2002

LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY

Cooperatives Bill 2002

EXPLANATORY MEMORANDUM

Circulated by authority of the
Attorney General
Mr Jon Stanhope MLA
August 2002

Cooperatives Bill 2002
Outline
The Cooperatives Bill 2001 replaces the Cooperatives Bill 2000, tabled in the Legislative Assembly in March 2000 and repeals the Cooperatives Societies Act 1939.  The Bill substantially incorporates a set of core consistent provisions that have been developed with all the States and the Northern Territory and have been enacted by most of these jurisdictions.  The Bill is a comprehensive reform of the Cooperative Societies Act 1939.  

Cooperatives are member-based organisations operated for the benefit of their members.  The factors which distinguish cooperatives from other forms of organisations are their mutuality, their democratic structure and character (each member is entitled to one vote only, regardless of the size of their shareholding), and the fact that capital in a cooperative services the activity rather than providing individual benefit.

The adoption of a uniform national approach to legislation dealing with cooperative societies overcomes the lack of consistency between the legislation of the States and Territories, particularly in respect of cooperatives that wish to carry on business outside the jurisdiction in which they are initially registered. 

The objects of the Bill are to provide for:

(a)	a clear set of principles covering the qualities of cooperatives.

(b)	the adoption of a set of core consistent provisions in relation to the regulation of cooperative societies.  All States and Territories have agreed to adopt the core consistent provisions.  

(c)	clarification of the differences between trading and non-trading cooperatives.  The separation relates mainly to fund raising and takeovers and requires that trading cooperatives comply with higher disclosure and reporting standards than those normally applying to non-trading cooperatives.

(d)	the inclusion of provisions dealing with the issuing of prospectuses and the provision of adequate disclosure statements to members.

(e)	the interstate registration of cooperatives outside the ACT in line with provisions adopted by other jurisdictions.

(f)	an adequate supervision and enforcement regime. 

(g)	the overall administration of cooperative societies by the ACT Registrar.

Financial Implications
Nil.

Clause Notes

PART 1 - PRELIMINARY

Part 1 deals with preliminary matters, including a statement of objects to the Bill.  These objects are:

•	to enable the formation, registration and operation of cooperatives;
•	to promote cooperatives philosophy, principles and practices and objectives;
•	to protect the interests of cooperatives, their members and the public in the operations and activities of cooperatives;
•	to ensure that the directors of cooperatives are accountable for their actions and decisions to the members of cooperatives; 
•	to encourage and facilitate self-management and self-regulation by cooperatives at all levels; and
•	to encourage the development, integration and strengthening of cooperatives at local, regional, national and international levels by supporting and fostering state and national peak organisations and cooperative instrumentalities. 

The seven cooperative principles are set out in part 1 of the Bill.  In summary, these principles are: voluntary association and open membership; democratic control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for the community.  If there is a problem interpreting the Bill in a particular situation a construction which would promote cooperative principles is to be preferred to an interpretation that would not.

The application of the commonwealth Corporations Act 2001 (the Corporations Act) to cooperatives, whether they operate within the ACT or interstate, is also clearly defined.  The Bill, either by direct reference or by inclusion, has adopted many of the provisions of the Corporations Act.

Division 1.1: Introductory

Clause 1	Provides that the Act be cited as the Cooperatives Act 2002.

Clause 2	Commencement: provides for the commencement of the Act fixed by the Minister. 

Clause 3	Objects: provides for the objects of the Act.

Division 1.2:	Interpretation

Clause 4	Provides for the dictionary as part of the Act.

Clause 5	Provides for explanatory notes. 

Clause 6	Provides circumstances in which a person has qualified privilege for the purposes of the law of defamation. 

Clause 7	Provides that the Act is to be interpreted to promote cooperative principles.

Division 1.3: Cooperative principles

Clause 8	Contains the cooperative principles underlying the legislation.

Division 1.4: Application of the Corporations Act generally 

Clause 9	Provides that regulations may apply certain provisions of the Corporations 	Act.

Clause 10	Provision of the Corporations Act applied by this Act are to be read as part of this Act.

Clause 11	Provides that provisions of the Corporations Act adopted by this Act apply with any modifications made by the Act. 

Clause 12	Provides for the implied adoption of regulations and other provisions of Corporations Act.

Clause 13	Provides that a provision of the Corporations Act adopted by the Act applies as in force from time to time. 

Clause 14	Provides that a provision of the Corporations Act that is applied by a provision of this Act is in effect adopted by the application provision.

Division 1.5 Application of Corporations Act – excluded matter

Clause 15	Provides that a cooperative is declared to be an excluded matter for the Corporations Act other than to the extent specified in this section.  The effect of this provision is to exclude the operation of the Corporations Act (other than as provided for under the Act) in relation to cooperatives.  This provisions is made pursuant to regulations under 23(2) of the Australian Capital Territory (Self‑Government) Act 1988.

PART 2 – FORMATION

Part 2 of the Bill provides for the formation of cooperatives, associations and federations of cooperatives.  A cooperative may be either trading or non-trading, depending upon its rules.  A trading cooperative is one that gives returns or distributions on share capital.  A non-trading cooperative is one that does not give returns or distributions on surplus or share capital other than the nominal value of shares, if any, at winding up.  The division of types of cooperatives is to facilitate different levels of compliance with the legislation in relation to disclosure in fundraising activities.  Non-trading cooperatives are the traditional not-for-profit organisations which exist for the purposes of community benefit rather than individual profit.

A non-trading cooperative may trade, but the benefits to the members flowing from the activities of the cooperative - for example, provision of child-care facilities or community radio - are not direct financial returns.  Surpluses must be retained by the cooperative and must not be distributed to members.  The investment in the cooperative does not result in a financial return and therefore a modified disclosure regime has been proposed.  Trading cooperatives, however, exist for the purpose of maximising the financial position of the member through the services offered.  Trading cooperatives, therefore, have a higher level of disclosure.

It also provides for the transfer of incorporation of a body corporate to a cooperative.  Part 3 of the Bill provides for the legal capacity and powers of cooperatives.  Traditionally, cooperative legislation has been somewhat paternalistic in character.  The new Bill provides wider corporate powers than cooperatives currently enjoy.

Division 2.1: Types of Cooperatives

Clause 16	Provides that a cooperative registered under the Act may be either trading or non-trading.  (Note that trading cooperatives were formerly permitted in the ACT under Part III of the Co-operative Societies Act 1939.)

Clause 17	Provides that a trading cooperative must have share capital and also prescribes a minimum numbers of members.

Clause 18	Provides that a non-trading cooperative may have a share capital, but must not give returns or distributions on surplus or share capital other than the nominal value of shares (if any) on winding up.

Division 2.2: Formation meeting

Clause 19	Provides that a formation meeting must be held before a proposed cooperative can be registered, and specifies the matters which must be considered at the meeting and the persons who must attend the meeting.

Division 2.3: Approval of disclosure statements and rules

Clause 20	Provides that a draft disclosure statement (containing the matters specified) of a proposed trading cooperative must be submitted to the Registrar of Cooperatives (“the Registrar”) at least 28 days before the formation meeting is due to be held.  If the Registrar does not otherwise notify the person who submitted the disclosure statement at least 5 days before the formation meeting is due to be held, the Registrar is to be considered to have approved the statement.

Clause 21	Provides that a draft of the rules (in the specified form) proposed for the cooperative must be submitted to the Registrar at least 28 days before the formation meeting is due to be held.  The Registrar may approve or refuse to approve the rules and must give notice of his/her decision to the person who submitted the rules.

Division 2.4: Registration of proposed cooperative

Clause 22	Provides for applications for registration of proposed cooperatives, and prescribes the form and content of such an application.

Clause 23	Provides for the registration of cooperatives.

Clause 24	Provides that the incorporation of a cooperative takes effect upon the registration of the cooperative.

Division 2.5:	Registration of an existing body corporate

Clause 25	Provides that a body corporate may apply to the Registrar to be registered as a cooperative under the Act.

Clause 26	Provides for the holding of a formation meeting by a body corporate, at which a special resolution approving of the proposed registration must be passed.

Clause 27	Provides for the application for registration by bodies corporate and prescribes the form and content of such an application.

Clause 28	Provides for the requirements for registration of a body corporate as a cooperative under this Division.

Clause 29	Provides that the Registrar must issue a certificate of registration to a body corporate which has been registered as a cooperative and must prepare a written notice about the issue of the certificate. 

Clause 30	Provides that the corporate name of a corporation registered as a cooperative is the name stated in the certificate of registration issued by the registrar.

Clause 31	Describes the effect of registration and incorporation of the body corporate as a cooperative.

Division 2.6: Conversion of cooperative

Clause 32	Provides that a cooperative may convert from a cooperative with share capital to one without share capital (or vice versa) or from trading to non-trading (or vice versa).

Division 2.7: General

Clause 33	Provides a stamp duty exemption for certain charitable, sporting or recreational cooperatives.

Clause 34	Provides that money accepted by a proposed cooperative must be held on trust until the cooperative is registered, and must be returned if the proposed cooperative is not registered within 3 months of acceptance of the money.

Clause 35	Provides for the issuing by the Registrar of a duplicate certificate of registration under certain circumstances.

PART 3 – LEGAL CAPACITY AND POWERS

Part 3 of the Bill provides for the legal capacity and powers of cooperatives.  The new Bill provides wider corporate powers than cooperatives currently enjoy.

Part 3 also sets out the general powers that a cooperative has as a body corporate.  The Bill provides that a cooperative has the legal capacity of a natural person.  A similar regime to that which exists in the Corporations Act for persons having dealings with the cooperative is also provided.  A cooperative may also still apply for a government guarantee in respect of any loan.

Division 3.1: General Powers

Clause 36	Describes the effect of incorporation on a cooperative.

Clause 37	Provides that, in addition to other powers, a cooperative has power to form companies and enter into joint ventures.

Division 3.2: Non-application of doctrine of ultra vires 

Clause 38	Provides guidance in the interpretation of this Division.

Clause 39	Provides that the objects of this Division are to provide that the doctrine of ultra vires does not apply to cooperatives and to ensure that a cooperative’s officers and members give effect to the provisions of the cooperative’s rules relating to the primary activities or powers of the cooperative.

Clause 40	Provides that a cooperative has the legal capacity of a natural person and specifies certain particular powers of cooperatives.

Clause 41	Provides that a cooperative’s rules may contain restrictions or prohibitions on the exercise by the cooperative of a power, and also provides that the section is contravened if a cooperative exercises a power contrary to an express restriction or prohibition in its rules.

Clause 42	Provides that the exercise of a power or the doing of an act in contravention of section 41 is not invalid merely because of the contravention.

Division 3.3: Dealings with cooperatives

Clause 43	Provides that a person is entitled to make the assumption in section 44 in relation to dealings with a cooperative and persons who have or purport to have acquired title to property from a cooperative.

Clause 44	Specifies the assumptions which a person is entitled to make when dealing with a cooperative.

Clause 45	Provides that a person who knows or ought to know that an assumption is incorrect is not entitled to make that assumption.

Clause 46	Provides that a person is not to be considered to have constructive knowledge of documents (other than those relating to registrable charges) lodged with the Registrar.

Clause 47	Provides that a person’s entitlement to make assumptions under this Division is not affected by fraudulent conduct of, or forgery by, a person attempting to rely on the assumption has actual knowledge of the fraudulent conduct or forgery.

Division 3.4:	Authentication and execution of documents and confirmation of contracts

Clause 48	Provides that a document or proceeding requiring authentication by a cooperative may be authenticated under the common seal of the cooperative.

Clause 49	Provides that a cooperative may have, for use outside the ACT, one or more official seals, each of which must be a facsimile of the cooperative’s common seal, to be used in place of its common seal with the addition on its face of the name of every place where it is to be used.

Clause 50	Provides that a document or proceeding may be authenticated by the signature of a director and a director or officer of a cooperative, and need not be under seal.

Clause 51	Provides that a cooperative may authorise a person as its agent or attorney to execute deeds on its behalf.

Clause 52	Provides for the validity of documents executed under seal where a person attesting the affixing of the seal was in any way interested in the matter contained in the document.

Clause 53	Provides that a person acting under the authority of a cooperative may make, vary or discharge a contract on behalf of the cooperative.

Clause 54	Provides that this Division does not affect other legal requirements as to consent or sanction in relation to contractual procedures.

Clause 55	Provides for the transitional operation of this Division.

Division 3.5:	Pre-registration contracts

Clause 56	Provides for the entering into on behalf of a proposed cooperative, and the later ratification by a cooperative of pre-registration contracts.

Clause 57	Provides that the person who entered into the pre-registration contract may be released from liability but is not entitled to an indemnity.

Clause 58	Provides that this Division replaces any rights or liabilities anyone would otherwise have in relation to a pre-registration contract.

PART 4 – MEMBERSHIP

Part 4 deals with membership of the cooperative.  The rules of a cooperative must provide for a grievance procedure in relation to disputes under the rules of the cooperative, and application may also be made to the Supreme Court to settle disputes.  Remedies in relation to oppressive conduct of affairs and statutory derivative actions are also provided for.

Division 4.1:	General

Clause 59	Provides for the admission of persons as members of a cooperative.

Clause 60	Provides for the admission of cooperative and other bodies corporate as members of an association.

Clause 61	Provides for membership of a federation.

Clause 62	Prescribes qualifications for membership of a cooperative.

Clause 63	Provides that membership of a cooperative may be joint.

Clause 64	Provides for the membership of a cooperative by natural persons under 18 years of age but persons under 18 years old are not competent to hold office in a cooperative and is not entitled to vote.

Clause 65	Provides that a body corporate which is a member of a cooperative may appoint a person to represent it in respect of its membership.

Clause 66	Requires a body corporate which is a member of a cooperative to notify the board of directors of the cooperative (if requested) of the body corporate’s shareholders and shareholdings.

Clause 67	Prescribes the circumstances in which membership of a cooperative ceases.

Clause 68	Provides additional circumstances in which membership of a cooperative with share capital ceases.

Clause 69	Provides for the effect of carrying on business with too few members and provides that the directors of a cooperative which carries on business for more than 28 days after the number of members falls below the minimum are guilty of an offence.		

Division 4.2:	Rights and liabilities of members

Clause 70	Provides that rights of membership are not exercisable until the member’s name appears on the cooperative register of members and payment is made and shares acquired by the member.

Clause 71	Requires that the board of a cooperative must ensure that the name of a person admitted to membership is recorded in the register within 28 days after the person is admitted to membership.

Clause 72	Describes the liability of members of a cooperative.

Clause 73	Requires the board of a cooperative to provide certain information to each person intending to become a member of the cooperative. 

Clause 74	Provides that the rules of a cooperative may require the payment by members of entry fees and regular subscriptions.

Clause 75	Provides for the imposition of a fine by a cooperative on a member for any infringement of the rules of the cooperative, if the rules of the cooperative so provide.

Clause 76	Provides for charges on certain property of members and ex-members where a debt is owed to the cooperative, and the set off of any amount paid towards satisfaction of that debt.

Clause 77	Provides for the repayment of the amount paid up on a member’s shares when the member is expelled from the cooperative.

Division 4.3:	Death of member

Clause 78	Defines a deceased member’s “interest” for the purposes of this Division.

Clause 79	Provides for the transfer of a member’s shares or interest in a cooperative by the board on the death of the member.

Clause 80	Provides for the transfer of a member’s shares or interest in a cooperative on the death of the member, where the total value of the shares or interest is less than $10,000 (or such other amount as prescribed).

Clause 81	Provides that the value of the shares or interest of a deceased member is to be determined for the purposes of this Division in accordance with the rules of the cooperative.

Clause 82	Provides that any transfer of property made by the board of a cooperative in accordance with this Division is valid and effectual against any demand made on the cooperative by any other person.

Division 4.4:	Disputes involving members

Clause 83	Provides that the rules of a cooperative must provide for a grievance procedure, which must allow for the application of natural justice, for dealing with disputes under the rules between members and the cooperative and between members of the cooperative.

Clause 84	Provides that a member of a cooperative may make application to the Supreme Court for an order declaring and enforcing the rights or obligations of members or the cooperative.

Division 4.5:	Oppressive conduct of affairs

Clause 85	Provides for an extended definition of “member” for the purposes of this Division.

Clause 86	Provides that this Division does not apply in respect of anything done under or for the purposes of Part 6 (Active membership).

Clause 87	Specifies who may apply to the Supreme Court for an order under this Division.

Clause 88	Provides that the Supreme Court may make any order it considers appropriate in respect of an application under this Division, including but not limited to the orders specifies.

Clause 89	Describes the basis on which the Supreme Court may make orders under this Division.

Clause 90	Provides that the Court need not make an order for the winding up of a cooperative if the winding up would unfairly prejudice an oppressed member.

Clause 91	Provides for the application of the winding up provisions of the Act where an order for winding up is made by the Court under this Division.

Clause 92	Provides for the effect of an alteration of a cooperative’s rules resulting from an order of the Court under this Division.

Clause 93	Requires an applicant for an order under this Division to lodge a copy of the order with the Registrar within 14 days after it is made.

Division 4.6:	Proceedings on behalf of a cooperative by members and others

Clause 94	Specifies who may bring or intervene in proceedings on behalf of a cooperative.

Clause 95	Provides that a person referred to in section 94 may apply to the Supreme Court for leave to bring or intervene in proceedings, and specifies the circumstances in which the Court must grant the application.

Clause 96	Specifies the persons who may apply to the Court for an order that they may be substituted for a person to whom leave has been granted under section 95.

Clause 97	Provides for the effect of a ratification or approval of conduct by members of a cooperative on an application under section 95.

Clause 98	Provides that proceedings brought or intervened in with leave must not be discontinued, compromised or settled without the leave of the Court.

Clause 99	Empowers the Court to make orders and give directions in relation to proceedings brought or intervened in under this Division.

Clause 100	Empowers the Court to make a costs order in relation to proceedings brought or intervened in with leave under section 95.

PART 5 – RULES

Part 5 of the Bill provides for the rules of a cooperative to constitute a contract between the cooperative and each member.  This part also permits regulations to prescribe model rules.

Clause 101	Describes the effect of the rules of a cooperative as a contract under seal between the cooperative and each member, between the cooperative and each director, the principal executive officer and the secretary, and between a member and each other member.

Clause 102	Specifies that the rules of the cooperative must comply with the requirements mentioned in schedule 2.

Clause 103	Specifies other requirements about the content and layout of the rules.

Clause 104	Provides for the obtaining a copy of the cooperative’s rules.

Clause 105	Provides that a person who gives a false copy of the rules of a cooperative to a member or a person intending to become a member is guilty of an offence.

Clause 106	Provides for the approval of model rules by the Registrar by a notifiable instrument.

Clause 107	Provides that the rules of a cooperative cannot be altered except in accordance with this Act.

Clause 108	Provides that a proposed alteration of a cooperative’s rules must be approved by the Registrar in writing before the passing of the resolution to alter the rules.

Clause 109	Provides that a draft of the proposed alteration of the rules of a cooperative must be given to the registrar at least 28 days before and also provides that the registrar may approve or refuse to approve the alteration.

Clause 110	Provides that the rules of a cooperative must be altered by special resolution unless otherwise specified in this Part.

Clause 111	Provides that certain alterations of a cooperative’s rules may be affected by a resolution passed by the board.

Clause 112	Provides for the process for the registration of an alteration of the rules and the issuing of a certificate of registration of any alteration of the rules of a cooperative.

Clause 113	Provides that an alteration of a cooperative’s rules does not take effect unless and until it is registered by the Registrar.  

PART 6 – ACTIVE MEMBERSHIP

Part 6 of the Bill deals with active membership.  Active membership arises out of the cooperative principle of member economic participation and ensures that only those members actively participating in the cooperative control the cooperative.  The active member provisions were introduced into the Co-operation Act 1923 (NSW) during 1987 with some further refinements occurring in 1988 and the Cooperatives Act 1992 (NSW).  

If a member's whereabouts is not known to the cooperative or the member has not fulfilled the active membership obligations under the rules of the cooperative for a period of three years, or less if the rules so provide, the board is required to cancel the membership of the member and repay the amount due to the member in respect of that cancellation.  If repayment would adversely affect the financial position of the cooperative, the board may convert the amount due to a deposit or debenture.  The deposit or debenture must be repaid within 10 years.  However, a member of a trading cooperative whose membership has been cancelled under this part is still considered to be a member for certain purposes for a period of five years.

Division 6.1:	Definitions

Clause 114	Defines the expression “primary activity”.

Clause 115	Defines an “active member” for the purposes of this Act.

Clause 116	Defines what are active membership provisions and resolutions (the primary activities of a cooperative and how and to what extent a member may be required by the cooperative to do something in relation to the primary activities).

Division 6.2:	Rules to contain active membership provisions

Clause 117	States that a cooperative must have at least one primary activity.

Clause 118	Requires the board of a cooperative to ensure that the rules of the cooperative contain active membership provisions in accordance with this Part.

Clause 119	Specifies the factors and considerations for determining which of a cooperative’s activities are its primary activities, and for determining an appropriate activity test in relation to each activity.

Clause 120	Provides for the active membership provisions required of trading cooperatives.

Clause 121	Provides that payment of a regular subscription may be an adequate active membership requirement for a non-trading cooperative.

Division 6.3:	Active membership resolutions

Clause 122	Provides for the giving of notice of a meeting at which an active membership resolution is to be proposed.

Clause 123	Specifies which members are eligible to vote on an active membership resolution.

Clause 124	Specifies which directors are eligible to vote at a board meeting on a proposal to submit an active membership resolution to a meeting of the cooperative.

Clause 125	Provides that this Division does not affect other entitlements of members.

Division 6.4:	Cancellation of membership of inactive members

Clause 126	Provides for the cancellation of the membership of an inactive member.

Clause 127	Provides that the shares of a member are to be forfeited at the same time as the member’s membership is cancelled under section 126.

Clause 128	Provides that failure by the board of a cooperative to cancel a membership as required by this Part renders a director who did not use all due diligence to prevent that failure guilty of an offence.

Clause 129	Provides that cancellation of a membership may be deferred by the board for periods up to 1 year according to certain grounds.

Clause 130	Provides that cancellation of a member’s membership is prohibited in certain circumstances.

Clause 131	Provides for the giving of notice to a member of the intention to cancel their membership.

Clause 132	Empowers the Supreme Court to order against the cancellation of a membership.

Clause 133	Requires a cooperative to repay certain amounts to a member whose membership has been cancelled under this Part, or otherwise apply those amounts within 12 months after the cancellation of the former membership.

Clause 134	Provides for the accrual of interest when amounts owed to a former member are applied as a deposit with the cooperative or the cooperative allots or issues debentures to the former member in satisfaction of the amount owed.

Clause 135	Provides for the repayment of the deposits and debentures referred to in section 134.

Clause 136	Requires a cooperative to keep a register of cancelled memberships.

Division 6.5:	Entitlement of former members of trading cooperatives

Clause 137	Provides that this Division only applies to trading cooperatives.

Clause 138	Provides that former shareholders are to be regarded as shareholders for certain purposes.

Clause 139	Provides for the entitlement of a former member whose shares have been forfeited within 5 years of a merger of, or a transfer of engagements by, the cooperative of which he/she was a member.

Clause 140	Provides for the set-off of amounts repaid to a person under section 133 (repayment of amounts due in respect of cancelled membership) or section 135 (repayment of deposits and debentures) against any entitlement of the person under section 138.

Clause 141	Provides for the entitlement of former members to any distribution from the reserves of the cooperative that takes place within 5 years after the person’s membership was cancelled.

Clause 142	Provides that the Registrar may exempt a specified cooperative or a cooperative that is a member of a specified class of cooperatives from all or specified provisions of this Division.

PART 7 – SHARES

Part 7 of the Bill deals with cooperatives share capital.  It provides for the issue of shares, the disclosure of beneficial and non-beneficial interests in shares and the procedure involved in the transfer of shares, as well as the repurchase of shares.

Part of the interface arrangements with the Corporations Act requires that shares may not be held by non-members.

Division 7.1:	Nature of share in cooperative

Clause 143	Describes the nature of a share or other interest in a cooperative.

Division 7.2:	Disclosure

Clause 144	Requires the board of a cooperative to provide to intending shareholders with a disclosure statement, in the specified form, before shares are issued to the intending shareholder.

Clause 145	Requires that the last annual report be sent with the disclosure statement to a person intending to become a shareholder under section 144.

Clause 146	Provides for exemptions for the provision of disclosure statements as required under section 144 or 145.

Division 7.3:	Issue of shares in a cooperative

Clause 147	Provides for the amount of share capital to be in accordance to the nominal value of shares from time to time subscribed, the value of shares and the classes of shares of a cooperative, and states that, with certain exceptions, shares must not be issued to a non-member. 

Clause 148	Provides that a share must not be allotted unless at least 10% of the nominal value of the share has been paid.

Clause 149	States that a cooperative must not issue shares at a discount.

Clause 150	Provides for the issue of shares at a premium.

Clause 151	Allows for joint ownership of shares.

Clause 152	Provides that members may be required to take up additional shares.

Clause 153	Provides for the issue of bonus shares by a cooperative.

Clause 154	Places a number of restrictions on the issuing of bonus shares by a cooperative.

Clause 155	Specifies the content of the notice which must be given to members of the meeting or postal ballot at which a special resolution is to be proposed for the approval of a bonus share issue.

Division 7.4:	Beneficial and non-beneficial interests in shares

Clause 156	Provides that notice of non-beneficial ownership of shares (where this is reasonably expected) must be given at the time of the transfer of those shares.

Clause 157	Provides for the notification of non-beneficial ownership of shares where this was not notified at the time of transfer.

Clause 158	Provides that, where notice of non-beneficial ownership has been given under  section 156, but on registration of the transfer the transferee holds some or all of those shares beneficially, notice of that fact must be given to the cooperative.

Clause 159	Requires notification of a change in the nature of a person’s shareholding.

Clause 160	Provides that, for the purpose of this Division, a person is presumed to have been aware of a circumstance of which an employee or agent of the person was aware. 

Clause 161	Specifies certain circumstances in which non-beneficial interest ownership of shares will be presumed.

Clause 162	Requires the noting of beneficial interests in a cooperative’s register of members.

Clause 163	Provides for the registration of a trustee, executor or administrator as the holder of a share in a cooperative previously held by a person who has died.

Clause 164	Provides for the registration of an administrator as the holder of a share in a cooperative previously held by a person who has died.

Clause 165	Provides for the registration of the Official Trustee in Bankruptcy as the holder of a share in a cooperative previously held by a person who has become bankrupt.

Clause 166	Provides for the liability of persons registered as holders of shares under sections 163, 164 and 165.

Clause 167	Provides for the noting in the register of members, with the consent of the cooperative, of shares held on trust.

Clause 168	Provides that no notice of a trust is to be entered on a register except as provided in this Division.

Division 7.5: 	Sale or transfer of shares

Clause 169	Provides for the sale or transfer of shares.

Clause 170	Provides for the transfer of shares on the death of a member.

Clause 171	Places a restriction of 20% (or a lower percentage specified in the rules of a cooperative) on the shareholding to be held by a shareholder.

Clause 172 	Provides that a transfer of shares is not effective until registered.

Division 7.6:	Repurchase of shares

Clause 173	Provides for the purchase and repayment of shares by a cooperative.

Clause 174	Provides that if a cooperative repurchases a share of a member, the cooperative may instead of paying the purchase price to the member apply an amount owed as an interest bearing deposit by the member with the cooperative; or allot or issue debentures in satisfaction of the amount.

Clause 175	Requires a cooperative to cancel any share purchased by or forfeited to the cooperative. 

PART 8 – VOTING AND MEETING

Part 8 of the Bill deals with voting.  Cooperatives are democratic organisations.  This part makes it clear that each member of a cooperative will have only one vote.  Voting rights attach to membership, not to shareholding.  This part of the Bill also provides for the holding of meetings and the passing of resolutions.  An ordinary resolution is passed by a simple majority.  A special resolution is that passed by a two-thirds majority at a meeting or by post; certain special resolutions must be held by special postal ballot, and this requires a three‑quarters majority.  A required majority is ascertained by the number of members who at a meeting or in a postal ballot actually vote on the resolution.

Division 8.1:	Voting entitlements

Clause 176	Applies this Part to all voting on all resolutions.

Clause 177	Describes members’ right to vote.

Clause 178	Provides for voting by proxy.

Clause 179	Places a restriction on the voting entitlement under a power of attorney.

Clause 180	Places a restriction on voting by representatives of corporations.

Clause 181	Provides that inactive members are not entitled to vote.

Clause 182	Prohibits a person from controlling the exercise of the right to vote of a member.

Clause 183	Provides that a member of a cooperative can not vote if the member has sold or transferred, or disposed of the beneficial interest in, the members’ shares or has agreed to do so.

Clause 184	Provides that a member of a cooperative is not entitled to vote if another person (whether or not a member of the cooperative) has a relevant interest in any share held by the member or in the right to vote.

Clause 185	Provides for the rights of representatives of members to vote.

Clause 186	Provides that other rights and duties of members are not affected by a member’s ineligibility to vote.

Clause 187	Provides that any vote of a disentitled member is to be disregarded.

Division 8.2:	Resolutions

Clause 188	Provides that, except as otherwise provided, decisions by a cooperative are to be determined by ordinary resolution.

Clause 189	Defines “ordinary resolution”.

Clause 190	Defines “special resolution”.

Clause 191	Specifies how a majority obtained at a meeting or by postal ballot is to be ascertained.

Clause 192	Permits the Registrar to disallow a proposed special resolution before it is passed.

Clause 193	Provides for proof by declaration of the passing of a special resolution at meetings and by postal ballot.

Clause 194	Provides for the date from which special resolutions take effect and requires a special resolution to be registered if it is to have an effect.

Clause 195	Requires the lodgement of two copies of a special resolutions with the Registrar for registration.

Clause 196	Requires the Registrar to register a special resolution if satisfied of certain matters.

Division 8.3:	Resolution by circulated document

Clause 197	Provides this Division applies a resolution of a cooperative if the cooperative has fewer than 50 members and the resolution is required or permitted under this Act or the rules of the cooperative to be passed at a general meeting of the cooperative.

Clause 198	Provides that if all the members of a cooperative have signed a document that sets out the terms of the resolution and contains a statement that they are in favour of the resolution, the resolution is taken to have passed at a general meeting of the cooperative. 

Division 8.4:	Postal Ballots

Clause 199	Provides for the holding of postal ballots.

Clause 200	Provides for the holding of special postal ballots.

Clause 201	Specifies the circumstances in which a special postal ballot is required.

Clause 202	Provides for the requisitioning by members of a postal ballot.

Clause 203	Describes the expenses that are to be considered to constitute the “expenses involved in holding the ballot” for the purposes of section 202.

Division 8.5:	Meetings

Clause 204	Provides for the timing of the holding of annual general meetings by cooperatives, including the first annual general meeting.

Clause 205	Provides for the convening of special general meetings by the board.

Clause 206	Requires the giving of 14 days notice to members of each general meeting.

Clause 207	Makes provision for the quorum for a meeting of a cooperative to be specified in its rules and provides that business cannot be transacted without a quorum present.

Clause 208	Provides for the manner of determining a question for decision at a general meeting.

Clause 209	Provides for the convening of a general meeting on the requisition of at least 20% of members or any lesser percentage specified in the rules.

Clause 210	Provides for the entering and confirming of minutes of each general meeting, board meeting and sub-committee meeting.

PART 9 – MANAGEMENT AND ADMINISTRATION OF COOPERATIVES

Part 9 deals with the management and administration of cooperatives.  In particular, it provides for the election of directors and includes provisions for a limited number of independent directors to be elected to the boards of cooperatives.  The majority of directors will still need to be members.  Such independent directors will bring additional expertise to the operation of cooperatives either by virtue of being an employee of the cooperative or as otherwise determined in the rules.  This part also deals with the duties and responsibilities of directors, and the keeping and auditing of accounts and registers, records and returns.

Division 9.1:	The Board

Clause 211	Provides that the business of a cooperative is to be managed by a board of directors which may exercise all the powers of the cooperative in general meeting.

Clause 212	Provides for the election of directors.

Clause 213	Specifies the qualification of directors.

Clause 214	Specifies disqualified persons who must not act as a director or directly or indirectly take part in or be concerned with the management of a cooperative.

Clause 215	Provides for the holding, timing and procedure of board meetings.

Clause 216	Provides for the transaction of business by the board outside board meetings.

Clause 217	Provides for the appointment of deputy directors.

Clause 218	Allows the board to delegate the exercise of specified functions (other than the  power of delegation) to a director or committee.

Clause 219	Provides for the removal from and vacation of office of a director.

Division 9.2:	Secretary

Clause 220	Provides that a cooperative shall have a secretary.

Division 9.3:	Duties and liabilities of directors, officers and employees 

Clause 221	Defines “officer” for the purposes of this Division.

Clause 222	Requires officers of cooperatives to act honestly in the exercise of their powers and the discharge of their duties.  It is an offence for a person to intentionally or recklessly contravene this clause.

Clause 223	Specifies the standard of care and diligence of officers of cooperatives.

Clause 224	Prohibits the improper use of information or position by officers of cooperatives.

Clause 225	Empowers a court that convicts a person for contravention of this Division to order payment of compensation by the convicted person to the cooperative.

Clause 226	Provides for the recovery of damages by a cooperative from a person who has contravened this Division, whether or not the person has been convicted of an offence.

Clause 227	Provides that this Division does not affect other legal duties and liabilities relating to a person’s office or employment in relation to a cooperative.

Clause 228	Deals with the indemnification of officers and auditors. It specifies that a provision exempting or indemnifying an officer or auditor of a cooperative from liability is void. The clause allows a cooperative under its rules or otherwise to indemnify an officer or auditor of the cooperative against any liability incurred by the person in defending any proceeding.

Clause 229	Adopts and applies the provisions of the Corporations Act in regard to offences.

Division 9.4:	Employee Entitlements

Clause 230	This division applies part 5.8A of the Corporations Act, which deals with employee entitlements to a cooperative and its employees. 

Division 9.5:	Restrictions on directors and officers

Clause 231	Restricts directors’ fees, concessions and other benefits that are approved at a general meeting of the cooperative.  It also prohibits officers from obtaining certain financial accommodation from the cooperative.

Clause 232	Provides for financial accommodation to directors and associates of directors under specified conditions.

Clause 233	Restricts directors of certain cooperatives from selling land to the cooperative.

Clause 234	Provides that a cooperative must not enter into a management contract unless that contract has first been approved by special resolution.

Division 9.6:	Declaration of interests

Clause 235	Requires directors to declare the nature and extent of any interest in contracts or proposed contracts with the cooperative.

Clause 236	Requires declarations under this Division to be recorded in the minutes.

Clause 237	Provides that this Division does not affect other laws or rules restricting a director from having any interest in contracts with the cooperative.

Clause 238	Specifies that certain interests need not be declared.

Division 9.7:	Financial statements, reports and audit

Clause 239	Defines “entity” and “control” for the purposes of this Division.

Clause 240	Specifies requirements for the provision of financial records, statements and reports of a cooperative with particular accordance with the Corporations Act.

Clause 241	Empowers the Registrar to grant exemptions from all or specified provisions of the regulations made for the purposes of this Part.

Clause 242	Requires directors to make certain disclosures in relation to the affairs of the cooperative and of any entity that the cooperative controls that are required by the regulations.

Clause 243	Provides qualified privilege for auditors and persons who publish documents prepared by auditors.

Clause 244	Provides for the financial year of a cooperative as provided under the rules of a cooperative.

Division 9.8:	Registers, records and returns

Clause 245	Specifies the registers to be kept by cooperatives.

Clause 246	Specifies the required location of a cooperative’s registers.

Clause 247	Provides that a cooperative must have certain registers, records and returns available for the inspection.

Clause 248	Restricts the use of information contained in a cooperative’s registers.

Clause 249	Requires the giving of notice to the Registrar of the appointment of a director, principal executive officer or secretary of the cooperative.

Clause 250	Requires a cooperative to file with the Registrar within the required period in each year an annual report containing the matters specified.

Clause 251	Requires a cooperative to provide a list of members at the request of the Registrar.

Clause 252	Allows a register to require from a cooperative a special return on the subject matter and in the form specified by the request of the Registrar.

Division 9.9:	Name and registered office

Clause 253	Specifies the required components of a cooperative’s name.

Clause 254	Allows the use of certain abbreviations in a cooperative’s name.

Clause 255	Requires the name of a cooperative to appear on its seal, advertisements and business documents.

Clause 256	Provides for the change of name of a cooperative.

Clause 257	Requires a cooperative to have a registered office.

PART 10 – FUNDS AND PROPERTY

Part 10 of the Bill deals with the funds and property of cooperatives.  Division 1 of this part makes it clear that a cooperative may only obtain finance and accommodation, which includes the obtaining of credit or borrowing or raising money by any means, or give security for the repayment of money as provided by its rules and in accordance with the regulations.

The registrar may give a cooperative directions as to the obtaining, repayment or refinancing of financial accommodation.  The Bill provides for deposit taking by cooperatives if the cooperative currently has a deposit-taking power.  It is intended that existing cooperatives without a deposit-taking power and all new cooperatives will not be able to accept deposits in view of the movement of financial cooperatives to the Financial Institutions Code.  Cooperatives may obtain financial accommodation by way of debentures from both non‑members and members under appropriate disclosure regimes.  Part 10 also provides for the registration of charges and matters in relation to receivers and other controllers of property of cooperatives.

Division 10.1:	Power to raise money

Clause 258	Includes a definition of “financial accommodation” for the purposes of this Division.

Clause 259	Requires fund raising by a cooperative to be in accordance with the Act and its regulations.

Clause 260	Restricts the ability to take deposits to those cooperatives which were authorised to do so prior to the commencement of this Act.

Clause 261	Provides that members are not required to see to the application of money provided to the cooperative by way of loan or deposit.

Clause 262	Empowers the Registrar to give directions to a cooperative in relation to the obtaining by the cooperative of financial accommodation.

Clause 263	Allows a cooperative to incur subordinated debt as defined in the Act.

Clause 264	Provides that the provisions of Parts 1.2A, 2L, 6D, and 7.11 of the Corporations Act are adopted and apply to and in respect of debentures of a cooperative, except where an issue of debentures is made by a cooperative solely to members or solely to members and employees. 

Clause 265	Requires a cooperative to provide a disclosure statement for the issuing of debentures, containing the specified matters, where an issue of debentures is solely to members and employees of the cooperative.

Clause 266	Provides that a debenture of a cooperative cannot be sold or transferred except with the consent of the board and in accordance with the rules of the cooperative.

Clause 267	Adopts and applies section 124 and 563AAA of the Corporations Act in relation to the reissue of redeemed debentures issued by a cooperative to any of its members.

Clause 268	Provides that a cooperative may require its members to lend money, with or without security, to the cooperative, in accordance with a proposal approved by special resolution of the cooperative.

Clause 269	Provides for the rate of interest payable on a compulsory loan made under section 268.

Division 10.2:	Charges

Clause 270	Gives effect to Schedule 3 (Registration etc of Charges) and specifies the mortgages, charges and encumbrances to which the Schedule does not apply.

Division 10.3:	Receivers and other controllers of property of cooperatives

Clause 271	Gives effect to Schedule 4 (Receivers, and other controllers, of property of cooperatives).

Division 10.4:	Disposal of surplus from activities

Clause 272	Allows a cooperative to retain all or any part of its surplus for the benefit of the cooperative.

Clause 273	Provides that the rules of a cooperative may authorise the cooperative to apply a specified proportion of its surplus for any charitable purpose and that the rules of a trading cooperative may authorise the cooperative to apply a part of its surplus for supporting any activity approved by the cooperative.

Clause 274	Provides for the distribution by a trading cooperative of surplus or reserves to members.

Clause 275	Provides for the crediting of a part of a cooperative’s surplus to a person who is not a member, but is qualified to be a member, by way of rebate in proportion to the business done by him or her with the cooperative.

Division 10.5:	Acquisitions and disposal of assets

Clause 276	Provides that a cooperative may do any of the things specified (relating to the acquisition and disposal of assets) providing they are approved by special resolution by a special postal ballot.

PART 11 – RESTRICTIONS ON ACQUISITION OF INTERESTS IN TRADING COOPERATIVES

Part 11 of the Bill deals with restrictions on the acquisition of shares in cooperatives.  The provisions apply only to trading cooperatives.  Division 1 sets out requirements relating to relevant interests in the voting rights or shares of members.

A relevant interest is not to exceed 20 per cent of the nominal value of the issued share capital of the cooperative.  The registrar may increase the maximum percentage in a particular case or approve a special resolution by special postal ballot increasing the maximum percentage.  Division 2 of this part places restrictions on offers to purchase shares in a cooperative.  Part 11 is designed to ensure that adequate information on matters relating to shares and voting entitlements is available to all members or other concerned persons.  The provisions in this Bill do not prevent a cooperative from being taken over.  They do, however, ensure that all relevant information relating to such takeovers, including various share or voting entitlements, are made public, thus enabling active members to make a fully informed decision in any particular case.

Division 11.1:	Restrictions on share and voting interests

Clause 277	Requires a person to give notice to a trading cooperative of a relevant interest, or the cessation of a relevant interest, in the right to vote of a member of the cooperative within 5 days of becoming aware that the person has a relevant interest.

Clause 278	Requires a person to give notice to a cooperative of a substantial share interest, a substantial change in a substantial share interest or a cessation of a substantial share interest, in the cooperative.
Clause 279	Specifies the requirements for notices under this Division.

Clause 280	Specifies the maximum permissible level of a relevant interest in shares of a cooperative.

Clause 281	Provides that shares held in contravention of this Division are declared to be forfeited by the board of the cooperative to the extent necessary to remedy the contravention.

Clause 282	Specifies the powers of the board of a cooperative in response to a suspected contravention of section 277.

Clause 283	Specifies the powers of the Supreme Court with respect to a contravention of section 277.

Clause 284	Requires a cooperative to inform the Registrar of a relevant interest which exceeds the maximum permissible level.

Clause 285	Requires a cooperative to keep a register of notifiable interests.

Clause 286	Requires an unlisted company (within the meaning of the Corporations Act) that is a member of a cooperative to furnish to the cooperative a list of the company's shareholders within 28 days after the end of each financial year of the company and within 28 days after a request by the Registrar.

Clause 287	Provides that an excess share interest does not affect a loan liability of a member.

Clause 288	Describes the extent of the operation of this Division.
Clause 289	Allows the Registrar to grant exemptions from the operation of this Division.

Division 11.2:	Restrictions on certain share offers

Clause 290	Specifies the share offers to which this Division applies.

Clause 291	Specifies the requirements to be satisfied before an offer to which this Division applies can be made.

Clause 292	Prohibits certain discriminatory offers.

Clause 293	Provides that offers to which this Division applies must first be submitted to the board of the cooperative.

Clause 294	Prohibits the public announcement of a proposed takeover involving the conversion of a cooperative to a company where the person making the announcement knows that the announcement is false, is recklessly indifferent as to whether it is true or false, or has no reasonable grounds for believing that the performance of obligations arising from the announcement is possible.

Clause 295	Specifies additional disclosure requirements for offers involving the conversion of a cooperative to a company.

Clause 296	Specifies the consequences of an offer to purchase shares in a cooperative made in contravention of this Division.

Clause 297	Allows the Registrar to grant exemptions from all or specified provisions of this Division.

PART 12 – MERGER, TRANSFER OF ENGAGEMENTS, WINDING UP

Part 12 of the Bill provides for mergers, transfers of engagements, transfers of incorporation, winding up, and appointment of administrators.  

Division 12.1:	Mergers and transfers of engagements

Clause 298	Provides that this Division does not apply to a merger or transfer of engagements to which Part 14 (Foreign Cooperatives) applies.

Clause 299	Provides that any 2 or more cooperatives may consolidate all or any of their assets, liabilities or undertakings by way of merger or transfer of engagements approved under this Division.

Clause 300	Specifies the requirements which must be complied with before an application can be made under this Division.

Clause 301	Requires each cooperative to send to each of its members a disclosure statement approved by the Registrar at least 21 days before the ballot papers must be returned by members voting in the special postal ballot required by section 300.

Clause 302	Provides for the making of an application to the Registrar for approval of a merger or transfer of engagements.

Clause 303	Provides that the Registrar must approve a merger pursuant to an application under this Division if satisfied of certain specified matters.

Clause 304	Provides that the Registrar must approve a transfer of engagements pursuant to an application under this Division if satisfied of certain specified matters.

Clause 305	Provides for a transfer of engagements by direction of the Registrar.

Division 12.2:	Transfer of registration or incorporation

Clause 306	Defines "new body" and "transfer" for the purposes of this Division.

Clause 307	Provides for an application for transfer of incorporation of a cooperative to one of the bodies corporate specified in the section.

Clause 308	Specifies the requirements that must be complied with before an application can be made under section 307.

Clause 309	Provides that a transfer of incorporation under this Division must not impose greater or different liability on the members of the new body who were members of the cooperative.

Clause 310	Describes the effect of a new certificate of registration or incorporation.

Clause 311	Provides that on the issue of a certificate or incorporation in respect of a cooperative, the cooperative ceases to be registered as a cooperative under this Act.

Clause 312	Provides that the new body is the same entity as the body corporate constituted by the cooperative.

Clause 313	Provides that stamp duty previously paid is to be taken into account when assessing the stamp duty payable on an incorporation or registration pursuant to a transfer under this Division.

Division 12.3:	Winding up and deregistration

Clause 314	Provides that a cooperative may be wound up voluntarily, by the Supreme Court or on a certificate of the Registrar.

Clause 315	Provides for winding up on a Registrar's certificate only if the necessary grounds for the taking of that action exist, as mentioned in section 338.

Clause 316	Provides that a cooperative may be deregistered in the same way and in the same circumstances as a company may be deregistered under the Corporations Act.

Clause 317	Provides that the provisions of Parts 5.4 to 5.7 and Chapter 5A of the Corporations Act apply to the winding up and deregistration of a cooperative subject to specified modifications of the Corporations Act.
Clause 318	Places certain restrictions on voluntary winding up of a cooperative.
Clause 319	Specifies when a members' voluntary winding up commences.

Clause 320	Provides for the distribution of surplus on a winding up of a non-trading cooperative.

Clause 321	Provides that a vacancy in the office of liquidator (in the case of a voluntary winding up) may be filled by the Registrar.

Clause 322	Provides for application to the Supreme Court for review of the remuneration of a liquidator.

Clause 323	Provides for the liability of a member to contribute in a winding up where their membership is cancelled within 2 years of the commencement of the winding up.

Division 12.4:	Administration of cooperative- application of the Corporations Act

Clause 324	Provides that the provisions of Part 5.3A and Division 3 of Part 5.9 of the Corporations Act apply to and in respect of a cooperative as if it were a company.
Division 12.5:	Appointment of administrator
Clause 325	Provides for the appointment of an administrator by the Registrar.
Clause 326	Describes the effect of the appointment of an administrator.

Clause 327	Provides for the termination of appointment of an administrator by the Registrar.

Clause 328	Provides that the expenses of an administration are payable out of the funds of the cooperative.
  
Clause 329	Provides that an administrator is liable for any loss incurred by the cooperative which is incurred because of any fraud, dishonesty, negligence or wilful failure to comply with the Act, the regulations or the cooperative's rules by the administrator.

Clause 330	Provides the Registrar with additional powers where the Registrar has appointed directors of a cooperative under section 327.

Clause 331	Provides for a stay of proceedings against a cooperative where the Registrar has appointed an administrator to conduct the cooperative's affairs.

Clause 332	Requires an administrator to report to the Registrar if requested to do so by the Registrar.

Division 12.6:	Effect of merger, transfer of engagements and transfer of incorporation 

Clause 333	Provides for the application of this Division to a merger of cooperatives.

Clause 334	Provides for the application of this Division to a transfer of engagements of a cooperative to another cooperative under Division 12.1.

Clause 335	Provides for the application of this Division to a transfer of incorporation under Division 12.2.

Clause 336	Describes the effect of an event to which this Division applies (as provided for in sections 333, 334 and 335) on the property, liabilities etc of the relevant bodies.

Clause 337	Provides that certain instruments are not liable for stamp duty or to any fee payable under any law for registration.

Division 12.7:	Miscellaneous

Clause 338	Specifies the grounds for a winding up, a transfer of engagements and the appointment of an administrator.
	
Clause 339	Provides that the provisions of Part 5.7B of the Corporations Act apply to a cooperative.

PART 13 – ARRANGEMENTS AND RECONSTRUCTIONS

Part 13 provides for arrangements and reconstructions.

Division 13.1:	General requirements

Clause 340	Specifies the requirements for a binding compromise or arrangement.

Clause 341	Provides for a meeting of creditors as ordered on application by the Supreme Court.

Clause 342	Provides for the giving of notice to the Registrar of the hearing of an application for an order under this Division and is given opportunity to make submissions to the Supreme Court.

Clause 343	Provides that the results of 2 or more meetings of creditors to be held in relation to a proposed compromise or arrangement are to be aggregated.

Clause 344	Specifies persons who are disqualified from administering a compromise or arrangement approved under this Act.

Clause 345	Provides for the application of certain provisions of Schedule 4 to this Act, and the application of section 536 of the Corporations Act, to persons appointed to administer a compromise or arrangement.

Clause 346	Requires a cooperative to ensure that a copy of an order of the Supreme Court approving a compromise or arrangement is annexed to each future copy of the cooperative's rules.

Clause 347	Requires the directors of a cooperative in respect of which a compromise or arrangement has been proposed to instruct that certain reports be prepared and made available.

Clause 348	Empowers the Supreme Court to restrain further proceedings in respect of a cooperative that has proposed a compromise or arrangement with any of its creditors.

Clause 349	Provides that the Supreme Court need not approve a compromise or arrangement unless it is satisfied of certain matters.

Division 13.2:	Explanatory statements

Clause 350	Provides that an explanatory statement, containing the specified information, must be sent with every notice to creditors convening the court-ordered meeting, and to members for the purpose of the conduct of the special postal ballot.

Clause 351	Specifies further requirements for the explanatory statement referred to in section 350.
Clause 352	Provides that a contravention of this Division constitutes an offence.
Clause 353	Specifies provisions for facilitating reconstructions and mergers.

Division 13.3:	Acquisition of shares of dissenting shareholders

Clause 354	Defines "dissenting shareholder" and "excluded shares" for the purposes of this Division.

Clause 355	Describes the schemes and contracts to which this Division applies.

Clause 356	Provides for the acquisition of shares pursuant to a compulsory acquisition notice sent to a dissenting shareholder.

Clause 357	Specifies certain restrictions to the application of section 356 where the nominal value of excluded shares exceeds 10% of the aggregate nominal value of all the shares to be transferred under the scheme.

Clause 358	Provides that remaining shareholders in the transferor cooperative may require the transferee to acquire the holders' shares.

Clause 359	Provides for the transfer of shares pursuant to a compulsory acquisition.

Clause 360	Provides for the disposal of the consideration received for shares compulsorily acquired by the transferor.

Division 13.4:	Miscellaneous

Clause 361	Requires a person appointed to administer a compromise or arrangement to give written notice to the Registrar of his/her appointment.

Clause 362	Empowers the Supreme Court, when an application is made to it under this Part, to require certain reports concerning the proposed compromise or arrangement to be given to it.

Clause 363	Describes the effect of an out-of-jurisdiction compromise or arrangement.

Clause 364	Requires the jurisdiction of the Supreme Court under this Part to be exercised in harmony with its jurisdiction under the Corporations Act.

Clause 365	Allows the Registrar (or his/her representative) to appear and be heard in any  proceedings before the Supreme Court under this Part.

PART 14 – FOREIGN COOPERATIVES

Part 14 of the Bill introduces new provisions in relation to foreign cooperatives.  A foreign cooperative may be either a participating cooperative or from a non-participating jurisdiction.  A participating cooperative is a cooperative registered under a cooperatives law.  It is intended that a cooperatives law, for the purposes of this part, is a law that has been enacted that contains the core consistent provisions of this Bill.  The core consistent provisions are those that are subject to an intergovernmental arrangement.  Non-participating jurisdictions include overseas jurisdictions to enable registration of a cooperative from outside Australia for the first time.  All foreign cooperatives registered under this part are to be subject to at least the prescribed core consistent provisions.  Provision has also been included for a cooperative and a foreign cooperative to consolidate all or any of their assets, liabilities and undertakings by way of merger or transfer of engagements.

Division 14.1:	Introductory

Clause 366	Contains a number of definitions for the purposes of this Part.

Clause 367	Provides that the Minister may make a declaration that a law of a State is a cooperatives law for this Part by a notifiable instrument. 

Division 14.2:	Registration of foreign cooperatives

Clause 368	Provides that a foreign cooperative must not carry on business in the Territory unless it is registered under this Part.
Clause 369	Specifies what constitutes carrying on business.

Clause 370	Provides for an application for registration as a foreign cooperative by a participating cooperative in the Territory.

Clause 371	Provides for an application for registration as a foreign cooperative by a non‑participating cooperative in the Territory.

Clause 372	Provides that a non-participating cooperative is not eligible for registration unless the Registrar is satisfied as to certain matters in relation to the cooperative's rules.

Clause 373	Provides that a foreign cooperative is eligible for registration if the name it proposes to use in the Territory is not likely to be confused with the name of a body corporate or a registered Territory business name.

Clause 374	Requires the Registrar to register a foreign cooperative if satisfied that it is eligible for registration.

Clause 375	Applies the Act and regulations to foreign cooperatives as if they were cooperatives.

Clause 376	Specifies certain changes affecting a foreign cooperative of which the Registrar must be notified within 28 days of the alteration.

Clause 377	Requires the lodgement by a foreign cooperative of a balance sheet and any accompanying documents within 6 months (or such longer period as allowed by the Registrar) of the end of each of its financial years.

Clause 378	Requires a foreign cooperative to notify the Registrar within 7 days of ceasing to carry on business as a cooperative in the Territory.

Clause 379	Provides for the issue of a certificate of compliance by the Registrar to a cooperative that proposes to apply to be registered as a foreign cooperative in another participating State.

Division 14.3:	Mergers and transfers of engagements

Clause 380	Defines "appropriate Registrar", “Territory cooperative” and “Territory registrar” for the purposes of this Division.

Clause 381	Provides for the merger of or transfer of engagements between a Territory cooperative and a participating cooperative or according to certain requirements a merger of or transfer of engagements between a Territory cooperative and a non-participating cooperative.

Clause 382	Specifies the requirements that must be complied with before an application can be made under this Division.

Clause 383	Requires that a disclosure statement, containing the specified matters, be sent to each member by each cooperative prior to the passing of the special resolution approving the merger or transfer of engagements.

Clause 384	Provides for the making of an application to the Territory Registrar for approval of a merger or transfer of engagements under this Division.

Clause 385	Provides for the approval of a merger under this Division by the Territory Registrar.

Clause 386	Provides for the approval of a transfer of engagements under this Division by the Territory Registrar.

Clause 387	Describes the effect of a merger or transfer of engagements under this Division.

Clause 388	Provides that this Division applies instead of Division 1 of Part 12 of the Act.

PART 15 – SUPERVISION AND PROTECTION OF COOPERATIVES

Part 15 deals with the supervision and inspection of cooperatives and the holding of inquiries into cooperatives.  In general terms the provisions dealing with inspection and supervision of cooperatives have been strengthened to ensure that the general interests of members and the public are better protected

Division 15.1:	Supervision and inspection

Clause 389	Contains certain definitions for the purposes of this Part.

Clause 390	Provides that, in this Part, "cooperative" includes subsidiaries, foreign cooperatives and cooperative ventures.

Clause 391	Provides for the appointment of inspectors by the Registrar for the purposes of the Act.

Clause 392	Provides that the Registrar and investigators have and may exercise all the functions of an inspector.

Clause 393	Requires the Registrar to provide each inspector with an identity card, which must be produced by the inspector on request.

Clause 394	Provides that inspectors may require certain persons to appear, answer questions and produce documents.

Clause 395	Specifies inspectors' powers of entry to certain premises.

Clause 396	Specifies the powers of inspectors on premises that they are authorised to enter.

Clause 397	Specifies the functions of inspectors in relation to taking possession or making copies of relevant documents found on the premises.

Clause 398	Provides that failure to comply with any requirement of an inspector constitutes an offence.

Clause 399	Provides that a person is not excused from making a statement on the grounds that the statement might tend to incriminate him or her, but the statement is not admissible against him or her in criminal proceedings other than proceedings under this Division.

Clause 400	Provides for the issuing of search warrants by a magistrate to inspectors.

Clause 401	Provides for the admissibility into evidence of copies or extracts of records relating to the affairs of a cooperative.

Clause 402	Relates to documents containing privileged legal communications, and allows a legal practitioner to refuse to comply with a requirement under section 394 or 397 under certain circumstances.  It also stipulates circumstances where a legal practitioner is required to comply with such requirements.

Clause 403	Provides for the giving of assistance by the Police to inspectors.

Division 15.2:	Inquiries

Clause 404	Contains definitions of "affairs", “costs” and "involved person" for the purposes of this Division.

Clause 405	Provides for the appointment of investigators.

Clause 406	Specifies the powers of investigators.

Clause 407	Provides for the examination of "involved persons" by investigators.

Clause 408	Provides for the entitlement of legal professional privilege of an involved person who is a legal practitioner.

Clause 409	Creates a number of offences by involved persons.

Clause 410	Creates a number of offences relating to documents.

Clause 411	Provides for the admissibility into evidence of a record of an examination made under section 407 but this does not preclude the admission of other written or oral evidence.

Clause 412	Provides for interim and final reports to be made by an investigator to the Registrar.

Clause 413	Provides for the institution of legal proceedings following an inquiry under this Division.

Clause 414	Provides for the admissibility into evidence of an investigator's report.

Clause 415	Provides that the payment of the costs of an inquiry under this Division be paid out of money appropriated by the Legislative Assembly.

Division 15.3:	Prevention of fraud and certain other conduct

Clause 416	Prohibits the falsification of the records of a cooperative.

Clause 417	Prohibits the obtaining of any property of a cooperative by fraud or misappropriation of the assets of a cooperative.

Clause 418	Prohibits the offering or paying of a commission, fee or reward to an officer of a cooperative in connection with a transaction of the cooperative.

Clause 419	Prohibits an officer from accepting such commission, fee or reward.

Clause 420	Prohibits the making of false statements in or in relation to any loan application, request or demand for money made to or of any cooperative.

Division 15.4:	Miscellaneous powers of the Registrar

Clause 421	Provides for the calling by the Registrar of a special meeting or the holding of an inquiry, on the application of a majority of members of the board or not less than one third of the members of a cooperative.

Clause 422	Provides for the holding of a special meeting by the Registrar.

Clause 423	Provides for the payment of expenses of a special meeting called or an inquiry held under this Division.

Clause 424	Allows the Registrar, without any application, to hold a special inquiry into a cooperative.

Clause 425	Provides for the calling by the Registrar of a special meeting following an inquiry under this Division.

Clause 426	Allows the Registrar to require information and evidence from an applicant in relation to any application for registration or approval of any rule or document under the Act.
	
Clause 427	Allows the Registrar to extend or abridge any time for doing anything required to be done by a cooperative under the Act, the regulations or the rules of a cooperative.

Clause 428	Empowers the Registrar to intervene in any proceedings relating to a matter arising under the Act or the regulations.

PART 16 – ADMINISTRATION OF ACT

Part 16 deals with the administration of this Bill and the specific functions of the registrar.  These provisions form part of the core consistent provisions.

Division 16.1:	The Registrar

Clause 429	Requires the Minister to appoint a Registrar of Cooperatives.
Clause 430	Specifies the Registrar's functions.

Clause 431	Provides for the appointment of a Deputy Registrar and Assistant Registrars as are necessary for the purposes of the Act.

Clause 432	Allows the Registrar to delegate any of his/her functions including this power of delegation.

Clause 433	Establishes a Register of Cooperatives.

Clause 434	Requires the Registrar to keep certain registers in the form and contain the particulars the Registrar thinks fit.

Clause 435	Provides for the disposal of records by the Registrar.

Clause 436	Provides for the inspection of the Register and the obtaining of copies of documents kept by the Registrar on payment of a prescribed fee.

Clause 437	Allows the Registrar to indicate to an applicant for an approval under the Act that the approval is considered to have been granted at the end of a specified period unless the applicant is otherwise notified.

Clause 438	Provides that a document is not considered to be lodged unless all required information is provided and the fee (if any) paid.

Clause 439	Provides for lodgment of documents by facsimile or electronic transmission.

Clause 440	Empowers the Registrar to reject or refuse to register documents under certain circumstances.

Division 16.2:	Evidence

Clause 441	Provides that certificates of registration issued under the Act are conclusive evidence of incorporation and that all requirements for registration have been complied with.

Clause 442	Provides for the issue of certificates by the Registrar certifying that certain matters have or have not been done or that certain requirements of the Act have or have not been complied with.

Clause 443	Provides for the admissibility into evidence of records kept by a cooperative.

Clause 444	Provides that minutes purporting to be minutes of the business transacted at a meeting are evidence that the business recorded, was transacted at the meeting and that the meeting was duly convened and held.

Clause 445	Provides that official certificates and other documents signed by or bearing the seal of the Registrar are to be received in evidence without further proof.

Clause 446	Provides that judicial notice is to be taken of the Registrar's signature.

Clause 447	Provides that a copy of a cooperative's rules verified by statutory declaration by the secretary of the cooperative to be a true copy of the rules is evidence of the rules.

Clause 448	Provides that the registers of a cooperative are evidence of the particulars inserted therein.

PART 17 – OFFENCES AND PROCEEDINGS

Part 17 provides for offences and proceedings.

Clause 449	Provides that officers and directors involved in a contravention of the Act or the regulations by a cooperative are taken to have contravened the same provision.

Clause 450	Provides that notice is to be given to each member of a cooperative of a conviction for an offence against this Act or the regulations by the cooperative or an officer within 28 days after the conviction is recorded.

Clause 451	Imposes obligations of confidentiality, with specified exceptions, on persons involved in the administration of this or the former Act.

Clause 452	Provides that the making of false or misleading statements in a document required for the purposes of the Act or lodged with the Registrar is an offence.

Clause 453	Defines the term “exempt body” and imposes penalties on persons who trade or carry on business under any name or title including the word “cooperative” or “co-operative” or “co-op” or hold out in any manner that its trade or business is cooperative in nature.

Clause 454	Creates a further offence for a continuing failure to do a required act under provisions of the Act.

Clause 455	Provides that a contravention by a cooperative of the Act, the regulations or its rules in making, guaranteeing or raising any loan or receiving any deposit does not affect the civil rights and liabilities of the cooperative or any person in the recovery of the loan or deposit affected, but the money becomes immediately payable.

Clause 456	Provides for the issuing of injunctions by the Supreme Court on the application of the Registrar or an affected person on certain specified grounds.

Clause 457	Provides that proceedings for recovery of fines or penalties imposed under the rules of a cooperative may be taken only by the cooperative. 

PART 18 – REVIEW OF REGISTRAR’S DECISIONS

Part 18 deals with general matters in connection with the administration of the Bill.  

Clause 458	Provides for the definitions that relate to this Part.  In particular the clause specifies those decisions of the Registrar as stated in the Act which are reviewable.

Clause 459	Specifies that the Registrar must give written notice of a reviewable decision to people whose interests are affected by the decisions of the Registrar.

Clause 460	Provides that a person whose interest are affected by a reviewable decision of the Registrar may apply to the Administrative Appeals Tribunal for a review of the decision.

PART 19 – MISCELLANEOUS

Clause 461	Provides an exemption from stamp duty in respect of certificates of incorporation of cooperatives and share certificates and other instruments issued or  executed in connection with the share capital of cooperatives.

Clause 462	Requires the Registrar to register a dissolution of a cooperative and cancel the registration of the cooperative.

Clause 463	Provides for the service of documents on a cooperative.

Clause 464	Provides for the service of documents on a member of a cooperative.

Clause 465	Provides for the reciprocal exchange of information between State and Territory Registrars.

Clause 466	Requires translations of documents that are not in English that are required to be furnished or lodged.

Clause 467	Enables the Minister to determine fees for this Act. A determination made under this section is a disallowable instrument under the Legislation Act 2001.

Clause 468	Allows the Registrar to approve forms for use under the Act.

Clause 469	Provides that the Minister may make guidelines about the exercise of the Registrar’s functions.

Clause 470	States that in an Act or instrument other than this Act a reference to the Cooperative Societies Act 1939 is  taken to be a reference to this Act and a reference to a society or cooperative society registered under that Act is taken to be taken to be a reference to a cooperative registered under this Act.

Clause 471	Provides for the making of regulations by the Executive under the Act.

Part 20 – Repeal and Transitional

Clause 472	Repeals the Cooperative Societies Act 1939.

Clause 473	Gives effect to Schedule 5 (Transitional). 

Clause 473	Provides that regulations may provide for transitional matters on the commencement of this Act.

Clause 474	Enables the Regulations to modify this part or schedule 5 to make provision with respect to any matter that, in the Executive’s opinion, is not, or is not adequately, dealt with in the part or schedule.

Clause 475	Provides for sunsetting after year 1 after the commencement of this section for the following sections 468, 470 and this section and clauses 1 to 5, 7, 9, 10 and 12 to 14 of Schedule 5.

Clause 472	Provides for sunsetting in that this Part and Schedule 5 (so far as they remain in force) expire 2 years after the commencement of this section.

SCHEDULE 1
Relevant Interests, associates, related bodies
In relation to the dictionary of this Act, Schedule 1 defines and deals with the relevant interests, associates and related bodies with respect to the rights, meaning and powers of relevant interests, associates and related bodies.

SCHEDULE 2
In relation to section 102 of the Act, Schedule 2 deals with matters which the rules of a cooperative must make provision for.

SCHEDULE 3
In respect to section 270 of the Act, Schedule 3 deals with the notice, registration of charges, priority rules and other matters related to charges arranged by cooperatives.

SCHEDULE 4
In respect to sections 271 and 345 of the Act, Schedule 4 deals with the powers and responsibilities of receivers and other controllers of property of cooperatives.

SCHEDULE 5
In respect to section 473 of the Act, Schedule 5 gives effect to saving and transitional aspects of the Cooperatives Act.  There is specific coverage of the treatment of existing cooperatives and societies started to be formed prior to the commencement of this Act. 

Dictionary
In respect to section 4 the Act contains a Dictionary providing definitions of key terms for interpreting the legislation.