to the formation meeting a separate, written disclosure statement for the purpose of ensuring the prospective members are adequately informed of the nature and extent of a person's financial involvement or liability as a member of the cooperative.

The disclosure statement contains a number of sections to be completed together with the provision of annexures. When completed, a draft must be submitted to Business Affairs at least 28 days before the formation meeting is held.

Business Affairs may approve the draft statement as submitted or may approve an amended statement or refuse to approve the statement. Approval is given by Business Affairs by notice in writing to the person who submitted the draft statement.

Outlined below are the major areas you need to consider in the disclosure statement.

• The rights and liabilities attaching to shares (including the capital required for the cooperative).
• The nature of the proposed membership of the cooperative including details of active membership requirements and objects.
• Details of how the cooperative will perform its activities.
• Particulars of how the cooperative will be managed, including details of:
  •  proposed directors;
  • proposed directors' interests in any contract with the cooperative;
  • day to day management;
  • responsibility for accounting and financial functions of the cooperative;
  • name of auditor together with written consent to appointment.
• Detailed financial information including details of:
  • start up funding showing internal and external source of funds;
  • property and assets;
  • trading stock;
  • market research;
  • estimated costs of formation;
  • any contracts required to be entered into by the cooperative;
  • proposed contacts which the cooperative will assume once formed;
  • projected cash flow budget in the format provided or by annexure;
  • projected income and expenditure statement in the format provided or by annexure.

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Registering as a Non Trading Cooperative

Prior to reading this information, you should have determined that a non-trading cooperative structure will suit your needs. You should also have decided whether or not the proposed cooperative would have a share capital.

It should be noted that, pursuant to section 14 of the Act, a non trading cooperative must not give returns or distributions on surplus or share capital to members other than the nominal value of shares (if any) on winding up.

Forming a Non Trading Cooperative

You should consider the following requirements when forming a non trading cooperative:

1.  Required Number of Persons - You will need at least five (5) interested people.

2.  Documents to be Lodged with Business Affairs - Prepare a set of draft rules and submit them to Business Affairs at least 28 days before the scheduled formation meeting. Business Affairs has model rules upon which you may base your rules.

3.  Submission of Documents - Complete the Application for Approval of Proposed Rules for a Cooperative and, together with the prescribed fee and draft rules, submit to Business Affairs.

You will need a PDF viewer such as Adobe Reader to view PDF documents. To download a copy of this free from the internet, click on the icon.   Please contact us if you have difficulty viewing or printing the documents.

4.  Review by Business Affairs - Officers of Business Affairs will then review the draft rules.

5.  The Formation Meeting - If the rules are approved by Business Affairs you can hold your formation meeting with as many potential members as possible present. The legal minimum number required is five (5). Section 15(3)(c) of (the Act)

Other requirements relating to the formation meeting, as set out in section 16, are:

• the proposed rules must be passed by two-thirds of the proposed members attending the meeting;
• the proposed members must sign the Application for Membership of a Proposed Cooperative, which must be in the form approved by Business Affairs;
• the proposed members must elect the first directors of the proposed cooperative in accordance with the proposed rules; and
• the proposed members must authorise a person to apply to Business Affairs for registration of the proposed cooperative, and to do any act or thing necessary to have the proposed cooperative registered.

6.  After the Formation Meeting - The Application for Registration of a Cooperative, accompanied by the Statement Listing Director's Details must be lodged with Business Affairs, with the prescribed fee, within two (2) months after closure of the formation meeting or within the extended period that Business Affairs may allow. (See section 18(2) of the Act).

7.  Registration -  Once registered, Business Affairs will issue a certificate of registration to the cooperative.

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Register of Cooperatives

Business Affairs' functions in relation to cooperatives include maintaining a register of cooperatives and the public file which includes the registered rules and alterations thereto, special resolutions, audited accounts, details of directors and secretary, and charges given over assets of the cooperative. 

Business Affairs provides search facilities for people wishing to search and/or obtain copies of documents on the public file.