New South Wales Bills New South Wales Bills[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Co-operatives (Adoption of National
aw) Bill 2012
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Overview of Bill
The object of this Bill is to enact co-operatives legislation applying in this State. It
does so as part of a proposed substantively uniform scheme of legislation applying
the Co-operatives National Law in the States and Territories (jurisdictions).
The Bill contains the Co-operatives National Law, set out in the Appendix, which
operates as a template for all jurisdictions. Each jurisdiction has agreed to enact
legislation applying the National Law in its jurisdiction or to enact consistent
legislation. The intention is that there will be a substantively uniform scheme of
legislation for co-operatives applying in all jurisdictions, based on the National Law.
Some features of the National Law are set out below.
In addition to applying the Co-operatives National Law, this Bill and the application
legislation of other jurisdictions would specify local administration details such as
the appointment of a Registrar of Co-operatives, specifying which courts deal with
various matters, and stating how official notices are published.
National Regulations supporting the Co-operatives National Law would be made by
the Governor of New South Wales. Each jurisdiction has agreed to adopt, or make
regulations consistent with, the National Regulations.
2011-78-24.d22
Co-operatives (Adoption of National Law) Bill 2012
Explanatory note
Existing co-operatives legislation in all jurisdictions is based on Core Consistent
Provisions developed by the Standing Committee of Attorneys-General. The
proposed Co-operatives National Law continues the major features of the existing
legislation, while also removing variations between jurisdictions and updating some
provisions--particularly provisions that apply parts of the Corporations Act 2001 of
the Commonwealth (the Corporations Act).
Outline of provisions
Part 1 Preliminary
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act by proclamation.
Clause 3 defines certain words and expressions used in the proposed Act.
Part 2 Application of Co-operatives National Law and
Co-operatives National Regulations
Clause 4 applies the Co-operatives National Law as a law of this jurisdiction called
the Co-operatives National Law (NSW). The clause applies the Co-operatives
National Regulations as regulations called the Co-operatives National Regulations
(NSW).
Clause 5 defines certain words and expressions used in the Co-operatives National
aw (NSW).
Clause 6 excludes the operation of the Interpretation Act 1987 and Subordinate
egislation Act 1989 from applying to the applied provisions and the Co-operatives
National Regulations and other instruments made under the Co-operatives National
aw. The clause makes it clear that it does not affect local regulations made under
the proposed Act.
Part 3 Some matters referred to in the Co-operatives
National Law (NSW)
Clause 7 specifies for this jurisdiction the meaning of certain terms used in the
Co-operatives National Law. These terms are designated authority, designated
instrument, and designated tribunal. It is intended that each jurisdiction will make
appropriate provision for these terms in jurisdictional legislation applying the
National Law.
Clause 8 provides that a reference to a particular date in provisions of the
Corporations Act as applied in this jurisdiction is to be read as a reference to a
specified different date. The specified different date relates to changes to the liability
of directors under insolvent trading provisions in the Corporations Act that were not
adopted by the Co-operatives Act 1992 until a later time.
Explanatory note page 2
Co-operatives (Adoption of National Law) Bill 2012
Explanatory note
Clause 9 provides that unclaimed money from the disposal of shares compulsorily
acquired is to be dealt with under the Unclaimed Money Act 1995.
Clause 10 results in certain property of a deregistered co-operative vesting in the
State of New South Wales. The clause achieves this by providing that the specified
entity referred to in section 453 (d) of the Co-operatives National Law (NSW) is the
State of New South Wales. By way of explanation, section 453 of the Co-operatives
National Law applies provisions of the Corporations Act that refer to the
Commonwealth, and clause 10 (1) has the effect of substituting the State of New
South Wales for this purpose. Clause 10 (2) replaces references to a Special Account
under Commonwealth legislation with references to the Special Deposits Account
under State legislation.
Clause 11 provides for the application of legislation of this jurisdiction to warrants
issued under the Co-operatives National Law.
Clause 12 provides that the costs of an inquiry under Part 6.5 of the Co-operatives
National Law (NSW) may be directed to be paid to the State.
Clause 13 provides that information obtained in the course of administering the
Co-operatives National Law (NSW) or the Co-operatives Act 1992 may be divulged
to certain specified persons.
Clause 14 provides that a pecuniary penalty ordered to be paid in the State is a civil
debt payable to the Registrar of Co-operatives on behalf of the State, and is
recoverable accordingly.
Clause 15 provides that stamp duty is not payable on certain instruments associated
with co-operatives, and stamp duty already paid is to be taken into account in respect
of certain other instruments associated with co-operatives.
Clause 16 provides that registration fees are not chargeable under any Act in respect
of certain instruments associated with co-operatives.
Part 4 Regulations
Clause 17 authorises the Governor to make regulations (National Regulations)
under the power conferred by the Co-operatives National Law as applied in each
jurisdiction to make Co-operatives National Regulations. The Co-operatives
National Regulations in that form take effect only to the extent they are applied or
adopted by individual jurisdictions (see clause 4 in the case of this jurisdiction).
Clause 18 authorises the Governor to make regulations (local regulations) for the
purposes of the proposed Act or as contemplated by the Co-operatives National Law
as applying in this jurisdiction.
Part 5 Miscellaneous
Clause 19 provides that the Co-operatives National Law does not apply to certain
co-operative housing bodies.
Explanatory note page 3
Co-operatives (Adoption of National Law) Bill 2012
Explanatory note
Clause 20 contains evidentiary provisions relating to the making of orders, notices,
exemptions and other instruments published in the Gazette.
Clause 21 provides for the procedure for the prosecution of offences under the
proposed Act and the Co-operatives National Law (NSW).
Clause 22 provides for the recovery of fines and penalties imposed by the rules of a
co-operative.
Clause 23 gives protection from civil liability for certain persons.
Clause 24 specifies the officer who is to exercise functions as the Registrar of
Co-operatives under the proposed Act or the Co-operatives National Law (NSW).
Clause 25 repeals the Co-operatives Act 1992, the Co-operatives Amendment
Act 1997, and the Co-operatives Regulation 2005.
Schedule 1 Savings and transitional provisions
This Schedule contains some specific savings and transitional provisions, and also
enables local regulations of a savings or transitional nature to be made.
Appendix Co-operatives National Law
This Appendix sets out the Co-operatives National Law. It is divided into Chapters
and Schedules, which are briefly summarised below.
Chapter 1 Preliminary
This Chapter sets out the principles used by a co-operative organisation. The
principles are those agreed by the International Co-operative Alliance and
incorporated into Recommendation 193 of the International Labour Organization.
The Chapter contains interpretation provisions and also sets out the relationship
between the Co-operatives National Law and the Corporations Act. The provisions
of the Corporations Act that are applied throughout the Co-operatives National Law
are collected in a note and cross-referenced in tabular form along with relevant
modifications for ease of reference.
Chapter 2 Formation, powers and constitution of co-operatives
This Chapter provides the mechanism for incorporating a co-operative and specifies
the legal powers of the incorporated body as well as the legal assumptions that
underpin a co-operative's dealings with third parties. It identifies the matters that
must be included in the rules of a co-operative and authorises the Registrar of
Co-operatives to publish model rules that a co-operative can adopt. The Chapter also
sets out the nature of share capital of a co-operative and establishes the legal notions
of membership and active membership. Member rights and obligations as well as the
circumstances in which membership is cancelled and any rights accompanying
cancellation are dealt with in the Chapter.
Explanatory note page 4
Co-operatives (Adoption of National Law) Bill 2012
Explanatory note
Chapter 3 Management and operation of co-operatives
This Chapter deals with corporate governance of a co-operative. Matters such as the
board as the managing organ, directors and their duties and meetings are included.
Matters relating to financial reporting and auditing are contained in the Chapter along
with provisions governing fundraising from members and the public.
Chapter 4 Structural and other events for co-operatives
This Chapter deals with corporate structural events such as external administration,
mergers, schemes of arrangement and transfers of incorporation. Relevant provisions
of the Corporations Act are applied and modified to achieve consistency of treatment
in most external administration processes. Special provisions for caretaker-type
administration and administrative powers of the Registrar of Co-operatives leading
to a winding up are also located here.
Chapter 5 Participating co-operatives
This Chapter replaces the existing system of multiple registration to enable
cross-border trade by co-operatives with a mutual recognition scheme for
co-operatives from jurisdictions that participate in the Co-operatives National Law
scheme.
Chapter 6 Supervision and protection of co-operatives
This Chapter establishes the powers of the Registrar of Co-operatives, inspectors and
special investigators and the procedures that must be used when conducting an
investigation. The Co-operatives National Law will introduce consistent powers and
procedures across jurisdictions. If necessary, however, a particular jurisdiction will
be able to modify provisions in this Chapter to account for local circumstances.
Chapter 7 Legal proceedings and other matters
This Chapter establishes nationally consistent provisions for offences, civil penalty
provisions, appeals against administrative decisions, and the use of evidence in
proceedings.
Chapter 8 General
This Chapter deals with administrative and other miscellaneous matters such as those
relating to the office of Registrar of Co-operatives, the service and filing of
documents, and the making of National Regulations.
Schedules
Schedule 1 sets out the matters that must be addressed in the rules of a co-operative.
Schedule 2 defines terms used in provisions that regulate interests and control in
shares of a co-operative.
Schedule 3 contains savings and transitional provisions.
Explanatory note page 5
Co-operatives (Adoption of National Law) Bill 2012
Explanatory note
Schedule 4 sets out interpretation provisions that are nationally consistent and are
used in place of the interpretation legislation in each jurisdiction.
Explanatory note page 6
First print
New South Wales
Co-operatives (Adoption of National
aw) Bill 2012
Contents
Page
Part 1 Preliminary
1 Name of Act 2
2 Commencement 2
3 Definitions 2
Part 2 Application of Co-operatives National Law and
Co-operatives National Regulations
4 Adoption of Co-operatives National Law and Co-operatives
National Regulations 4
5 Meaning of certain terms in Co-operatives National Law for
purposes of this jurisdiction 4
6 Exclusion of legislation of this jurisdiction 4
2011-78-24.d22
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 3 Some matters referred to in Co-operatives
National Law (NSW)
7 Designated authority, designated instrument and
designated tribunal (Co-operatives National Law s 4) 6
8 Adjustment of date referred to in Corporations Act as
applied (Co-operatives National Law ss 201, 444 and 451) 9
9 Disposal of consideration for shares compulsorily acquired
(Co-operatives National Law s 436) 9
10 Deregistration (Co-operatives National Law s 453--
sections 601AD, 601AE and 601AF of Corporations Act
as applied) 9
11 Warrants (Co-operatives National Law ss 483 and 518) 10
12 Costs of inquiry (Co-operatives National Law s 530) 10
13 Secrecy (Co-operatives National Law s 537) 10
14 Pecuniary penalty orders (Co-operatives National Law
s 556) 11
15 Stamp duty (Co-operatives National Law s 620) 11
16 Registration fees (Co-operatives National Law s 620) 12
Part 4 Regulations
17 National Regulations 13
18 Local regulations 13
Part 5 Miscellaneous
19 Non-application of Co-operatives National Law to
co-operative housing societies and other bodies 14
20 Orders and other instruments published in Gazette 14
21 Proceedings for offences 14
22 Proceedings for recovery of fines or penalties under
co-operative's rules 15
23 Particular officials protected from liability 15
24 Registrar of Co-operatives 15
25 Repeals 15
Schedule 1 Savings and transitional provisions 16
Appendix Co-operatives National Law 19
Chapter 1 Preliminary
Part 1.1 Introductory
1 Citation 19
2 Commencement 19
Contents page 2
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
3 Objects 19
Part 1.2 Interpretation
4 Definitions 20
5 Miscellaneous provisions relating to the interpretation of
this Law (Schedule 4) 28
6 References to regulations where National Regulations are
not applied 28
7 Corresponding co-operatives law 28
8 Co-operatives National Law Act of this jurisdiction 28
9 Involvement in contraventions 29
Part 1.3 The co-operative principles
10 Co-operative principles 29
11 Interpretation to promote co-operative principles 30
Part 1.4 The Corporations legislation
Division 1 Exclusion of matters from the Corporations
legislation
12 Excluded matter--co-operatives and participating
co-operatives 30
Division 2 Applied matters (applied Corporations
legislation matters)
13 Applied Corporations legislation matters under this Law 32
14 Applied Corporations legislation matters under the
National Regulations 36
15 Modifications to applied provisions 37
Division 3 Prescription by National Regulations of other
matters dealt with by Corporations legislation
16 National Regulations may provide for matters dealt with by
Corporations legislation 38
Chapter 2 Formation, powers and constitution of
co-operatives
Part 2.1 Formation
Division 1 Types of co-operatives
17 Types of co-operatives 39
18 Distributing co-operatives 39
19 Non-distributing co-operatives 39
Contents page 3
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
20 Provisions regarding Registrar's approvals about numbers 40
Division 2 Formation meeting
21 Formation meeting 40
22 Requirements regarding formation meeting 40
Division 3 Initial approval of rules and formation
disclosure statement
23 Submission of draft rules and draft formation disclosure
statement 42
24 Provisions relating to and approval of rules 42
25 Provisions relating to and approval of formation disclosure
statement 43
Division 4 Registration of proposed co-operative
26 Application for registration of proposed co-operative 45
27 Registration of proposed co-operative 46
28 Incorporation and certificate of registration 46
Division 5 Registration of existing corporation
29 Existing corporation can be registered 46
30 Formation meeting (existing corporation) 46
31 Application for registration of existing corporation 47
32 Requirements for registration 48
33 Certificate of registration 49
34 Effect of registration 49
Division 6 Conversion of co-operative
35 Conversion of co-operative 49
Division 7 General
36 Acceptance of money by proposed co-operative 50
37 Issue of duplicate certificate 50
Part 2.2 Legal capacity and powers
Division 1 General powers
38 Effect of incorporation 51
39 Power to form companies and enter into joint ventures 51
Division 2 Doctrine of ultra vires not to apply
40 Interpretation 51
41 Doctrine of ultra vires not to apply 51
42 Legal capacity 52
43 Rules may limit powers and set out objects 52
Contents page 4
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Division 3 Persons having dealings with co-operatives
44 Entitlement to make assumptions 53
45 Assumptions 53
46 Person who knows or ought to know cannot make
assumptions 54
47 Filing of documents not to constitute constructive
knowledge 54
48 Effect of fraud 54
Division 4 Execution of documents
49 Execution of documents by co-operative 55
50 Agent exercising co-operative's power to make contracts 55
51 Other requirements as to consent or sanction not affected 55
Division 5 Pre-registration contracts
52 Contracts before registration 55
53 Person may be released from liability but is not entitled to
indemnity 56
54 This Division replaces other rights and liabilities 57
Part 2.3 Rules
Division 1 Rules of a co-operative
55 Effect of rules 57
56 Content of rules 57
57 Purchase and inspection of copy of rules 58
58 False copies of rules 58
59 Rules can only be amended under this Law 58
60 Approval of certain rule amendments 58
61 Amendment by special resolution 60
62 Amendment by resolution of board 60
63 Amendment does not take effect until registered 60
Division 2 Model rules
64 Model rules 61
65 Adoption of model rules 61
66 Relationship of this Division to Division 1 61
Part 2.4 Shares
Division 1 Nature of share
67 Nature of share in co-operative 61
Contents page 5
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Division 2 Disclosure requirements for distributing
co-operatives
68 Registration of current disclosure statement 62
69 Restrictions on advertising and publicity 63
70 Disclosure to intending shareholders in distributing
co-operative 63
71 Exemptions from disclosure statements 64
Division 3 Compensation for defective disclosure
72 Contravention leading to right to recover for loss
or damage 64
73 Right to recover for loss or damage resulting from
contravention 64
74 Due diligence defence 65
75 General defences 66
Division 4 Issue of shares
76 Shares--general 66
77 Minimum number of shares to be subscribed for 66
78 Minimum paid up amount 67
79 Shares not to be issued at a discount 67
80 Issue of shares at a premium 67
81 Joint ownership of shares 68
82 Members may be required to take up additional shares 68
83 Bonus share issues 69
84 Restrictions on bonus shares 69
85 Notice about bonus shares 69
Division 5 Provisions applying to particular share
subscriptions
86 Definition 70
87 Application of this Division 70
88 Application money to be held on trust 70
89 Minimum subscription condition must be fulfilled before
issue or transfer 71
90 Repayment of money if disclosure statement condition
not
met 71
Division 6 Disclosure and registration of interests
in shares
91 Direction to disclose 72
92 Disclosure by member of relevant interests and instructions 72
93 Registration as trustee, executor or administrator on death
of owner of shares 73
Contents page 6
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
94 Registration as administrator of estate on incapacity of
shareholder 73
95 Registration as Official Trustee in Bankruptcy 74
96 Liabilities of person registered as trustee or administrator 74
97 Notice of trusts in register of members 74
98 No notice of trust except as provided by this Division 74
Division 7 Sale or transfer of shares
99 Sale or transfer of shares 75
100 Sale or transfer of shares to be subject to rules 75
101 Transfer not effective until registered 75
Division 8 Transfer of shares and other interests on
death of member
102 Meaning of "interest" 75
103 Transfer of shares and other interests on death of member 76
104 Transfer of small shareholdings and interests on death 76
105 Value of shares and interests 77
106 Co-operative protected 77
Division 9 Repurchase of shares
107 Purchase and repayment of shares 77
108 Deposits, debentures or CCUs instead of payment when
share repurchased 78
109 Cancellation of shares 79
Part 2.5 Membership
Division 1 General
110 Becoming a member of co-operative 79
111 Members of co-operative group 80
112 Qualification for membership 80
113 Membership may be joint 80
114 Minors 81
115 Representatives of corporations 81
116 Notification of shareholders and shareholdings 81
117 Circumstances in which membership ceases--all
co-operatives 82
118 Additional circumstances in which membership ceases--
co-operatives with share capital 82
119 Carrying on business with too few members 83
Division 2 Rights and liabilities of members
120 Rights of membership not exercisable until registered etc 83
121 Liability of members to co-operative 84
Contents page 7
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
122 Co-operative to give information to person intending or
applying to become a member 84
123 False copy of documents 85
124 Entry fees and regular subscriptions 85
125 Members etc may be required to deal with co-operative 86
126 Fines payable by members 86
127 Lien and set-off 87
128 Repayment of shares on expulsion or resignation 87
Division 3 Disputes involving members
129 Grievance procedure 88
130 Application to designated tribunal 89
Division 4 Oppressive conduct of affairs
131 Interpretation--extended meaning of "member" 89
132 Application of Division 89
133 Application for order 90
134 Orders 90
135 Basis on which orders made 91
136 Winding up need not be ordered if members unfairly
prejudiced by order 91
137 Application of winding up provisions 91
138 Changes to rules 92
139 Copy of order to be filed with Registrar 92
Division 5 Inspection of books
140 Order for inspection of books of co-operative 92
141 Ancillary orders 93
142 Disclosure of information acquired in inspection 93
143 Co-operative or directors may allow member to inspect
books 93
Part 2.6 Active membership
Division 1 Definitions
144 Meaning of "primary activity" 94
145 Meaning of "active member" 94
146 Meaning of "active membership provisions and
resolutions" 94
Division 2 Active membership provisions
147 Number of primary activities required 94
148 Rules to contain active membership provisions 94
149 Factors and considerations for deciding primary activities
and other matters 95
Contents page 8
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
150 Active membership provisions--distributing co-operatives 96
151 Active membership provisions--non-distributing
co-operatives--regular subscriptions 96
Division 3 Active membership resolutions
152 Notice of meeting 96
153 Eligibility to vote on active membership resolution 97
154 Eligibility of directors to vote on proposal at board meeting 97
155 Other entitlements of members not affected 97
Division 4 Cancellation of membership of inactive
members
156 Cancellation of membership of inactive member 97
157 Shares to be forfeited if membership cancelled 98
158 Failure to cancel membership--offence by director 98
159 Deferral of cancellation by board 98
160 Cancellation of membership prohibited in certain
circumstances 99
161 Notice of intention to cancel membership 99
162 Order against cancellation 100
163 Repayment of amounts owing because of cancelled
membership 100
164 Interest on deposits, debentures and CCUs 101
165 Repayment of deposits, debentures and CCUs 102
166 Register of cancelled memberships 102
Division 5 Entitlements of former members of
distributing co-operatives
167 Application of Division 102
168 Former shareholders to be taken to be shareholders for
certain purposes 102
169 Entitlements of former shareholders on mergers etc 103
170 Set-off of amounts repaid etc on forfeited shares 104
171 Exemption of co-operatives from provisions 105
Chapter 3 Management and operation of
co-operatives
Part 3.1 Management
Division 1 The board
172 Board of directors 106
173 Election of directors 106
174 Qualification of directors 107
175 Meeting of board of directors 107
Contents page 9
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
176 Transaction of business outside meetings 108
177 Alternate directors 108
178 Delegation by board 109
179 Removal from and vacation of office 109
180 Removal from office by resolution 109
Division 2 Disqualification from managing
co-operatives
181 Offence for disqualified person to manage co-operative 111
182 Automatic disqualification for offences 111
183 Extension of period of automatic disqualification 112
184 Court's power of disqualification--contravention of civil
penalty provision 112
185 Court's power of disqualification--insolvency and
non-payment of debts 113
186 Court's power of disqualification--repeated
contraventions of Law 114
187 Registrar's power of disqualification 114
188 Registrar's power to give permission 115
189 Court's power to grant leave 115
Division 3 Secretary
190 Secretary 116
191 Responsibility of secretary 116
Division 4 Duties and liabilities of directors, officers
and employees
192 Care and diligence--civil obligation only 116
193 Good faith--civil obligations 117
194 Use of position--civil obligations 118
195 Use of information--civil obligations 118
196 Good faith, use of position and use of information--
criminal offences 119
197 Interaction of preceding sections with other laws 120
198 Indemnification and exemption of officer or auditor 120
199 Insurance premiums for certain liabilities of director,
secretary, other officer or auditor 121
200 Certain indemnities, exemptions, payments and
agreements not authorised and certain documents void 121
201 Application of Corporations Act--offences by officers of
co-operatives 122
202 Application of Corporations Act--employee entitlements 122
203 Directors' remuneration 122
204 Certain financial accommodation to officers prohibited 123
205 Financial accommodation to directors and associates 123
Contents page 10
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
206 Restriction on directors of certain co-operatives selling
land to co-operative 125
207 Management contracts 125
Division 5 Declaration of interests
208 Declaration of interest 126
209 Declarations to be recorded in minutes 127
210 Division does not affect other laws or rules 127
211 Certain interests need not be declared 128
Division 6 Co-operative's registers, books and
returns
212 Registers to be kept by co-operatives 128
213 Location of registers 129
214 Inspection of co-operative's registers and other
documents 129
215 Use of information on registers 131
216 Notice of appointment or cessation of appointment of
directors and officers to be lodged with Registrar 131
217 List of members to be lodged with Registrar at request
of Registrar 132
218 Reports to be lodged with Registrar concerning
prescribed particulars 132
219 Special return to be lodged at request of Registrar 132
Division 7 Name and registered office
220 Name to include certain matter 132
221 Exception to requirement for using "Limited" in name 133
222 Use of abbreviations 134
223 Name to appear on seals, publications and business
documents 134
224 Change of name of co-operative 135
225 Restriction on use of word co-operative or similar words 136
226 Registered office of co-operative 136
Part 3.2 Voting and meetings
Division 1 Voting entitlements
227 Application of Part to voting 137
228 Voting 137
229 Voting by proxy 137
230 Inactive members not entitled to vote 138
231 Control of right to vote 138
232 Effect of disposal of shares on voting rights 138
Contents page 11
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
233 Effect of relevant share and voting interests on voting
rights 138
234 Rights of representatives to vote 139
235 Other rights and duties of members not affected by
ineligibility to vote 139
236 Vote of disentitled member to be disregarded 139
Division 2 Resolutions
237 Decisions to be by ordinary resolution 139
238 Ordinary resolutions 139
239 Special resolutions 139
240 How majority is ascertained 140
241 Declaration of passing of special resolution 140
242 Effect of special resolution 140
243 Registration of special resolution 141
244 Decision of Registrar on application to register special
resolution 141
Division 3 Resolution by circulated document
245 Application of Division 142
246 Resolution by circulation of document--fewer than
50 members 142
Division 4 Postal ballots
247 Postal ballots 143
248 Special postal ballots 143
249 When special postal ballot is required 144
250 Holding of postal ballot on requisition 145
251 Expenses involved in postal ballots on requisition 145
Division 5 Meetings
252 Annual general meetings 146
253 Special general meetings 146
254 Notice of meetings 146
255 Quorum at meetings 146
256 Decision at meetings 146
257 Calling of general meeting on requisition 147
258 Minutes 148
259 Auditor entitled to notice and other communications 148
260 Auditor's right to be heard at general meetings 148
261 Questions and comments by members on co-operative
management at annual general meeting 149
262 Questions by members of auditors at annual general
meeting 149
Contents page 12
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 3.3 Financial reports and audit
Division 1 Preliminary
263 Interpretation 151
264 General modifications to applied provisions of
Chapter 2M of Corporations Act 152
Division 2 Financial records
265 Obligation to keep financial records 152
266 Language requirements 152
267 Physical format 153
268 Place where records are kept 153
269 Director access 154
Division 3 Annual financial reports and directors'
reports generally
270 Who has to prepare annual financial reports and
directors' reports 154
271 Small co-operative--direction by members 155
272 Small co-operative--direction by Registrar 156
Division 4 Annual financial reports
273 Contents of annual financial report 156
274 Compliance with accounting standards and regulations 158
275 True and fair view 158
276 Audit of annual financial report 158
277 Application of Corporations Act--co-operatives with
quoted securities--declaration about financial
statements by certain officers 159
Division 5 Annual directors' reports
278 Annual directors' report 159
279 Annual directors' report--general information 160
280 Annual directors' report--specific information 161
281 Application of Corporations Act--co-operatives with
quoted securities--additional information to be provided
in directors' annual report 165
Division 6 Half-year financial report and directors'
report
282 Application of Corporations Act--co-operatives that are
disclosing entities--half-year financial reports and
directors' reports 165
Division 7 Audit and auditor's report
283 Application of Corporations Act--audit and auditor's report 166
Contents page 13
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Division 8 Annual financial reporting to members
284 Annual financial reporting to members 166
285 Deadline for reporting to members 169
286 Member's choices for annual financial information 169
287 Consideration of reports at annual general meeting 170
288 Application of Corporations Act--additional reporting by
debenture issuers 170
Division 9 Lodging reports and returns with Registrar
289 Lodgment of annual reports by large co-operatives with
Registrar 171
290 Lodgment of half-year reports with Registrar 171
291 Registrar's power to require lodgment 171
292 Relodgment if financial statements or directors' reports
amended after lodgment 172
293 Lodgment by small co-operatives of annual returns with
Registrar 172
Division 10 Special provisions about consolidated
financial statements
294 Application of Corporations Act--special provisions
about consolidated statements 172
Division 11 Financial years and half-years
295 Financial year 173
296 Half-year 173
Division 12 Auditors
Subdivision 1 General provisions relating to
auditors
297 Application of Corporations Act--auditors 173
Subdivision 2 Appointment of auditors
298 Appointment of auditor of small co-operative 174
299 Initial appointment of auditor of large co-operative 174
300 Annual appointment at annual general meeting of
auditor of large co-operative to fill vacancy 174
301 Appointment by directors or annual general meeting of
auditor of large co-operative to fill casual vacancy 177
302 Appointment to replace auditor removed from office 177
303 Registrar to be notified of appointment of auditor 178
304 Registrar may appoint auditor if auditor removed but not
replaced 178
305 Registrar's general power to appoint auditor of large
co-operative 179
Contents page 14
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
306 Restrictions on Registrar's powers to appoint auditor of
large co-operative 179
307 Remaining auditors may act during vacancy 180
308 Nomination of auditor 180
309 Auditor's consent to appointment 181
Subdivision 3 Removal and resignation of auditors
310 Removal and resignation of auditors 181
311 Effect of winding up on office of auditor 183
Subdivision 4 Auditors' fees and expenses
312 Fees and expenses of auditors 184
Subdivision 5 Protection of auditors
313 Protection of auditors 184
Division 13 Accounting and auditing standards
314 Accounting and auditing standards 184
315 Interpretation of accounting and auditing standards 185
Division 14 Exemptions and modifications
316 Exemptions--individual co-operatives 185
317 Exemptions--classes of co-operatives 186
318 Exemptions--criteria for exemptions for individual
co-operatives or classes of co-operatives 187
319 Exemptions--non-auditor members and former members
of audit firms, and former employees of audit companies 188
320 Exemptions--classes of non-auditor members etc 188
321 Exemptions--criteria for exemptions for non-auditor
members etc 189
322 Exemptions from National Regulations 189
323 Registrar's power to modify the operation of
section 324DA of Corporations Act 190
324 Auditor to notify co-operative of declaration 191
325 Modification by National Regulations 192
326 Amendment, suspension or revocation of exemption 192
Division 15 Miscellaneous
327 Disclosure by directors 192
328 Contravention by directors of provisions of this Part 192
329 Submission of financial reports to Financial Reporting
Panel 193
330 Notification of ASIC by Registrar of certain matters
relating to auditor independence 193
Contents page 15
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 3.4 Funds and property
Division 1 Power to raise money
331 Meaning of "obtaining of financial accommodation" 193
332 Fundraising to be in accordance with National
Regulations 193
333 Limits on deposit taking 193
334 Members and other persons not required to see to
application of money 194
335 Registrar's directions about obtaining financial
accommodation 194
336 Subordinated debt 195
337 Application of Corporations Act--issues of debentures 195
338 Disclosure statement 196
339 Restrictions on advertising and publicity 197
340 Application money to be held on trust 197
341 Approval of board for transfer of debentures 198
342 Application of Corporations Act--reissue of redeemed
debentures 198
343 Compulsory loan by member to co-operative 198
344 Interest payable on compulsory loan 199
Division 2 Co-operative capital units (CCUs)
345 General nature of CCU 200
346 Priority of CCUs on winding up 201
347 Financial accommodation provisions apply to issue of
CCUs 201
348 CCUs can be issued to non-members 201
349 Minimum requirements for rules concerning CCUs 201
350 CCUs not to be issued unless terms of issue approved
by Registrar 202
351 Directors' duties concerning CCUs 202
352 Redemption of CCUs 203
353 Capital redemption reserve 203
354 Issue of shares in substitution for redemption 203
Division 3 Disposal of surplus from activities
355 Retention of surplus for benefit of co-operative 204
356 Application for charitable purposes or approved activities 204
357 Distribution of surplus or reserves to members 204
358 Application of surplus to other persons 205
Division 4 Acquisition and disposal of assets
359 Acquisition and disposal of assets 206
Contents page 16
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 3.5 Restrictions on acquisition of interests in
co-operatives
Division 1 Restrictions on share and voting
interests
360 Notice required to be given of voting interest 207
361 Notice required to be given of substantial share
interest 207
362 Requirements for notices 208
363 Maximum permissible level of share interest 208
364 Shares to be forfeited to remedy contravention 208
365 Powers of board in response to suspected
contravention 209
366 Powers of Supreme Court about contravention 209
367 Co-operative to inform Registrar of interest over 20% 210
368 Co-operative to keep register 210
369 Unlisted companies to provide list of shareholders etc 210
370 Excess share interest not to affect loan liability 211
371 Extent of operation of this Division 211
372 Exemptions 211
Division 2 Restrictions on certain share offers
373 Share offers to which this Division applies 212
374 Requirements to be satisfied before offer can be made 212
375 Some offers totally prohibited if they discriminate 212
376 Offers to be submitted to board first 213
377 Announcements of proposed takeovers about proposed
company 213
378 Additional disclosure requirements for offers involving
conversion to company 214
379 Consequences of prohibited offer 215
380 Exemptions 215
Chapter 4 Structural and other events for
co-operatives
Part 4.1 Appointment of administrator
Division 1 Introductory
381 Operation of this Part 216
Division 2 Administration under Corporations Act
382 Application of Corporations Act--administration of
co-operative 216
Contents page 17
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
383 Appointment of administrator by Registrar in the case
of insolvency 217
Division 3 Administration--alternative procedure
384 Operation of this Division 217
385 Appointment of administrator by Registrar 217
386 Effect of appointment of administrator 218
387 Revocation of appointment 218
388 Expenses of administration 219
389 Liabilities arising from administration 219
390 Additional powers of Registrar 219
391 Stay of proceedings 220
392 Administrator to report to Registrar 220
Part 4.2 Receivers and other controllers of property
393 Application of Corporations Act--receivers and other
controllers of property of co-operatives 221
Part 4.3 Mergers and transfers of engagements
Division 1 Merger or transfer of engagements
394 Application of this Division 222
395 Mergers and transfers of engagements of local
co-operatives 222
396 Requirements before application can be made 222
397 Disclosure statement required 223
398 Making an application 223
399 Approval of merger 224
400 Approval of transfer of engagements 224
401 Transfer of engagements by direction of Registrar 225
Division 2 Transfer of incorporation
402 Meaning of "new body" and "transfer" 225
403 Application for transfer 226
404 Requirements before application can be made 226
405 New body ceases to be registered as co-operative 227
406 Transfer not to impose greater liability etc 227
407 Effect of new certificate 227
408 Copy of new certificate to be given to Registrar 227
409 New body is a continuation of the co-operative 228
Division 3 Effect of merger or transfer on assets
and liabilities
410 How this Division applies to a merger 228
Contents page 18
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
411 How this Division applies to a transfer of engagements 228
412 How this Division applies to a transfer of incorporation 228
413 Effect of merger or transfer on assets and liabilities 229
Part 4.4 Compromises and arrangements
Division 1 General requirements
414 Requirements for binding compromise or arrangement 230
415 Court ordered meeting of creditors 230
416 Registrar to be given notice and opportunity to make
submissions 231
417 Results of 2 or more meetings 232
418 Persons disqualified from administering compromise or
arrangement 232
419 Application of Corporations Act to person appointed to
administer compromise or arrangement 232
420 Application of Corporations Act--person appointed to
administer compromise or arrangement 233
421 Copy of order to be attached to rules 233
422 Directors to arrange for reports 233
423 Power of Court to restrain further proceedings 234
424 Court need not approve compromise or arrangement
takeovers 234
425 Provisions for facilitating reconstructions and mergers 234
426 Costs for Registrar 236
Division 2 Explanatory statements
427 Explanatory statement required to accompany notice
of meeting etc 236
428 Requirements for explanatory statement 237
429 Contravention of this Division--offence by co-operative 237
Division 3 Acquisition of shares of dissenting
shareholders
430 Definitions 238
431 Schemes and contracts to which this Division applies 238
432 Acquisition of shares pursuant to notice to dissenting
shareholder 238
433 Restrictions when excluded shares are more than 10% 239
434 Remaining shareholders may require acquisition 239
435 Transfer of shares pursuant to compulsory acquisition 240
436 Disposal of consideration for shares compulsorily
acquired 241
Division 4 Miscellaneous
437 Notification of appointment of scheme manager 242
Contents page 19
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
438 Power of Supreme Court to require reports 242
439 Effect of out-of-jurisdiction compromise or
arrangement 242
440 Jurisdiction to be exercised in harmony with
Corporations Act jurisdiction 243
441 Registrar may appear and be heard 243
Part 4.5 Winding up
442 Methods of winding up 243
443 Winding up on Registrar's certificate 243
444 Application of Corporations Act--voluntary winding up
and court-ordered winding up 244
445 Voluntary winding up--restrictions 246
446 Voluntary winding up--start of members' voluntary
winding up 247
447 Voluntary winding up--liquidator vacancy may be filled
by Registrar 247
448 Distribution of surplus--non-distributing co-operatives 247
449 Review of liquidator's remuneration 247
450 Liability of member to contribute in a winding up if
shares forfeited etc 248
Part 4.6 Insolvency
451 Application of Corporations Act--insolvent co-operatives 248
Part 4.7 Deregistration
452 Method of deregistration 250
453 Application of Corporations Act--deregistration 250
454 Deregistration of co-operative ceasing to exist 250
Part 4.8 Grounds for certain actions
455 Grounds for appointment of administrator, transfer of
engagements or winding up of co-operative 251
Chapter 5 Participating co-operatives
Part 5.1 Introductory
456 What constitutes carrying on business 253
Part 5.2 Participating co-operatives carrying on
business in this jurisdiction
457 Operation of participating co-operatives in this jurisdiction 253
458 Authorisation to carry on business in this jurisdiction 253
Contents page 20
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
459 Authorisation to carry on business in this jurisdiction is
subject to conditions and restrictions of participating
jurisdiction 253
460 Ceasing to be authorised to carry on business in this
jurisdiction 253
461 Withdrawal of authorisation to carry on business 254
462 Name of participating co-operative 255
463 Application of Law and National Regulations to
participating co-operatives 255
Part 5.3 General
464 False copies of rules 255
465 False copy of documents 256
466 Restrictions on advertising and publicity--shares 256
467 Restrictions on advertising and publicity--debentures
or CCUs 257
468 Registrar's directions about obtaining financial
accommodation 258
469 Name and place of origin to appear on business and
other documents 258
Part 5.4 Winding up of participating co-operatives in this
jurisdiction
470 Winding up to relate to activities in this jurisdiction 259
471 Supreme Court may order winding up 260
472 Application of Corporations Act--winding up of
participating co-operatives in this jurisdiction 260
473 Outstanding property of participating co-operative 261
Part 5.5 Mergers and transfers of engagements affecting
participating co-operatives
474 Definitions 262
475 Authority for merger or transfer of engagements 262
476 Requirements before application can be made 262
477 Disclosure statement required 263
478 Making an application 264
479 Approval of merger 264
480 Approval of transfer of engagements 265
481 Effect of merger or transfer of engagements 266
482 Part applies instead of certain other provisions of
this Law 266
Contents page 21
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Chapter 6 Supervision and protection of
co-operatives
Part 6.1 Introductory
483 Application of Chapter 267
Part 6.2 Prevention of fraud and other activities
484 Falsification of books 267
485 Fraud or misappropriation 268
486 Offering or paying commission 268
487 Accepting commission 269
488 False statements in loan application etc 269
Part 6.3 Examining a person about a co-operative
489 Application of Corporations Act--court-directed
examinations 269
Part 6.4 Supervision and inspection
490 Definitions 270
491 Co-operative includes subsidiaries, participating
co-operatives and co-operative ventures 270
492 Appointment of inspectors 270
493 Registrar and investigators have functions of inspectors 270
494 Inspector's identity card 271
495 Production or display of inspector's identity card 271
496 Powers of inspector 271
497 Inspector's appointment conditions 271
498 Entry of place 272
499 Consent to entry 272
500 Inspectors may require certain persons to appear,
answer questions and produce documents 273
501 Powers of inspectors at place entered 273
502 Functions of inspectors in relation to relevant documents 274
503 Protection from incrimination 274
504 Warrants 275
505 Warrants--applications made otherwise than in person 276
506 Requirements before executing warrant 277
507 General powers after entering places 277
508 Power to seize evidence 278
509 Receipt for seized things 278
510 Return of seized things 278
511 Power to require name and address 279
512 False or misleading statements 279
Contents page 22
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
513 Power to require production of documents 280
514 False or misleading documents 280
515 Obstruction of inspectors 280
516 Copies or extracts of records to be admitted in evidence 281
517 Privilege 281
518 Machinery and other provisions for warrants 282
Part 6.5 Inquiries
519 Definitions 282
520 Appointment of investigators 283
521 Powers of investigators 283
522 Examination of involved person 284
523 Privilege 284
524 Offences by involved person 285
525 Offences relating to documents 285
526 Record of examination 286
527 Report of investigator 286
528 Proceedings following inquiry 287
529 Admission of investigator's report as evidence 288
530 Costs of inquiry 288
Part 6.6 Special meetings and inquiries
531 Application for special meeting or inquiry 289
532 Holding of special meeting 289
533 Expenses of special meeting or inquiry 289
534 Power to hold special inquiry into co-operative 290
535 Special meeting following inquiry 290
Chapter 7 Legal proceedings and other matters
Part 7.1 Offences, enforcement and remedies
536 Notice to be given of conviction for offence 291
537 Secrecy 291
538 False or misleading statements 293
539 Further offence for failure to do required act 293
540 Civil remedies 294
541 Order against person concerned with co-operative 294
542 Injunctions 295
543 Undertakings 297
544 Offence for contravention of undertaking 297
545 Enforcement order on application with consent of
person giving undertaking 297
546 Enforcement orders after contravention of undertaking 298
Contents page 23
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
547 Copy of undertaking 298
548 Registration of undertakings 299
549 Double jeopardy 299
550 Strict liability 300
551 Time limit for starting proceedings for offence 300
552 Authorisation to start proceedings for offence 300
Part 7.2 Civil consequences of contravening civil penalty
provisions
553 Definitions 300
554 Declarations of contravention 300
555 Declaration of contravention is conclusive evidence 302
556 Pecuniary penalty orders 302
557 Compensation orders 302
558 Who may apply for a declaration or order 303
559 Time limit for application for a declaration or order 303
560 Civil evidence and procedure rules for declarations of
contravention and civil penalty orders 303
561 Civil proceedings after criminal proceedings 303
562 Criminal proceedings during civil proceedings 304
563 Criminal proceedings after civil proceedings 304
564 Evidence given in proceedings for penalty not admissible
in criminal proceedings 304
565 Relief from liability for contravention of civil penalty
provision 305
566 Power to grant relief 306
567 Irregularities 307
568 Civil proceedings not to be stayed 309
569 Standard of proof 309
Part 7.3 Appeals and review
570 Operation of Part--appeal includes review 309
571 Appeal against refusal to approve draft rules 310
572 Appeal against refusal to approve disclosure statement 310
573 Appeal against refusal to register co-operative 310
574 Appeal against refusal to approve amendment of rules 310
575 Appeal against refusal to register amendment 310
576 Appeal against decision of Registrar about remuneration
of liquidator 310
577 Appeal against notice that participating co-operative not
authorised to carry on business in this jurisdiction 311
578 Provisions relating to appeals 311
Contents page 24
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 7.4 Proceedings in relation to co-operatives
579 Bringing, or intervening in, proceedings on behalf of
co-operative 311
580 Applying for and granting leave 312
581 Substitution of another person for the person granted
leave 312
582 Effect of ratification by members 313
583 Leave to discontinue, compromise or settle proceedings
brought, or intervened in, with leave 313
584 General powers of Supreme Court 314
585 Power of Supreme Court to make costs orders 314
586 Power of Registrar to intervene in proceedings 314
Part 7.5 Evidentiary matters
587 Certificate of registration 315
588 Certificate evidence 315
589 Records kept by co-operatives 316
590 Minutes 316
591 Official certificates 316
592 The Registrar and proceedings 316
593 Rules 317
594 Co-operative's registers 317
Chapter 8 General
Part 8.1 Administrative and other matters
595 Registrar of Co-operatives and other officials 318
596 Registrar's functions 318
597 Functions conferred on Registrar under corresponding
co-operatives laws 318
598 Delegation by Registrar 318
599 Register of co-operatives 319
600 Keeping of register of co-operatives 319
601 Inspection of register of co-operatives 319
602 Retention of records by Registrar 320
603 Disposal of records by Registrar 320
604 Filing of documents 321
605 Way of filing 321
606 Power of Registrar to refuse to register or reject
documents 321
607 Approvals by Registrar 322
608 Information and evidence 322
609 Extension or shortening of time 322
Contents page 25
Co-operatives (Adoption of National Law) Bill 2012
Contents
Page
Part 8.2 Service of documents
610 Service of documents on co-operative or participating
co-operative 323
611 Service on member of co-operative 324
Part 8.3 Co-operatives National Regulations
612 Power to make Co-operatives National Regulations 324
613 National Regulations for savings or transitional matters 325
614 Publication and commencement of National Regulations 325
Part 8.4 Miscellaneous
615 Disclosure statements 326
616 Supply of information between jurisdictions 326
617 Supply of information under reciprocal arrangements 326
618 Translations of documents 327
619 Qualified privilege 327
620 Stamp duty and registration fees 327
621 Procedures regarding giving of exemptions 327
622 Approval of forms 328
623 Exclusion of bodies 328
624 Savings and transitional provisions 328
Schedule 1 Matters for which rules of co-operative
must make provision 329
Schedule 2 Relevant interests, associates, and related
corporations 332
Schedule 3 Savings and transitional provisions 339
Schedule 4 Miscellaneous provisions relating to
interpretation 340
Contents page 26
New South Wales
Co-operatives (Adoption of National
aw) Bill 2012
No , 2012
A Bill for
An Act relating to the formation, registration and management of co-operatives; and
for related purposes.
Clause 1 Co-operatives (Adoption of National Law) Bill 2012
Part 1 Preliminary
The Legislature of New South Wales enacts: 1
Part 1 Preliminary 2
1 Name of Act 3
This Act is the Co-operatives (Adoption of National Law) Act 2012. 4
2 Commencement 5
(1) This Act commences on a day or days to be appointed by proclamation. 6
(2) Different days may be appointed under subsection (1) for the 7
commencement of different provisions of the Co-operatives National 8
Law. 9
3 Definitions 10
(1) For the purposes of this Act, the local application provisions of this Act 11
are the provisions of this Act other than the Co-operatives National 12
Law. 13
(2) In the local application provisions of this Act: 14
Co-operatives National Law (NSW) means the provisions applying in 15
relation to this jurisdiction because of section 4 (1). 16
Co-operatives National Regulations or National Regulations means 17
the Co-operatives National Regulations made under the Co-operatives 18
National Law. 19
Co-operatives National Regulations (NSW) means the provisions 20
applying in relation to this jurisdiction because of section 4 (2). 21
Director-General means: 22
(a) the Commissioner for Fair Trading, Department of Finance and 23
Services, or 24
(b) if there is no such position in the Department of Finance and 25
Services--the Director-General of that Department. 26
instrument includes a document. 27
local regulations means regulations made under section 18, but does 28
not include the Co-operatives National Regulations and the 29
Co-operatives National Regulations (NSW). 30
this jurisdiction means the State of New South Wales. 31
(3) Terms used in the local application provisions of this Act and also in the 32
Co-operatives National Law have the same meanings in those 33
provisions as they have in that Law. 34
Page 2
Co-operatives (Adoption of National Law) Bill 2012 Clause 3
Preliminary Part 1
(4) The Appendix forms part of this Act but notes included in this Act 1
(other than in the Appendix) do not form part of this Act. 2
Page 3
Clause 4 Co-operatives (Adoption of National Law) Bill 2012
Part 2 Application of Co-operatives National Law and Co-operatives National
Regulations
Part 2 Application of Co-operatives National Law and 1
Co-operatives National Regulations 2
4 Adoption of Co-operatives National Law and Co-operatives National 3
Regulations 4
(1) The Co-operatives National Law, as in force from time to time, set out 5
in the Appendix to this Act: 6
(a) applies as a law of this jurisdiction, and 7
(b) as so applying may be referred to as the Co-operatives National 8
Law (NSW), and 9
(c) so applies as if it were an Act. 10
(2) The Co-operatives National Regulations, as in force from time to time: 11
(a) apply as National Regulations in force for the purposes of the 12
Co-operatives National Law (NSW), subject to modifications 13
prescribed by the local regulations, and 14
(b) as so applying may be referred to as the Co-operatives National 15
Regulations (NSW). 16
Note. The Co-operatives National Regulations as in force from time to time 17
apply by virtue of this provision as National Regulations for the purposes of the 18
Co-operatives National Law (NSW). The regulations as so applying and 19
referred to as the Co-operatives National Regulations (NSW) are interpreted in 20
accordance with that Law (and see in particular clauses 15 and 37 of 21
Schedule 4 to that Law). 22
5 Meaning of certain terms in Co-operatives National Law for purposes of 23
this jurisdiction 24
In the Co-operatives National Law (NSW): 25
police officer means a member of the NSW Police Force who is a police 26
officer within the meaning of the Police Act 1990. 27
public sector official means a member of the Government Service 28
within the meaning of the Public Sector Employment and Management 29
Act 2002. 30
Registrar means the Director-General, who is designated by section 24 31
as the Registrar of Co-operatives. 32
this jurisdiction means the State of New South Wales. 33
6 Exclusion of legislation of this jurisdiction 34
The following Acts of this jurisdiction do not apply to the Co-operatives 35
National Law (NSW), the Co-operatives National Regulations (NSW), 36
Page 4
Co-operatives (Adoption of National Law) Bill 2012 Clause 6
Application of Co-operatives National Law and Co-operatives National Part 2
Regulations
the Co-operatives National Regulations or other instruments (excluding 1
local regulations) made under that Law: 2
(a) Interpretation Act 1987, 3
(b) Subordinate Legislation Act 1989. 4
Page 5
Clause 7 Co-operatives (Adoption of National Law) Bill 2012
Part 3 Some matters referred to in Co-operatives National Law (NSW)
Part 3 Some matters referred to in Co-operatives 1
National Law (NSW) 2
7 Designated authority, designated instrument and designated tribunal 3
(Co-operatives National Law s 4) 4
(1) With respect to the definition of designated authority in the 5
Co-operatives National Law (NSW): 6
(a) the Registrar is specified for the purposes of sections 15, 601 and 7
622 of that Law, and 8
(b) the Director-General is specified for the purposes of sections 492, 9
494 and 520 of that Law, and 10
(c) an authorised officer within the meaning of the Law Enforcement 11
(Powers and Responsibilities) Act 2002 is specified for the 12
purposes of sections 504 and 505 of that Law. 13
(2) With respect to the definition of designated instrument in the 14
Co-operatives National Law (NSW): 15
(a) an order in writing in the approved form is specified for the 16
purposes of the provisions of that Law referred to in Column 2 of 17
the table to this subsection and for the person or class (if any) or 18
in the circumstances (if any) specified in that Column, and 19
(b) a Gazette notice in the approved form is specified for the 20
purposes of the provisions of that Law referred to in Column 3 of 21
the table to this subsection and for the person or class (if any) or 22
in the circumstances (if any) specified in that Column, and 23
(c) a written notice in the approved form is specified for the purposes 24
of section 443 (5) of that Law. 25
Table 26
Column 1 Column 2 Column 3
Item Designated instrument is Designated instrument is
an order in writing a Gazette notice
1 ... Section 33 (1) (certificate of
registration)
2 Section 35 (5) (a) (exemption Section 35 (5) (b) (exemption
from special postal ballot for from special postal ballot for
amendment of rules for amendment of rules for
conversion)--for individual conversion)--for class of
co-operative co-operatives
3 ... Section 60 (2) (specifying rule
amendments requiring prior
approval by Registrar)
Page 6
Co-operatives (Adoption of National Law) Bill 2012 Clause 7
Some matters referred to in Co-operatives National Law (NSW) Part 3
Column 1 Column 2 Column 3
Item Designated instrument is Designated instrument is
an order in writing a Gazette notice
4 Section 71 (1) (exemption Section 71 (1) (exemption
from requirements of Division from requirements of Division
2 of Part 2.4)--for individual 2 of Part 2.4)--for class of
co-operative co-operatives
5 Section 92 (6) (exemption ...
from complying with
disclosure direction)
6 Section 171 (1) (exemption Section 171 (1) (exemption
from requirements of Division from requirements of Division
5 of Part 2.6)--for individual 5 of Part 2.6)--for class of
co-operative co-operatives
7 ... Section 221 (1) (approval of
omission of "Limited" or
"Ltd" from name)
8 Section 226 (6) (exemption Section 226 (6) (exemption
from requirement to display from requirement to display
location notice)--for location notice)--for class of
individual small co-operative or all small co-operatives)
9 Section 316 (1) (exemption for ...
individual co-operative from
accounting and auditing
provisions)
10 ... Section 317 (1) (exemption for
class of co-operatives from
accounting and auditing
provisions)
11 ... Section 319 (1) (exemption for
non-auditor members and
former members of audit
firms, and former employees
of audit companies from
accounting and auditing
provisions)
12 ... Section 320 (1) (exemption for
classes of non-auditor
members etc from accounting
and auditing provisions)
13 ... Section 322 (1) (exemption
from National Regulations
made under Part 3.3)
Page 7
Clause 7 Co-operatives (Adoption of National Law) Bill 2012
Part 3 Some matters referred to in Co-operatives National Law (NSW)
Column 1 Column 2 Column 3
Item Designated instrument is Designated instrument is
an order in writing a Gazette notice
14 Section 338 (6) (exemption Section 338 (6) (exemption
from compliance with section from compliance with section
338)--for individual 338)--for class of
co-operative co-operatives
15 Section 343 (10) (exemption Section 343 (10) (exemption
from compliance with section from compliance with section
343)--for individual 343)--for class of
co-operative co-operatives
16 Section 359 (3) (exemption ...
from compliance with section
359 or 248)
17 Section 363 (2) (stating Section 363 (2) (stating
maximum greater than 20% of maximum greater than 20% of
nominal value of issued share nominal value of issued share
capital)--for individual capital)--for class of
co-operative co-operatives
18 ... Section 372 (1) (exemption of
person or class of persons from
the operation of Division 1 of
Part 3.5)
19 Section 380 (1) (exemption ...
from compliance with Division
2 of Part 3.5 or section 248)
20 Section 397 (4) (exemption ...
from compliance with section
397)
21 ... Section 401 (7) (notification
by Registrar of date of effect of
transfer of engagements
between co-operatives)
22 Section 404 (4) (exemption ...
from compliance with section
404 or 248)
23 Section 445 (3) (exemption Section 445 (3) (exemption
from compliance with section from compliance with section
445 or 248)--for individual 445 or 248)--for class of
co-operative co-operatives
24 Section 607 (3) (Registrar's Section 607 (3) (Registrar's
approval)--for individual approval)--for class of
co-operative or person co-operatives or persons
Page 8
Co-operatives (Adoption of National Law) Bill 2012 Clause 8
Some matters referred to in Co-operatives National Law (NSW) Part 3
(3) The following provisions have effect with respect to the definition of 1
designated tribunal in the Co-operatives National Law (NSW): 2
(a) the Supreme Court is specified for the purposes of the provisions 3
of that Law in which the term is used, except Part 7.3 of that Law, 4
(b) the Administrative Decisions Tribunal is specified for the 5
purposes of Part 7.3 of that Law. 6
8 Adjustment of date referred to in Corporations Act as applied 7
(Co-operatives National Law ss 201, 444 and 451) 8
For the purposes of sections 201 (b), 444 (3) (k) and 451 (1) (f) of the 9
Co-operatives National Law (NSW), the reference to 23 June 1993 is to 10
be read as a reference to 15 December 1995. 11
9 Disposal of consideration for shares compulsorily acquired 12
(Co-operatives National Law s 436) 13
(1) For the purposes of section 436 (3) (b) (i) of the Co-operatives National 14
Law (NSW), references in section 1339 of the Corporations Act to 15
crediting an amount to the Companies and Unclaimed Moneys Special 16
Account are to be read as references to dealing with the amount as 17
unclaimed money in accordance with the Unclaimed Money Act 1995. 18
(2) For the purposes of section 436 (3) (b) (ii) of the Co-operatives National 19
Law (NSW), section 1341 (1) and (2) of the Corporations Act are taken 20
to be replaced by subsection (3) of this section. 21
(3) The amount is to be dealt with in accordance with the Unclaimed Money 22
Act 1995, and accordingly applications for the payment of the amount 23
may be made under that Act to the Chief Commissioner of State 24
Revenue. 25
10 Deregistration (Co-operatives National Law s 453--sections 601AD, 26
601AE and 601AF of Corporations Act as applied) 27
(1) For the purposes of section 453 (d) of the Co-operatives National Law 28
(NSW), references in sections 601AD-601AF of the Corporations Act 29
to the Commonwealth are to be read as references to the State of New 30
South Wales. 31
(2) For the purposes of section 453 (e) of the Co-operatives National Law 32
(NSW), references in section 601AE of the Corporations Act to 33
crediting an amount to a Special Account (within the meaning of the 34
Financial Management and Accountability Act 1997 of the 35
Commonwealth) are to be read as references to crediting the amount to 36
the Special Deposits Account (within the meaning of the Public 37
Finance and Audit Act 1983). 38
Page 9
Clause 11 Co-operatives (Adoption of National Law) Bill 2012
Part 3 Some matters referred to in Co-operatives National Law (NSW)
11 Warrants (Co-operatives National Law ss 483 and 518) 1
(1) Division 4 of Part 5 of the Law Enforcement (Powers and 2
Responsibilities) Act 2002 applies to warrants under Part 6.4 of the 3
Co-operatives National Law (NSW). 4
(2) Part 6.4 of the Co-operatives National Law (NSW) does not apply to the 5
extent of any inconsistency with that Division. 6
Note 1. Section 7 (1) (c) of this Act provides for authorised officers within the 7
meaning of the Law Enforcement (Powers and Responsibilities) Act 2002 to be 8
designated authorities for the issue of warrants under the Law. 9
Note 2. Section 518 of the Law contemplates that the Co-operatives National 10
Law Act of a jurisdiction may contain machinery and other provisions for 11
applications for, the issue of, and the execution of, warrants. 12
Note 3. Section 483 of the Law provides that Part 6.4 (which includes 13
section 518) applies to a jurisdiction except to the extent (if any) that the 14
Co-operatives National Law Act of a jurisdiction provides otherwise, and with 15
the modifications (if any) made by that Act. 16
12 Costs of inquiry (Co-operatives National Law s 530) 17
For the purposes of section 530 (3) (b) of the Co-operatives National 18
Law (NSW), the prescribed entity is the State of New South Wales. 19
13 Secrecy (Co-operatives National Law s 537) 20
(1) For the purposes of section 537 (4) (c) of the Co-operatives National 21
Law (NSW), information may be divulged to: 22
(a) the Treasurer, or 23
(b) the Chief Commissioner of State Revenue, or 24
(c) the Auditor-General, or 25
(d) the Independent Commission Against Corruption, or 26
(e) any special commission (within the meaning of the Special 27
Commissions of Inquiry Act 1983) if: 28
(i) the Registrar has received a written request for information 29
from the special commission, and 30
(ii) the Minister has given written approval to the Registrar of 31
the communication of that information, and 32
(iii) the Registrar has given to the special commission written 33
approval of the communication of that information. 34
(2) For the purposes of the definition of former Act in section 537 (6) of the 35
Co-operatives National Law (NSW), the Co-operatives Act 1992 is 36
specified. 37
Page 10
Co-operatives (Adoption of National Law) Bill 2012 Clause 14
Some matters referred to in Co-operatives National Law (NSW) Part 3
14 Pecuniary penalty orders (Co-operatives National Law s 556) 1
(1) For the purposes of section 556 (2) of the Co-operatives National Law 2
(NSW), a pecuniary penalty ordered to be paid in this jurisdiction is to 3
be paid and treated in accordance with this section. 4
(2) The penalty is a civil debt payable to the Registrar on behalf of the State. 5
(3) The Registrar or the State may enforce the order as if it were an order 6
made in civil proceedings against the person to recover a debt due by 7
the person. 8
(4) The debt arising from the order is taken to be a judgment debt. 9
15 Stamp duty (Co-operatives National Law s 620) 10
(1) No duty is payable in respect of any of the following instruments: 11
(a) in the case of a co-operative that: 12
(i) has as its primary activity the providing of any community 13
service or benefit, and 14
(ii) was, before it was incorporated under the Co-operatives 15
National Law (NSW), an unincorporated club, association 16
or body operating to provide sporting or recreational 17
facilities for its members and not carried on for the 18
pecuniary benefit of its members, 19
an instrument transferring to the co-operative any property that 20
was, immediately before the co-operative was so incorporated, 21
held by or on behalf of the unincorporated club, association or 22
body, 23
(b) an instrument executed or registered for or with respect to a 24
transfer of any property to give effect to section 413 or 481 of the 25
Co-operatives National Law (NSW) in respect of: 26
(i) a merger of co-operatives, or 27
(ii) a transfer of engagements, 28
(c) a share certificate or any other instrument issued or executed in 29
connection with the capital of a co-operative. 30
(2) If: 31
(a) a co-operative that transfers its incorporation under Division 2 of 32
Part 4.3 of the Co-operatives National Law (NSW) was before its 33
registration as a co-operative under that Law a company under 34
the Corporations Act or any corresponding previous law of this 35
jurisdiction, and 36
Page 11
Clause 16 Co-operatives (Adoption of National Law) Bill 2012
Part 3 Some matters referred to in Co-operatives National Law (NSW)
(b) stamp duty had been paid on its incorporation as such a company 1
in respect of the amount of the nominal capital of the company 2
(or if subsequently increased on the amount of its nominal capital 3
as so increased), 4
any stamp duty so paid is to be taken into account and included in 5
assessing the stamp duty payable on its incorporation or registration 6
pursuant to the transfer. 7
(3) An instrument issued or executed in connection with a CCU of a 8
co-operative is not exempt under subsection (2). 9
16 Registration fees (Co-operatives National Law s 620) 10
No fee is chargeable under any Act for registration of an instrument 11
executed or registered for or with respect to a transfer of any property 12
to give effect to section 413 or 481 of the Co-operatives National Law 13
(NSW) in respect of: 14
(a) a merger of co-operatives, or 15
(b) a transfer of engagements, or 16
(c) a transfer of incorporation. 17
Page 12
Co-operatives (Adoption of National Law) Bill 2012 Clause 17
Regulations Part 4
Part 4 Regulations 1
17 National Regulations 2
(1) The Governor is authorised to exercise the power to make 3
Co-operatives National Regulations conferred by the Co-operatives 4
National Law as applied by an Act of any jurisdiction. 5
(2) The Executive Council of the State is authorised to advise the Governor 6
in the exercise of the power referred to in subsection (1). 7
(3) This section does not limit the power of the Governor to make local 8
regulations conferred under the Co-operatives National Law (NSW). 9
18 Local regulations 10
(1) The Governor may make regulations (the local regulations), not 11
inconsistent with the local application provisions of this Act or the 12
Co-operatives National Law (NSW), for or with respect to any matter: 13
(a) that by the local application provisions of this Act is required or 14
permitted to be prescribed by the local regulations or that is 15
necessary or convenient to be prescribed by the local regulations 16
for carrying out or giving effect to the local application 17
provisions of this Act, or 18
(b) that by the Co-operatives National Law (NSW) is required or 19
permitted to be prescribed by the local regulations. 20
(2) Without limitation, the local regulations may make provision for or with 21
respect to: 22
(a) the administration of the Co-operatives National Law (NSW), 23
and 24
(b) procedural matters relating to any aspects of the Co-operatives 25
National Law (NSW), and 26
(c) without limiting paragraphs (a) and (b), administrative matters 27
relating to the supervision and inspection of co-operatives. 28
(3) The local regulations may create offences and impose penalties for an 29
offence of not more than the amount specified in section 612 (5) of the 30
Co-operatives National Law (NSW). 31
Page 13
Clause 19 Co-operatives (Adoption of National Law) Bill 2012
Part 5 Miscellaneous
Part 5 Miscellaneous 1
19 Non-application of Co-operatives National Law to co-operative housing 2
societies and other bodies 3
Except as provided by the local regulations, the Co-operatives National 4
Law (NSW) does not apply to or in respect of: 5
(a) a co-operative housing body under the Co-operative Housing and 6
Starr-Bowkett Societies Act 1998, or 7
(b) a body that is of the same nature as such a co-operative housing 8
body but that is not registered under that Act. 9
20 Orders and other instruments published in Gazette 10
A copy of an order, notice, exemption or other instrument published in 11
the Gazette purporting to have been given or issued under this Act, the 12
Co-operatives National Law (NSW), the Co-operatives National 13
Regulations (NSW) or the local regulations is evidence of the giving or 14
issuing of the order, notice, exemption or other instrument of which it 15
purports to be a copy. 16
21 Proceedings for offences 17
(1) In this section: 18
offence means an offence under the local application provisions of this 19
Act, the local regulations, the Co-operatives National Law (NSW) or the 20
Co-operatives National Regulations (NSW). 21
(2) Proceedings for an offence are to be disposed of summarily before: 22
(a) the Local Court, or 23
(b) the Supreme Court in its summary jurisdiction. 24
(3) The maximum penalty that may be imposed by the Local Court for an 25
offence is 50 penalty units or imprisonment for 12 months, or both. 26
(4) Proceedings for an offence under the local application provisions of this 27
Act or the local regulations may be: 28
(a) started no later than 5 years after the alleged commission of the 29
offence, and 30
(b) started only by the Registrar or a person authorised in writing by 31
the Registrar to start the proceedings. 32
Note. See sections 551 and 552 of the Co-operatives National Law about 33
starting proceedings for an offence under that Law or the National Regulations. 34
(5) Nothing in this section affects the operation of the Director of Public 35
Prosecutions Act 1986. 36
Page 14
Co-operatives (Adoption of National Law) Bill 2012 Clause 22
Miscellaneous Part 5
22 Proceedings for recovery of fines or penalties under co-operative's rules 1
(1) Proceedings for the recovery of any fine or penalty imposed by the rules 2
of a co-operative are to be disposed of summarily before the Local 3
Court. 4
(2) Proceedings for the recovery of a fine or penalty imposed by the rules 5
of a co-operative may be instituted only by the co-operative. 6
23 Particular officials protected from liability 7
(1) In this section: 8
official means: 9
(a) the Minister, or 10
(b) the Registrar, or 11
(c) a public sector official (within the meaning of section 5) engaged 12
in the administration of the local application provisions of this 13
Act or the Co-operatives National Law (NSW). 14
(2) An official does not incur civil liability for an act done, or omission 15
made, honestly and without negligence under the local application 16
provisions of this Act, the local regulations, the Co-operatives National 17
Law (NSW) or the Co-operatives National Regulations (NSW). 18
(3) If subsection (2) prevents a civil liability attaching to an official, the 19
liability attaches instead to the State. 20
24 Registrar of Co-operatives 21
(1) The Director-General is designated as the Registrar of Co-operatives 22
and may exercise the functions of the Registrar of Co-operatives 23
expressed to be conferred or imposed on the Registrar by or under the 24
local application provisions of this Act, the local regulations, the 25
Co-operatives National Law (NSW) or the Co-operatives National 26
Regulations (NSW). 27
(2) For that purpose, a reference in the local application provisions of this 28
Act, the local regulations, the Co-operatives National Law (NSW) or the 29
Co-operatives National Regulations (NSW) to the Registrar is to be read 30
as a reference to the Director-General, but those functions are to be 31
exercised under the title of the Registrar of Co-operatives. 32
25 Repeals 33
The following are repealed: 34
(a) Co-operatives Act 1992, 35
(b) Co-operatives Amendment Act 1997, 36
(c) Co-operatives Regulation 2005. 37
Page 15
Co-operatives (Adoption of National Law) Bill 2012
Schedule 1 Savings and transitional provisions
Schedule 1 Savings and transitional provisions 1
Part 1 Preliminary 2
1 Local regulations for savings or transitional matters 3
(1) The local regulations may contain provisions of a savings or transitional 4
nature consequent on the enactment of this Act or any Act that amends 5
this Act. 6
(2) Any such provision may, if the local regulations so provide, take effect 7
from the date of assent to the Act concerned or a later date. 8
(3) To the extent to which any such provision takes effect from a date that 9
is earlier than the date of its publication on the NSW legislation website, 10
the provision does not operate so as: 11
(a) to affect, in a manner prejudicial to any person (other than the 12
State or an authority of the State), the rights of that person 13
existing before the date of its publication, or 14
(b) to impose liabilities on any person (other than the State or an 15
authority of the State) in respect of anything done or omitted to 16
be done before the date of its publication. 17
Part 2 Provisions consequent on enactment of this 18
Act 19
2 Definition 20
In this Part: 21
repealed Act means the Co-operatives Act 1992. 22
3 General savings 23
Subject to the local application provisions of this Act and the 24
Co-operatives National Law (NSW), each person, thing and 25
circumstance appointed or created under the repealed Act or existing or 26
continuing under that Act immediately before the commencement of 27
relevant provisions of the Co-operatives National Law (NSW) continues 28
to have the same status, operation and effect as it would have had if this 29
Act had not been enacted. 30
4 Registration of co-operatives 31
(1) A co-operative whose registration under the repealed Act is in force 32
immediately before the commencement of this clause is taken to be 33
registered under the Co-operatives National Law (NSW). 34
Page 16
Co-operatives (Adoption of National Law) Bill 2012
Savings and transitional provisions Schedule 1
(2) A co-operative referred to in subclause (1) that was a trading 1
co-operative immediately before the commencement of this clause is 2
taken to be a distributing co-operative. 3
(3) A co-operative referred to in subclause (1) that was a non-trading 4
co-operative immediately before the commencement of this clause is 5
taken to be a non-distributing co-operative. 6
5 Rules of certain co-operatives formed to carry on club may restrict 7
voting rights 8
(1) The rules of a co-operative that has as a primary activity the operation, 9
maintenance or carrying on of a club may provide for different classes 10
of membership and restrict the voting rights attaching to membership of 11
those different classes, but only if: 12
(a) the Registrar approves of the provisions concerned, and 13
(b) the membership of the class or classes entitled to full voting 14
rights constitutes at least 40% of the total membership of the 15
co-operative. 16
(2) Any such provision in the rules of a co-operative must not be amended 17
except with the prior approval of the Registrar. 18
(3) An approval that was given under section 177 of the repealed Act by the 19
Co-operatives Council constituted under that Act, and that was 20
operative immediately before the commencement of this clause, has 21
effect as if given by the Registrar. 22
(4) This clause applies only to: 23
(a) a co-operative that holds a club licence under the Liquor Act 2007 24
(regardless of when it was registered as a co-operative), or 25
(b) a co-operative that was registered under the repealed Act before 26
17 December 1997 (being the date of assent to the Statute Law 27
(Miscellaneous Provisions) Act (No 2) 1997). 28
6 Entitlements of former members of trading co-operatives (Co-operatives 29
National Law Sch 3, clause 1) 30
A reference in Division 5 of Part 2.6 of the Co-operatives National Law 31
(NSW) to the period of 2 years is taken to be a reference to a period of 32
5 years in a case where the cancellation of membership occurred before 33
the commencement of that Division. 34
Page 17
Co-operatives (Adoption of National Law) Bill 2012
Schedule 1 Savings and transitional provisions
7 Entitlement to distribution from business or reserves of co-operative 1
Any entitlement that a member or former member of a co-operative had 2
immediately before the commencement of this clause in relation to a 3
surplus arising from the business of the co-operative or a part of the 4
reserves of the co-operative continues in force until satisfied. 5
8 Minimum paid up amount of shares (Co-operatives National Law s 78 (4)) 6
Section 78 of the Co-operatives National Law (NSW) does not affect 7
shares issued before the commencement of that section. 8
9 Personal property security interests 9
The repeal of the Co-operatives Act 1992 does not affect the operation 10
of Part 6 of Schedule 6 to that Act on and after the date of the repeal, 11
and that Part so operates as if that Act had not been repealed. 12
Page 18
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Appendix Co-operatives National Law 1
(Section 4) 2
Chapter 1 Preliminary 3
Part 1.1 Introductory 4
1 Citation 5
This Law may be cited as the Co-operatives National Law. 6
2 Commencement 7
This Law commences in a jurisdiction as provided by the Co-operatives 8
National Law Act of that jurisdiction. 9
3 Objects 10
The objects of this Law are: 11
(a) to enable the formation, registration and operation of 12
co-operatives; and 13
(b) to promote co-operative philosophy, principles, practices and 14
objectives; and 15
(c) to protect the interests of co-operatives, their members and the 16
public in the operations and activities of co-operatives; and 17
(d) to ensure directors of co-operatives are accountable for their 18
actions and decisions to the members of co-operatives; and 19
(e) to encourage and facilitate self-management by co-operatives at 20
all levels; and 21
(f) to encourage the development, integration and strengthening of 22
co-operatives at local, regional, national and international levels 23
by supporting and fostering State, Territory and national peak 24
organisations and co-operative instrumentalities. 25
Page 19
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 1.2 Interpretation 1
4 Definitions 2
In this Law: 3
active member--see section 145. 4
active membership provisions--see section 146 (1). 5
active membership resolution--see section 146 (2). 6
agreement means an agreement, arrangement or understanding: 7
(a) whether formal or informal or partly formal and partly informal; 8
or 9
(b) whether written or oral or partly written and partly oral; or 10
(c) whether or not having legal or equitable force and whether or not 11
based on legal or equitable rights. 12
another jurisdiction means a State or Territory other than this 13
jurisdiction. 14
approved form means a form approved under section 622. 15
ASIC means the Australian Securities and Investments Commission. 16
ASIC Act means the Australian Securities and Investments Commission 17
Act 2001 of the Commonwealth. 18
Australian legal practitioner means a person who: 19
(a) is admitted to the legal profession under the law of a jurisdiction; 20
and 21
(b) holds a current practising certificate under a law of a jurisdiction 22
authorising the person to engage in legal practice. 23
authorised deposit-taking institution means an authorised 24
deposit-taking institution within the meaning of the Banking Act 1959 25
of the Commonwealth. 26
board means the board of directors of a co-operative, and includes a 27
person or committee exercising a power of the board delegated to the 28
person or committee under the rules of the co-operative. 29
books includes: 30
(a) a register; and 31
(b) minutes; and 32
(c) any other record of information; and 33
Page 20
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(d) financial reports or financial records, however compiled, 1
recorded or stored; and 2
(e) a document. 3
carry on business has the same meaning in relation to a co-operative or 4
participating co-operative as it has under the Corporations Act in 5
relation to a company. 6
Note. Division 3 of Part 1.2 of the Corporations Act contains provisions relating 7
to carrying on business. 8
CCU means a co-operative capital unit, as provided for by Division 2 of 9
Part 3.4 (see section 345). 10
chief executive officer of a co-operative or a subsidiary of a 11
co-operative means the chief executive officer of the co-operative or 12
subsidiary for the time being (by whatever name called), and whether or 13
not the officer is a director or the secretary. 14
civil penalty provision--see section 553. 15
compensation order--see section 553. 16
constituent documents of a corporation means the constitution of the 17
corporation or any rules or other document constituting the corporation 18
or governing its activities, and includes a memorandum or articles of 19
association and replaceable rules or other rules. 20
co-operative means a body registered under this Law as applying under 21
the Co-operatives National Law Act of this jurisdiction as a 22
co-operative (including a co-operative group). 23
co-operative group means a co-operative that has a membership as 24
described in section 111. 25
co-operative principles--see section 10. 26
Co-operatives National Law Act of a jurisdiction means the Act of that 27
jurisdiction that applies this Law (whether with or without 28
modification) as a law of that jurisdiction. 29
corporation includes: 30
(a) a company; and 31
(b) any body corporate (whether incorporated in this jurisdiction or 32
elsewhere); and 33
(c) an unincorporated body that, under the law of its place of origin, 34
may: 35
(i) sue or be sued; or 36
(ii) hold property in the name of its secretary or of an office 37
holder of the body duly appointed for that purpose; 38
Page 21
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
but does not include: 1
(d) an exempt public authority (within the meaning of the 2
Corporations Act); or 3
(e) a corporation sole. 4
Note. A co-operative is a corporation within this definition. 5
Corporations Act means the Corporations Act 2001 of the 6
Commonwealth or, where appropriate, that Act as applying under this 7
Law as a law of this jurisdiction. 8
Corporations application legislation means: 9
(a) for a State--Part 3 of the Corporations (Ancillary Provisions) 10
Act 2001 of that State; or 11
(b) for the Northern Territory--Part 4 of the Corporations Reform 12
(Northern Territory) Act of that Territory; or 13
(c) for the Australian Capital Territory--the provisions of a law of 14
that Territory that are declared by the Co-operatives National 15
Law Act of that Territory to be the Corporations application 16
legislation of that Territory; 17
unless a law of the State or Territory concerned provides otherwise. 18
Corporations legislation means the Corporations legislation to which 19
Part 1.1A of the Corporations Act applies. 20
corresponding co-operatives law of another jurisdiction--see 21
section 7. 22
de facto partner has the meaning given by the Acts Interpretation 23
Act 1901 of the Commonwealth in relation to an Act of the 24
Commonwealth. 25
debenture of a co-operative means a chose in action that includes an 26
undertaking by the co-operative to repay as a debt money deposited 27
with or lent to the co-operative. The chose in action may (but need not) 28
include a security interest in property of the co-operative to secure 29
repayment of the money. However, a debenture does not include: 30
(a) an undertaking to repay money deposited with or lent to the 31
co-operative by a person if: 32
(i) the person deposits or lends the money in the ordinary 33
course of a business carried on by the person; and 34
(ii) the co-operative receives the money in the ordinary course 35
of carrying on a business that neither comprises nor forms 36
part of a business of borrowing money and providing 37
finance; or 38
Page 22
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) an undertaking by an Australian authorised deposit-taking 1
institution to repay money deposited with it, or lent to it, in the 2
ordinary course of its banking business; or 3
(c) an undertaking to pay money under: 4
(i) a cheque; or 5
(ii) an order for the payment of money; or 6
(iii) a bill of exchange; or 7
(d) an undertaking by a co-operative to pay money to a related 8
corporation; or 9
(e) an undertaking to repay money that is prescribed by the 10
regulations under the Corporations Act; or 11
(f) another document of a class prescribed by the National 12
Regulations as exempt from this definition. 13
For the purposes of this definition, if a chose in action that includes an 14
undertaking by a co-operative to pay money as a debt is offered as 15
consideration for the acquisition of securities under an off-market 16
takeover bid, or is issued under a compromise or arrangement under 17
Part 4.4, the undertaking is taken to be an undertaking to repay as a debt 18
money deposited with or lent to the co-operative. 19
deed of arrangement means a deed of arrangement executed by a 20
co-operative under Part 5.3A of the Corporations Act as applying under 21
this Law (see section 382 of this Law) or a deed of that type as varied 22
and in force from time to time. 23
deposit-taking co-operative means a co-operative permitted under 24
section 333 to accept money on deposit. 25
designated authority means (except in section 612) the person or body 26
specified or described in the Co-operatives National Law Act of this 27
jurisdiction for the purposes of the provision in which the term is used. 28
designated instrument means an instrument or document: 29
(a) of the kind; and 30
(b) made, served or published in the manner (if any); 31
specified or described in the Co-operatives National Law Act of this 32
jurisdiction for the purposes of the provision in which the term is used. 33
Note. Examples are an order in writing served on a person and a notice 34
published in the Gazette. 35
designated tribunal means the court or tribunal specified or described 36
in the Co-operatives National Law Act of this jurisdiction for the 37
purposes of the provision in which the term is used. 38
Page 23
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
director of a co-operative includes: 1
(a) a person who occupies or acts in the position of a director or 2
member of the board of a co-operative, whether or not the person 3
is called a director and whether or not the person is validly 4
appointed or properly authorised to act in the position; and 5
(b) a person under whose directions or instructions the directors or 6
members of the board of directors of the co-operative are 7
accustomed to act. 8
distributing co-operative--see section 18. 9
entity includes a person and an unincorporated body. 10
evidential burden, in relation to a matter, means the burden of adducing 11
or pointing to evidence that suggests a reasonable possibility that the 12
matter exists or does not exist. 13
file includes lodge. 14
financial records includes: 15
(a) invoices, receipts, orders for the payment of money, bills of 16
exchange, cheques, promissory notes and vouchers; and 17
(b) documents of prime entry; and 18
(c) working papers and other documents needed to explain: 19
(i) the methods by which financial statements are made up; 20
and 21
(ii) adjustments to be made in preparing financial statements. 22
half-year--see section 296. 23
inactive member of a co-operative is a member of the co-operative who 24
is not an active member of the co-operative. 25
inspector means a person appointed as an inspector under Part 6.4. 26
investigator means a person appointed under section 520 to hold an 27
inquiry into the affairs of a co-operative. 28
involved in a contravention--see section 9. 29
jurisdiction means a State or Territory. 30
large co-operative means a co-operative that is not a small co-operative. 31
local Registrar means the Registrar for this jurisdiction. 32
local regulations means regulations made under the Co-operatives 33
National Law Act of this jurisdiction, but does not include the National 34
Regulations. 35
Page 24
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Ministerial Council means the MCCA as defined in the Australian 1
Uniform Co-operative Laws Agreement, the parties to which are the 2
States and Territories, and which came into force on 21 January 2012 3
(being the date when it has been executed by all the parties). 4
Note. The Agreement includes the following definition: 5
"MCCA" means the Ministerial Council on Consumer Affairs which for the 6
purposes of this Agreement comprises the members in accordance with 7
Part VIII of this Agreement or such body as succeeds it or for the time being 8
performs the functions carried out by the Ministerial Council on Consumer 9
Affairs as set out in this Agreement. 10
model rules means model rules under Division 2 of Part 2.3. 11
modification, in relation to an applied Corporations legislation matter, 12
means a modification or change (as the case may be) within the meaning 13
of the Corporations application legislation of this jurisdiction. 14
mortgage includes a lien, charge or other security over property. 15
National Regulations means the Co-operatives National Regulations 16
made under this Law, as referred to in section 612. 17
Note. Jurisdictional legislation may provide for the application of the National 18
Regulations in individual jurisdictions. Section 6 of this Law deals with the case 19
where the National Regulations are not applied in a jurisdiction in that manner 20
but are separately made for that jurisdiction. 21
non-distributing co-operative--see section 19. 22
NSW legislation website means the website with the URL of 23
www.legislation.nsw.gov.au, or any other website, used by the 24
Parliamentary Counsel of New South Wales to provide public access to 25
the legislation of New South Wales. 26
officer of a co-operative or participating co-operative means: 27
(a) a director or secretary of the co-operative; or 28
(b) a person: 29
(i) who makes, or participates in making, decisions that affect 30
the whole, or a substantial part, of the business of the 31
co-operative; or 32
(ii) who has the capacity to affect significantly the 33
co-operative's financial standing; or 34
(iii) in accordance with whose instructions or wishes the 35
directors of the co-operative are accustomed to act 36
(excluding advice given by the person in the proper 37
performance of functions attaching to the person's 38
professional capacity or their business relationship with 39
the directors or the co-operative); or 40
Page 25
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) a receiver, or receiver and manager, of property of the 1
co-operative; or 2
(d) an administrator of the co-operative; or 3
(e) an administrator of a deed of arrangement executed by the 4
co-operative; or 5
(f) a liquidator of the co-operative; or 6
(g) a trustee or other person administering a compromise or 7
arrangement made between the co-operative and someone else. 8
ordinary resolution--see section 238. 9
participating co-operative means a body that is registered and 10
incorporated under, and is subject to, a corresponding co-operatives law 11
of another jurisdiction. 12
participating jurisdiction means a jurisdiction in which a 13
corresponding co-operatives law is in force. 14
participating Registrar means a person exercising the functions of a 15
Registrar under a corresponding co-operatives law of another 16
jurisdiction. 17
pecuniary penalty order--see section 553. 18
PPSA security interest (short for Personal Property Securities Act 19
security interest) means a security interest within the meaning of the 20
Personal Property Securities Act 2009 of the Commonwealth and to 21
which that Act applies, other than a transitional security interest within 22
the meaning of that Act. 23
Note 1. The Personal Property Securities Act 2009 of the Commonwealth 24
applies to certain security interests in personal property. See the following 25
provisions of that Act: 26
(a) section 8 (Interests to which this Act does not apply); 27
(b) section 12 (Meaning of security interest); 28
(c) Chapter 9 (Transitional provisions). 29
Note 2. For the meaning of transitional security interest, see section 308 of 30
the Personal Property Securities Act 2009 of the Commonwealth. 31
primary activity--see section 144. 32
prison includes a correctional centre or correctional complex. 33
public sector official has the meaning given by the Co-operatives 34
National Law Act of this jurisdiction. 35
quoted security means a security that is quoted on a prescribed financial 36
market (within the meaning of the Corporations Act). 37
receiver includes a receiver and manager. 38
Page 26
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Registrar for this jurisdiction has the meaning given by the 1
Co-operatives National Law Act of this jurisdiction. 2
related (in the context of related corporations)--see Part 3 of 3
Schedule 2. 4
relevant interest--see Part 1 of Schedule 2. 5
rules of a co-operative (otherwise than in the context of proposed rules 6
or model rules) means the registered rules of the co-operative in force 7
for the time being. 8
secretary of a co-operative means the person appointed under 9
section 190 to be, or to act as, the secretary of the co-operative. 10
security interest means: 11
(a) a PPSA security interest; or 12
(b) a charge, lien or pledge. 13
serve includes give, send and similar terms. 14
small co-operative means a co-operative of a class or description 15
prescribed by the National Regulations. 16
special postal ballot--see section 248. 17
special resolution--see section 239. 18
strict liability--see section 550. 19
subsidiary has the same meaning as it has in the Corporations Act. 20
Supreme Court means the Supreme Court of this jurisdiction. 21
surplus, in relation to a co-operative, means the excess of income over 22
expenditure after making adequate allowance for taxation expense, for 23
depreciation in value of the property of the co-operative and for future 24
contingencies. 25
the Minister means: 26
(a) the Minister administering the Co-operatives National Law Act 27
of this jurisdiction; or 28
(b) if different Ministers are administering that Act in different 29
respects--the Minister administering the Act in the relevant 30
respect; or 31
(c) if different Ministers are administering different portions of that 32
Act--the Minister administering the relevant portion of the Act; 33
or 34
Page 27
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(d) if paragraphs (b) and (c) do not apply and 2 or more Ministers are 1
administering that Act or a portion of that Act--any one of the 2
Ministers administering the Act or portion of the Act. 3
this jurisdiction--see the definition of that term in the Co-operatives 4
National Law Act of each jurisdiction that adopts this Law. 5
5 Miscellaneous provisions relating to the interpretation of this Law 6
(Schedule 4) 7
Schedule 4 contains miscellaneous provisions relating to the 8
interpretation of this Law. 9
6 References to regulations where National Regulations are not applied 10
(1) This section applies where the Co-operatives National Law Act of a 11
jurisdiction does not provide that the National Regulations apply as 12
regulations for the purposes of this Law as applying in that jurisdiction. 13
(2) A reference in this Law as applying in that jurisdiction to National 14
Regulations is taken to be a reference to regulations made under that Act 15
that are the same or substantially the same as the National Regulations. 16
7 Corresponding co-operatives law 17
(1) This section determines what (if any) law of another jurisdiction is a 18
corresponding co-operatives law for the purposes of this Law. 19
(2) If this Law applies as a law of the other jurisdiction (whether with or 20
without modification), this Law as so applying is a corresponding 21
co-operatives law for the purposes of this Law. 22
(3) If this Law does not apply as a law of the other jurisdiction, a law of the 23
other jurisdiction is a corresponding co-operatives law for the purposes 24
of this Law if the National Regulations declare that the law substantially 25
corresponds to the provisions of this Law. 26
8 Co-operatives National Law Act of this jurisdiction 27
(1) It is intended that this Law will or may be supplemented by provisions 28
of the Co-operatives National Law Act of this jurisdiction where an 29
intention of supplementation (however expressed) is indicated in this 30
Law, including provisions designating: 31
(a) a person or body to be a designated authority; or 32
(b) an instrument or document to be a designated instrument; or 33
(c) a court or tribunal to be a designated tribunal; 34
for the purposes of particular provisions of this Law. 35
Note. Other provisions of this Law express the intention that the Co-operatives 36
National Law Act of this jurisdiction will or may provide for particular matters. 37
Page 28
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) It is also intended that the National Regulations will or may be 1
supplemented by provisions of the local regulations where an intention 2
of supplementation is indicated in the National Regulations. 3
9 Involvement in contraventions (cf Corporations Act s 79) 4
A person is involved in a contravention if, and only if, the person: 5
(a) has aided, abetted, counselled or procured the contravention; or 6
(b) has induced, whether by threats or promises or otherwise, the 7
contravention; or 8
(c) has been in any way, by act or omission, directly or indirectly, 9
knowingly concerned in, or party to, the contravention; or 10
(d) has conspired with others to effect the contravention. 11
Part 1.3 The co-operative principles 12
10 Co-operative principles 13
The co-operative principles are the following principles: 14
1 Voluntary and open membership 15
Co-operatives are voluntary organisations, open to all persons 16
able to use their services and willing to accept the responsibilities 17
of membership, without gender, social, racial, political or 18
religious discrimination. 19
2 Democratic member control 20
Co-operatives are democratic organisations controlled by their 21
members, who actively participate in setting their policies and 22
making decisions. Men and women serving as elected 23
representatives are accountable to the membership. In primary 24
co-operatives members have equal voting rights (1 member, 25
1 vote) and co-operatives at other levels are organised in a 26
democratic way. 27
3 Member economic participation 28
Members contribute equitably to, and democratically control, the 29
capital of their co-operative. At least part of the capital is usually 30
the common property of the co-operative. They usually receive 31
limited compensation (if any) on capital subscribed as a condition 32
of membership. Members allocate surpluses for any or all of the 33
following purposes: 34
(a) developing the co-operative, possibly by setting up 35
reserves, part of which at least would be indivisible; 36
Page 29
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) benefiting members in proportion to their transactions with 1
the co-operative; 2
(c) supporting other activities approved by the membership. 3
4 Autonomy and independence 4
Co-operatives are autonomous, self-help organisations controlled 5
by their members. If they enter into agreements with other 6
organisations, including governments, or raise capital from 7
external sources, they do so on terms that ensure democratic 8
control by their members and maintain their co-operative 9
autonomy. 10
5 Education, training and information 11
Co-operatives provide education and training for their members, 12
elected representatives, managers and employees so they can 13
contribute effectively to the development of their co-operatives. 14
They inform the general public, particularly young people and 15
opinion leaders, about the nature and benefits of co-operation. 16
6 Co-operation among co-operatives 17
Co-operatives serve their members most effectively and 18
strengthen the co-operative movement by working together 19
through local, national, regional and international structures. 20
7 Concern for the community 21
While focusing on member needs, co-operatives work for the 22
sustainable development of their communities through policies 23
accepted by their members. 24
Note. The co-operative principles are those adopted by the International 25
Co-operative Alliance. 26
11 Interpretation to promote co-operative principles 27
In the interpretation of a provision of this Law, a construction that 28
would promote the co-operative principles is to be preferred to a 29
construction that would not promote the co-operative principles. 30
Part 1.4 The Corporations legislation 31
Division 1 Exclusion of matters from the Corporations 32
legislation 33
12 Excluded matter--co-operatives and participating co-operatives 34
(1) A co-operative and a participating co-operative are each declared to be 35
an excluded matter for the purposes of section 5F of the Corporations 36
Page 30
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Act in relation to the whole of the Corporations legislation other than to 1
the extent specified in this section. 2
Note. This section ensures that neither the Corporations Act nor Part 3 of the 3
ASIC Act will apply in relation to a co-operative or participating co-operative, 4
other than to the extent specified in this section. Section 5F of the Corporations 5
Act provides that if a State or Territory law declares a matter to be an excluded 6
matter in relation to the whole of the Corporations legislation other than to a 7
specified extent, then that legislation will not apply, except to the specified 8
extent, in relation to that matter in the State or Territory concerned. However, 9
other provisions of this Part provide for the application of provisions of the 10
Corporations legislation to co-operatives or participating co-operatives as laws 11
of this jurisdiction. 12
(2) Subsection (1) does not exclude the application of the following 13
provisions of the Corporations legislation to co-operatives or 14
participating co-operatives to the extent that the provisions would 15
otherwise be applicable to them: 16
(a) provisions relating to a matter that the National Regulations 17
provide is not to be excluded from the operation of the 18
Corporations legislation; 19
(b) provisions relating to the role of a co-operative or participating 20
co-operative in the formation of a company; 21
(c) provisions relating to the registration of a co-operative as a 22
company under Chapter 5B of the Corporations Act; 23
(d) provisions relating to substantial shareholdings, by or involving 24
a co-operative or participating co-operative, in a company; 25
(e) provisions conferring or imposing functions on a co-operative or 26
participating co-operative as a member, or former member, of a 27
corporation; 28
(f) provisions relating to dealings by a co-operative or participating 29
co-operative in financial products of a corporation, other than 30
financial products of the co-operative or participating 31
co-operative itself; 32
(g) provisions conferring or imposing functions on a co-operative or 33
participating co-operative in its dealings with a corporation, not 34
being dealings in financial products of the co-operative or 35
participating co-operative; 36
(h) provisions relating to financial products of a co-operative, other 37
than shares in, CCUs of, debentures of, or deposits with, a 38
co-operative or participating co-operative; 39
(i) provisions relating to financial markets and participants in 40
financial markets; 41
(j) provisions relating to financial services licensees whose licence 42
covers dealing in, or providing advice about, financial products; 43
Page 31
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(k) provisions relating to carrying on a financial services business; 1
(l) provisions relating to financial statements, and audits of financial 2
statements, of financial services licensees whose licence covers 3
dealing in, or providing advice about, financial products; 4
(m) provisions relating to clients of financial services licensees 5
whose licence covers dealing in, or providing advice about, 6
financial products; 7
(n) provisions relating to registers of interests in financial products; 8
(o) provisions relating to powers of a court to cure procedural 9
irregularities and to make other orders. 10
(3) To avoid doubt, it is declared that subsection (1) does not operate so as 11
to exclude the operation of the following provisions of the Corporations 12
Act, except in relation to shares in, CCUs issued by, debentures of, or 13
deposits with, a co-operative or participating co-operative: 14
(a) Part 1.2A; 15
(b) Chapter 2L; 16
(c) Chapter 6CA; 17
(d) Chapter 6D; 18
(e) Part 7.10. 19
Division 2 Applied matters (applied Corporations legislation 20
matters) 21
13 Applied Corporations legislation matters under this Law 22
(1) Other provisions of this Law declare matters to be applied Corporations 23
legislation matters for the purposes of the Corporations application 24
legislation of this jurisdiction in relation to provisions of the 25
Corporations Act specified in those provisions. 26
(2) A declaration is made subject to any modifications specified in or in 27
connection with the provision in which the declaration is made. 28
(3) Additionally, a declaration is also made subject to: 29
(a) any modifications applying under section 15; and 30
(b) any modifications prescribed by the National Regulations; and 31
(c) any necessary modifications. 32
Note 1. The Corporations application legislation of this jurisdiction provides for 33
the application of provisions of the Corporations Act and Part 3 of the ASIC Act 34
as laws of this jurisdiction in respect of any matter declared by a law of this 35
jurisdiction (whether with or without modification) to be an applied Corporations 36
legislation matter for the purposes of the Corporations application legislation in 37
relation to those Commonwealth provisions. The Corporations application 38
Page 32
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
legislation ensures that a declaration made for the purposes of that legislation 1
only operates so as to apply a provision of the Corporations legislation to a 2
matter as a law of this jurisdiction if that provision does not already apply to the 3
matter as a law of the Commonwealth. If a provision referred to in a declaration 4
already applies as a law of the Commonwealth, nothing in the declaration will 5
affect its continued operation as a law of the Commonwealth. 6
Note 2. The following Table indicates the location and subject matter of 7
declarations made under other provisions of this Law. 8
Table 9
Applied Location of Matter to which Provision of
provisions of applied applied this Law
Corporations provisions in provision that makes
Act Corporations Act applies the
declaration
Sections Part 1.2A (Disclosing Debentures (and Section 337
111AA-111AX entities) CCUs) of a
co-operative
Sections Chapter 2L Debentures (and Section 337
283AA-283HB (Debentures) CCUs) of a
co-operative
Section 295A Part 2M.3, Division 1 A co-operative Section 277
(Annual financial with quoted
reports and directors' securities
reports)
Sections Part 2M.3, Division 1 A co-operative Section 281
299A-300A (Annual financial with quoted
reports and directors' securities
reports)
Sections Part 2M.3, Division 2 A co-operative that Section 282
302-306 (Half-year financial is a disclosing
report and directors' entity
report)
Sections Part 2M.3, Division 3 A co-operative Section 283
307-313 (Audit and auditor's
report)
Section 315 (1) Part 2M.3, Division 4 A co-operative that Section 285
(Annual financial is a disclosing
reporting to entity
members)
Section 318 Part 2M.3, Division 4 A co-operative Section 288
(Annual financial
reporting to
members)
Page 33
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Applied Location of Matter to which Provision of
provisions of applied applied this Law
Corporations provisions in provision that makes
Act Corporations Act applies the
declaration
Sections Part 2M.3, Division 6 A co-operative Section 294
323-323C (Special provisions
about consolidated
financial statements)
Sections Part 2M.4 A co-operative Section 297
324AA-324DD (Appointment and
(except section removal of auditors),
324BD) Divisions 1-5
Sections Part 5.2 (Receivers, A co-operative Section 393
416-434G and other controllers,
of property of
corporations)
Sections Part 5.3A A co-operative Section 382
435A-451D (Administration of a
(except section company's affairs
446B) with a view to
executing a deed of
company
arrangement)
Sections Part 5.4 (Winding up The winding up of Section 444
459A-581 in insolvency) a co-operative
Part 5.4A (Winding
up by the court on
other grounds)
Part 5.4B (Winding
up in insolvency or
by the court)
Part 5.5 (Voluntary
winding up)
Part 5.6 (Winding up
generally)
Sections Part 5.4B (Winding The winding up or Section 472
465-489E up in insolvency or deregistration of
by the court) participating
co-operatives
Sections Part 5.6 (Winding up The winding up or Section 472
513-581 generally) deregistration of
participating
co-operatives
Page 34
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Applied Location of Matter to which Provision of
provisions of applied applied this Law
Corporations provisions in provision that makes
Act Corporations Act applies the
declaration
Section 536 Part 5.6, Division 3 A person appointed Section 420
(Liquidators) to administer a
compromise or
arrangement
Section Part 5.6, Division 6 Debentures (and Section 342
563AAA (Proof and ranking of CCUs) issued by a
claims) co-operative to any
of its members or
employees
Sections Part 5.7B A co-operative Section 451
588C-588Z (Recovering property
or compensation for
the benefit of
creditors of insolvent
company)
Sections Part 5.8 (Offences) A co-operative Section 201
589-596
Sections Part 5.8A (Employee A co-operative Section 202
596AA-596AI entitlements)
Sections Part 5.9, Division 1 A co-operative Section 489
596A-597B (Examining a person
about a corporation)
Sections Part 5.9, Division 3 A co-operative Section 382
600A-600H (Provisions applying
to various kinds of
external
administration)
Sections Part 5A.1 The deregistration Section 453
601AA-601AH (Deregistration) of a co-operative
and a deregistered
co-operative
Sections Chapter 6CA Debentures (and Section 337
674-678 (Continuous CCUs) of a
disclosure) co-operative
Sections Chapter 6D Debentures (and Section 337
700-742 (Fundraising) CCUs) of a
co-operative
Page 35
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Applied Location of Matter to which Provision of
provisions of applied applied this Law
Corporations provisions in provision that makes
Act Corporations Act applies the
declaration
Sections Part 7.10 (Market Debentures (and Section 337
1040A-1045A misconduct and other CCUs) of a
prohibited conduct co-operative
relating to financial
products and
financial services)
Sections Part 9.7 (Unclaimed Anything paid or Section 436
1339-1343A property) transferred to the (3)
Registrar under
section 436 (2)
14 Applied Corporations legislation matters under the National Regulations 1
(1) The National Regulations may declare any matter relating to 2
co-operatives or participating co-operatives to be an applied 3
Corporations legislation matter for the purposes of the Corporations 4
application legislation of this jurisdiction in relation to any provision of 5
the Corporations legislation that does not apply of its own force to 6
co-operatives or participating co-operatives (as the case may be). 7
(2) The declaration is made subject to any modifications specified in the 8
provision in which the declaration is made. 9
(3) Additionally, the declaration is also made subject to: 10
(a) any modifications applying under section 15; and 11
(b) any modifications prescribed by the National Regulations; and 12
(c) any necessary modifications. 13
(4) The National Regulations may also provide that a specified provision of 14
the Corporations legislation (with any applicable modifications) that is 15
the subject of the declaration: 16
(a) operates to the exclusion of a specified provision of this Law; or 17
(b) prevails over a specified provision of this Law to the extent of any 18
inconsistency. 19
Page 36
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
15 Modifications to applied provisions 1
(1) This section applies in relation to any provisions of the Corporations 2
legislation (the applied provisions) that are the subject of: 3
(a) a declaration under this Law, as referred to in section 13; or 4
(b) a declaration under the National Regulations, as referred to in 5
section 14. 6
(2) For the purposes of sections 13 and 14, the following modifications 7
apply: 8
(a) a reference in the applied provisions to a corporation, company 9
or public company is to be read as a reference to a co-operative; 10
(b) a reference in the applied provisions to ASIC is to be read as a 11
reference to the Registrar; 12
(c) a reference in the applied provisions to the court is to be read as 13
a reference to the Supreme Court; 14
(d) a reference in the applied provisions to the Commonwealth is to 15
be read as a reference to this jurisdiction; 16
(e) a reference in the applied provisions to articles or memorandum 17
of association or constitution or replaceable rules is to be read as 18
a reference to rules; 19
(f) a reference in the applied provisions to the Gazette is to be read 20
as a reference to the Government Gazette of this jurisdiction; 21
(g) a reference in the applied provisions to "prescribed" is to be read 22
as a reference to "approved by the designated authority", and 23
(without limitation) a reference to a prescribed form is to be read 24
as a reference to an approved form within the meaning of this 25
Law; 26
(h) a reference in the applied provisions to a special resolution is to 27
be read as a reference to a special resolution referred to in 28
section 239 of this Law; 29
(i) a cross-reference in the applied provisions to another provision of 30
the Corporations Act is, if that cross-reference is not appropriate 31
(because, for example, the provision cross-referred to is not 32
among the applied provisions), to be read as a cross-reference to 33
the equivalent provision of this Law; 34
(j) a reference in the applied provisions (including section 311 of the 35
Corporations Act) to a "contravention of this Act" is to be read as 36
including a reference to a contravention of this Law; 37
Page 37
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(k) a reference in the applied provisions to the regulations is to be 1
read as a reference to the National Regulations or local 2
regulations, as the case requires; 3
(l) all notes in the applied provisions are to be ignored; 4
(m) any of the applied provisions that are not relevant to 5
co-operatives or that are incapable of application to co-operatives 6
or participating co-operatives are to be ignored. 7
(3) Subsection (2) does not apply to the extent to which this Law or the 8
National Regulations provide otherwise, whether expressly or by 9
implication. 10
Division 3 Prescription by National Regulations of other 11
matters dealt with by Corporations legislation 12
16 National Regulations may provide for matters dealt with by Corporations 13
legislation 14
(1) The National Regulations may make provision, in relation to 15
co-operatives, participating co-operatives or associated matters, for or 16
with respect to any matter for which a provision of the Corporations 17
legislation has effect in relation to companies or associated matters. 18
(2) A National Regulation made under subsection (1) may deal with a 19
matter in a similar way as, or in a different way from, that in which the 20
provision of the Corporations legislation has effect. 21
(3) Subsection (1) does not apply in relation to a provision of the 22
Corporations legislation that applies of its own force or by operation of 23
other provisions of this Law. 24
(4) Without limiting subsection (1) or (2), the National Regulations may 25
confer jurisdiction on a court or tribunal to exercise any function 26
conferred by the National Regulations made under subsection (1). 27
Note. This section authorises the National Regulations to deal with a matter 28
dealt with by Corporations legislation (with certain limitations) in a manner that 29
does not involve the declaration of the matter to be an applied Corporations 30
legislation matter. This procedure is contemplated by the Corporations 31
application legislation of the various jurisdictions. 32
Page 38
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Chapter 2 Formation, powers and constitution of 1
co-operatives 2
Part 2.1 Formation 3
Division 1 Types of co-operatives 4
17 Types of co-operatives 5
(1) A body may be registered under this Law as a co-operative. 6
(2) A co-operative may be either: 7
(a) a distributing co-operative; or 8
(b) a non-distributing co-operative. 9
18 Distributing co-operatives 10
(1) A distributing co-operative is a co-operative that is not prohibited from 11
giving returns or distributions on surplus or share capital. 12
(2) A distributing co-operative must have share capital. 13
(3) A distributing co-operative must have a membership of: 14
(a) in the case of a co-operative group--2 or more co-operatives; or 15
(b) in the case of any other distributing co-operative: 16
(i) if a lesser number than 5 is approved by the Registrar--at 17
least that number of active members; or 18
(ii) otherwise--5 or more active members. 19
(4) An approval under subsection (3) may be given in relation to a 20
particular co-operative or class of co-operatives. 21
19 Non-distributing co-operatives 22
(1) A non-distributing co-operative is a co-operative that is prohibited 23
from giving returns or distributions on surplus or share capital to 24
members, other than the nominal value of shares (if any) at winding up. 25
(2) A non-distributing co-operative may or may not have share capital. 26
(3) A non-distributing co-operative must have a membership of: 27
(a) in the case of a co-operative group--2 or more co-operatives; or 28
(b) in the case of any other non-distributing co-operative: 29
(i) if a lesser number than 5 is approved by the Registrar--at 30
least that number of active members; or 31
(ii) otherwise--5 or more active members. 32
Page 39
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) An approval under subsection (3) may be given in relation to a 1
particular co-operative or class of co-operatives. 2
20 Provisions regarding Registrar's approvals about numbers 3
(1) The Registrar may give one composite approval that operates as more 4
than one of the following: 5
(a) an approval concerning the number of active members of a 6
co-operative required under section 18 (3) or 19 (3); 7
(b) an approval concerning the number of persons required to hold 8
the formation meeting of a co-operative under section 22 (2); 9
(c) an approval concerning the number of members required to sign 10
the application for registration of a proposed co-operative under 11
section 26 (1); 12
(d) an approval concerning the minimum number of members for a 13
co-operative to continue to carry on business under section 119. 14
(2) A composite approval may be given in relation to: 15
(a) a particular co-operative or proposed co-operative; or 16
(b) a particular class of co-operatives or proposed co-operatives; or 17
(c) all co-operatives or proposed co-operatives. 18
(3) This section does not limit the power of the Registrar to give separate 19
approvals under any of the relevant sections. 20
Division 2 Formation meeting 21
21 Formation meeting 22
(1) Before a proposed co-operative (other than an existing corporation) can 23
be registered, a formation meeting must be held under this Division. 24
(2) Before a formation meeting can be held for a proposed co-operative, a 25
draft of the proposed rules and a draft of the proposed formation 26
disclosure statement must be approved by the Registrar in accordance 27
with Division 3. 28
22 Requirements regarding formation meeting 29
(1) At the formation meeting for a proposed co-operative: 30
(a) the proposed rules of the co-operative approved under section 24 31
for the proposed co-operative, including active membership 32
provisions, must be passed by two-thirds of the proposed 33
members of the proposed co-operative attending the meeting; and 34
Page 40
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) in the case of: 1
(i) a proposed distributing co-operative; or 2
(ii) a proposed non-distributing co-operative that is the subject 3
of a direction under section 23 (2) (a); 4
a formation disclosure statement approved under section 25 must 5
be presented to the meeting; and 6
(c) the proposed members of the proposed co-operative must sign the 7
application for membership; and 8
(d) the proposed members must elect the first directors of the 9
proposed co-operative under the proposed rules; and 10
(e) the proposed members must authorise a person: 11
(i) to apply to the Registrar for registration of the proposed 12
co-operative; and 13
(ii) to do anything necessary to have the proposed co-operative 14
registered. 15
(2) The formation meeting must be held by: 16
(a) in the case of a co-operative group--not less than 2 co-operatives 17
suitably qualified to be members of the proposed co-operative 18
group; or 19
(b) in the case of any other co-operative--not less than 5 persons, or 20
if a lesser number than 5 is approved by the Registrar not less 21
than the approved number of persons, suitably qualified to be 22
members of the proposed co-operative. 23
(3) For the purposes of subsection (2), a person (including a co-operative) 24
is suitably qualified to be a member if: 25
(a) there are reasonable grounds to believe the person will be an 26
active member of the proposed co-operative; and 27
(b) in the case of an individual--the person is an adult; and 28
(c) the person satisfies any other requirements for membership in the 29
proposed rules. 30
(4) Each co-operative forming a proposed co-operative group may be 31
represented at the formation meeting by one person. 32
(5) An approval under subsection (2) may be given in relation to a 33
particular co-operative or class of co-operatives or to all co-operatives. 34
Page 41
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 3 Initial approval of rules and formation disclosure 1
statement 2
23 Submission of draft rules and draft formation disclosure statement 3
(1) The following documents must be submitted to the Registrar before the 4
formation meeting: 5
(a) a draft of the rules proposed for the co-operative (including active 6
membership provisions); 7
(b) in the case of: 8
(i) a distributing co-operative--a draft formation disclosure 9
statement for the co-operative; or 10
(ii) a non-distributing co-operative--a draft formation 11
disclosure statement for the co-operative if the Registrar so 12
directs under subsection (2) (a); 13
(c) a written notice of intention to apply for registration as a 14
co-operative. 15
(2) The Registrar may by written notice direct that: 16
(a) a draft formation disclosure statement for a proposed 17
non-distributing co-operative must be submitted to the Registrar; 18
and 19
(b) a formation disclosure statement approved under section 25 must 20
be presented to the formation meeting for the co-operative. 21
(3) The notice under subsection (2) is to be given to the person who 22
submitted notice of intention to apply for registration as a co-operative 23
and must specify the time by which the draft formation disclosure 24
statement must be submitted to the Registrar. 25
24 Provisions relating to and approval of rules 26
(1) This section applies to draft rules for a co-operative required to be 27
submitted to the Registrar under section 23. 28
(2) The rules must: 29
(a) be in accordance with section 56; and 30
(b) be in a form that may reasonably be approved. 31
(3) If the rules do not make provision for any matter required by 32
Schedule 1, the Registrar may approve the relevant provisions of the 33
model rules as rules of the co-operative. 34
Page 42
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) The Registrar may: 1
(a) approve the rules as submitted; or 2
(b) approve different rules to those submitted; or 3
(c) refuse to approve the rules; or 4
(d) require the person submitting the draft rules to give the Registrar 5
any additional information the Registrar reasonably requires, and 6
then act under paragraph (a), (b) or (c). 7
(5) Subject to subsection (6), the Registrar approves of the rules by giving 8
written notice of the approval of the rules to the person who submitted 9
the draft rules to the Registrar. 10
(6) The Registrar is taken to have approved the proposed rules (as 11
submitted to the Registrar) at the end of the period of 28 days after they 12
were submitted, unless before the end of that period the Registrar gives 13
written notice to the person who submitted them that the Registrar: 14
(a) has approved different rules to those submitted; or 15
(b) is still considering the matter; or 16
(c) refuses to approve the proposed rules. 17
(7) The Registrar must give the person who submitted the proposed rules to 18
the Registrar written notice of the reasons for acting under 19
subsection (6) (a) or (c). 20
25 Provisions relating to and approval of formation disclosure statement 21
(1) This section applies to a draft formation disclosure statement for a 22
co-operative required to be submitted to the Registrar under section 23. 23
(2) The draft formation disclosure statement for a distributing co-operative 24
must contain the information necessary to ensure prospective members 25
are adequately informed of the nature and extent of a person's financial 26
involvement or liability as a member of the co-operative including so 27
far as applicable: 28
(a) the estimated costs of formation; and 29
(b) the active membership provisions of the proposed co-operative; 30
and 31
(c) the rights and liabilities attaching to shares in the proposed 32
co-operative; and 33
(d) the capital required for the co-operative at the time of formation; 34
and 35
(e) the projected income and expenditure of the co-operative for its 36
first year of operation; and 37
Page 43
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(f) information about any contracts required to be entered into by the 1
co-operative; and 2
(g) any other information that the Registrar directs to be included. 3
(3) The draft formation disclosure statement for a non-distributing 4
co-operative must contain the information that the Registrar directs to 5
be included. 6
(4) The Registrar may: 7
(a) approve the draft statement as submitted; or 8
(b) amend the draft, or require a specified amendment of the draft, 9
and then approve the amended statement; or 10
(c) approve a different statement to that submitted; or 11
(d) refuse to approve the draft statement; or 12
(e) require the person submitting the draft statement to give the 13
Registrar any additional information the Registrar reasonably 14
requires, and then act under paragraph (a), (b), (c) or (d). 15
(5) Approval may be given at any time before the formation meeting is 16
held. 17
(6) Approval may be given with or without conditions. 18
(7) Subject to subsection (8), the Registrar approves of a formation 19
disclosure statement by giving written notice of the approval of the 20
statement to the person who submitted the draft statement to the 21
Registrar. 22
(8) The Registrar is taken to have approved the formation disclosure 23
statement (as submitted to the Registrar) at the end of the period of 24
28 days after the day it was submitted to the Registrar, unless before the 25
end of that period the Registrar gives written notice to the person who 26
submitted the draft statement that the Registrar: 27
(a) has approved a different formation disclosure statement to that 28
submitted; or 29
(b) is still considering the matter; or 30
(c) refuses to approve the formation disclosure statement. 31
(9) The Registrar must give the person who submitted the draft statement 32
to the Registrar written notice of the reasons for acting under 33
subsection (8) (a) or (c). 34
Note. Section 69 contains restrictions on advertising or publishing statements 35
about an offer, or intended offer, of shares in a distributing co-operative unless 36
a current formation disclosure statement relating to the shares is registered with 37
or approved by the Registrar. 38
Page 44
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 4 Registration of proposed co-operative 1
26 Application for registration of proposed co-operative 2
(1) An application for registration of a proposed co-operative (other than an 3
existing corporation) must: 4
(a) be made in the approved form; and 5
(b) be accompanied by the fee: 6
(i) prescribed by the National Regulations, unless 7
subparagraph (ii) applies; or 8
(ii) prescribed by the local regulations; and 9
(c) be signed by: 10
(i) in the case of a co-operative group--at least 2 directors; 11
and 12
(ii) in the case of any other proposed co-operative--at least 5, 13
or if a lesser number than 5 is approved by the Registrar at 14
least the approved number of, suitably qualified members, 15
including 2 directors elected at the formation meeting; and 16
(d) be accompanied by: 17
(i) 2 copies of the proposed rules signed and certified by the 18
persons who acted as chairperson and secretary at the 19
formation meeting; and 20
(ii) in the case of: 21
(A) a proposed distributing co-operative; or 22
(B) a proposed non-distributing co-operative that is 23
subject to a direction under section 23 (2); 24
a copy of the formation disclosure statement presented to 25
the formation meeting signed and certified by the persons 26
who acted as chairperson and secretary at the formation 27
meeting; and 28
(iii) a statement listing the name, address, occupation and place 29
and date of birth of each director; and 30
(iv) a statement of the address (located in this jurisdiction) of 31
the co-operative's registered office or proposed registered 32
office; and 33
(v) any other particulars the Registrar may require in a 34
particular case. 35
(2) The application must be filed with the Registrar within 2 months after 36
closure of the formation meeting for the proposed co-operative or 37
within the extended period that the Registrar may allow. 38
Page 45
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
27 Registration of proposed co-operative 1
(1) If an application is made under this Division for registration of a 2
proposed co-operative, the Registrar must register the co-operative and 3
its rules if the Registrar is satisfied that the requirements for registration 4
of the co-operative have been met. 5
(2) The requirements for registration of a co-operative under this Division 6
are as follows: 7
(a) the proposed rules of the proposed co-operative must be the rules 8
approved by the Registrar under section 24; 9
(b) the requirements of this Law must have been complied with in 10
relation to the proposed co-operative; 11
(c) the proposed co-operative must be designed to function under the 12
co-operative principles or, if it is not designed to function entirely 13
under the co-operative principles, the Registrar must be satisfied 14
there are special reasons why the co-operative should be 15
registered under this Law; 16
(d) there must be no reasonable cause for refusing registration of the 17
proposed co-operative. 18
(3) If the Registrar is not satisfied that the requirements for registration of 19
the co-operative have been met, the Registrar may refuse to register the 20
co-operative and its rules. 21
(4) The Registrar must give to the applicant written notice of the refusal and 22
the reasons for the refusal. 23
28 Incorporation and certificate of registration 24
(1) A co-operative becomes a corporation on being registered. 25
(2) On the registration of the co-operative, the Registrar must issue a 26
certificate of registration. 27
Division 5 Registration of existing corporation 28
29 Existing corporation can be registered 29
A corporation (other than a co-operative taken to be registered under 30
this Law) may apply to the Registrar to be registered as a co-operative 31
under this Law. 32
30 Formation meeting (existing corporation) 33
(1) Before applying for registration as a co-operative, the corporation must, 34
at the formation meeting, by a resolution approve of: 35
(a) the proposed registration; and 36
Page 46
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) any amendment of its existing constituent documents necessary 1
to enable the corporation to comply with this Law; and 2
(c) the proposed rules of the proposed co-operative approved under 3
section 24, including active membership provisions. 4
(2) The formation disclosure statement approved under section 25 must be 5
presented to the formation meeting, in the case of: 6
(a) a proposed distributing co-operative; or 7
(b) a proposed non-distributing co-operative that is the subject of a 8
direction under section 23 (2). 9
(3) A resolution under this section must have been passed by a two-thirds 10
majority of eligible members present at the formation meeting. 11
Note. Section 32 (5) provides that, despite anything to the contrary in this 12
Division, the registration of a corporation as a co-operative does not take effect 13
until the corporation ceases to be registered under the law under which it was 14
previously registered. 15
31 Application for registration of existing corporation 16
An application for the registration of an existing corporation must: 17
(a) be in the approved form; and 18
(b) be accompanied by the fee: 19
(i) prescribed by the National Regulations, unless 20
subparagraph (ii) applies; or 21
(ii) prescribed by the local regulations; and 22
(c) be accompanied by: 23
(i) a written declaration, signed no more than 28 days before 24
the application for registration by the directors or 25
committee of management of the corporation, stating that 26
at a meeting of the directors or committee they formed the 27
opinion that the corporation will be able to pay its debts as 28
they fall due; and 29
(ii) a report in the approved form as to the affairs of the 30
corporation and showing its assets and liabilities, made up 31
to the latest practicable date before the application; and 32
(iii) a copy of the constituent documents of the corporation in 33
force at the date of the application; and 34
(iv) 2 copies of the proposed rules of the co-operative, as 35
provided for by the special resolution; and 36
(v) in the case of a proposed distributing co-operative or in the 37
case of a proposed non-distributing co-operative that is 38
subject to a direction under section 23 (2)--a copy of the 39
formation disclosure statement presented to the meeting 40
Page 47
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
held under section 30, certified by the directors or 1
committee of management of the corporation; and 2
(vi) a list containing the name, address, occupation and place 3
and date of birth of each director; and 4
(vii) evidence to the satisfaction of the Registrar of the 5
incorporation of the corporation; and 6
(viii) a statement setting out the connection that the proposed 7
co-operative would have to this jurisdiction; and 8
(ix) a statement of the address (located in this jurisdiction) of 9
the co-operative's registered office or proposed registered 10
office; and 11
(x) any other particulars the Registrar may require in a 12
particular case. 13
32 Requirements for registration 14
(1) When an application is made for the registration of a corporation as a 15
co-operative under this Division, the Registrar must register the 16
corporation as a co-operative under this Law and register its rules under 17
this Law if the Registrar is satisfied the requirements for the registration 18
of the corporation as a co-operative have been met. 19
(2) The requirements for the registration of a corporation as a co-operative 20
under this Division are as follows: 21
(a) the proposed rules of the proposed co-operative must be the rules 22
approved by the Registrar under section 24; 23
(b) the requirements of this Law must have been complied with in 24
relation to the proposed co-operative; 25
(c) there must be no reasonable cause for refusing registration of the 26
proposed co-operative; 27
(d) the proposed co-operative must have a sufficient connection with 28
this jurisdiction. 29
(3) If the Registrar is not satisfied the requirements for registration of the 30
corporation as a co-operative have been met, the Registrar may refuse 31
to register the proposed co-operative and its rules and must give to the 32
applicant written notice of the refusal and the reasons for the refusal. 33
(4) If the Registrar has decided under this section to register a corporation 34
under this Law, the corporation must notify the authority responsible for 35
registering the corporation under the law under which it was previously 36
registered of that decision. 37
Page 48
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) Despite anything to the contrary in this Division, the registration of a 1
corporation as a co-operative does not take effect until the corporation 2
ceases to be registered under the law under which it was previously 3
registered. 4
(6) The corporation must notify the Registrar in writing within 7 days after 5
ceasing to be registered under that other law. 6
33 Certificate of registration 7
(1) On the registration of the corporation as a co-operative, the Registrar 8
must: 9
(a) issue a certificate of registration; and 10
(b) publish notice of the issue of the certificate by designated 11
instrument. 12
(2) The corporate name of a corporation registered as a co-operative is the 13
name approved by the Registrar, as stated in the certificate of 14
registration issued by the Registrar. 15
34 Effect of registration 16
(1) The corporation is to be taken to be incorporated under this Law on its 17
registration. 18
(2) Except as expressly provided in this Law, the registration and 19
incorporation of the corporation as a co-operative does not prejudice 20
any right of a member in relation to any shares held at the time of 21
registration and incorporation. 22
(3) The change of registration and incorporation does not affect the identity 23
of the corporation and it is taken to be the same body after registration 24
as a co-operative as it was before and no act, matter or thing is affected 25
by the change. 26
Division 6 Conversion of co-operative 27
35 Conversion of co-operative 28
(1) A co-operative may, by amendment of its rules, convert from: 29
(a) a co-operative with share capital to a co-operative without share 30
capital, or vice versa; or 31
(b) a distributing co-operative to a non-distributing co-operative, or 32
vice versa. 33
(2) An amendment of the rules for the conversion of a co-operative with 34
share capital to a co-operative without share capital cannot be passed 35
until at least 2 weeks after a notice has been published in a newspaper 36
Page 49
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
circulating generally in the district in which the registered office of the 1
co-operative is situated advising of the proposal to submit the proposed 2
amendment to members of the co-operative. 3
(3) An amendment of the rules for the conversion of a non-distributing 4
co-operative to a distributing co-operative does not have effect without 5
the prior approval of the Registrar under section 60. 6
(4) An amendment of the rules for the conversion of a co-operative must be 7
approved by special resolution passed by a special postal ballot. 8
(5) The Registrar may exempt: 9
(a) a co-operative from subsection (4) by designated instrument; or 10
(b) a class of co-operatives from subsection (4) by designated 11
instrument. 12
(6) An exemption may be given unconditionally or subject to conditions. 13
Division 7 General 14
36 Acceptance of money by proposed co-operative 15
(1) A proposed co-operative or any person on its behalf or otherwise who 16
accepts money for the proposed co-operative before the proposed 17
co-operative is registered must hold that money on trust until the 18
co-operative is registered. 19
(2) If a co-operative is not registered within 3 months after the acceptance 20
of money under subsection (1), the proposed co-operative or the person 21
who accepted the money on its behalf must refund the money to the 22
person who paid it. 23
Maximum penalty: $6,000. 24
37 Issue of duplicate certificate 25
The Registrar must issue a duplicate certificate of registration: 26
(a) if the Registrar is satisfied the original certificate is lost or 27
destroyed; and 28
(b) on payment of the fee: 29
(i) prescribed by the National Regulations, unless 30
subparagraph (ii) applies; or 31
(ii) prescribed by the local regulations. 32
Page 50
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Part 2.2 Legal capacity and powers 1
Division 1 General powers 2
38 Effect of incorporation 3
As a corporation, a co-operative: 4
(a) has perpetual succession; and 5
(b) may have a common seal; and 6
(c) may sue and be sued in its corporate name; and 7
(d) subject to this Law, is capable of taking, purchasing, leasing, 8
holding, selling and disposing of real and personal property; and 9
(e) may do and suffer all acts and things that corporations may by 10
law do and suffer and that are necessary or expedient. 11
39 Power to form companies and enter into joint ventures 12
Without limiting any other provision of this Law, a co-operative has 13
power: 14
(a) to form or participate in the formation of a corporation or unit 15
trust; and 16
(b) to acquire interests in and sell or otherwise dispose of interests in 17
corporations, unit trusts and joint ventures; and 18
(c) to form or enter into a partnership, joint venture or other 19
association with other persons or bodies. 20
Division 2 Doctrine of ultra vires not to apply 21
40 Interpretation 22
In this Division: 23
(a) a reference to the doing of an act by a co-operative includes a 24
reference to the making of an agreement by the co-operative and 25
a reference to a transfer of property to or by the co-operative; and 26
(b) a reference to legal capacity includes a reference to powers. 27
41 Doctrine of ultra vires not to apply 28
(1) The objects of this Division are: 29
(a) to provide that the doctrine of ultra vires does not apply to 30
co-operatives; and 31
(b) without affecting the validity of a co-operative's dealings with 32
others--to ensure the co-operative's officers and members give 33
Page 51
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
effect to the provisions of the rules of the co-operative relating to 1
the primary activities or powers of the co-operative. 2
(2) This Division is to be construed and to have effect in accordance with 3
subsection (1). 4
42 Legal capacity 5
(1) A co-operative has, both within and outside this jurisdiction, the legal 6
capacity of an individual. 7
(2) Without limiting subsection (1), a co-operative has, both within and 8
outside this jurisdiction, power: 9
(a) to issue and allot fully or partly paid shares in the co-operative; 10
and 11
(b) to issue debentures and CCUs of the co-operative; and 12
(c) to distribute any of the property of the co-operative among the 13
members, in kind or otherwise; and 14
(d) to give security by charging uncalled capital; and 15
(e) to grant a security interest in property of the co-operative; and 16
(f) to procure the co-operative to be registered or recognised as a 17
corporation in any place outside this jurisdiction; and 18
(g) to do any other act it is authorised to do by any other law 19
(including a law of a place outside this jurisdiction). 20
(3) The fact that the doing of an act by a co-operative would not be, or is 21
not, in its best interests does not affect its legal capacity to do the act. 22
(4) To avoid doubt, this section does not: 23
(a) authorise a co-operative to do an act that is prohibited by a law of 24
this jurisdiction; or 25
(b) give a co-operative a right that a law of this jurisdiction denies the 26
co-operative. 27
43 Rules may limit powers and set out objects (cf Corporations Act s 125) 28
(1) The rules of a co-operative may contain an express restriction on, or a 29
prohibition of, the co-operative's exercise of any of its powers, but the 30
exercise of a power by the co-operative is not invalid merely because it 31
is contrary to an express restriction or prohibition in the rules of the 32
co-operative. 33
(2) The rules of a co-operative may set out the co-operative's objects, but 34
an act of the co-operative is not invalid merely because it is contrary to 35
or beyond any objects in the rules of the co-operative. 36
Page 52
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 3 Persons having dealings with co-operatives 1
44 Entitlement to make assumptions 2
(1) A person may make the assumptions in section 45 in relation to: 3
(a) dealings with a co-operative; or 4
(b) dealings with a person who has, or purports to have, directly or 5
indirectly acquired title to property from a co-operative. 6
(2) If a person may assume a matter, the co-operative or anyone referred to 7
in subsection (1) (b) cannot assert in proceedings in relation to the 8
dealings that the matter is incorrect. 9
45 Assumptions (cf Corporations Act s 129) 10
(1) A person may assume that the rules of a co-operative have been 11
complied with. 12
(2) A person may assume that anyone who appears, from information 13
provided by the co-operative that is available to the public from the 14
Registrar, to be a director or secretary of the co-operative: 15
(a) has been duly appointed; and 16
(b) has authority to exercise the powers and perform the duties 17
customarily exercised or performed by a director or secretary of 18
a similar co-operative. 19
(3) A person may assume that anyone who is held out by the co-operative 20
to be an officer or agent of the co-operative: 21
(a) has been duly appointed; and 22
(b) has authority to exercise the powers and perform the duties 23
customarily exercised or performed by that kind of officer or 24
agent of a similar co-operative. 25
(4) A person may assume that the officers and agents of the co-operative 26
properly perform their duties to the co-operative. 27
(5) A person may assume that a document has been properly executed by 28
the co-operative if it is signed by 2 people, one of whom is, or may be 29
assumed to be, a director of the co-operative, and the other is, or may be 30
assumed to be, a director or secretary of the co-operative. 31
(6) A person may assume that a document has been sealed by the 32
co-operative if it bears what appears to be an impression of the 33
co-operative's common seal and the sealing of the document appears to 34
be witnessed by 2 people, one of whom is, or may be assumed to be, a 35
director of the co-operative, and the other is, or may be assumed to be, 36
a director or secretary of the co-operative. 37
Page 53
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(7) A person may assume that anyone who is, or may be assumed to be, an 1
officer or agent of the co-operative who has authority to issue a 2
document or a certified copy of a document on its behalf also has 3
authority to warrant that the document is genuine or is a true copy. 4
46 Person who knows or ought to know cannot make assumptions 5
This Division does not entitle a person to make an assumption, and does 6
not prevent an assertion being made in relation to an assumption, if: 7
(a) the person has actual knowledge that the assumption is not 8
correct; or 9
(b) the person ought to know that the assumption is not correct 10
because of the nature of the person's connection or relationship 11
with the co-operative. 12
47 Filing of documents not to constitute constructive knowledge 13
(1) A person is not considered to have knowledge of the rules of a 14
co-operative, any of the contents of the rules of a co-operative, a 15
document, the contents of a document, or any particulars, merely 16
because of either or both of the following: 17
(a) the rules, the document or the particulars have been filed with the 18
Registrar; 19
(b) the rules, the document or the particulars are mentioned in any 20
other document that has been filed with the Registrar, or filed 21
with a person under a previous law corresponding to a provision 22
of this Law. 23
(2) Despite subsection (1), a member of a co-operative is taken to have 24
knowledge of the rules of the co-operative. 25
48 Effect of fraud 26
(1) A person's entitlement under this Division to make an assumption is not 27
affected merely by the fact that any person: 28
(a) has acted or is acting fraudulently in relation to the dealing, 29
acquisition or purported acquisition of title to property to which 30
the assumption relates; or 31
(b) has forged a document that appears to have been sealed on behalf 32
of a co-operative. 33
(2) A person may not make an assumption if the person has actual 34
knowledge of the fraudulent action or forgery referred to in 35
subsection (1). 36
Page 54
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 4 Execution of documents 1
49 Execution of documents by co-operative (cf Corporations Act s 127) 2
(1) A co-operative may execute a document without using a common seal 3
if the document is signed by: 4
(a) 2 directors of the co-operative; or 5
(b) a director and the secretary of the co-operative. 6
(2) A co-operative with a common seal may execute a document if the seal 7
is fixed to the document and the fixing of the seal is witnessed by: 8
(a) 2 directors of the co-operative; or 9
(b) a director and the secretary of the co-operative. 10
(3) A co-operative may execute a document as a deed if the document is 11
expressed to be executed as a deed and is executed in accordance with 12
subsection (1) or (2). 13
(4) This section does not limit the ways in which a co-operative may 14
execute a document (including a deed). 15
50 Agent exercising co-operative's power to make contracts (cf Corporations 16
Act s 126) 17
(1) A co-operative's power to make, vary, ratify or discharge a contract 18
may be exercised by an individual acting with the co-operative's 19
express or implied authority and on behalf of the co-operative. 20
(2) The power may be exercised without using a common seal. 21
(3) This section does not affect the operation of a law that requires a 22
particular procedure to be complied with in relation to the contract. 23
51 Other requirements as to consent or sanction not affected 24
This Division does not affect the operation of a law that requires some 25
consent or sanction to be obtained, or some procedure to be complied 26
with, in relation to the making, varying or discharging of a contract. 27
Division 5 Pre-registration contracts 28
52 Contracts before registration 29
(1) If a person enters into, or purports to enter into, a contract on behalf of, 30
or for the benefit of, a proposed co-operative (pre-registration 31
contract), the co-operative becomes bound by the contract and entitled 32
Page 55
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
to its benefit if the co-operative, or a co-operative that is reasonably 1
identifiable with it, is registered and ratifies the contract: 2
(a) within a reasonable period after the contract is entered into; or 3
(b) within any period agreed to by the parties to the contract. 4
(2) The person is released from any liability under the pre-registration 5
contract if the co-operative enters into another contract in substitution 6
for it: 7
(a) within a reasonable period after the pre-registration contract is 8
entered into; or 9
(b) within any period agreed to by the parties to the pre-registration 10
contract. 11
(3) The person is liable to pay damages to each other party to the 12
pre-registration contract if a co-operative is not registered, or a 13
co-operative is registered but does not ratify the contract or enter into a 14
substitute for it: 15
(a) within a reasonable period after the contract is entered into; or 16
(b) within the period agreed to by the parties to the contract. 17
(4) The maximum amount of damages the person is liable to pay to a party 18
is the amount the co-operative would be liable to pay to the party if the 19
co-operative had been registered and had ratified the contract and then 20
completely failed to perform it. 21
(5) If proceedings are brought to recover damages under subsection (3) 22
because the co-operative is registered but does not ratify the 23
pre-registration contract or enter into a substitute for it, the court may 24
do anything it thinks just in the circumstances, including ordering the 25
co-operative: 26
(a) to pay all or part of the damages the person is liable to pay; or 27
(b) to transfer property the co-operative received because of the 28
contract to a party to the contract; or 29
(c) to pay an amount to a party to the contract. 30
(6) If the co-operative ratifies the pre-registration contract but fails to 31
perform all or part of it, the court may order the person to pay all or part 32
of the damages that the co-operative is ordered to pay. 33
53 Person may be released from liability but is not entitled to indemnity 34
(1) Any of the parties to the pre-registration contract may release the person 35
who entered into, or purported to enter into, the contract from any 36
liability in relation to that contract. 37
(2) The release must be in writing. 38
Page 56
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) The party giving the release cannot recover damages under section 52 1
from the person. 2
(4) Despite any rule of law or equity, the person does not have a right of 3
indemnity against the co-operative in relation to the person's liability 4
under this Division even if the person was acting, or purporting to act, 5
as trustee for the co-operative. 6
54 This Division replaces other rights and liabilities 7
This Division replaces any rights or liabilities anyone would otherwise 8
have in relation to the pre-registration contract. 9
Part 2.3 Rules 10
Division 1 Rules of a co-operative 11
55 Effect of rules 12
(1) The rules of a co-operative have the effect of a contract under seal: 13
(a) between the co-operative and each member; and 14
(b) between the co-operative and each director, the chief executive 15
officer and the secretary of the co-operative; and 16
(c) between a member and each other member. 17
(2) Under the contract, each of those persons agrees to observe and perform 18
the provisions of the rules as in force for the time being so far as those 19
provisions apply to the person. 20
56 Content of rules 21
(1) The rules of a co-operative must state or otherwise make provision for 22
the matters included in Schedule 1. 23
(2) The rules must be divided into consecutively numbered paragraphs. 24
(3) The rules may state the objects of the co-operative. 25
(4) The rules may adopt by reference all or any of the provisions of the 26
model rules, as provided in Division 2. 27
(5) The rules may provide for the imposition of a fine on a member for an 28
infringement of the rules. 29
(6) If the rules provide for the imposition of a fine, the rules must state the 30
maximum fine that may be imposed on a member. 31
(7) The maximum fine fixed by the rules must not be more than any amount 32
prescribed by the National Regulations as the maximum fine. 33
Page 57
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(8) The rules may contain other provisions not inconsistent with this Law. 1
57 Purchase and inspection of copy of rules 2
(1) Any member is entitled to obtain from a co-operative a copy of its rules 3
on payment of the amount required by the rules of the co-operative or, 4
if the rules do not prescribe an amount, on payment of $5. 5
(2) The amount required by the rules must not be more than the fee: 6
(a) prescribed by the National Regulations, unless paragraph (b) 7
applies; or 8
(b) prescribed by the local regulations; 9
for obtaining a copy of the rules from the Registrar. 10
(3) Any person is entitled to obtain from the Registrar a copy of the rules of 11
a co-operative on payment of the fee: 12
(a) prescribed by the National Regulations, unless paragraph (b) 13
applies; or 14
(b) prescribed by the local regulations. 15
58 False copies of rules 16
(1) A person must not give to a member of a co-operative or to a person 17
intending or applying to become a member of a co-operative a copy of 18
any rules or any amendments of rules, other than those that have been 19
registered, representing that they are binding on the members of the 20
co-operative. 21
(2) A person must not amend any of the rules of a co-operative after they 22
have been registered and circulate the amended rules representing that 23
they have been registered when they have not been. 24
Maximum penalty: $1,000. 25
59 Rules can only be amended under this Law 26
The rules of a co-operative cannot be amended except under this Law. 27
60 Approval of certain rule amendments 28
(1) This section applies to: 29
(a) an amendment of rules that is referred to in subsection (2); and 30
(b) an amendment of rules that are referred to in section 35 (3) 31
relating to the conversion of a non-distributing co-operative to a 32
distributing co-operative. 33
(2) The Registrar may, by designated instrument, specify for the purposes 34
of this section classes of amendments that must not be made to the rules 35
of a co-operative without the prior approval of the Registrar, and 36
Page 58
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
without limitation may do so by reference to classes or subclasses of 1
matters referred to in Schedule 1. 2
(3) A proposed amendment to which this section applies must be approved 3
by the Registrar before the resolution amending the rules is passed by a 4
co-operative or the board of a co-operative. 5
(4) A draft of the proposed amendment must be submitted to the Registrar 6
before: 7
(a) the notice of the proposed special resolution amending the rules 8
is given to the members by the co-operative; or 9
(b) the resolution is passed by the board of the co-operative. 10
(5) The proposed amendment must: 11
(a) be in accordance with section 56; and 12
(b) be in a form that may reasonably be approved; and 13
(c) be accompanied by a statement stating the reasons for the 14
amendment. 15
(6) The Registrar may: 16
(a) approve the amendment as submitted; or 17
(b) approve a different amendment to that submitted; or 18
(c) refuse to approve the amendment; or 19
(d) require the person submitting the draft amendment to give the 20
Registrar any additional information the Registrar reasonably 21
requires, and then act under paragraph (a), (b) or (c). 22
(7) Subject to subsection (8), the Registrar approves of the amendment by 23
giving written notice of the approval of the amendment to the person 24
who submitted the draft amendment to the Registrar. 25
(8) The Registrar is taken to have approved the proposed amendment (as 26
submitted to the Registrar) at the end of the period of 28 days after it was 27
submitted, unless before the end of that period the Registrar gives 28
written notice to the person who submitted it that the Registrar: 29
(a) has approved a different amendment to that submitted; or 30
(b) is still considering the matter; or 31
(c) refuses to approve the proposed amendment. 32
(9) The Registrar must give the person who submitted the draft amendment 33
to the Registrar written notice of the reasons for acting under 34
subsection (8) (a) or (c). 35
Page 59
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
61 Amendment by special resolution 1
The rules of a co-operative may only be amended by special resolution 2
unless this Law otherwise provides. 3
62 Amendment by resolution of board 4
(1) The rules of a co-operative may be amended by a resolution passed by 5
the board if the amendment does no more than give effect to a 6
requirement, direction, restriction or prohibition imposed or given 7
under the authority of this Law. 8
(2) If the rules of a co-operative are amended under this section, the 9
co-operative must cause the amendment to be notified in writing to its 10
members as soon as practicable after the amendment takes effect and in 11
any event no later than the day when notice of the next annual general 12
meeting of the co-operative after the amendment takes effect is given to 13
the members. 14
63 Amendment does not take effect until registered 15
(1) An amendment of the rules of a co-operative does not take effect unless 16
and until it is registered by the Registrar. 17
(2) An application for registration of an amendment must: 18
(a) be made in the approved form; and 19
(b) be made within 28 days, or a shorter or longer time prescribed by 20
the National Regulations, after the amendment is made; and 21
(c) be accompanied by a consolidated copy of the rules of the 22
co-operative, including the amendment. 23
(3) The Registrar must register the amendment unless: 24
(a) the Registrar is satisfied the amendment is contrary to this Law; 25
or 26
(b) the Registrar has other reasonable cause to refuse to register the 27
amendment. 28
(4) A certificate of registration of an amendment of the rules of a 29
co-operative given by the Registrar is, in favour of any person 30
advancing money to the co-operative on the faith of the certificate or a 31
guarantor of that advance, evidence that the amendment in the rules was 32
properly made. 33
Page 60
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 2 Model rules 1
64 Model rules 2
(1) The National Regulations may prescribe model rules. 3
(2) The model rules may make provision for anything for which the rules 4
of a co-operative may make provision. 5
(3) A model rule commences on: 6
(a) the day occurring 28 days after the date of publication of the 7
National Regulations containing the model rule; or 8
(b) a later day specified in, or ascertained in accordance with, the 9
model rule or the National Regulations. 10
(4) A model rule may apply generally or be limited in its application to a 11
specified class of co-operatives. 12
65 Adoption of model rules 13
The rules of a co-operative may adopt by reference all or any of the 14
provisions of the model rules: 15
(a) as in force from time to time, unless paragraph (b) applies; or 16
(b) as in force at a particular time, if the rules so provide. 17
66 Relationship of this Division to Division 1 18
If the rules of a co-operative adopt a model rule as in force from time to 19
time and the model rule is amended, Division 1 does not require the 20
amendment (so far as it affects the rules of the co-operative) to be 21
approved or registered before the amendment takes effect in relation to 22
the co-operative. 23
Part 2.4 Shares 24
Division 1 Nature of share 25
67 Nature of share in co-operative 26
(1) A share or other interest in a co-operative: 27
(a) is personal property; and 28
(b) is transferable or transmissible as provided by this Law and the 29
rules of the co-operative; and 30
(c) is, subject to the rules of the co-operative, capable of devolution 31
by will or by operation of law. 32
Page 61
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) Subject to subsection (1): 1
(a) the laws applying to ownership of and dealing with personal 2
property apply to a share or other interest of a member in a 3
co-operative as they apply to other property; and 4
(b) equitable interests in a share or other interest of a member in a 5
co-operative may be created, dealt with and enforced as in the 6
case of other personal property. 7
Division 2 Disclosure requirements for distributing 8
co-operatives 9
68 Registration of current disclosure statement 10
(1) A distributing co-operative must take all reasonable steps to ensure that 11
it has a current disclosure statement registered with the Registrar. 12
(2) The disclosure statement must contain the information necessary to 13
ensure prospective members are adequately informed of the nature and 14
extent of a person's financial involvement or liability as a member of 15
the co-operative including so far as applicable: 16
(a) the active membership provisions of the co-operative; and 17
(b) the rights and liabilities attaching to shares in the co-operative; 18
and 19
(c) any other information that the Registrar directs to be included. 20
(3) A formation disclosure statement approved by the Registrar under 21
section 25 is taken to be registered with the Registrar for the purposes 22
of this section until it stops being current under subsection (4). 23
(4) A disclosure statement stops being current when: 24
(a) a change occurs in the rights or liabilities attaching to any class 25
of share in the co-operative; or 26
(b) a significant change occurs in the financial position or prospects 27
of the co-operative. 28
(5) The co-operative must register a new disclosure statement with the 29
Registrar when the currently registered disclosure statement stops being 30
current, and must do so within 14 days (or a longer period approved by 31
the Registrar) after it stops being current. 32
Maximum penalty: $1,000. 33
Page 62
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
69 Restrictions on advertising and publicity (cf Corporations Act s 734) 1
(1) A person must not: 2
(a) advertise; or 3
(b) publish a statement that directly or indirectly refers to; 4
an offer, or intended offer, of shares in a distributing co-operative unless 5
a current disclosure statement relating to the shares is: 6
(c) registered with the Registrar under section 68; or 7
(d) lodged with the Registrar for registration under section 68. 8
Maximum penalty: $1,000. 9
(2) Subsection (1) applies in relation to shares in a distributing co-operative 10
only if: 11
(a) the shares are offered to persons who are not shareholders in the 12
co-operative; or 13
(b) the invitation is made to persons who are not shareholders in the 14
co-operative. 15
(3) A person does not contravene subsection (1) by publishing an 16
advertisement or statement if they publish it in the ordinary course of a 17
business of: 18
(a) publishing a newspaper or magazine; or 19
(b) broadcasting by radio or television; 20
and the person did not know and had no reason to suspect that its 21
publication would amount to a contravention of a provision of that 22
subsection. 23
(4) An offence based on subsection (1) is an offence of strict liability. 24
70 Disclosure to intending shareholders in distributing co-operative 25
(1) The board of a distributing co-operative must give a person who intends 26
to acquire shares in the co-operative and is not already a shareholder in 27
the co-operative: 28
(a) a current disclosure statement; and 29
(b) any other information the Registrar directs. 30
(2) The disclosure statement and any other information required under 31
subsection (1) and Part 2.5 must be given before the person becomes 32
bound to acquire the shares. 33
Page 63
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
71 Exemptions from disclosure statements 1
(1) The Registrar may, by designated instrument, exempt a co-operative or 2
class of co-operatives from any or all of the provisions of this Division. 3
(2) An exemption under subsection (1) may be given only if the Registrar 4
is satisfied that compliance with the requirement would be 5
inappropriate in the circumstances or would impose an unreasonable 6
burden. 7
(3) An exemption may be given unconditionally or subject to conditions. 8
Division 3 Compensation for defective disclosure 9
72 Contravention leading to right to recover for loss or damage (cf 10
Corporations Act s 728) 11
A co-operative contravenes this section if a disclosure statement is 12
given to a person under section 70 and: 13
(a) there is: 14
(i) a misleading or deceptive statement in the disclosure 15
statement or in any application form or document that 16
accompanies the disclosure statement; or 17
(ii) an omission from the disclosure statement of material or 18
information required to be contained in the statement by or 19
under this Law; 20
and the misleading or deceptive statement or the omission is 21
materially adverse from the point of view of the person to whom 22
it is given; or 23
(b) the disclosure statement is not current (as referred to in 24
section 70 (1)). 25
73 Right to recover for loss or damage resulting from contravention (cf 26
Corporations Act s 729) 27
(1) A person who suffers loss or damage because of a contravention of 28
section 72 in relation to a co-operative may recover the amount of the 29
loss or damage from a person referred to in a following paragraph if the 30
loss or damage is one that the paragraph makes the person liable for, 31
even if the person did not commit, and was not involved in, the 32
contravention: 33
(a) the co-operative is liable for loss or damage caused by any 34
contravention of section 72 in relation to the disclosure 35
statement; 36
(b) each director of the co-operative is liable for loss or damage 37
caused by any contravention of section 72 in relation to the 38
disclosure statement; 39
Page 64
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(c) a person named in the disclosure statement with their consent as 1
having made a statement (see section 615): 2
(i) that is included in the disclosure statement; or 3
(ii) on which a statement made in the disclosure statement is 4
based; 5
is liable for loss or damage caused by the inclusion of the 6
statement in the disclosure statement; 7
(d) a person who is involved in the contravention of section 72 is 8
liable for loss or damage caused by that contravention. 9
(2) An action under subsection (1) may begin at any time within 6 years 10
after the day on which the cause of action arose. 11
(3) This Division does not affect any liability that a person has under any 12
other law. 13
Note. Section 9 defines "involved" in a contravention. 14
74 Due diligence defence (cf Corporations Act s731) 15
(1) A person is not liable under this Division in relation to a contravention 16
of section 72 because of a misleading or deceptive statement if the 17
person proves they: 18
(a) made all inquiries (if any) that were reasonable in the 19
circumstances; and 20
(b) after doing so, believed on reasonable grounds that the statement 21
was not misleading or deceptive. 22
(2) A person is not liable under this Division in relation to a contravention 23
of section 72 because of an omission from a disclosure statement in 24
relation to a particular matter or particular information if the person 25
proves they: 26
(a) made all inquiries (if any) that were reasonable in the 27
circumstances; and 28
(b) after doing so, believed on reasonable grounds that there was no 29
omission from the statement in relation to that matter or 30
information. 31
(3) A person is not liable under this Division in relation to a contravention 32
of section 72 because a disclosure statement is not current if the person 33
proves they: 34
(a) made all inquiries (if any) that were reasonable in the 35
circumstances; and 36
(b) after doing so, believed on reasonable grounds that the statement 37
was current. 38
Page 65
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
75 General defences (cf Corporations Act s 733) 1
(1) A person is not liable under this Division in relation to a contravention 2
of section 72 because of a misleading or deceptive statement in, or an 3
omission from, a disclosure statement if the person proves that they 4
placed reasonable reliance on information given to them by: 5
(a) if the person is a body--someone other than a director, employee 6
or agent of the body; or 7
(b) if the person is an individual--someone other than an employee 8
or agent of the individual. 9
(2) For the purposes of subsection (1), a person is not the agent of a body 10
or individual merely because they perform a particular professional or 11
advisory function for the body or individual. 12
(3) A person is not liable under this Division in relation to a contravention 13
of section 72 because a disclosure statement is not current if the person 14
proves that they were not aware of the circumstance or event that caused 15
the statement to cease to be current. 16
Division 4 Issue of shares 17
76 Shares--general 18
(1) The share capital of a co-operative varies in amount according to the 19
nominal value of shares from time to time subscribed. 20
(2) Shares are to be of a fixed amount that must be specified in the rules of 21
the co-operative. 22
(3) A co-operative may have more than one class of shares if the 23
shareholding and the rights of shareholders comply with the 24
co-operative principles. 25
(4) Subject to this Part and Part 2.5, shares must not be issued to a 26
non-member. 27
77 Minimum number of shares to be subscribed for 28
(1) A member of a co-operative with share capital must subscribe for such 29
minimum number of shares (if any) as may be required by the rules of 30
the co-operative. 31
(2) The minimum number may be determined by reference to the use made 32
by the member of the co-operative or in any other manner specified in 33
the rules of the co-operative. 34
(3) An amendment of the rules of the co-operative as to the minimum 35
number of shares to be subscribed for does not operate to require an 36
existing member of the co-operative to subscribe for additional shares, 37
Page 66
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
but an existing member is not prevented from agreeing to subscribe for 1
additional shares. 2
(4) This section does not affect section 82. 3
78 Minimum paid up amount 4
(1) A share must not be allotted unless at least 10% of the nominal value of 5
the share has been paid. 6
(2) Any balance unpaid for shares at the time of allotment must be paid in 7
a way specified in the rules of the co-operative or permitted by this Law. 8
(3) This section does not apply to a bonus share issued under section 83 9
or 357. 10
(4) This section does not affect shares issued before the commencement of 11
this section in this jurisdiction if the Co-operatives National Law Act of 12
this jurisdiction so provides. 13
79 Shares not to be issued at a discount 14
A co-operative must not issue shares at a discount. 15
80 Issue of shares at a premium 16
(1) A distributing co-operative may issue shares at a premium. 17
(2) A premium may be in the form of cash or other valuable consideration. 18
(3) If a distributing co-operative issues shares for which it receives a 19
premium, an amount equal to the total amount or value of the premiums 20
on the shares must be transferred to a share premium account. 21
(4) The share premium account is to be treated as paid-up share capital of 22
the distributing co-operative and may be applied in one or more of the 23
following ways: 24
(a) in paying up unissued shares to be issued to members of the 25
co-operative as fully paid bonus shares; 26
(b) in paying up, in whole or in part, the balance unpaid on shares 27
previously issued to members of the co-operative; 28
(c) in the payment of dividends, if the dividends are satisfied by the 29
issue of shares to members of the co-operative; 30
(d) in writing off the preliminary expenses of the co-operative; 31
(e) in providing for the premium payable on redemption of shares, 32
debentures or CCUs. 33
Page 67
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
81 Joint ownership of shares 1
A share may be held by 2 or more persons jointly, unless the rules of the 2
co-operative otherwise provide. 3
82 Members may be required to take up additional shares 4
(1) The board of a distributing co-operative may require a member to take 5
up or subscribe for additional shares under a proposal approved by a 6
special resolution of the co-operative passed by a special postal ballot. 7
(2) The board of a distributing co-operative may deduct amounts in 8
payment for additional shares from money payable to members for 9
dealings with the co-operative, under a proposal approved by a special 10
resolution of the co-operative passed by a special postal ballot. 11
(3) A proposal to require a member to take up or subscribe for additional 12
shares must: 13
(a) be accompanied by a disclosure statement, registered by the 14
Registrar, that explains the purpose for which the funds raised by 15
the issue of the additional shares are to be used; and 16
(b) clearly show the total number of additional shares to be issued 17
and the basis on which the shares are to be apportioned among 18
members; and 19
(c) be accompanied by a statement informing the member that the 20
member may inform the board by notice on or before the date 21
stated in the statement (being a date before the passing of the 22
special resolution) that the member resigns on the passing of the 23
special resolution. 24
(4) A proposal to deduct amounts in payment for additional shares from 25
amounts payable to members for their dealings with the distributing 26
co-operative must clearly show: 27
(a) the basis on which the deductions are to be made; and 28
(b) the time and way of making those deductions. 29
(5) A proposal approved under this section is binding on: 30
(a) all members of the distributing co-operative at the date of the 31
passing of the special resolution, other than a member who has 32
given a notice of resignation under subsection (3) (c); and 33
(b) all persons who become members of the distributing co-operative 34
after that date and before the total number of shares to be issued 35
under the proposal has been issued. 36
(6) The requirements in respect of a proposal to take up additional shares 37
under subsection (3) do not apply to the issue of bonus shares under 38
section 80 (4) (a), 83 or 357. 39
Page 68
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
83 Bonus share issues 1
(1) A distributing co-operative may issue bonus shares to members of the 2
co-operative if the assets of the co-operative: 3
(a) have been sold at a profit; or 4
(b) have been revalued at a greater value than that disclosed before 5
the revaluation in the books of the co-operative. 6
(2) This section does not apply if the assets were acquired for resale at a 7
profit. 8
84 Restrictions on bonus shares 9
Bonus shares may be issued under section 83 subject to the following 10
restrictions: 11
(a) each issue must have been approved by a special resolution of the 12
co-operative; 13
(b) they are to be issued as fully paid-up shares with no payment 14
required to be made by a member of the co-operative to whom 15
they are issued; 16
(c) they are to be issued only for shares of the same class of shares 17
that are fully paid-up as at the date of issue of the bonus shares; 18
(d) the total nominal value of bonus shares issued by a co-operative 19
in any period of 12 months must not be more than 20%, or 20
another percentage prescribed under the National Regulations, of 21
the nominal value of the issued share capital of the co-operative 22
immediately before the date of issue of the bonus shares. 23
85 Notice about bonus shares 24
Notice of the meeting or postal ballot at which a resolution is to be 25
proposed as a special resolution to approve a bonus share issue under 26
section 83 must be accompanied by: 27
(a) a statement of the value of the assets concerned as disclosed in the 28
books of the co-operative before the sale or revaluation; and 29
(b) if the issue arises from, or partly from, a sale of assets--a 30
statement of the price for which the assets were sold; and 31
(c) if the issue arises from, or partly from, a revaluation of assets--a 32
certificate of value of the assets, being a certificate given in 33
relation to a valuation made not more than one year before the 34
date of the notice by: 35
(i) a person prescribed by the National Regulations; or 36
(ii) a person having qualifications prescribed by the National 37
Regulations; and 38
Page 69
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(d) particulars of acquisitions of shares in the co-operative made 1
within the 3 years immediately preceding the date of the notice 2
by or on behalf of each of its directors and his or her spouse or de 3
facto partner and the father, mother, children, brothers and sisters 4
of each director and each spouse or de facto partner; and 5
(e) a certificate signed by 2 directors of the co-operative stating that 6
to the best of their knowledge and belief the issue of bonus shares 7
would not be imprudent and no circumstances are known to them 8
as to why the issue should not take place. 9
Division 5 Provisions applying to particular share 10
subscriptions 11
86 Definition 12
In this Division: 13
disclosure statement means a disclosure statement, of any type, under 14
this Law. 15
87 Application of this Division 16
This Division applies in relation to shares in a co-operative only if: 17
(a) the shares are offered to persons who are not shareholders in the 18
co-operative; or 19
(b) the invitation is made to persons who are not shareholders in the 20
co-operative. 21
88 Application money to be held on trust (cf Corporations Act s 722) 22
(1) If a person offers shares for issue or sale under a disclosure statement, 23
the person must hold: 24
(a) all application money received from people applying for shares 25
under the disclosure statement; and 26
(b) all other money paid by them on account of the shares before they 27
are issued or transferred; 28
in trust under this section for the applicants until: 29
(c) the shares are issued or transferred; or 30
(d) the money is returned to the applicants. 31
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 32
(2) If the application money needs to be returned to an applicant, the person 33
must return the money as soon as practicable. 34
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 35
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 36
Page 70
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
89 Minimum subscription condition must be fulfilled before issue or 1
transfer (cf Corporations Act s 723 (2)) 2
If a disclosure statement for an offer of shares states that the shares will 3
not be issued or transferred unless: 4
(a) applications for a minimum number of the shares are received; or 5
(b) a minimum amount is raised; 6
the person making the offer must not issue or transfer any of the shares 7
until that condition is satisfied. For the purpose of working out whether 8
the condition has been satisfied, a person who has agreed to take 9
securities as underwriter is taken to have applied for those shares. 10
Note 1. Under section 88, the application money must be held in trust until the 11
issue or transfer of the shares. 12
Note 2. This section prevents the issue or transfer of the shares not only to 13
those who apply for them in response to the disclosure statement but also to 14
those who do not need to apply for them (for example, because they are to take 15
the securities under an underwriting agreement). 16
90 Repayment of money if disclosure statement condition not met (cf 17
Corporations Act s 724 (1) (a), (1A) and (2) (a)) 18
(1) If: 19
(a) a person offers shares under a disclosure statement; and 20
(b) the disclosure statement states (expressly or impliedly) that it is a 21
condition that the shares will not be issued or transferred unless: 22
(i) applications for a minimum number of the shares are 23
received; or 24
(ii) a minimum amount is raised; and 25
(c) that condition is not satisfied within 4 months after the date of the 26
disclosure statement; 27
the person must repay the money received by the person in respect of 28
any applications for the shares made under the disclosure statement that 29
have not resulted in an issue or transfer of the shares. 30
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 31
(2) For the purpose of working out whether a condition referred to in 32
subsection (1) has been satisfied, a person who has agreed to take shares 33
as underwriter is taken to have applied for those shares. 34
(3) An offence based on subsection (1) is an offence of strict liability. 35
Page 71
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 6 Disclosure and registration of interests in shares 1
91 Direction to disclose (cf Corporations Act s 672A (1)) 2
The board of a co-operative may direct: 3
(a) a member of the co-operative; or 4
(b) a person named in a previous disclosure under section 92 as 5
having a relevant interest in, or having given instructions about, 6
shares in the co-operative; 7
to make the disclosure required by section 92. 8
92 Disclosure by member of relevant interests and instructions (cf 9
Corporations Act s 672B) 10
(1) A person given a direction under section 91 must disclose in writing to 11
the board of the co-operative giving the direction: 12
(a) full details of their own relevant interest in the shares and of the 13
circumstances that give rise to that interest; and 14
(b) the name and address of each other person who has a relevant 15
interest in any of the shares together with full details of: 16
(i) the nature and extent of the interest; and 17
(ii) the circumstances that give rise to the other person's 18
interest; and 19
(c) the name and address of each person who has given the person 20
instructions about: 21
(i) the acquisition or disposal of the shares; or 22
(ii) the exercise of any voting or other rights attached to the 23
shares; or 24
(iii) any other matter relating to the shares or interests; 25
together with full details of those instructions (including the date 26
or dates on which they were given). 27
Maximum penalty: $1,000 or imprisonment for 3 months, or both. 28
(2) However, a matter referred to in subsection (1) (b) or (c) need be 29
disclosed only to the extent to which it is known to the person required 30
to make the disclosure. 31
(3) An offence based on subsection (1) is an offence of strict liability. 32
(4) A defendant bears an evidential burden in relation to the matter in 33
subsection (2). 34
Page 72
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) The disclosure must be made within 5 business days after: 1
(a) the person is given the direction; or 2
(b) if the person applies for an exemption under subsection (6) from 3
complying with the direction and the Registrar refuses to grant 4
the exemption--the Registrar notifies the person of the 5
Registrar's decision on the application. 6
(6) The Registrar may, by designated instrument, exempt a person from 7
complying with a direction if the Registrar believes the direction is 8
unjustified. 9
(7) The person does not have to comply with a direction given by the 10
co-operative if the person proves that the giving of the direction is 11
vexatious. 12
(8) A board that receives information from a person acting on a direction 13
given to the person by the board must pay to the person the fee (if any): 14
(a) prescribed by the National Regulations, except to the extent 15
paragraph (b) applies; or 16
(b) prescribed by the local regulations. 17
93 Registration as trustee, executor or administrator on death of owner of 18
shares 19
(1) A trustee, executor or administrator of the estate of a dead person who 20
was the registered holder of a share in a co-operative may be registered 21
as the holder of the share as trustee, executor or administrator of the 22
estate. 23
(2) A trustee, executor or administrator of the estate of a dead person who 24
was entitled in equity to a share in a co-operative may, with the consent 25
of the co-operative and of the registered holder of the share, be 26
registered as the holder of the share as trustee, executor or administrator 27
of the estate. 28
94 Registration as administrator of estate on incapacity of shareholder 29
(1) This section applies to a person (the appointed person) who is 30
appointed under a law of a jurisdiction relating to the administration of 31
the estates of persons who, through mental or physical infirmity, are 32
incapable of managing their affairs, to administer the estate of another 33
person (the incapable person). 34
(2) If the incapable person is the registered holder of a share in a 35
co-operative, the appointed person may be registered as the holder of 36
the share as administrator of the estate of the incapable person. 37
Page 73
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) If the incapable person is entitled in equity to a share in a co-operative, 1
the appointed person may, with the consent of the co-operative and of 2
the registered holder of the share, be registered as the holder of the share 3
as administrator of the estate of the incapable person. 4
95 Registration as Official Trustee in Bankruptcy 5
(1) This section applies when a share in a co-operative that is the property 6
of a bankrupt vests by force of the Bankruptcy Act 1966 of the 7
Commonwealth in the Official Trustee in Bankruptcy. 8
(2) If the bankrupt is the registered holder of the share, the official trustee 9
may be registered as the holder of the share as the Official Trustee in 10
Bankruptcy. 11
(3) If the bankrupt is entitled in equity to the share, the official trustee may, 12
with the consent of the co-operative and of the registered holder of the 13
share, be registered as the holder of the share as the Official Trustee in 14
Bankruptcy. 15
96 Liabilities of person registered as trustee or administrator 16
(1) A person registered under section 93, 94 or 95 is, while so registered, 17
subject to the same liabilities in relation to the share as the liabilities to 18
which the person would have been subject if the share had remained, or 19
had been, registered in the name of the dead person, the incapable 20
person or the bankrupt. 21
(2) The person registered is subject to no other liabilities in relation to the 22
share. 23
97 Notice of trusts in register of members 24
Shares held by a trustee under a particular trust may, with the consent 25
of the co-operative, be marked in the register of members in a way that 26
identifies the shares as being held under the trust. 27
98 No notice of trust except as provided by this Division 28
Except as provided in this Division: 29
(a) no notice of a trust, whether express, implied or constructive, is 30
to be entered on a register or be receivable by the Registrar; and 31
(b) no liabilities are affected by anything done under this Division; 32
and 33
(c) nothing done under this Division affects a co-operative with 34
notice of a trust. 35
Page 74
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 7 Sale or transfer of shares 1
99 Sale or transfer of shares 2
A share in a co-operative cannot be sold or transferred except: 3
(a) on the death of a member--under Division 8; or 4
(b) to a person appointed to administer the estate of a shareholder 5
under a law relating to the administration of the estates of persons 6
who, through mental or physical infirmity, are incapable of 7
managing their affairs; or 8
(c) with the consent of the board--to any person, if there are 9
reasonable grounds for believing the person will be an active 10
member of the co-operative. 11
100 Sale or transfer of shares to be subject to rules 12
(1) A share in a co-operative cannot be sold or transferred except under the 13
rules of the co-operative. 14
(2) Without limiting subsection (1), a share in a co-operative cannot be sold 15
or transferred to 2 or more persons jointly if the rules of the co-operative 16
do not (either generally or in the circumstances of the particular case) 17
allow the share to be held jointly. 18
101 Transfer not effective until registered 19
The transfer (by sale or otherwise) of a share in a co-operative is not 20
effective until the transfer is registered and the name of the transferee is 21
entered in the register of members in respect of the share. 22
Division 8 Transfer of shares and other interests on death of 23
member 24
102 Meaning of "interest" 25
In this Division: 26
interest, of a deceased member, in a co-operative, includes: 27
(a) the member's membership; and 28
(b) any credit balance payable to the member; and 29
(c) any loan from or to, or deposit with, the co-operative; and 30
(d) any surplus arising on the sale by the co-operative as mortgagee 31
of any property mortgaged by the deceased to the co-operative. 32
Page 75
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
103 Transfer of shares and other interests on death of member 1
(1) On the death of a member of a co-operative, the board must transfer the 2
deceased member's share or interest in the co-operative to: 3
(a) the personal representative of the deceased member; or 4
(b) one or more persons that the deceased's personal representative 5
specifies in an application for transfer made to the co-operative 6
within 3 months after the death of the member. 7
(2) On the death of a member of a co-operative, the member's share or 8
interest in the co-operative cannot be transferred to a person other than 9
the personal representative of the deceased member except with the 10
consent of the board of the co-operative. 11
(3) The board: 12
(a) in the case of an application referred to in subsection (1) (b)-- 13
must give its consent under subsection (2) to the transfer of the 14
deceased member's share or interest in the co-operative, unless 15
the board reasonably believes the only transferee or each 16
transferee will not be an active member of the co-operative; or 17
(b) in any other case--may give its consent under subsection (2) only 18
if the board reasonably believes the only transferee or each 19
transferee will be an active member of the co-operative. 20
(4) The board must not give its consent under subsection (2) to the transfer 21
of a share if, because of the transfer, the nominal value of the shares held 22
by the transferee would be more than: 23
(a) 20% of the nominal value of the share capital of the co-operative; 24
or 25
(b) if a lower percentage is specified in the rules of the 26
co-operative--that lower percentage of the nominal value of the 27
share capital of the co-operative. 28
(5) This section has effect subject to section 100. 29
104 Transfer of small shareholdings and interests on death 30
(1) If the total value of a deceased member's shares or interest in a 31
co-operative is less than $10,000 (or a higher amount prescribed by the 32
National Regulations), the board may, on the basis of evidence that it 33
considers sufficient, transfer the shares or interest under whichever of 34
the following paragraphs is appropriate: 35
(a) if the member dies testate--to the person who appears to the 36
board to be entitled to the shares or interest under the will of the 37
deceased member; 38
Page 76
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) if the member dies intestate--to any person who appears to the 1
board to be entitled to obtain a grant of administration of the 2
estate of the deceased, and that person must then hold the shares 3
or interest on the same trusts as if he or she had obtained the 4
grant. 5
(2) A transfer must not be made under this section after evidence has been 6
produced to the co-operative of the grant of letters of administration of 7
the estate, or probate of the will, of the deceased member. 8
(3) This section has effect subject to section 100. 9
(4) In this section: 10
transfer of an interest includes the payment of money. 11
105 Value of shares and interests 12
The value of the shares or interest of a deceased member must be 13
decided, for the purposes of this Division, under the rules of the 14
co-operative. 15
106 Co-operative protected 16
Any transfer of property made by the board of a co-operative under this 17
Division is valid and effectual against any demand made on the 18
co-operative by any other person. 19
Division 9 Repurchase of shares 20
107 Purchase and repayment of shares 21
(1) The rules of a co-operative may authorise the co-operative: 22
(a) to purchase any share of a member in the co-operative at the 23
request of the member; and 24
(b) to repay to a member, with the member's consent, all or any part 25
of the amount paid up on any share held by the member when the 26
amount repaid is not required for the activities of the 27
co-operative. 28
(2) The amount paid by a co-operative under this section in purchasing 29
shares or repaying any amount paid up on shares, or both, in any 30
financial year of the co-operative must not be more than the total of: 31
(a) 5% of the nominal value of the issued share capital of the 32
co-operative immediately before the start of the financial year; 33
and 34
(b) the amount of any additional share capital of the co-operative 35
subscribed for within that year. 36
Page 77
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) The members of a co-operative may, by special resolution, exempt a 1
co-operative from the operation of subsection (2) in relation to a 2
particular financial year, either unconditionally or subject to conditions. 3
(4) The amount paid for a share when it is repurchased may be an amount 4
decided by the board that is less than the nominal value of the share but 5
only: 6
(a) if the books of the co-operative disclose that the amount paid is 7
the net shareholder's equity per share in the business of the 8
co-operative; or 9
(b) under the rules of the co-operative. 10
(5) A co-operative must not purchase shares or repay amounts paid up on 11
shares if: 12
(a) the co-operative is likely to become insolvent because of the 13
repurchase of the shares or because of the repayment of amounts 14
paid up on the shares; or 15
(b) the co-operative is insolvent. 16
(6) This section does not apply if the member has been expelled or has 17
resigned from the co-operative or the member's membership has been 18
otherwise cancelled under Part 2.6. 19
108 Deposits, debentures or CCUs instead of payment when share 20
repurchased 21
(1) If a co-operative repurchases a share of a member, the co-operative may 22
instead of paying the purchase price to the member: 23
(a) for a deposit-taking co-operative--apply the amount as an 24
interest-bearing deposit by the member with the co-operative; or 25
(b) allot or issue debentures or CCUs of the co-operative to the 26
member in satisfaction of the amount. 27
(2) Subsection (1) applies only if: 28
(a) the board considers payment of the repurchase price would 29
adversely affect the financial position of the co-operative; or 30
(b) the board and the member so agree. 31
(3) The deposit, debenture or CCU bears interest during any period: 32
(a) for a co-operative with share capital: 33
(i) at the rate (or, if there is more than one rate, at the higher 34
or highest rate) of dividend payable for that period on the 35
share capital of the co-operative; or 36
(ii) if the rate of dividend payable for that period has not been 37
decided--at the rate (or the higher or highest rate) payable 38
Page 78
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
for the immediately preceding period for which a rate has 1
been decided; or 2
(iii) if a rate of dividend has never been decided for the share 3
capital of the co-operative--at the rate the board of the 4
co-operative considers reasonable; or 5
(b) for a co-operative without share capital--at the rate the board of 6
the co-operative considers reasonable; or 7
(c) if the rules of the co-operative provide for a rate to be payable that 8
is higher than the rate applicable under paragraph (a) or (b)--at 9
the higher rate. 10
(4) The deposit, debenture or CCU must be repaid to the member as soon 11
as repayment would not, in the opinion of the board, adversely affect the 12
financial position of the co-operative. 13
(5) The deposit, debenture or CCU must in any case be repaid within 14
10 years (or within any shorter period the rules of the co-operative 15
require) after the repurchase of the shares concerned. 16
109 Cancellation of shares 17
A co-operative must cancel any share purchased by or forfeited to the 18
co-operative under this Law or the rules of the co-operative. 19
Part 2.5 Membership 20
Division 1 General 21
110 Becoming a member of co-operative 22
(1) On the registration of a co-operative, the persons who signed the 23
application for registration become members of the co-operative. 24
(2) Other persons may be admitted as members of the co-operative as 25
provided by its rules. 26
(3) A minor may be admitted as a member of the co-operative unless the 27
rules of the co-operative otherwise provide. 28
(4) A corporation is not (merely because it is a corporation) disqualified 29
from being a member of a co-operative unless the rules of the 30
co-operative provide that corporations are disqualified from being 31
members. 32
Page 79
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(5) If 2 or more co-operatives merge, the members of the merged 1
co-operative are: 2
(a) the members of the merging co-operatives; and 3
(b) other persons admitted as members of the merged co-operative 4
under its rules. 5
111 Members of co-operative group 6
(1) The members of a co-operative group are: 7
(a) the co-operatives by which the co-operative group is formed; and 8
(b) any other co-operative, admitted to membership in accordance 9
with the rules of the co-operative group; and 10
(c) any other corporation or other body admitted to membership in 11
accordance with subsection (2). 12
(2) A corporation or other body, not being a co-operative, may be admitted 13
to membership of the co-operative group if: 14
(a) it is incorporated or registered under any other law, whether or 15
not a law of this jurisdiction; and 16
(b) in the opinion of the board of the co-operative group, it is 17
designed to function in accordance with co-operative principles; 18
and 19
(c) it is eligible to be admitted to membership in accordance with the 20
rules of the co-operative group. 21
112 Qualification for membership 22
(1) A person is not qualified to be admitted to membership of a co-operative 23
unless: 24
(a) there are reasonable grounds for believing the person will be an 25
active member of the co-operative; and 26
(b) the person is otherwise eligible under the rules of the 27
co-operative. 28
(2) The rules of a co-operative must contain provisions that: 29
(a) impose a duty on all persons who become members to be active 30
members; and 31
(b) set out the consequences of failing to be, or ceasing to be, an 32
active member. 33
113 Membership may be joint 34
Membership of a co-operative may be individual and, unless the rules 35
of the co-operative provide otherwise, may be joint. 36
Page 80
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
114 Minors 1
(1) A member of a co-operative is not entitled to avoid any obligation or 2
liability as a member under a contract, deed or other document entered 3
into as a member on any ground relating to minority. 4
(2) A minor is not competent to hold any office in a co-operative. 5
(3) A member of a co-operative who is a minor is not entitled to vote, but 6
this does not apply to joint membership of a co-operative except where 7
all the joint members are minors. 8
(4) This section applies only to individuals. 9
115 Representatives of corporations 10
(1) If a corporation is a member of a co-operative, it may by instrument 11
served on the co-operative appoint a person to represent it in relation to 12
its membership. 13
(2) A corporation must not appoint a person to represent the corporation as 14
a member of a co-operative if the person is currently a member of the 15
co-operative or a representative of another corporation member. 16
Maximum penalty: $1,000. 17
(3) The power to appoint a representative is subject to any restriction 18
imposed by the rules of the co-operative as to the entitlement of a person 19
to represent a corporation. 20
(4) A person is not qualified to be appointed the representative of a 21
company that is not a listed corporation (within the meaning of the 22
Corporations Act) unless the person is an officer, member or employee 23
of the company. 24
116 Notification of shareholders and shareholdings 25
On the request of the board of a co-operative, a corporation that is a 26
member of the co-operative must provide the board of the co-operative 27
with: 28
(a) a list of the names of all the shareholders of the corporation and 29
the number of shares held by each shareholder; or 30
(b) in the case of a corporation without share capital--a list of the 31
members of the corporation; 32
within 7 days of the request. 33
Maximum penalty: $2,000. 34
Page 81
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
117 Circumstances in which membership ceases--all co-operatives 1
(1) A person ceases to be a member of a co-operative in each of the 2
following circumstances and as otherwise provided by this Law: 3
(a) if the member's membership is cancelled under Part 2.6; 4
(b) if the member is expelled or resigns under the rules of the 5
co-operative; 6
(c) if: 7
(i) the individual member becomes bankrupt or the corporate 8
member becomes insolvent; or 9
(ii) the member's property becomes subject to control under 10
the law relating to bankruptcy; 11
unless provision is made to the contrary in the rules of the 12
co-operative; 13
(d) on the death of the member; 14
(e) if the contract of membership is rescinded on the ground of 15
misrepresentation or mistake; 16
(f) for a member that is a corporation--if the corporation is 17
deregistered. 18
(2) On the death of a member, the member's estate remains liable as the 19
member until the member's personal representative or some other 20
person is registered in the member's place. 21
118 Additional circumstances in which membership ceases--co-operatives 22
with share capital 23
In the case of a co-operative that has share capital, in addition to the 24
circumstances in section 117, a member ceases to be a member if: 25
(a) the member's total shareholding is transferred to another person 26
under the rules of the co-operative and the name of the transferee 27
is entered in the register of members in respect of the 28
shareholding; or 29
(b) the member's total shareholding is forfeited under this Law or the 30
rules of the co-operative; or 31
(c) the member's total shareholding is sold by the co-operative under 32
a power conferred by the rules of the co-operative, and the name 33
of the purchaser is entered in the register of members in respect 34
of the shareholding; or 35
(d) the member's total shareholding is purchased by the co-operative 36
under this Law; or 37
(e) the amount paid up on the member's shares is repaid to the 38
member under the rules of the co-operative. 39
Page 82
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
119 Carrying on business with too few members 1
(1) A person who is a director of a co-operative must not knowingly allow 2
the co-operative to continue to carry on business with fewer than the 3
minimum number of members allowed (under subsection (3)) for more 4
than 28 days after the number of members falls below that minimum 5
number. 6
Maximum penalty: $2,000. 7
(2) Each person who is found guilty of an offence under subsection (1) is 8
also liable to satisfy all obligations of the co-operative incurred after the 9
28 days referred to in subsection (1), and may be sued without any other 10
member being joined in the action. 11
(3) The minimum number of members allowed is: 12
(a) in the case of a co-operative group--2 co-operatives; or 13
(b) in the case of any other co-operative: 14
(i) if a lesser number than 5 is approved by the Registrar-- 15
that number of active members; or 16
(ii) otherwise--5 active members. 17
Note. See section 20 for composite approvals. 18
(4) The Registrar may, by written notice, extend and further extend in a 19
particular case the period of 28 days referred to in subsection (1). 20
(5) An application for an extension must be made in the approved form 21
before the period to be extended ends. 22
Division 2 Rights and liabilities of members 23
120 Rights of membership not exercisable until registered etc 24
(1) A member of a co-operative is not entitled to exercise any rights of 25
membership until: 26
(a) the member's name appears in the register of members; and 27
(b) the member has made any payment to the co-operative for 28
membership or acquired any share or interest that is provided for 29
in the rules of the co-operative. 30
(2) A co-operative must ensure the name of a person admitted to 31
membership is recorded in the register of members within 28 days after 32
the person is admitted to membership. 33
Maximum penalty (for subsection (2)): $2,000. 34
Page 83
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
121 Liability of members to co-operative 1
(1) A member of a co-operative is not, as a member, under any personal 2
liability to the co-operative, except as provided by this section. 3
(2) A member of a co-operative with share capital is liable to the 4
co-operative for the amount (if any) unpaid on the shares held by the 5
member together with any charges payable by the member to the 6
co-operative as required by the rules of the co-operative. 7
(3) A member of a co-operative without share capital is liable to the 8
co-operative for any charges payable by the member to the co-operative 9
as required by the rules of the co-operative. 10
(4) This section does not affect a liability that a member of a co-operative 11
may have to the co-operative in respect of: 12
(a) any trade or other business conducted by the member with the 13
co-operative; or 14
(b) any fines imposed on the member by the co-operative. 15
122 Co-operative to give information to person intending or applying to 16
become a member 17
(1) The board of a co-operative must give each person intending or 18
applying to become a member of the co-operative: 19
(a) a consolidated copy of the rules of the co-operative; and 20
(b) a copy of all special resolutions that would apply to the 21
prospective member passed by the members of the co-operative, 22
except special resolutions providing for an amendment of the 23
rules of the co-operative; and 24
(c) a copy of the most recent financial information reported to 25
members of the co-operative under Part 3.3. 26
(2) The board of a co-operative may comply with subsection (1): 27
(a) by: 28
(i) giving the person notice that the documents referred to in 29
subsection (1) may be inspected by the person at the 30
registered office of the co-operative and at each other 31
office of the co-operative in or outside this jurisdiction, 32
including outside Australia; and 33
(ii) making the documents available for inspection in person; 34
or 35
(b) if the person has elected to receive the documents as an electronic 36
copy--by sending the person an electronic copy of the 37
documents; or 38
Page 84
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(c) if the person did not make the election--by directly notifying, in 1
writing, that the documents are accessible on the website and 2
specifying the direct address on the website where the documents 3
may be accessed. 4
Note. A direct address may be specified, for example, by specifying the URL of 5
the documents. 6
123 False copy of documents 7
(1) A person who, in purported compliance with section 122: 8
(a) gives a person intending or applying to become a member of a 9
co-operative a document as a copy of: 10
(i) a special resolution of the co-operative; or 11
(ii) the last annual report of the co-operative; and 12
(b) knows or ought to know that, in a material respect, it is not a true 13
copy of the resolution or report; and 14
(c) does not indicate to that person that it is not a true copy; 15
is guilty of an offence. 16
Note. Section 58 deals with false copies of rules. 17
(2) A person who, in purported compliance with section 122: 18
(a) makes available for inspection by a person intending or applying 19
to become a member of a co-operative a document as a copy of: 20
(i) a special resolution of the co-operative; or 21
(ii) the last annual report of the co-operative; and 22
(b) knows or ought to know that, in a material respect, it is not a true 23
copy of the resolution or report; and 24
(c) does not indicate to that person that it is not a true copy; 25
is guilty of an offence. 26
Maximum penalty: $1,000. 27
124 Entry fees and regular subscriptions 28
(1) The rules of a co-operative may: 29
(a) require the payment by members of entry fees and regular 30
subscriptions; and 31
(b) provide for the repayment of the fees and subscriptions on a 32
person's ceasing to be a member. 33
(2) The calculation of the amount of a particular member's regular 34
subscription may be based on the value of business the member does 35
with the co-operative or on profits earned by the co-operative on 36
business done by the member with the co-operative. 37
Page 85
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) A co-operative must give to any person intending or applying to become 1
a member written notice of entry fees or regular subscriptions payable 2
by a member to the co-operative. 3
(4) A person who becomes a member of the co-operative is not liable to pay 4
entry fees or regular subscriptions except: 5
(a) the fees or subscriptions of which the person was given written 6
notice before becoming a member; and 7
(b) any regular subscriptions that are imposed in accordance with the 8
rules of the co-operative and of which the member has been given 9
notice. 10
125 Members etc may be required to deal with co-operative 11
(1) The rules of a co-operative may contain provisions that require a 12
member to have stated dealings with the co-operative for a fixed period 13
and to enter into a contract for that purpose. 14
(2) A co-operative may, if authorised by its rules, make a contract with a 15
member containing provisions that require the member to have stated 16
dealings with the co-operative for a fixed period. 17
(3) In particular, the provisions of the rules of the co-operative or a contract 18
may require a member: 19
(a) to sell products through or to the co-operative; or 20
(b) to obtain supplies or services through or from the co-operative; or 21
(c) to pay to the co-operative a stated amount as liquidated damages 22
for any failure to comply with a requirement authorised by this 23
section. 24
(4) Any amount required to be paid to the co-operative as liquidated 25
damages is, for the purposes of section 127, a debt payable by the 26
member to the co-operative and is accordingly subject to that section. 27
(5) A contract authorised by this section is binding on the co-operative and 28
all other parties even though, apart from this Law, the contract would be 29
invalid as being in restraint of trade. 30
(6) Rules authorised by this section are authorised even though, apart from 31
this section, the rules might be invalid as being in restraint of trade. 32
126 Fines payable by members 33
(1) A co-operative may impose a fine on a member for an infringement of 34
the rules of the co-operative if the rules so provide. 35
(2) A fine imposed under subsection (1) must not be more than the 36
maximum fine fixed by the rules of the co-operative. 37
Page 86
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) A fine must not be imposed unless: 1
(a) notice of intention to impose the fine and the reason for it has 2
been given to the member; and 3
(b) the member has been given a reasonable opportunity to appear 4
before the board in person (with or without witnesses), or to send 5
to the board a written statement, to show cause why the fine 6
should not be imposed. 7
(4) The co-operative may set-off the whole or any part of the fine against 8
an amount payable to the member for produce delivered by the member 9
to the co-operative, but no part of the fine is to be set-off against any 10
advance payable to the member from the co-operative under the rules of 11
the co-operative against produce so delivered. 12
127 Lien and set-off 13
(1) A co-operative has, in relation to any debt payable by a member or 14
former member to the co-operative, a lien on each of the following: 15
(a) the share or interest in the capital and the credit balance and 16
deposits of the member or former member; 17
(b) any rebate, bonus, dividend or interest payable to the member or 18
former member; 19
(c) any entry fees and regular subscriptions required to be repaid to 20
a member when the member ceases to be a member. 21
(2) The co-operative may set-off any amount paid on account of that share 22
or other thing, or any amount credited or payable to the member or 23
former member, in or towards payment of the debt. 24
(3) The lien created by this section may be enforced by the appropriation by 25
the co-operative of the thing that is subject to the lien, but only after at 26
least 7 days notice has been given to the member or former member. 27
(4) Any share in relation to which capital has been so appropriated must be 28
cancelled. 29
128 Repayment of shares on expulsion or resignation 30
(1) When a member is expelled or resigns from a co-operative under its 31
rules, the co-operative must, within one year after the day of expulsion 32
or resignation: 33
(a) repay to the former member an amount (the repayable amount) 34
made up of the amount paid up on the shares held by the member 35
at the day of expulsion or resignation, less any amount owed by 36
the member to the co-operative at the day of expulsion or 37
resignation under the rules of the co-operative or any contract or 38
otherwise; or 39
Page 87
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) apply the repayable amount under subsection (2) if: 1
(i) the board considers repayment would adversely affect the 2
financial position of the co-operative; or 3
(ii) the board and the former member agree. 4
(2) The repayable amount may be applied in one or more of the following 5
ways: 6
(a) the co-operative may appropriate the amount as a donation to the 7
co-operative, but only if the former member consents in writing 8
to the donation; 9
(b) if the co-operative is a deposit-taking co-operative--the 10
co-operative may apply the amount as a deposit by the former 11
member with the co-operative; 12
(c) the co-operative may allot or issue debentures or CCUs of the 13
co-operative to the former member in satisfaction of the amount. 14
(3) If the balance sheet of the co-operative last issued before the expulsion 15
or resignation of a member of the co-operative disclosed a loss or 16
deficiency, there must be a proportionate reduction in the capital to be 17
repaid to the member. 18
(4) That reduction must be by an amount that bears to the amount of the loss 19
or deficiency so disclosed the same proportion as the number of shares 20
held by the member bore to the total number of shares held by all 21
members of the co-operative as at the date of expulsion or resignation 22
of the member. 23
(5) Shares for which capital has been repaid must be cancelled. 24
Note. Section 163 deals with repayment of amounts owing because of 25
cancelled membership. Sections 164 and 165 deal with interest on, and 26
repayment of, deposits, debentures and CCUs referred to in this section. 27
Division 3 Disputes involving members 28
129 Grievance procedure 29
(1) The rules of a co-operative must set out a grievance procedure for 30
dealing with any dispute under the rules between: 31
(a) a member and another member; or 32
(b) a member and the co-operative. 33
(2) A member may appoint any person to act on behalf of the member in the 34
grievance procedure. 35
(3) The grievance procedure must allow for natural justice to be applied. 36
Page 88
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) In this Division: 1
member includes any person who was a member not more than 2
6 months before the dispute occurred. 3
130 Application to designated tribunal 4
(1) The designated tribunal may, on the application of a member or the 5
co-operative, make an order declaring and enforcing: 6
(a) the rights or obligations of members of the co-operative between 7
themselves; or 8
(b) the rights or obligations of the co-operative and any member 9
between themselves. 10
(2) An order may be made under this section whether or not a right of a 11
proprietary nature is involved and whether or not the applicant has an 12
interest in the property of the co-operative. 13
(3) The designated tribunal may refuse to make an order on the application 14
or may make an order for costs against a party, whether successful or 15
not, if it considers that: 16
(a) the issue raised in the application is trivial; or 17
(b) having regard to the importance of the issue, the nature of the 18
co-operative, any other available method of resolving the issue, 19
the costs involved, lapse of time, acquiescence or any other 20
relevant circumstance, it was unreasonable to make the 21
application; or 22
(c) the unreasonable or improper conduct of a party: 23
(i) has been responsible for the making of the application; or 24
(ii) has added to the cost of the proceedings. 25
Division 4 Oppressive conduct of affairs 26
131 Interpretation--extended meaning of "member" 27
In this Division: 28
member, in relation to a co-operative that has share capital, includes a 29
person to whom a share in the co-operative has been transmitted by will 30
or by operation of law. 31
132 Application of Division 32
This Division does not apply to anything done under Part 2.6. 33
Page 89
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
133 Application for order 1
The following persons may apply to the Supreme Court for an order 2
under this Division: 3
(a) the Registrar; 4
(b) a member who believes the affairs of the co-operative are being 5
conducted in a way that is: 6
(i) oppressive or unfairly prejudicial to, or unfairly 7
discriminatory against, a member; or 8
(ii) contrary to the interests of the members as a whole; 9
(c) a member who believes an act or omission, or a proposed act or 10
omission, by or on behalf of the co-operative, or a resolution, or 11
a proposed resolution, of members, was or would be: 12
(i) oppressive or unfairly prejudicial to, or unfairly 13
discriminatory against, a member; or 14
(ii) contrary to the interests of the members as a whole. 15
134 Orders 16
On application under this Division, the Supreme Court may make any 17
order it considers appropriate including (without being limited to) one 18
or more of the following orders: 19
(a) an order that the Registrar appoint an administrator of the 20
co-operative; 21
(b) an order that the co-operative be wound up; 22
(c) an order for regulating the conduct of affairs of the co-operative 23
in the future; 24
(d) an order for the repayment of the member's shares under the 25
provisions of this Law for repayment of share capital; 26
(e) an order for the purchase of the shares of any member by the 27
co-operative and for the reduction accordingly of the 28
co-operative's capital; 29
(f) an order directing the co-operative to institute, prosecute, defend 30
or discontinue stated proceedings, or authorising a member or 31
members of the co-operative to institute, prosecute, defend or 32
discontinue stated proceedings in the name and on behalf of the 33
co-operative; 34
(g) an order appointing a receiver or a receiver and manager of 35
property of the co-operative; 36
(h) an order restraining a person from engaging in stated conduct or 37
from doing a stated act or thing; 38
Page 90
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(i) an order directing a co-operative to become registered as a 1
company under the Corporations Act; 2
(j) an order requiring a person to do a stated act or thing; 3
(k) an order as to costs; 4
(l) an order making amendments to the rules of the co-operative. 5
135 Basis on which orders made 6
The Supreme Court may make an order under this Division if it 7
considers that: 8
(a) the affairs of a co-operative are being conducted in a way that is: 9
(i) oppressive or unfairly prejudicial to, or unfairly 10
discriminatory against, a member (an oppressed member), 11
whether or not in the capacity of a member; or 12
(ii) contrary to the interests of the members as a whole; or 13
(b) an act or omission, or a proposed act or omission, by or on behalf 14
of a co-operative, or a resolution, or a proposed resolution, of 15
members, was or would be: 16
(i) oppressive or unfairly prejudicial to, or unfairly 17
discriminatory against, a member (an oppressed member), 18
whether or not in the capacity of a member; or 19
(ii) contrary to the interests of the members as a whole. 20
136 Winding up need not be ordered if members unfairly prejudiced by order 21
The Supreme Court need not make an order under this Division for the 22
winding up of a co-operative if it considers the winding up of the 23
co-operative would unfairly prejudice an oppressed member or unfairly 24
prejudice the members as a whole. 25
137 Application of winding up provisions 26
If an order that a co-operative be wound up is made under this Division, 27
the provisions of this Law relating to the winding up of co-operatives 28
apply, with any modifications that are necessary, as if the order had 29
been made on an application filed in the Supreme Court by the 30
co-operative. 31
Page 91
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
138 Changes to rules 1
(1) If an order under this Division makes any amendment of the rules of a 2
co-operative: 3
(a) the amendment has effect as if it had been properly made by 4
special resolution of the co-operative; and 5
(b) the co-operative must not (despite any other provisions of this 6
Law), without the leave of the Supreme Court, make any further 7
amendment of the rules inconsistent with the provisions of the 8
order. 9
(2) On receiving a copy of an order amending the rules of a co-operative the 10
Registrar must register the amendment. 11
139 Copy of order to be filed with Registrar 12
An applicant for an order under this Division must file an office copy of 13
the order with the Registrar within 14 days after it is made. 14
Maximum penalty: $1,000. 15
Division 5 Inspection of books 16
140 Order for inspection of books of co-operative (cf Corporations Act s 247A) 17
(1) On application by a member of a co-operative, the Supreme Court may 18
make an order: 19
(a) authorising the applicant to inspect books of the co-operative; or 20
(b) authorising another person (whether a member or not) to inspect 21
books of the co-operative on the applicant's behalf. 22
(2) A person authorised to inspect books may make copies of the books 23
unless the Supreme Court orders otherwise. 24
(3) A person who: 25
(a) is granted leave under section 580; or 26
(b) applies for leave under that section; or 27
(c) is eligible to apply for leave under that section; 28
may apply to the Supreme Court for an order under this section. 29
(4) On application, the Supreme Court may make an order authorising: 30
(a) the applicant to inspect books of the co-operative; or 31
(b) another person to inspect books of the co-operative on the 32
applicant's behalf. 33
Page 92
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) The Supreme Court may make the order only if it is satisfied that: 1
(a) the applicant is acting in good faith; and 2
(b) the inspection is to be made for a purpose connected with: 3
(i) applying for leave under section 580; or 4
(ii) bringing or intervening in proceedings with leave under 5
that section. 6
(6) A person authorised to inspect books may make copies of the books 7
unless the Supreme Court orders otherwise. 8
141 Ancillary orders (cf Corporations Act s 247B) 9
If the Supreme Court makes an order under section 140, the court may 10
make any other orders it considers appropriate, including either or both 11
of the following: 12
(a) an order limiting the use that a person who inspects books may 13
make of information obtained during the inspection; 14
(b) an order limiting the right of a person who inspects books to 15
make copies in accordance with section 140 (2). 16
142 Disclosure of information acquired in inspection (cf Corporations Act 17
s 247C) 18
(1) A person who inspects books on behalf of an applicant under section 19
140 must not disclose information obtained during the inspection. 20
Maximum penalty: $500. 21
(2) Subsection (1) does not apply to the extent that the disclosure is to: 22
(a) the Registrar; or 23
(b) the applicant. 24
(3) An offence based on subsection (1) is an offence of strict liability. 25
(4) A defendant bears an evidential burden in relation to the matter in 26
subsection (2). 27
143 Co-operative or directors may allow member to inspect books (cf 28
Corporations Act s 247D) 29
The board of a co-operative, or the co-operative by a resolution passed 30
at a general meeting, may authorise a member to inspect books of the 31
co-operative. 32
Page 93
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 2.6 Active membership 1
Division 1 Definitions 2
144 Meaning of "primary activity" 3
A primary activity of a co-operative is an activity specified in the rules 4
of the co-operative as a primary activity of the co-operative. 5
145 Meaning of "active member" 6
A member of a co-operative is an active member of the co-operative if 7
the member: 8
(a) uses or supports an activity of, or maintains a relationship or an 9
arrangement with, the co-operative, for carrying on a primary 10
activity of the co-operative, in the way and to the extent the rules 11
of the co-operative provide; or 12
(b) maintains any other relationship or arrangement with the 13
co-operative for carrying on a primary activity of the 14
co-operative that the National Regulations provide. 15
146 Meaning of "active membership provisions and resolutions" 16
(1) Active membership provisions in the rules of a co-operative are 17
provisions in the rules that state: 18
(a) which of the activities of the co-operative are the primary 19
activities of the co-operative; and 20
(b) the way in which, and the extent to which, a member of the 21
co-operative must use or support an activity of, or maintain a 22
relationship or arrangement with, the co-operative, for carrying 23
on a primary activity of the co-operative, to establish active 24
membership of the co-operative. 25
(2) An active membership resolution is a resolution that would, if given 26
effect to, make or amend active membership provisions in the rules of a 27
co-operative. 28
Division 2 Active membership provisions 29
147 Number of primary activities required 30
A co-operative must have at least one primary activity. 31
148 Rules to contain active membership provisions 32
The board of a co-operative must ensure the rules of the co-operative 33
contain active membership provisions under this Part. 34
Page 94
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
149 Factors and considerations for deciding primary activities and other 1
matters 2
(1) The board of a co-operative must ensure the relevant factors and 3
considerations are taken into account in deciding: 4
(a) which of the activities of a co-operative are its primary activities; 5
and 6
(b) the way and extent to which a member is required to use or 7
support an activity of, or maintain a relationship or arrangement 8
with, a co-operative, for carrying on a primary activity of the 9
co-operative, to establish active membership of the co-operative. 10
(2) The relevant factors and considerations are: 11
(a) the primary activity or (if more than one) the primary activities 12
taken together must form the basic purpose for which the 13
co-operative exists and a significant contribution to the business 14
of the co-operative; and 15
(b) the way and extent of required utilisation, support, relationship or 16
arrangement should be reasonable when considered in relation to 17
the activities of the co-operative as a whole; and 18
(c) any other factors and considerations prescribed by the National 19
Regulations. 20
(3) The National Regulations may: 21
(a) provide for the things to be taken into account in deciding 22
whether an activity makes a significant contribution to the 23
business of the co-operative; and 24
(b) state minimum percentages of turnover, minimum amounts of 25
income or minimum amounts of business necessary to constitute 26
that significant contribution. 27
(4) Factors and considerations may be prescribed by the National 28
Regulations so as to apply to co-operatives generally or to a specified 29
class of co-operatives. 30
(5) Nothing in this section limits the right of active members other than the 31
board of the co-operative to propose an active membership resolution. 32
Page 95
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
150 Active membership provisions--distributing co-operatives 1
The only active membership provisions that may be contained in the 2
rules of a distributing co-operative are: 3
(a) provisions requiring a member to use an activity of the 4
co-operative for carrying on a primary activity stated in the 5
provisions to establish active membership; and 6
(b) any other active membership provisions the Registrar may 7
approve. 8
151 Active membership provisions--non-distributing co-operatives-- 9
regular subscriptions 10
(1) Active membership provisions for a non-distributing co-operative may 11
include a provision to the effect that the payment of a regular 12
subscription by a member of the co-operative, to be applied to a primary 13
activity of the co-operative, is sufficient to establish active membership 14
of the co-operative. 15
(2) A member of a non-distributing co-operative who would, on payment 16
of the subscription, be an active member of the co-operative is taken to 17
be an active member until the subscription is payable. 18
Division 3 Active membership resolutions 19
152 Notice of meeting 20
(1) At least 21 days notice must be given to members of a co-operative of a 21
meeting at which an active membership resolution is to be proposed. 22
(2) The notice must, in addition to the other matters required to be stated: 23
(a) state whether the member is eligible to vote on the resolution; and 24
(b) state the full text of the proposed resolution; and 25
(c) contain a copy of section 156. 26
(3) If the notice to a member states that he or she is not eligible to vote on 27
a resolution, the member may, after endeavouring to settle the matter 28
with the co-operative, apply to the Registrar for a decision as to the 29
member's eligibility. 30
(4) The Registrar may decide the matter, on the information available to the 31
Registrar, by direction in writing to the co-operative and the member. 32
(5) The Registrar's decision as to eligibility has effect but only if given 33
before the meeting concerned is due to be held. 34
Page 96
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
153 Eligibility to vote on active membership resolution 1
The only members of a co-operative who are eligible to vote on an 2
active membership resolution when the rules of the co-operative do not 3
contain active membership provisions are the members who would be 4
active members if the resolution had already taken effect. 5
154 Eligibility of directors to vote on proposal at board meeting 6
If the board of a co-operative is meeting to consider a proposal to submit 7
an active membership resolution to a meeting of the co-operative, all the 8
directors are eligible to vote on that proposal at the meeting of the board 9
of directors. 10
155 Other entitlements of members not affected 11
A provision of this Division that renders a member of a co-operative 12
ineligible to vote on a resolution does not affect any other right, 13
entitlement, obligation or duty of the member as a member. 14
Division 4 Cancellation of membership of inactive members 15
156 Cancellation of membership of inactive member 16
(1) Subject to sections 159 and 160, the board of a co-operative must 17
declare the membership of a member cancelled if: 18
(a) the whereabouts of the member are not presently known to the 19
co-operative and have not been known to the co-operative for at 20
least the required period before that time; or 21
(b) the member is not presently an active member of the co-operative 22
and has not been an active member of the co-operative at any time 23
during the required period immediately before that time. 24
(2) This section applies to a member only if he or she was a member of the 25
co-operative throughout the required period. 26
(3) The question of whether a member was an active member at a particular 27
time in the past is to be decided as if the active membership provisions 28
concerned had been in force at that time. 29
(4) The board's declaration under this section has the effect of cancelling 30
the membership concerned. 31
(5) A person may apply for an order under section 162 in relation to the 32
cancellation of the person's membership under this section. 33
Page 97
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(6) In this section: 1
the required period, in relation to a co-operative, means: 2
(a) 3 years; or 3
(b) if a shorter period is stated in the rules of the co-operative--that 4
period. 5
157 Shares to be forfeited if membership cancelled 6
(1) If a co-operative has share capital, the board of the co-operative must 7
declare the shares of a member to be forfeited at the same time as the 8
member's membership is cancelled under section 156. 9
(2) The board's declaration has the effect of forfeiting the shares 10
concerned. 11
(3) Nothing in this section affects the operation of section 163. 12
158 Failure to cancel membership--offence by director 13
If the board of a co-operative fails to cancel the membership of a 14
member as required by this Part, a director of the co-operative who did 15
not use all due diligence to prevent the failure commits an offence. 16
Maximum penalty: $2,000. 17
159 Deferral of cancellation by board 18
(1) The board of a co-operative may by resolution defer cancellation of a 19
member's membership for up to one year: 20
(a) if the board has reasonable grounds to believe a member has 21
ceased to be an active member because of unusual circumstances 22
that prevent the member fulfilling his or her active membership 23
obligations; or 24
(b) if: 25
(i) the board thinks that during the deferral period an active 26
membership resolution may be put to the members of the 27
co-operative; and 28
(ii) the effect of the resolution would be relevant to the 29
question of whether the member is an active member. 30
(2) The board of the co-operative must review the resolution to defer within 31
the deferral period to decide if a further resolution should be made under 32
subsection (1). 33
Page 98
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
160 Cancellation of membership prohibited in certain circumstances 1
(1) Unless the National Regulations otherwise provide, the board of a 2
co-operative must not declare the membership of a member to be 3
cancelled under this Part: 4
(a) if the co-operative is insolvent; or 5
(b) if the co-operative is under administration under Part 5.3A of the 6
Corporations Act as applying under this Law; or 7
(c) if a compromise or an arrangement is being administered in 8
relation to the co-operative; or 9
(d) if the co-operative is in the course of being wound up; or 10
(e) if an appointment of a receiver (whether or not a receiver and 11
manager) of any property of the co-operative is in force; or 12
(f) if the co-operative has, for the purpose of being registered as a 13
company under the Corporations Act, filed with the Registrar a 14
copy of the entry made in the minutes of the co-operative. 15
(2) The National Regulations may provide that the board of a co-operative 16
must not declare the membership of a member to be cancelled under this 17
Part in other circumstances that may be prescribed. 18
161 Notice of intention to cancel membership 19
(1) The board of a co-operative must ensure that not less than 28 days notice 20
of its intention to declare the membership of a member to be cancelled 21
is given to the member. 22
(2) Notice is not required to be given under this section if: 23
(a) the member's whereabouts are unknown to the co-operative; and 24
(b) the amount required to be repaid to the member in relation to the 25
cancelled membership (whether because of the cancellation of 26
shares or otherwise) is not more than $100 (or any other amount 27
prescribed by the National Regulations). 28
(3) Notice may be given by publication of a notice in a newspaper in the 29
district in which the registered office of the co-operative is situated if: 30
(a) the member's whereabouts are unknown to the co-operative; and 31
(b) the amount required to be repaid to the member in relation to the 32
cancelled membership (whether because of the cancellation of 33
shares or otherwise) is more than the applicable amount under 34
subsection (2) (b). 35
Page 99
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
162 Order against cancellation 1
(1) If the designated tribunal is satisfied the cancellation of a member's 2
membership under section 156 was or would be unreasonable, the 3
tribunal may, on application by the member or former member, direct 4
that the membership should not have been cancelled or should not be 5
cancelled. 6
(2) An application for an order may be made only within 6 months after: 7
(a) notice of the board's intention to declare the membership to be 8
cancelled is given to the member under section 161 (1) or is first 9
published under section 161 (3); or 10
(b) if notice was not required as referred to in section 161 (2)--the 11
cancellation takes effect. 12
(3) While an order is in force under this section: 13
(a) the membership concerned is not required to be cancelled and 14
any shareholding of the member is not required to be forfeited; 15
and 16
(b) the person whose membership was cancelled is entitled to be 17
reinstated as a member of the co-operative with all the rights and 18
entitlements (including any shareholding) attaching to or arising 19
from the former membership. 20
(4) Reinstatement of a member under this section is to be effected under the 21
directions of the designated tribunal. 22
163 Repayment of amounts owing because of cancelled membership 23
(1) If the membership of a member of a co-operative is cancelled under this 24
Part, the co-operative must, within one year after the date of 25
cancellation: 26
(a) repay to the former member the amount owing to the member 27
because of the cancellation; or 28
(b) apply the amount under subsection (2) if: 29
(i) the board considers repayment would adversely affect the 30
financial position of the co-operative; or 31
(ii) the board and the former member so agree. 32
(2) The amount payable may be applied as follows: 33
(a) if the co-operative is a deposit-taking co-operative--the 34
co-operative may apply the amount as a deposit by the former 35
member with the co-operative (subject to the requirements of 36
section 164 as to interest on the deposit); 37
Page 100
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) the co-operative may allot or issue debentures or CCUs of the 1
co-operative to the former member in satisfaction of the amount; 2
(c) the co-operative may appropriate the amount as a donation to the 3
co-operative, but only if the former member consents in writing 4
to the donation. 5
(3) The amount payable to a former member because of the cancellation of 6
membership includes any amount paid up for shares forfeited because 7
of the cancellation of membership. 8
(4) If the former member is subsequently readmitted to membership, any 9
amount held by the co-operative under this section must, if the member 10
asks, be applied towards the cost of readmission to membership 11
(including any subscription for share capital). 12
(5) The co-operative may retain the amount otherwise payable to a former 13
member under this section, if: 14
(a) the former member cannot be found by the co-operative, after 15
reasonable efforts by the co-operative to find the former member; 16
and 17
(b) the amount is less than $100 (or any other amount prescribed by 18
the National Regulations). 19
164 Interest on deposits, debentures and CCUs 20
(1) This section applies when the amount payable to a former member 21
under section 128 or 163 is applied as a deposit with the co-operative or 22
the co-operative allots or issues debentures or CCUs to the former 23
member in satisfaction of the amount. 24
(2) The deposit, debenture or CCU bears interest during any period: 25
(a) for a co-operative with share capital: 26
(i) at the rate (or, if there is more than one rate, at the higher 27
or highest rate) of dividend payable for that period on the 28
share capital of the co-operative; or 29
(ii) if the rate of dividend payable for that period has not been 30
decided--at the rate (or the higher or highest rate) payable 31
for the immediately preceding period for which a rate has 32
been decided; or 33
(iii) if a rate of dividend has never been decided for the share 34
capital of the co-operative--at the rate the board of the 35
co-operative considers reasonable; or 36
Page 101
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) for a co-operative without share capital--at the rate the board of 1
the co-operative considers reasonable; or 2
(c) if the rules of the co-operative provide for a rate to be payable that 3
is higher than the rate applicable under paragraph (a) or (b)--at 4
the higher rate. 5
(3) A former member may agree to the rate of interest being lower than that 6
which would otherwise be payable under this section and may agree to 7
no interest being paid. 8
(4) The following provisions of the Corporations Act, as applying under 9
section 337 of this Law, do not apply to an allotment or issue of 10
debentures or CCUs under this section: 11
(a) Chapter 2L; 12
(b) Chapter 6D. 13
165 Repayment of deposits, debentures and CCUs 14
(1) A deposit, debenture or CCU to which an amount payable to a former 15
member is transferred under this Division or section 128 (2) is to be 16
repaid to the former member as soon as repayment would not, in the 17
opinion of the board, adversely affect the financial position of the 18
co-operative. 19
(2) The deposit, debenture or CCU must in any case be repaid within 20
10 years (or within any shorter period the rules of the co-operative may 21
require) after cancellation of the member's membership. 22
166 Register of cancelled memberships 23
A co-operative must keep a register stating the particulars prescribed by 24
the National Regulations of persons whose membership has been 25
cancelled under this Part. 26
Division 5 Entitlements of former members of distributing 27
co-operatives 28
167 Application of Division 29
This Division applies only to distributing co-operatives. 30
168 Former shareholders to be taken to be shareholders for certain 31
purposes 32
(1) Even though a person's shares in a co-operative have been forfeited 33
under this Part, the person is to be taken to be the holder of shares in the 34
Page 102
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
co-operative (the same in all respects as those that were forfeited) for 1
the following purposes: 2
(a) the entitlement of a shareholder in relation to the purchase of 3
shares in the co-operative under an offer described in section 4
373 (1) (a), (b) or (c) or the purchase of all the shares in the 5
co-operative, if the offer or purchase occurs within 2 years after 6
the person's shares were forfeited; 7
(b) the entitlement of a shareholder when the co-operative becomes 8
registered as a company if the relevant special resolution under 9
section 404 is passed within 2 years after the person's shares were 10
forfeited; 11
(c) the entitlement of a shareholder to a distribution of surplus in a 12
winding up of the co-operative that starts within 2 years after the 13
person's shares were forfeited. 14
(2) Subsection (1) (a) does not apply to: 15
(a) an offer described in section 373 (1) (a) or (c) that is made by 16
another co-operative; or 17
(b) the purchase of all the shares in the co-operative by another 18
co-operative. 19
(3) Subsection (1) (c) does not apply if the winding up is for a merger under 20
Part 4.3. 21
(4) The entitlement under subsection (1) (a) of a person whose shares have 22
been forfeited does not include an entitlement to vote on any matter. 23
(5) This section does not apply to a forfeited shareholding in a co-operative 24
if section 169 operates so as to require the forfeited shareholding to be 25
regarded as a forfeited shareholding in another co-operative. 26
169 Entitlements of former shareholders on mergers etc 27
(1) This section applies when a person's shares in a co-operative (the 28
original co-operative) are forfeited under this Part and within 2 years 29
after the forfeiture: 30
(a) another co-operative (the new co-operative) is created because of 31
a merger under Part 4.3 involving the original co-operative; or 32
(b) the engagements of the original co-operative are transferred to 33
another co-operative (the new co-operative) under Part 4.3. 34
(2) A person referred to in subsection (1) is, for the purposes of section 168 35
(and the further operation of this section), taken to have held shares in 36
the new co-operative and as having had those shares in the new 37
co-operative forfeited under this Part when the person's shares in the 38
original co-operative were forfeited. 39
Page 103
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) The extent of the forfeited shareholding in the new co-operative is 1
decided as follows: 2
(a) if the entitlement of active members of the original co-operative 3
in the circumstances concerned is solely an entitlement to be 4
allotted shares in the new co-operative--the forfeited 5
shareholding in the new co-operative is the shareholding to which 6
the person would have been entitled had the person's shares in the 7
original co-operative not been forfeited; 8
(b) in any other case--the forfeited shareholding in the new 9
co-operative is the shareholding that is the same in all respects as 10
the forfeited shareholding in the original co-operative. 11
(4) The decision under subsection (3) (a) of the person's shareholding in the 12
new co-operative must be made: 13
(a) solely on the basis of the person's shareholding in the original 14
co-operative when the shares were forfeited or (in a further 15
operation of this section to the person) when the person was first 16
taken to have a forfeited shareholding in the original 17
co-operative; and 18
(b) without regard to any additional shareholding in the original 19
co-operative to which the person would have become entitled had 20
the shares not been forfeited (whether because of any bonus share 21
issue or otherwise). 22
170 Set-off of amounts repaid etc on forfeited shares 23
(1) If a person has an entitlement because of section 169, the entitlement 24
operates to end any liability of the co-operative: 25
(a) to repay to the person under section 163 any amount for the 26
forfeited shares concerned; or 27
(b) for a deposit held by the co-operative, or debentures or CCUs 28
allotted or issued to the person, under section 163 for the forfeited 29
shares concerned (except a liability to pay interest that is payable 30
but unpaid). 31
(2) If an amount has been repaid to a person under section 163 or 165, the 32
amount repaid is to be set-off against any entitlement of the person 33
under section 168 for the forfeited shares concerned. 34
(3) If the amount repaid cannot be set-off against the entitlement because 35
the entitlement is not, or is only partly, an entitlement to money, the 36
entitlement is lost unless the person pays to the co-operative the amount 37
repaid to the person and does so within the period required under 38
subsection (4). 39
Page 104
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) If the circumstances referred to in subsection (3) arise, the co-operative 1
concerned must: 2
(a) give written notice of the matter by post to the person concerned 3
at the person's address last known to the co-operative, stating a 4
period of not less than 28 days after the notice is given within 5
which any amount repaid must be paid to the co-operative; and 6
(b) publish a general notice to that effect in a newspaper circulating 7
generally in the district in which the registered office of the 8
co-operative is situated. 9
171 Exemption of co-operatives from provisions 10
(1) The Registrar may, by designated instrument, exempt a co-operative or 11
class of co-operatives from any or all of the provisions of this Division. 12
(2) An exemption may be given unconditionally or subject to conditions. 13
Page 105
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Chapter 3 Management and operation of 1
co-operatives 2
Part 3.1 Management 3
Division 1 The board 4
172 Board of directors 5
(1) Subject to this Law and the rules of the co-operative, the business of a 6
co-operative is to be managed by a board of directors. 7
(2) The board must consist of at least 3 directors (not counting alternates of 8
directors) and at least 2 of the directors must be ordinarily resident in 9
Australia. 10
(3) The board of directors may exercise all the powers of the co-operative 11
that are not, by this Law or the rules of the co-operative, required to be 12
exercised by the co-operative in general meeting. 13
(4) The acts of a director are valid despite any defect that may afterwards 14
be discovered in his or her appointment or qualification. 15
173 Election of directors 16
(1) Except as provided in subsections (2)-(4), the directors of a 17
co-operative are to be elected in the way specified in the rules of the 18
co-operative. 19
(2) The first directors of: 20
(a) a co-operative formed under this Law are to be elected at its 21
formation meeting; or 22
(b) a co-operative that was a corporation incorporated under another 23
law are to be the directors in office at the date of registration 24
under this Law. 25
(3) If authorised by the rules of the co-operative, a board of directors may 26
appoint a person to fill a casual vacancy in the office of a director until 27
the next annual general meeting. 28
(4) A motion approving or nominating 2 or more persons for election as 29
directors by a single resolution must not be made at a meeting of a 30
co-operative unless a resolution that it be made has first been agreed to 31
by the meeting without any vote being given against it. 32
Page 106
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) If a resolution is passed following a motion in contravention of 1
subsection (4): 2
(a) the resolution is void; and 3
(b) there is no provision for the automatic re-election of retiring 4
directors in default of another election. 5
(6) This section does not apply to a resolution amending the rules of a 6
co-operative to prevent the election of 2 or more directors by ballot. 7
(7) A nomination for election or appointment to the office of a director must 8
give details of the qualifications and experience of the person 9
nominated. 10
(8) Unless this Law or the rules of a co-operative otherwise provide, a 11
director is eligible for re-election at the end of his or her term of office. 12
174 Qualification of directors 13
(1) A person is not qualified to be a director of a co-operative unless he or 14
she is: 15
(a) a person who is an active member of the co-operative or a 16
representative of a corporation that is an active member of the 17
co-operative (a member director); or 18
(b) a person who is qualified as provided by the rules of the 19
co-operative (a non-member director) and who is not an active 20
member of the co-operative. 21
Note. A non-member director either is not a member of the co-operative 22
or is an inactive member of the co-operative. 23
(2) The majority of directors must be member directors. 24
(3) Subsection (2) does not prevent the rules of a co-operative requiring that 25
a greater number of directors than a majority must be member directors. 26
(4) An employee of a co-operative is not precluded from being a member 27
director or non-member director of the co-operative if he or she is 28
otherwise qualified. 29
175 Meeting of board of directors 30
(1) Meetings of the board of directors must be held at least once every 31
3 months and may be held as often as may be necessary. 32
(2) A meeting of the board of directors may be called by a director giving 33
notice individually to every other director. 34
(3) A meeting of the board of directors may be called or held using any 35
technology consented to by the board, and the consent may be a 36
standing one. 37
Page 107
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) A quorum of a meeting of the board of directors is 50% of the number 1
of directors, or a greater number of directors specified in the rules of the 2
co-operative. 3
(5) However, for a quorum, the member directors must outnumber the 4
non-member directors by at least one or, if a greater number is stated in 5
the rules of the co-operative, by that greater number. 6
(6) The chairperson of the board may be elected either by the board or at a 7
general meeting of the co-operative, and is to be elected, hold office, 8
and retire, and may be removed from office, as provided by the rules of 9
the co-operative. 10
176 Transaction of business outside meetings 11
(1) The board of a co-operative may, if it considers appropriate, transact 12
any of its business by the circulation of papers among all of the directors 13
of the board. 14
(2) A resolution in writing approved in writing by a majority of the 15
directors of the board is to be taken to be a decision of the board. 16
(3) Separate copies of a resolution may be distributed for signing by the 17
directors if the wording of the resolution and approval is identical in 18
each copy. 19
(4) For the purpose of the approval of a resolution under this section, the 20
chairperson of the board and each director of the board have the same 21
voting rights as they have at an ordinary meeting of the board. 22
(5) The resolution is approved when the last director required for the 23
majority signs. 24
(6) A resolution approved under this section must be recorded in the 25
minutes of the meetings of the board within 28 days after the resolution 26
is approved under this section. 27
(7) Papers may be circulated among directors of the board for the purposes 28
of this section by fax or other transmission of the information in the 29
papers concerned. 30
177 Alternate directors 31
(1) In the absence of a director from a meeting of the board, a person 32
appointed by the board under the rules of the co-operative concerned to 33
act as an alternate for the director (an alternate director) may act in the 34
place of the director. 35
(2) The rules of the co-operative may include provisions regulating the term 36
of office, vacation of or removal from office, and remuneration of an 37
alternate director. 38
Page 108
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
178 Delegation by board 1
If authorised by the rules of the co-operative, the board may, by 2
resolution, delegate the board's functions (other than this power of 3
delegation) stated in the resolution: 4
(a) to a director; or 5
(b) to a committee of 2 or more directors; or 6
(c) to a committee of members of the co-operative; or 7
(d) to a committee of members of the co-operative and other persons 8
if members form the majority of persons on the committee. 9
179 Removal from and vacation of office 10
(1) The directors hold office, must retire, and may be removed from office, 11
as provided by the rules of the co-operative. 12
(2) A director vacates office in the circumstances (if any) provided in the 13
rules of the co-operative and in any of the following cases: 14
(a) if the director is a disqualified person under section 181; 15
(b) if the director absents himself or herself from 3 consecutive 16
ordinary meetings of the board without its leave; 17
(c) if the director resigns the office of director by written notice 18
given by the director to the co-operative; 19
(d) if the person ceases to hold the qualification because of which the 20
person was qualified to be a director; 21
(e) if an administrator of the co-operative's affairs is appointed under 22
Part 4.1; 23
(f) if the director is removed from office under section 180. 24
180 Removal from office by resolution (cf Corporations Act s 203D) 25
(1) A co-operative may by ordinary resolution remove a director from 26
office despite anything in: 27
(a) the rules of the co-operative; or 28
(b) an agreement between the co-operative and the director; or 29
(c) an agreement between any or all members of the co-operative and 30
the director. 31
(2) Notice of intention to move the resolution must be given to the 32
co-operative at least 2 months before the meeting is to be held. 33
However, subject to subsection (3), if the co-operative calls a meeting 34
after the notice of intention is given under this subsection, the meeting 35
may pass the resolution even though the meeting is held less than 36
2 months after the notice of intention is given. 37
Page 109
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) At least 21 days notice must be given of a meeting of the members of 1
the co-operative at which a resolution will be moved: 2
(a) to remove a director from office; or 3
(b) to appoint a director in place of a director removed from office. 4
(4) The co-operative must give the director a copy of the notice as soon as 5
practicable after it is received. 6
Maximum penalty: $500. 7
(5) The director is entitled to put his or her case to members by: 8
(a) giving the co-operative a written statement for circulation to 9
members (see subsections (6) and (7)); and 10
(b) speaking to the motion at the meeting. 11
(6) The written statement is to be circulated by the co-operative to members 12
by: 13
(a) sending a copy to everyone to whom notice of the meeting is sent 14
if there is time to do so; or 15
(b) if there is not time to comply with paragraph (a)--having the 16
statement distributed to members attending the meeting and read 17
out at the meeting before the resolution is voted on. 18
The co-operative contravenes this subsection if it does not comply with 19
this subsection. 20
Maximum penalty: $500. 21
(7) The director's statement does not have to be circulated to members if it 22
is more than 1,000 words long or defamatory. 23
(8) If a person is appointed to replace a director removed under this section, 24
the time at which: 25
(a) the replacement director; or 26
(b) any other director; 27
is to retire is to be worked out as if the replacement director had become 28
director on the day on which the replaced director was last appointed a 29
director. 30
(9) An offence based on subsection (4) or (6) is an offence of strict liability. 31
Page 110
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 2 Disqualification from managing co-operatives 1
181 Offence for disqualified person to manage co-operative 2
(1) A person is a disqualified person in relation to a co-operative if the 3
person: 4
(a) is disqualified from managing corporations under Part 2D.6 of 5
the Corporations Act; or 6
(b) is disqualified from managing co-operatives under this Division; 7
or 8
(c) is disqualified from managing co-operatives under a 9
corresponding co-operatives law; or 10
(d) is the auditor of the co-operative or a business partner, employee 11
or employer of the auditor. 12
(2) A person must not act as a director or directly or indirectly take part in, 13
or be concerned with the management of, a co-operative if the person is 14
a disqualified person in relation to the co-operative. 15
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 16
(3) It is a defence to an offence arising under this section if the person had 17
permission or leave: 18
(a) in the case of an offence arising in relation to subsection (1) (a)-- 19
to manage corporations granted under section 206G of the 20
Corporations Act and as referred to in section 206G (1) (a) of that 21
Act; or 22
(b) in any case--to manage co-operatives given or granted under 23
either section 188 or 189; 24
and their conduct was within the terms of that permission or leave. 25
182 Automatic disqualification for offences 26
(1) A person who has been convicted of an offence under this Law or a 27
corresponding co-operatives law is disqualified from managing 28
co-operatives during the period of 5 years after the conviction or, if 29
sentenced to imprisonment, after his or her release from prison. 30
(2) A person who has, whether before or after the commencement of this 31
section in this jurisdiction, been convicted of an offence under a 32
previous law of this or any other jurisdiction relating to co-operatives is 33
disqualified from managing co-operatives during the period of 5 years 34
after the conviction or, if sentenced to imprisonment, after his or her 35
release from prison. 36
(3) In proceedings for an offence arising under this Division in relation to 37
this section, a certificate by an authority prescribed by the National 38
Page 111
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Regulations for the purposes of this subsection stating that a person has 1
been convicted of an offence under a stated law on a stated date is 2
evidence the person was convicted of that offence on that date. 3
(4) In proceedings for an offence arising under this Division in relation to 4
this section, a certificate by an authority prescribed by the National 5
Regulations for the purposes of this subsection stating that a person was 6
released from prison on a stated date is evidence the person was released 7
from prison on that date. 8
183 Extension of period of automatic disqualification (cf Corporations Act 9
s 206BA) 10
(1) This section applies if a person is disqualified from managing 11
co-operatives on being convicted of an offence under the Corporations 12
Act, this Law, a corresponding co-operatives law, or a previous law of 13
this or any other jurisdiction relating to co-operatives. 14
(2) On application by the Registrar, the Supreme Court may extend the 15
period of disqualification by up to an additional 15 years. 16
(3) The Registrar must apply: 17
(a) before the period of disqualification begins; or 18
(b) before the end of the first year of the disqualification. 19
(4) The Registrar may apply only once in relation to the disqualification. 20
(5) In determining whether an extension is justified (and if so, for how 21
long), the Supreme Court may have regard to any matters that the court 22
considers appropriate. 23
184 Court's power of disqualification--contravention of civil penalty 24
provision (cf Corporations Act s 206C) 25
(1) On application by the Registrar, the Supreme Court may disqualify a 26
person from managing co-operatives for a period that the court 27
considers appropriate if: 28
(a) a declaration is made under section 554 that the person has 29
contravened a civil penalty provision; and 30
(b) the court is satisfied that the disqualification is justified. 31
(2) In determining whether the disqualification is justified, the court may 32
have regard to: 33
(a) the person's conduct in relation to the management, business or 34
property of any corporation; and 35
(b) any other matters that the court considers appropriate. 36
Page 112
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
185 Court's power of disqualification--insolvency and non-payment of 1
debts (cf Corporations Act s 206D) 2
(1) On application by the Registrar, the Supreme Court may disqualify a 3
person from managing co-operatives for up to 20 years if: 4
(a) within the last 7 years, the person has been an officer of 2 or more 5
entities (being co-operatives or other corporations) when they 6
have failed; and 7
(b) the court is satisfied that: 8
(i) the manner in which the entity was managed was wholly 9
or partly responsible for the entity failing; and 10
(ii) the disqualification is justified. 11
(2) For the purposes of subsection (1), an entity fails if: 12
(a) a court orders the entity to be wound up because the court is 13
satisfied that it is insolvent; or 14
(b) the entity enters into voluntary liquidation and creditors are not 15
fully paid or are unlikely to be fully paid; or 16
(c) the entity executes a deed of arrangement and creditors are not 17
fully paid or are unlikely to be fully paid; or 18
(d) the entity ceases to carry on business and creditors are not fully 19
paid or are unlikely to be fully paid; or 20
(e) a levy of execution against the entity is not satisfied; or 21
(f) a receiver, receiver and manager, or provisional liquidator is 22
appointed in relation to the entity; or 23
(g) the entity enters into a compromise or arrangement with its 24
creditors; or 25
(h) the entity is wound up and a liquidator lodges a report about the 26
entity's inability to pay its debts. 27
(3) In determining whether the disqualification is justified, the Supreme 28
Court may have regard to: 29
(a) the person's conduct in relation to the management, business or 30
property of any entity; and 31
(b) any other matters that the court considers appropriate. 32
Note. Action may be able to be taken under section 206D of the Corporations 33
Act in the circumstances to which this section applies, whether or not action is 34
taken under this section. 35
Page 113
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
186 Court's power of disqualification--repeated contraventions of Law (cf 1
Corporations Act s 206E) 2
(1) On application by the Registrar, the Supreme Court may disqualify a 3
person from managing co-operatives for the period that the court 4
considers appropriate if: 5
(a) the person: 6
(i) has at least twice been an officer of a co-operative that has 7
contravened co-operatives legislation while they were an 8
officer of the co-operative and each time the person has 9
failed to take reasonable steps to prevent the 10
contravention; or 11
(ii) has at least twice contravened co-operatives legislation 12
while they were an officer of a co-operative; or 13
(iii) has been an officer of a body corporate and has done 14
something that would have contravened section 192 or 193 15
if the body corporate had been a co-operative; and 16
(b) the court is satisfied that the disqualification is justified. 17
(2) In determining whether the disqualification is justified, the Supreme 18
Court may have regard to: 19
(a) the person's conduct in relation to the management, business or 20
property of any corporation; and 21
(b) any other matters that the court considers appropriate. 22
(3) In this section: 23
co-operatives legislation means this Law or a corresponding 24
co-operatives law. 25
187 Registrar's power of disqualification (cf Corporations Act s 206F (1)-(4)) 26
(1) The Registrar may disqualify a person from managing co-operatives for 27
up to 5 years if: 28
(a) within 7 years immediately before the Registrar gives a notice 29
under paragraph (b) (i): 30
(i) the person has been an officer of 2 or more co-operatives; 31
and 32
(ii) while the person was an officer, or within 12 months after 33
the person ceased to be an officer of those co-operatives, 34
each of the co-operatives was wound up and a liquidator 35
lodged a report about the co-operative's inability to pay its 36
debts; and 37
Page 114
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) the Registrar has given the person: 1
(i) a notice in the approved form requiring them to 2
demonstrate why they should not be disqualified; and 3
(ii) an opportunity to be heard on the question; and 4
(c) the Registrar is satisfied that the disqualification is justified. 5
(2) If the Registrar disqualifies a person from managing co-operatives 6
under this section, the Registrar must serve a notice on the person 7
advising them of the disqualification. 8
(3) The notice must be in the approved form. 9
(4) The disqualification takes effect from the time when a notice referred to 10
in subsection (2) is served on the person. 11
188 Registrar's power to give permission (cf Corporations Act s 206F (5)) 12
(1) The Registrar may give a person whom the Registrar has disqualified 13
from managing co-operatives under this Division written permission to 14
manage a particular co-operative or co-operatives. 15
(2) The permission may be expressed to be subject to conditions and 16
limitations determined by the Registrar. 17
(3) A person must comply with any condition or limitation subject to which 18
permission is given. 19
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 20
189 Court's power to grant leave (cf Corporations Act s 206G) 21
(1) A person who is disqualified from managing co-operatives may apply 22
to the Supreme Court for leave to manage: 23
(a) co-operatives; or 24
(b) a particular class of co-operatives; or 25
(c) a particular co-operative; 26
except where the person was disqualified by the Registrar under 27
section 187. 28
(2) The person must lodge a notice with the Registrar at least 21 days before 29
commencing the proceedings. 30
(3) The notice must be in the approved form. 31
(4) The order granting leave may be expressed to be subject to conditions 32
or limitations determined by the Supreme Court. 33
(5) The person must lodge with the Registrar a copy of any order granting 34
leave within 14 days after the order is made. 35
Page 115
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(6) On application by the Registrar, the Supreme Court may revoke the 1
leave. The order revoking leave does not take effect until it is served on 2
the person. 3
(7) A person must comply with any condition or limitation subject to which 4
leave is granted. 5
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 6
(8) This section does not apply to a person who is disqualified from 7
managing co-operatives because of section 181 (1) (d). 8
Division 3 Secretary 9
190 Secretary 10
(1) A co-operative must have a secretary. 11
(2) The board of the co-operative is to appoint the secretary. 12
(3) The board may appoint a person to act as the secretary during the 13
absence or incapacity of the secretary. 14
(4) A person is not qualified to be appointed as, or to act as, the secretary 15
unless the person is an adult who ordinarily resides in Australia. 16
191 Responsibility of secretary (cf Corporations Act s 188) 17
(1) The secretary of a co-operative contravenes this subsection if the 18
co-operative contravenes a provision of this Law specified in the 19
National Regulations. 20
Maximum penalty: $500. 21
(2) An offence based on subsection (1) is an offence of strict liability. 22
(3) A person does not contravene subsection (1) if they show that they took 23
all reasonable steps to ensure that the co-operative complied with the 24
section. 25
Division 4 Duties and liabilities of directors, officers and 26
employees 27
192 Care and diligence--civil obligation only (cf Corporations Act s 180) 28
(1) Care and diligence--directors and other officers 29
A director or other officer of a co-operative must exercise their powers 30
and discharge their duties with the degree of care and diligence that a 31
reasonable person would exercise if they: 32
(a) were a director or officer of a co-operative in the co-operative's 33
circumstances; and 34
Page 116
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) occupied the office held by, and had the same responsibilities 1
within the co-operative as, the director or officer. 2
Note. This subsection is a civil penalty provision (see section 554). 3
(2) Business judgment rule 4
A director or other officer of a co-operative who makes a business 5
judgment is taken to meet the requirements of subsection (1), and their 6
equivalent duties at common law and in equity in respect of the 7
judgment, if they: 8
(a) make the judgment in good faith for a proper purpose (taking into 9
account the co-operative principles where relevant and other 10
relevant matters); and 11
(b) do not have a material personal interest in the subject matter of 12
the judgment; and 13
(c) inform themselves about the subject matter of the judgment to the 14
extent they reasonably believe to be appropriate; and 15
(d) rationally believe that the judgment is in the best interests of the 16
co-operative. 17
The director's or officer's belief that the judgment is in the best interests 18
of the co-operative is a rational one unless the belief is one that no 19
reasonable person in their position would hold. 20
Note. This subsection only operates in relation to duties under this section and 21
their equivalent duties at common law or in equity (including the duty of care that 22
arises under the common law principles governing liability for negligence)--it 23
does not operate in relation to duties under any other provision of this Law or 24
under any other laws. 25
(3) In this section: 26
business judgment means any decision to take or not take action in 27
respect of a matter relevant to the business operations of the 28
co-operative. 29
193 Good faith--civil obligations (cf Corporations Act s 181) 30
(1) Good faith--directors and other officers 31
A director or other officer of a co-operative must exercise their powers 32
and discharge their duties: 33
(a) in good faith in the best interests of the co-operative; and 34
(b) for a proper purpose. 35
Note. This subsection is a civil penalty provision (see section 554). 36
Page 117
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) A person who is involved in a contravention of subsection (1) 1
contravenes this subsection. 2
Note 1. This subsection is a civil penalty provision (see section 554). 3
Note 2. Section 9 defines "involved" in a contravention. 4
194 Use of position--civil obligations (cf Corporations Act s 182) 5
(1) Use of position--directors, other officers and employees 6
A director, secretary, other officer or employee of a co-operative must 7
not improperly use their position to: 8
(a) gain an advantage for themselves or someone else; or 9
(b) cause detriment to the co-operative. 10
Note. This subsection is a civil penalty provision (see section 554). 11
(2) A person who is involved in a contravention of subsection (1) 12
contravenes this subsection. 13
Note 1. This subsection is a civil penalty provision (see section 554). 14
Note 2. Section 9 defines "involved" in a contravention. 15
195 Use of information--civil obligations (cf Corporations Act s 183) 16
(1) Use of information--directors, other officers and employees 17
A person who obtains information because they are, or have been, a 18
director or other officer or employee of a co-operative must not 19
improperly use the information to: 20
(a) gain an advantage for themselves or someone else; or 21
(b) cause detriment to the co-operative. 22
Note. This subsection is a civil penalty provision (see section 554). 23
(2) The duty under subsection (1) continues after the person stops being a 24
director or other officer or employee of the co-operative. 25
(3) A person who is involved in a contravention of subsection (1) 26
contravenes this subsection. 27
Note 1. This subsection is a civil penalty provision (see section 554). 28
Note 2. Section 9 defines "involved" in a contravention. 29
Page 118
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
196 Good faith, use of position and use of information--criminal offences 1
(cf Corporations Act s 184) 2
(1) Good faith--directors and other officer 3
A director or other officer of a co-operative commits an offence if they: 4
(a) are reckless; or 5
(b) are intentionally dishonest; 6
and fail to exercise their powers and discharge their duties: 7
(c) in good faith in the best interests of the co-operative; or 8
(d) for a proper purpose. 9
(2) Use of position--directors, other officers and employees 10
A director, other officer or employee of a co-operative commits an 11
offence if they use their position dishonestly: 12
(a) with the intention of directly or indirectly gaining an advantage 13
for themselves, or someone else, or causing detriment to the 14
co-operative; or 15
(b) recklessly as to whether the use may result in themselves or 16
someone else directly or indirectly gaining an advantage, or in 17
causing detriment to the co-operative. 18
(3) Use of information--directors, other officers and employees 19
A person who obtains information because they are, or have been, a 20
director or other officer or employee of a co-operative commits an 21
offence if they use the information dishonestly: 22
(a) with the intention of directly or indirectly gaining an advantage 23
for themselves, or someone else, or causing detriment to the 24
co-operative; or 25
(b) recklessly as to whether the use may result in themselves or 26
someone else directly or indirectly gaining an advantage, or in 27
causing detriment to the co-operative. 28
Maximum penalty: $200,000 or imprisonment for 5 years, or both. 29
Page 119
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
197 Interaction of preceding sections with other laws (cf Corporations Act 1
s 185) 2
Sections 192-196: 3
(a) have effect in addition to, and not in derogation of, any rule of 4
law relating to the duty or liability of a person because of their 5
office or employment in relation to a co-operative; and 6
(b) do not prevent the commencement of civil proceedings for a 7
breach of a duty or in respect of a liability referred to in 8
paragraph (a). 9
This section does not apply to section 192 (2) and (3) to the extent to 10
which they operate on the duties at common law and in equity that are 11
equivalent to the requirements of section 192 (1). 12
198 Indemnification and exemption of officer or auditor 13
(1) Exemptions not allowed (cf Corporations Act s 199A (1)) 14
A co-operative or a related corporation must not exempt a person 15
(whether directly or through an interposed entity) from a liability to the 16
co-operative incurred as an officer or auditor of the co-operative. 17
(2) When indemnity for liability (other than for legal costs) not allowed 18
(cf Corporations Act s 199A (2)) 19
A co-operative or a related corporation must not indemnify a person 20
(whether by agreement or by making a payment and whether directly or 21
through an interposed entity) against any of the following liabilities 22
incurred as an officer or auditor of the co-operative: 23
(a) a liability owed to the co-operative or a related corporation; 24
(b) a liability that is owed to someone other than the co-operative or 25
a related corporation and did not arise out of conduct in good 26
faith. 27
This subsection does not apply to a liability for legal costs. 28
(3) When indemnity for legal costs not allowed (cf Corporations Act 29
s 199A (3)) 30
A co-operative or related corporation must not indemnify a person 31
(whether by agreement or by making a payment and whether directly or 32
through an interposed entity) against legal costs incurred in defending 33
an action for a liability incurred as an officer or auditor of the 34
co-operative if the costs are incurred: 35
(a) in defending or resisting proceedings in which the person is 36
found to have a liability for which they could not be indemnified 37
under subsection (2); or 38
Page 120
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) in defending or resisting criminal proceedings in which the 1
person is found guilty; or 2
(c) in defending or resisting proceedings brought by the Registrar or 3
a liquidator for a court order if the grounds for making the order 4
are found by the court to have been established; or 5
(d) in connection with proceedings for relief to the person under this 6
Law in which the court denies the relief. 7
Paragraph (c) does not apply to costs incurred in responding to actions 8
taken by the Registrar or a liquidator as part of an investigation before 9
commencing proceedings for the court order. 10
(4) Meaning of outcome of proceedings (cf Corporations Act s 199A (4)) 11
For the purposes of subsection (3), the outcome of proceedings is the 12
outcome of the proceedings and any appeal in relation to the 13
proceedings. 14
199 Insurance premiums for certain liabilities of director, secretary, other 15
officer or auditor (cf Corporations Act s 199B) 16
(1) A co-operative or a related corporation must not pay, or agree to pay, a 17
premium for a contract insuring a person who is, or has been, an officer 18
or auditor of the co-operative against a liability (other than one for legal 19
costs) arising out of conduct involving a wilful breach of duty in relation 20
to the co-operative. 21
Maximum penalty: $500. 22
(2) This section applies to a premium whether it is paid directly or through 23
an interposed entity. 24
(3) An offence based on subsection (1) is an offence of strict liability. 25
200 Certain indemnities, exemptions, payments and agreements not 26
authorised and certain documents void (cf Corporations Act s 199C) 27
(1) Sections 198 and 199 do not authorise anything that would otherwise be 28
unlawful. 29
(2) Anything that purports to indemnify or insure a person against a 30
liability, or exempt them from a liability, is void to the extent that it 31
contravenes section 198 or 199. 32
Page 121
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
201 Application of Corporations Act--offences by officers of co-operatives 1
A co-operative is declared to be an applied Corporations legislation 2
matter for the purposes of the Corporations application legislation of 3
this jurisdiction in relation to Part 5.8 of the Corporations Act, subject 4
to the following modifications: 5
(a) section 589 (2) and (3) of the Corporations Act are taken to be 6
omitted; 7
(b) the reference in section 592 (1) (a) of the Corporations Act to 8
23 June 1993 is, if the Co-operatives National Law Act of this 9
jurisdiction so provides, to be read as a reference to a date 10
specified in that Act of this jurisdiction for the purposes of this 11
paragraph; 12
(c) the modifications referred to in section 13 (3) of this Law so far 13
as they are relevant. 14
Note. See section 13, including Note 1 to that section. 15
202 Application of Corporations Act--employee entitlements 16
A co-operative is declared to be an applied Corporations legislation 17
matter for the purposes of the Corporations application legislation of 18
this jurisdiction in relation to Part 5.8A of the Corporations Act, subject 19
to the modifications referred to in section 13 (3) of this Law so far as 20
they are relevant. 21
Note. See section 13, including Note 1 to that section. 22
203 Directors' remuneration 23
A director of a co-operative must not receive remuneration for services 24
as a director other than: 25
(a) fees, concessions and other benefits approved at a general 26
meeting of the co-operative; and 27
(b) director's travelling and other expenses that the director properly 28
incurs: 29
(i) in attending meetings of the board of directors of the 30
co-operative or any meetings of committees of directors of 31
the co-operative; and 32
(ii) in attending any general meetings of the co-operative. 33
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 34
Page 122
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
204 Certain financial accommodation to officers prohibited 1
(1) An officer of a co-operative who is not a director of the co-operative 2
must not obtain financial accommodation from the co-operative other 3
than: 4
(a) with the approval of a majority of the directors; or 5
(b) under a scheme about providing financial accommodation to 6
officers that has been approved by a majority of the directors. 7
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 8
(2) For the purposes of this section, financial accommodation is taken to be 9
obtained by an officer of a co-operative if it is obtained by: 10
(a) a proprietary company in which the officer is a shareholder or 11
director; or 12
(b) a trust of which the officer is a trustee or beneficiary; or 13
(c) a trust of which a corporation is trustee if the officer is a director 14
or other officer of the corporation. 15
(3) A co-operative must not give financial accommodation to an officer of 16
the co-operative if: 17
(a) by giving the financial accommodation, the officer would 18
contravene this section; and 19
(b) the co-operative knows or should reasonably know of the 20
contravention. 21
Maximum penalty (for subsection (3)): $50,000. 22
205 Financial accommodation to directors and associates 23
(1) A co-operative must not provide financial accommodation to a director, 24
or to a person the co-operative knows or should reasonably know is an 25
associate of a director, unless: 26
(a) the accommodation is: 27
(i) approved under subsection (2); or 28
(ii) given under a scheme approved under subsection (2); or 29
(iii) provided on terms no more favourable to the director or 30
associate than the terms on which it is reasonable to expect 31
the co-operative would give if dealing with the director or 32
associate at arm's length in the same circumstances; and 33
(b) the directors have approved the accommodation, at a meeting of 34
the board at which a quorum was present, by a majority of at least 35
two-thirds of the directors present and voting on the matter. 36
Maximum penalty: $50,000. 37
Page 123
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) For the purposes of subsection (1) (a) (i) and (ii), financial 1
accommodation or a scheme is approved if: 2
(a) it is approved by a resolution passed at a general meeting; and 3
(b) the full details of the accommodation or scheme were made 4
available to members at least 21 days before the meeting. 5
(3) A director or an associate of a director must not obtain financial 6
accommodation given in contravention of subsection (1). 7
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 8
(4) For the purposes of this section, a concessional rate of interest for a 9
borrower from a co-operative is a normal term only if the borrower is 10
entitled to the concession by being a member of a class of borrowers 11
from the co-operative specified in its rules as being entitled to the 12
concession. 13
(5) If a director of a co-operative or an associate of a director accepts, in 14
payment of a debt owed by a member of the co-operative to the director 15
or associate, any proceeds of financial accommodation provided to the 16
member by the co-operative, this section has effect as if the financial 17
accommodation has been provided to the director or associate. 18
(6) In this section, a reference to: 19
(a) the provision of financial accommodation to a director or an 20
associate of a director; or 21
(b) the obtaining of financial accommodation by a director or an 22
associate of a director; or 23
(c) a debt owed to a director or an associate of a director; 24
includes a reference to a provision of financial accommodation to, or an 25
obtaining of financial accommodation by, the director or associate, or a 26
debt owed to the director or associate, jointly with another person. 27
(7) In this section: 28
associate of a director means: 29
(a) the director's spouse or de facto partner; or 30
(b) a person when acting in the capacity of trustee of a trust under 31
which: 32
(i) the director or director's spouse or de facto partner has a 33
beneficial interest; or 34
(ii) a corporation referred to in paragraph (c) has a beneficial 35
interest; or 36
Page 124
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(c) a corporation if: 1
(i) the director or director's spouse or de facto partner has a 2
material interest in shares in the corporation; and 3
(ii) the nominal value of the shares is not less than 10% of the 4
nominal value of the issued share capital of the 5
corporation. 6
(8) For the purposes of this section, a person has a material interest in a 7
share in a corporation if: 8
(a) the person has power to withdraw the share capital subscribed for 9
the share or to exercise control over the withdrawal of the share 10
capital; or 11
(b) the person has power to dispose of the share or to exercise control 12
over the disposal of the share; or 13
(c) the person has power to exercise or to control the exercise of any 14
right to vote conferred on the holder of the share. 15
206 Restriction on directors of certain co-operatives selling land to 16
co-operative 17
A director of a co-operative, the primary activity of which is or includes 18
the acquisition of land to settle or retain people on the land and of 19
providing any community service or benefit, must not sell land to the 20
co-operative except under a special resolution of the co-operative. 21
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 22
207 Management contracts 23
(1) A co-operative must not enter into a management contract unless the 24
contract has first been approved by special resolution. 25
(2) A management contract entered into in contravention of subsection (1) 26
is void. 27
(3) In this section: 28
management contract means a contract or other arrangement under 29
which: 30
(a) a person who is not an officer of the co-operative agrees to 31
perform the whole, or a substantial part, of the functions of the 32
co-operative, whether under the control of the co-operative or 33
not; or 34
Page 125
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) a co-operative agrees to perform the whole or a substantial part 1
of its functions: 2
(i) in a particular way; or 3
(ii) in accordance with the directions of any person; or 4
(iii) subject to stated restrictions or conditions. 5
Division 5 Declaration of interests 6
208 Declaration of interest 7
(1) A director of a co-operative who is or becomes in any way, whether 8
directly or indirectly, interested in a contract or proposed contract with 9
the co-operative must declare the nature and extent of the interest to the 10
board of directors under this section. 11
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 12
(2) In the case of a proposed contract, the declaration must be made: 13
(a) at the meeting of the board at which the question of entering into 14
the contract is first considered; or 15
(b) if the director was not at that time interested in the proposed 16
contract--at the next meeting of the board held after the director 17
becomes interested in the proposed contract. 18
(3) If a director becomes interested in a contract with the co-operative after 19
it is made, the declaration must be made at the next meeting of the board 20
held after the director becomes interested in the contract. 21
(4) For the purposes of this section, a general written notice given to the 22
board by a director to the effect that the director: 23
(a) is a member of a stated entity; and 24
(b) is to be regarded as interested in any contract that may, after the 25
giving of the notice, be made with the entity; 26
is a sufficient declaration. 27
(5) A director of a co-operative who holds an office or has an interest in 28
property whereby, whether directly or indirectly, duties or interests 29
might be created that could conflict with the director's duties or 30
interests as director must, under subsection (6), declare at a meeting of 31
the board of directors the fact and the nature, character and extent of the 32
conflict. 33
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 34
Page 126
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(6) A declaration required by subsection (5) in relation to holding an office 1
or having an interest must be made by a person: 2
(a) if the person holds the office or has the interest when he or she 3
becomes a director--at the first meeting of the board held after 4
whichever is the later of the following: 5
(i) the person becomes a director; 6
(ii) the relevant facts as to holding the office or having the 7
interest come to the person's knowledge; or 8
(b) if the person starts to hold the office or acquires the interest after 9
the person becomes a director--at the first meeting of the board 10
held after the relevant facts as to holding the office or having the 11
interest come to the person's knowledge. 12
(7) If a director has made a declaration under this section, then, unless the 13
board otherwise decides, the director must not: 14
(a) be present during any deliberation of the board in relation to the 15
matter; or 16
(b) take part in any decision of the board in relation to the matter. 17
(8) For the purpose of the making of a decision of the board under 18
subsection (7) in relation to a director who has made a declaration under 19
this section, the director must not: 20
(a) be present during any deliberation of the board for the purpose of 21
making the decision; or 22
(b) take part in the making by the board of the decision. 23
(9) Any vote cast in contravention of this section is not to be counted. 24
209 Declarations to be recorded in minutes 25
Every declaration under this Division is to be recorded in the minutes of 26
the meeting at which it was made. 27
210 Division does not affect other laws or rules 28
Except as provided in section 211, this Division is in addition to, and 29
does not limit, the operation of a rule of law or a provision in the rules 30
of a co-operative restricting a director from having an interest in 31
contracts with the co-operative or from holding offices or possessing 32
properties involving duties or interests in conflict with his or her duties 33
or interests as director. 34
Page 127
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
211 Certain interests need not be declared 1
The interest in a contract or proposed contract that a director is required 2
by this Division to declare does not include an interest in: 3
(a) a contract or proposed contract for a purchase of goods and 4
services by the director from the co-operative; or 5
(b) a lease of land to the director by the co-operative; or 6
(c) a contract or proposed contract for the sale of agricultural 7
products or livestock by the director to the co-operative; or 8
(d) a contract or proposed contract that, under the rules of the 9
co-operative, may be made between the co-operative and a 10
member; or 11
(e) a contract or proposed contract of a class of contracts prescribed 12
by the National Regulations for the purposes of this section; 13
but only if the contract is made in good faith, in the ordinary course of 14
the business of the co-operative, and on the terms that are usual and 15
proper in similar dealings between the co-operative and its members. 16
Division 6 Co-operative's registers, books and returns 17
212 Registers to be kept by co-operatives 18
(1) A co-operative must keep the following registers under this section: 19
(a) a register of directors; 20
(b) a register of members (including their shareholding, if any); 21
(c) a register of: 22
(i) loans to, securities given by, debentures issued by, and 23
deposits received by the co-operative; and 24
(ii) names of persons who have given loans or deposits to the 25
co-operative or hold securities or debentures given or 26
issued by the co-operative; 27
(d) a register of loans made by or guaranteed by the co-operative, and 28
of securities taken by the co-operative; 29
(e) a register of CCUs issued by the co-operative and their holders; 30
(f) a register of memberships cancelled under Part 2.6; 31
(g) a register of notifiable interests under section 368; 32
(h) other registers required by the National Regulations. 33
Maximum penalty: $2,000. 34
(2) Registers kept by a co-operative under this Law must be kept in the way, 35
and contain the particulars, prescribed by this Law or the National 36
Regulations. 37
Page 128
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) An offence based on subsection (1) is an offence of strict liability. 1
Note. Other provisions of this Law require a co-operative to keep other 2
registers. 3
213 Location of registers 4
(1) A register kept by a co-operative under this Law must be kept at: 5
(a) the co-operative's registered office; or 6
(b) an office at the co-operative's principal place of business; or 7
(c) an office (whether of the co-operative or of someone else) where 8
the work involved in maintaining the register is done; or 9
(d) another office approved by the Registrar. 10
(2) The office must be in this jurisdiction. 11
(3) The co-operative must file with the Registrar a notice of the address at 12
which the register is kept within 28 days after the register is: 13
(a) established at an office that is not the co-operative's registered 14
office; or 15
(b) moved from one office to another. 16
214 Inspection of co-operative's registers and other documents 17
(1) A co-operative must have at the office where the registers are kept and 18
available during all reasonable hours for inspection by a member free of 19
charge the following: 20
(a) a copy of: 21
(i) this Law; and 22
(ii) the Co-operatives National Law Act of this jurisdiction; 23
and 24
(iii) the National Regulations; and 25
(iv) the local regulations; 26
(b) a copy of the rules of the co-operative and attachments to the 27
rules required under section 421; 28
(c) a copy of the minutes of each general meeting of the 29
co-operative; 30
(d) a copy of the last annual report of the co-operative; 31
(e) the register of directors; 32
(f) the register of members; 33
(g) the register of names of persons who have given loans or deposits 34
to the co-operative or hold securities or debentures given or 35
issued by the co-operative; 36
Page 129
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(h) the register of CCUs issued by the co-operative and their holders; 1
(i) other registers that the National Regulations may provide are to 2
be open for inspection under this section. 3
(2) If a register is not kept on a computer, the member may inspect the 4
register itself. 5
(3) If the register is kept on a computer, the member may inspect a hard 6
copy of the information on the register unless the person and the 7
co-operative agree the person can access the information by computer. 8
(4) A member is entitled to make a copy of entries in a register specified in 9
subsection (1) free of charge unless the rules of the co-operative require 10
a fee to be paid, in which case the copy may be made on payment of the 11
required fee. 12
(5) The fee required by the rules of the co-operative must not be more than 13
the fee (for a copy of any entry in the register): 14
(a) prescribed by the National Regulations, except to the extent 15
paragraph (b) applies; or 16
(b) prescribed by the local regulations. 17
(6) A co-operative must: 18
(a) permit a member to inspect a document or make a copy of a 19
document the member may inspect or make under this section; 20
and 21
(b) give the member all reasonable help to inspect the document or 22
make the copy. 23
Maximum penalty: $2,000. 24
(7) The rules of a co-operative may provide for the availability or 25
non-availability of minutes of board meetings and subcommittee 26
meetings for inspection by members. 27
(8) A co-operative must have, at the place where the registers are kept and 28
available during all reasonable hours for inspection by any person, the 29
documents in relation to the co-operative prescribed by the National 30
Regulations. 31
Maximum penalty: $2,000. 32
(9) Neither subsection (7) nor a rule referred to in that subsection affects 33
access to minutes being obtained under section 143 or any other 34
provision of this Law. 35
Page 130
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
215 Use of information on registers 1
(1) A person must not: 2
(a) use information about a person obtained from a register kept by a 3
co-operative under this Law to contact or send material to the 4
person; or 5
(b) disclose information of that kind knowing the information is 6
likely to be used to contact or send material to the person; 7
unless the use or disclosure of the information is: 8
(c) relevant to the holding of the directorship, membership, shares, 9
CCUs, loans, securities, debentures or deposits concerned or the 10
exercise of the rights attaching to them; or 11
(d) approved by the board; or 12
(e) necessary to comply with a requirement of this Law. 13
(2) A person who contravenes subsection (1) is liable to compensate 14
anyone else who suffers loss or damage because of the contravention. 15
(3) A person who makes a profit from a contravention of subsection (1) 16
owes a debt to the co-operative. 17
(4) The amount of the debt is the amount of the profit. 18
(5) The use or disclosure of information referred to in subsection (1) (a) 19
or (b) in the circumstances referred to in subsection (1) (c), (d) or (e) is 20
authorised by this Law. 21
Note. Regarding subsection (5), item 2.1 of National Privacy Principle 2 in 22
Schedule 3 to the Privacy Act 1988 of the Commonwealth provides: "An 23
organisation must not use or disclose personal information about an individual 24
for a purpose (the secondary purpose) other than the primary purpose of 25
collection unless: [...] (g) the use or disclosure is required or authorised by or 26
under law". 27
216 Notice of appointment or cessation of appointment of directors and 28
officers to be lodged with Registrar 29
(1) A co-operative must give notice to the Registrar under this section of the 30
appointment of a person as a director, chief executive officer or 31
secretary of the co-operative or a subsidiary of the co-operative, and of 32
the cessation of the appointment. 33
(2) The notice must: 34
(a) be in the approved form; and 35
(b) be given within 28 days after the appointment or cessation of 36
appointment; and 37
(c) state the particulars prescribed by the National Regulations of the 38
appointment or cessation of appointment. 39
Page 131
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) An offence based on subsection (2) is an offence of strict liability. 1
Maximum penalty: $2,000. 2
217 List of members to be lodged with Registrar at request of Registrar 3
(1) A co-operative must, at the written request of the Registrar, lodge with 4
the Registrar, within the time and in the way the Registrar states, a full 5
list of the members of the co-operative and of each subsidiary of the 6
co-operative, together with the particulars about the members the 7
Registrar states in the request. 8
Maximum penalty: $2,000. 9
(2) An offence based on subsection (1) is an offence of strict liability. 10
218 Reports to be lodged with Registrar concerning prescribed particulars 11
(1) A co-operative must lodge with the Registrar, within the period or 12
periods prescribed by, or determined in accordance with, the National 13
Regulations, a report on any particulars prescribed by the National 14
Regulations. 15
Maximum penalty: $2,000. 16
(2) An offence based on subsection (1) is an offence of strict liability. 17
219 Special return to be lodged at request of Registrar 18
(1) The Registrar may, by written direction, require a co-operative to lodge 19
with the Registrar a special return in the form, within the time, and 20
relating to the subject matter, stated by the Registrar. 21
(2) The co-operative must comply with a direction under subsection (1). 22
Maximum penalty: $2,000. 23
(3) An offence based on subsection (2) is an offence of strict liability. 24
Note. Part 3.3 also requires reports to be lodged with the Registrar. 25
Division 7 Name and registered office 26
220 Name to include certain matter 27
(1) The name of a co-operative may consist of words, numbers or a 28
combination of both. 29
(2) The name of the co-operative must include the word "Co-operative" or 30
"Cooperative" or the abbreviation "Co-op" or "Coop". 31
(3) The word "Limited" or the abbreviation "Ltd" must be the last word of 32
the name. 33
Page 132
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) A corporation that is formed or incorporated under an Act of this 1
jurisdiction (but not this Law) must not register under that Act by a 2
name including the word "Co-operative" or "Cooperative" or the 3
abbreviation "Co-op" or "Coop". 4
Maximum penalty: $2,000. 5
(5) The Registrar must not register as the name of a co-operative a name 6
that contains anything the National Regulations declare is an unsuitable 7
name. 8
(6) However, the Registrar may register a name that contains a thing 9
declared to be an unsuitable name, if the Registrar is satisfied the name 10
is suitable for registration in the particular circumstances. 11
(7) The local regulations may exempt or provide for the exemption of 12
specified entities or kinds of entities from subsection (4). 13
221 Exception to requirement for using "Limited" in name 14
(1) The Registrar may, by designated instrument, approve of the omission 15
of the word "Limited" or the abbreviation "Ltd" from the name of a 16
co-operative, if its rules: 17
(a) prohibit the co-operative making distributions to its members and 18
paying fees to its directors; and 19
(b) require the directors to approve all other payments the 20
co-operative makes to directors. 21
(2) The co-operative must notify the Registrar as soon as practicable if any 22
of those requirements or prohibitions in its rules are not complied with 23
or if its rules are modified to remove any of those requirements or 24
prohibitions. 25
Maximum penalty: $2,000. 26
(3) An approval may be granted subject to conditions and the conditions to 27
which an approval is subject may be varied from time to time by the 28
Registrar by notice in writing to the co-operative. 29
(4) Any conditions to which the Registrar's approval is subject are binding 30
on the co-operative and must, if the Registrar so directs, be inserted in 31
the rules of the co-operative. 32
Note. See section 62 (1), which provides that rules may be amended by 33
resolution passed by the board if the amendment does no more than give effect 34
to a requirement, direction, restriction or prohibition imposed or given under the 35
authority of this Law. 36
(5) The Registrar may at any time by notice in writing to the co-operative 37
revoke an approval under this section but only after giving the 38
co-operative an opportunity to make submissions to the Registrar on the 39
matter. 40
Page 133
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(6) An approval under this section operates to exempt the co-operative from 1
the requirement that the word "Limited" or the abbreviation "Ltd" form 2
part of its name. 3
222 Use of abbreviations 4
A description of a co-operative is not inadequate or incorrect merely 5
because of one or more of the following: 6
(a) the use of the abbreviation "Co-op" or "Coop" instead of the 7
word "Co-operative" or "Cooperative" in the co-operative's 8
name (see section 220 (2)); 9
(b) the use of the abbreviation "Ltd" instead of the word "Limited" 10
in the co-operative's name (see section 220 (3)); 11
(c) the use of the symbol "&" instead of the word "and" in the 12
co-operative's name; 13
(d) the use of any of the words instead of the corresponding 14
abbreviation or symbol in the co-operative's name; 15
(e) the use of any abbreviation or elaboration of the name of the 16
co-operative that is approved in a particular case or for a 17
particular purpose by the Registrar in writing. 18
223 Name to appear on seals, publications and business documents 19
(1) A co-operative must ensure its name appears in legible characters: 20
(a) on each seal of the co-operative; and 21
(b) in all notices, advertisements and other official publications of 22
the co-operative; and 23
(c) in all its business documents. 24
Maximum penalty: $2,000. 25
(2) An officer of a co-operative or a person on its behalf must not: 26
(a) use any seal of the co-operative; or 27
(b) issue or authorise the issue of a notice, advertisement or other 28
official publication of the co-operative; or 29
(c) sign or authorise to be signed on behalf of the co-operative a 30
business document of the co-operative; 31
in or on which the co-operative's name does not appear in legible 32
characters. 33
Maximum penalty: $2,000. 34
(3) A director of a co-operative must not knowingly authorise or permit a 35
contravention of this section. 36
Maximum penalty: $2,000. 37
Page 134
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) An offence based on subsection (1) is an offence of strict liability. 1
(5) In this section: 2
business document of a co-operative means a document that is issued, 3
signed or endorsed by or on behalf of the co-operative and is: 4
(a) a business letter, statement of account, invoice or order for goods 5
or services; or 6
(b) a bill of exchange, promissory note, cheque or other negotiable 7
instrument; or 8
(c) a receipt or letter of credit issued by the co-operative; or 9
(d) a document of a class prescribed by the National Regulations as 10
a class of business documents. 11
224 Change of name of co-operative 12
(1) A co-operative may by special resolution change its name to a name 13
approved by the Registrar. 14
(2) A change of name must be advertised as prescribed by the National 15
Regulations. 16
(3) A change of name does not take effect until: 17
(a) the Registrar has noted the change on the certificate of 18
registration of the co-operative; or 19
(b) the certificate of registration is surrendered to the Registrar and a 20
replacement certificate of registration is issued in the new name. 21
(4) A change of name by a co-operative does not affect: 22
(a) the identity of the co-operative; or 23
(b) the exercise of a right, or the enforcement of an obligation, by or 24
against the co-operative or a person; or 25
(c) the continuation of legal proceedings by or against the 26
co-operative. 27
(5) Legal proceedings that might have been continued or started by or 28
against the co-operative in its former name may be continued or started 29
by or against the co-operative in its new name. 30
(6) The Registrar may refuse to approve a change of name if the Registrar 31
thinks the new name is unsuitable. 32
(7) The Registrar may direct a co-operative to change its name if the 33
Registrar considers the name is likely to be confused with the name of 34
a corporation or a registered business name. The co-operative must 35
comply with the direction. 36
Maximum penalty: $500. 37
Page 135
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(8) An offence based on subsection (7) is an offence of strict liability. 1
225 Restriction on use of word co-operative or similar words 2
(1) A person other than a co-operative must not trade, or carry on business, 3
under a name or title containing the word "Co-operative" or 4
"Cooperative", the abbreviation "Co-op" or "Coop", or words 5
importing a similar meaning. 6
Maximum penalty: $2,000. 7
(2) The local regulations may exempt or provide for the exemption of 8
specified entities or kinds of entities from subsection (1). 9
226 Registered office of co-operative 10
(1) A co-operative must have a registered office. 11
Maximum penalty: $2,000. 12
(2) A co-operative is guilty of an offence if its registered office is not 13
located in this jurisdiction. 14
Maximum penalty: $2,000. 15
(3) A co-operative must, at the premises of its registered office, publicly 16
and conspicuously display a notice stating the name of the co-operative 17
and identifying the premises as its registered office. 18
Maximum penalty: $2,000. 19
(4) Within 28 days after changing the address of its registered office, a 20
co-operative must give the Registrar written notice of the new address 21
of its registered office. 22
Maximum penalty: $2,000. 23
(5) A co-operative's office is registered as the co-operative's registered 24
office while the address of the office is recorded in the register of 25
co-operatives by the Registrar and there specified as its registered 26
office. 27
(6) The Registrar may, by designated instrument, exempt a small 28
co-operative, a class of small co-operatives or all small co-operatives 29
from subsection (3). 30
(7) An exemption may be given unconditionally or subject to conditions. 31
(8) An offence based on subsection (1), (2), (3) or (4) is an offence of strict 32
liability. 33
Page 136
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Part 3.2 Voting and meetings 1
Division 1 Voting entitlements 2
227 Application of Part to voting 3
The provisions of this Part apply to voting on all resolutions. 4
228 Voting 5
(1) The right to vote attaches to membership and not shareholding. 6
(2) Except as provided in subsections (3) and (4), each member has only 7
one vote at a meeting of the co-operative. 8
(3) If its rules so provide, a member of a co-operative group may have the 9
number of votes (up to 5) at a general meeting that is stated in the rules. 10
(4) If the rules so provide, the chairperson has a second vote at a board 11
meeting or general meeting. 12
(5) In the case of joint membership: 13
(a) the joint members have only one vote between them; and 14
(b) that vote may be exercised (subject to the grant of a proxy or 15
power of attorney) only by the joint member decided under the 16
rules. 17
(6) In the case of shares held jointly by 2 or more members otherwise than 18
by virtue of joint membership, each member holding the shares is 19
entitled to vote in accordance with this section. 20
Note. See section 233 for the effect on a member's right to vote where a 21
non-member has a relevant interest in a share held by the member or in the 22
member's right to vote. 23
229 Voting by proxy 24
(1) If the rules of the co-operative so provide, voting may be by proxy at a 25
general meeting. 26
(2) The instrument of proxy may state the way in which a proxy is to vote 27
on a particular resolution. 28
(3) The proxy must vote in the way authorised by an instrument of proxy 29
referred to in subsection (2). 30
(4) A person must not act as a proxy unless he or she: 31
(a) is an active member of the co-operative; or 32
(b) in the case of a co-operative group--is entitled to represent a 33
member of the group. 34
Page 137
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(5) The rules of the co-operative may limit the number of persons for whom 1
a person may act as a proxy on the same question. 2
230 Inactive members not entitled to vote 3
A member cannot vote if the member is not an active member of the 4
co-operative. 5
231 Control of right to vote 6
(1) A person must not directly or indirectly control the exercise of the right 7
to vote of a member. 8
Maximum penalty: $6,000 or imprisonment for 6 months, or both. 9
(2) If a person controls the exercise of the right of a member to vote at a 10
meeting of a co-operative: 11
(a) the vote of the member is invalid; and 12
(b) if the person is a member--the vote of the person is invalid. 13
(3) Nothing in this section prevents: 14
(a) the exercise of a vote by means of a proxy or power of attorney; 15
or 16
(b) a director controlling the vote of a corporate member; or 17
(c) an agreed purchaser controlling a member's vote pending 18
settlement. 19
232 Effect of disposal of shares on voting rights 20
A member of a co-operative cannot vote if the member has sold or 21
transferred, or disposed of the beneficial interest in, all the member's 22
shares, or agreed to do so. 23
233 Effect of relevant share and voting interests on voting rights 24
(1) Subject to subsection (3) and section 228 (5) and (6), a member of a 25
co-operative cannot vote if another person (whether or not a member of 26
the co-operative) has a relevant interest in any share held by the member 27
or in the member's right to vote. 28
(2) A member who cannot vote because of this section may apply to the 29
Registrar to review the matter. 30
(3) The Registrar may order that the member may vote if the Registrar is 31
satisfied in the circumstances of the case that loss of the right to vote 32
would be unjust or unreasonable, and the order of the Registrar has 33
effect accordingly. 34
Page 138
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
234 Rights of representatives to vote 1
A person appointed under this Law to represent a member of a 2
co-operative or co-operative group: 3
(a) is entitled to receive notice of all meetings in the same way as the 4
member represented; and 5
(b) is entitled to exercise the same rights to vote as the member 6
represented. 7
235 Other rights and duties of members not affected by ineligibility to vote 8
A provision of this Law that disentitles a member of a co-operative to 9
vote (either generally or in relation to a particular matter) does not affect 10
any other right, entitlement, obligation or duty of the member as a 11
member. 12
236 Vote of disentitled member to be disregarded 13
A vote cast by or on behalf of a member of a co-operative when not 14
entitled to vote under this Division or any other provision of this Law 15
must be disregarded. 16
Division 2 Resolutions 17
237 Decisions to be by ordinary resolution 18
Unless this Law or the rules of the co-operative otherwise provide, 19
every question for decision by a co-operative must be decided by 20
ordinary resolution. 21
238 Ordinary resolutions 22
An ordinary resolution is a resolution of a co-operative that is passed 23
by a simple majority at a general meeting of the co-operative or in a 24
postal ballot of members. 25
239 Special resolutions 26
(1) A special resolution is a resolution of a co-operative that is passed: 27
(a) by a two-thirds majority at a general meeting of the co-operative; 28
or 29
(b) by a two-thirds majority in a postal ballot (other than a special 30
postal ballot) of members; or 31
(c) by a three-quarters majority in a special postal ballot of members. 32
Note 1. A co-operative may by its rules require a higher majority voting 33
percentage on any matter or that specified matters must be passed by postal or 34
special postal ballot. 35
Page 139
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Note 2. Section 250 enables 20% of members (or a lesser percentage specified 1
in the rules) to require a postal ballot for a special resolution. 2
(2) A special resolution may be passed by a postal ballot only if the rules of 3
the co-operative so permit or this Law requires the special resolution to 4
be passed by postal ballot (including a special postal ballot). 5
(3) A resolution must not be considered to have been passed as a special 6
resolution unless not less than 21 days notice has been given to the 7
members of the co-operative stating: 8
(a) the intention to propose the special resolution; and 9
(b) the reasons for proposing the special resolution; and 10
(c) the effect of the special resolution being passed. 11
240 How majority is ascertained 12
(1) A resolution is passed by a particular majority at a meeting if that 13
majority of the members of the co-operative who, being entitled to do 14
so, vote in person or (if proxies are allowed) by proxy at the meeting 15
vote in favour of the resolution. 16
(2) A resolution is passed by a particular majority in a postal ballot if that 17
majority of the members of the co-operative who, being entitled to do 18
so, cast formal votes in the postal ballot vote in favour of the resolution. 19
241 Declaration of passing of special resolution 20
(1) At a meeting of a co-operative for the purpose of passing a special 21
resolution, a declaration by the chairperson of the meeting that the 22
resolution has been passed as a special resolution is evidence of that 23
fact. 24
(2) A declaration by the returning officer for a postal ballot to pass a special 25
resolution that the resolution has been passed as a special resolution is 26
evidence of that fact. 27
(3) Subsection (1) does not apply if a poll is taken at the meeting of the 28
co-operative. 29
242 Effect of special resolution 30
(1) A special resolution has effect from the date it is passed. 31
(2) However, a special resolution relating to anything for which a special 32
resolution is required to be passed by special postal ballot has no effect 33
until it is registered. 34
Note. Section 446 provides that a members' voluntary winding up of a 35
co-operative starts when the result of the special postal ballot is noted in the 36
minutes by the secretary of the co-operative. 37
Page 140
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) Subsection (2) and sections 243 and 244 do not apply to a special 1
resolution amending the rules of a co-operative. 2
Note. Part 2.3 deals with amendments to rules and when amendments take 3
effect. 4
243 Registration of special resolution 5
(1) A co-operative must, in accordance with subsection (2), file 2 copies of 6
each special resolution passed by the co-operative with the Registrar for 7
registration. 8
Maximum penalty: $2,000. 9
(2) The copies must: 10
(a) be filed within 28 days after the passing of a special resolution or 11
the further period the Registrar allows; and 12
(b) be signed by a director, the secretary of the co-operative or 13
another authorised representative of the co-operative; and 14
(c) be accompanied by the filing fee prescribed by: 15
(i) the National Regulations, unless subparagraph (ii) applies; 16
or 17
(ii) the local regulations. 18
Note. See section 444 (4) (a) regarding the period within which a special 19
resolution must be filed with the Registrar in connection with the 20
voluntary winding up of a co-operative. 21
(3) A co-operative or an officer of the co-operative must not knowingly fail 22
to file the required copies under this section. 23
Maximum penalty: $2,000. 24
(4) An offence based on subsection (1) is an offence of strict liability. 25
244 Decision of Registrar on application to register special resolution 26
(1) If the Registrar is satisfied the co-operative has complied with this Law 27
and the special resolution is not contrary to this Law, the Registrar must 28
register the special resolution and may issue a certificate of registration. 29
(2) If the Registrar considers the effect of a special resolution filed for 30
registration would be in contravention of this Law or any other law, the 31
Registrar: 32
(a) may refuse to register the special resolution; and 33
Page 141
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) must give written notice to the co-operative that the special 1
resolution: 2
(i) for a special resolution referred to in section 242 (2)--has 3
no effect; and 4
(ii) in any other case--has no effect as from the date it was 5
passed. 6
(3) A certificate of registration of a special resolution issued by the 7
Registrar is, in favour of any person advancing money to the 8
co-operative on the faith of the certificate or in favour of any guarantor 9
of that advance, evidence that the resolution was properly passed. 10
Division 3 Resolution by circulated document 11
245 Application of Division 12
This Division applies to a resolution of a co-operative, including a 13
resolution appointing an officer or auditor or approving of or agreeing 14
to any act, matter or thing, if: 15
(a) the co-operative has fewer than 50 members; and 16
(b) the resolution is required or permitted under this Law or the rules 17
of the co-operative to be passed at a general meeting of the 18
co-operative. 19
246 Resolution by circulation of document--fewer than 50 members 20
(1) If all the members of a co-operative have signed a document that sets 21
out the terms of a resolution and contains a statement that they are in 22
favour of the resolution, the resolution is taken to have been passed at a 23
general meeting of the co-operative. 24
(2) The meeting is taken to have been held: 25
(a) if all the members signed the document on the one day--on the 26
day the document was signed, at the time the document was 27
signed by the last member to sign; or 28
(b) if the members signed the document on different days--on the 29
day, and at the time, the document was signed by the last member 30
to sign. 31
(3) The document need not exist as a single document, but may exist in the 32
form of 2 or more documents in identical terms. 33
(4) The document is taken to constitute a minute of the general meeting. 34
(5) Anything attached to the document and signed by the members signing 35
the document is taken to have been laid before the co-operative at the 36
general meeting. 37
Page 142
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(6) The document is signed by all members of a co-operative only if the 1
document is signed by each person who was a member of the 2
co-operative at the time the document was signed by the last member to 3
sign. 4
(7) Nothing in this section affects or limits any rule of law about the 5
effectiveness of the assent of members of a co-operative given to a 6
document, or to an act, matter or thing, otherwise than at a general 7
meeting of the co-operative. 8
Division 4 Postal ballots 9
247 Postal ballots 10
(1) A postal ballot may be held as provided by the rules of a co-operative 11
and must be conducted in the way prescribed by the National 12
Regulations. 13
(2) On the declaration by the returning officer of the result of the ballot, the 14
secretary of the co-operative must make an entry in the minutes of the 15
co-operative showing: 16
(a) the number of formal votes cast in favour of the proposal 17
concerned; and 18
(b) the number of formal votes cast against the proposal; and 19
(c) the number of informal votes cast. 20
248 Special postal ballots 21
(1) A special postal ballot is a postal ballot that is conducted in accordance 22
with this section. 23
(2) The ballot must not be held less than 28 days after notice of the ballot is 24
given to members. 25
Note. This period is intended to enable sufficient time for a meeting to be called 26
(whether by the board or on the requisition of members) and held to discuss the 27
proposal the subject of the ballot. 28
(3) The co-operative must send to each member (along with any other 29
material required to be sent in relation to the postal ballot) a disclosure 30
statement approved by the Registrar and containing information about: 31
(a) the financial position of the co-operative; and 32
(b) the interests of the directors of the co-operative in the proposal 33
with which the ballot is concerned, including any interests of the 34
directors in another organisation concerned in the proposal; and 35
(c) any compensation or consideration to be paid to officers or 36
members of the co-operative in connection with the proposal; and 37
(d) any other matters the Registrar directs. 38
Page 143
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) If the Registrar so requires, the disclosure statement is to be 1
accompanied by a report made by an independent person approved by 2
the Registrar about any matters the Registrar directs. 3
(5) A draft disclosure statement must be submitted to the Registrar at least 4
28 days (or the shorter period the Registrar may allow in a particular 5
case) before the notice of the special postal ballot is to be given to 6
members. 7
(6) Section 25 (except subsections (1), (2) and (3)) applies to a disclosure 8
statement under this section with any necessary modifications, and in 9
particular as if a reference in that section to a formation meeting were a 10
reference to the notice of the special postal ballot. 11
Note. Sections 380 and 445 provide for exemptions from this section in certain 12
circumstances. 13
249 When special postal ballot is required 14
The board of a co-operative must conduct a special postal ballot when 15
required by a provision of this Law. 16
Note. Voting by special postal ballot is provided for by this Law as follows: 17
(a) conversion of: 18
(i) a co-operative with share capital to a co-operative without share 19
capital, or vice versa; or 20
(ii) a distributing co-operative to a non-distributing co-operative, or 21
vice versa; 22
(see section 35); 23
(b) a special resolution to require members to take up or subscribe for 24
additional shares and a special resolution to deduct amounts for 25
additional shares (see section 82); 26
(c) a special resolution on the requisition of members (see section 250); 27
(d) a special resolution to require members to lend money to the 28
co-operative (see section 343); 29
(e) an acquisition or disposal of certain assets (see section 359); 30
(f) the maximum permissible level of share interest in a co-operative (see 31
section 363); 32
(g) certain share offers (see section 374); 33
(h) a merger (see sections 396 and 476); 34
(i) a transfer of engagements (see sections 396 and 476); 35
(j) a transfer of incorporation (see section 404); 36
(k) a compromise or arrangement between a co-operative and its members 37
(see section 414); 38
(l) a members' voluntary winding up (see section 445). 39
Page 144
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
250 Holding of postal ballot on requisition 1
(1) The board of a co-operative must conduct a postal ballot (including a 2
special postal ballot) for the passing of a special resolution on the 3
written requisition of the number of members who together are able to 4
cast at least 20% (or a lesser percentage specified in the rules of the 5
co-operative) of the total number of votes able to be cast at a meeting of 6
the co-operative. 7
(2) A member cannot be a requisitioning member unless the member is an 8
active member. 9
(3) The following provisions apply to a requisition for a postal ballot: 10
(a) it must state: 11
(i) the proposed special resolution to be voted on; and 12
(ii) the reasons for the making of the special resolution; and 13
(iii) the effect of the special resolution being passed; 14
(b) it must be signed by the requisitioning members (and may consist 15
of several documents in like form each signed by one or more of 16
the requisitioning members); 17
(c) it must be served on the co-operative by being filed at the 18
registered office of the co-operative. 19
(4) The postal ballot must be conducted as soon as practicable and in any 20
case must be conducted within 2 months after the requisition is served. 21
(5) If the special resolution for which the requisitioned postal ballot is 22
conducted is not passed, the co-operative may recover the expenses of 23
the postal ballot from the members who requisitioned the postal ballot 24
as a debt payable to the co-operative. 25
251 Expenses involved in postal ballots on requisition 26
(1) All reasonable expenses incurred by a co-operative in preparing for and 27
holding a special postal ballot are taken to form the expenses of the 28
postal ballot conducted for the purposes of section 250. 29
(2) Those expenses include (but are not limited to) the following expenses: 30
(a) the cost of obtaining expert advice (including legal and financial 31
advice) and of commissioning expert reports; 32
(b) costs attributable to the use of staff of the co-operative in 33
preparing for and holding the ballot; 34
(c) the cost of producing, printing and posting the ballot papers and 35
other material associated with the ballot. 36
Page 145
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 5 Meetings 1
252 Annual general meetings (cf Corporations Act s 250N) 2
(1) A co-operative must hold its initial annual general meeting within 3
18 months after its registration. 4
Maximum penalty: $1,000 or imprisonment for 3 months, or both. 5
(2) A co-operative must hold an annual general meeting at least once in 6
each calendar year after its initial annual general meeting and within 7
5 months after the end of its financial year. 8
Maximum penalty: $1,000 or imprisonment for 3 months, or both. 9
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 10
(4) An annual general meeting is to be held in addition to any other 11
meetings held by a co-operative in the year. 12
253 Special general meetings 13
A special general meeting of a co-operative may be called at any time 14
by the board. 15
254 Notice of meetings 16
The board must give each member at least 14 days notice of each 17
general meeting. 18
Note. Section 239 requires 21 days notice of each special resolution to be 19
considered at a general meeting. 20
255 Quorum at meetings 21
(1) The quorum for a meeting of a co-operative must be stated in the rules 22
of the co-operative. 23
(2) An item of business must not be transacted at a meeting of a 24
co-operative unless a quorum of members entitled to vote is present 25
during the transaction of that item. 26
256 Decision at meetings 27
(1) A question for decision at a general meeting of a co-operative is to be 28
decided by a show of hands, unless a poll is required (see 29
subsection (2)). 30
(2) The question is to be decided by a poll if a poll is required by the 31
chairperson of the meeting or by any 5 members present at the meeting 32
or represented at the meeting by proxy. 33
(3) A person who is a proxy for one or more members may cast only one 34
vote on a question for decision by a show of hands. 35
Page 146
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) A person who is a proxy for one or more members may cast more than 1
one vote on a question for decision by a poll, unless the rules of the 2
co-operative restrict the number of votes that a proxy may cast. 3
(5) In the case of an equality of votes, the chairperson of the meeting at 4
which the show of hands takes place or at which the poll is demanded 5
may cast a second vote if the rules of the co-operative so provide. 6
(6) This section has effect subject to section 229. 7
Note. Section 229 deals with voting by proxy. 8
257 Calling of general meeting on requisition 9
(1) The board of a co-operative must call a general meeting of the 10
co-operative on the written requisition of the number of members who 11
together are able to cast at least 20% (or a lesser percentage specified in 12
the rules of the co-operative) of the total number of votes able to be cast 13
at a meeting of the co-operative. 14
(2) A member cannot be a requisitioning member unless the member is an 15
active member. 16
(3) The following provisions apply to a requisition for a general meeting: 17
(a) it must state the objects of the meeting; 18
(b) it must be signed by the requisitioning members (and may consist 19
of several documents in like form each signed by one or more of 20
the requisitioning members); 21
(c) it must be served on the co-operative by being filed at the 22
registered office of the co-operative. 23
(4) The meeting must be called and held as soon as practicable and in any 24
case must be held within 63 days after the requisition is served. 25
(5) If the board does not call the meeting within 21 days after the requisition 26
is served, the following provisions apply: 27
(a) the requisitioning members (or any of them representing at least 28
half their total voting rights) may call the meeting in the same 29
way as nearly as possible as meetings are called by the board; 30
(b) for that purpose, they may ask the co-operative to supply a 31
written statement setting out the names and addresses of the 32
persons entitled when the requisition was served to receive notice 33
of general meetings of the co-operative; 34
(c) the board must send the requested statement to the requisitioning 35
members within 7 days after the request for the statement is 36
made; 37
(d) the meeting called by the requisitioning members must be held 38
within 91 days after the requisition is served; 39
Page 147
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(e) any reasonable expenses incurred by the requisitioning members 1
because of the board's failure to call the meeting must be paid by 2
the co-operative; 3
(f) any amount required to be paid by the co-operative under 4
paragraph (e) must be retained by the co-operative out of any 5
money due from the co-operative by way of fees or other 6
remuneration for their services to any of the directors that were in 7
default. 8
258 Minutes 9
(1) Minutes of each general meeting, board meeting and committee 10
meeting must be entered in the appropriate books within 28 days after 11
the meeting. 12
(2) A co-operative must ensure that minutes of a meeting are signed within 13
a reasonable time after the meeting by one of the following: 14
(a) the chairperson of the meeting; 15
(b) the chairperson of the next meeting. 16
(3) Minutes must be kept in the English language. 17
Note. Section 214 makes provision regarding the availability of minutes for 18
inspection. 19
259 Auditor entitled to notice and other communications (cf Corporations Act 20
s 249K) 21
(1) A co-operative must give its auditor: 22
(a) notice of a general meeting in the same way that a member of the 23
co-operative is entitled to receive notice; and 24
(b) any other communications relating to the general meeting that a 25
member of the co-operative is entitled to receive. 26
Maximum penalty: $500. 27
(2) An offence based on subsection (1) is an offence of strict liability. 28
260 Auditor's right to be heard at general meetings (cf Corporations Act s 249V) 29
(1) A co-operative's auditor is entitled to attend any general meeting of the 30
co-operative. 31
(2) The auditor is entitled to be heard at the meeting on any part of the 32
business of the meeting that concerns the auditor in the capacity of 33
auditor. 34
(3) The auditor is entitled to be heard even if: 35
(a) the auditor retires at the meeting; or 36
(b) the meeting passes a resolution to remove the auditor from office. 37
Page 148
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) The auditor may authorise a person in writing as the auditor's 1
representative for the purpose of attending and speaking at any general 2
meeting. 3
261 Questions and comments by members on co-operative management at 4
annual general meeting (cf Corporations Act s 250S) 5
(1) The chairperson of an annual general meeting of a co-operative must 5
6
allow a reasonable opportunity for the members as a whole at the 7
meeting to ask questions about or make comments on the management 8
of the co-operative. 9
Maximum penalty: $500. 10
(2) An offence based on subsection (1) is an offence of strict liability. 11
262 Questions by members of auditors at annual general meeting (cf 12
Corporations Act s 250T) 13
(1) If a co-operative's auditor or their representative is at the meeting, the 14
chairperson of an annual general meeting of the co-operative must: 15
(a) allow a reasonable opportunity for the members as a whole at the 16
meeting to ask the auditor or the auditor's representative 17
questions relevant to: 18
(i) the conduct of the audit; and 19
(ii) the preparation and content of the auditor's report; and 20
(iii) the accounting policies adopted by the co-operative in 21
relation to the preparation of the financial statements; and 22
(iv) the independence of the auditor in relation to the conduct 23
of the audit; and 24
(b) allow a reasonable opportunity for the auditor or their 25
representative to answer written questions submitted to the 26
auditor. 27
Maximum penalty: $500. 28
(2) An offence based on subsection (1) is an offence of strict liability. 29
(3) If: 30
(a) the co-operative's auditor or their representative is at the 31
meeting; and 32
(b) the auditor has prepared a written answer to a written question 33
submitted to the auditor; 34
the chairperson of the annual general meeting may permit the auditor or 35
their representative to table the written answer to the written question. 36
Page 149
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) The co-operative must make the written answer tabled under 1
subsection (3) reasonably available to members as soon as practicable 2
after the annual general meeting. 3
Maximum penalty (for subsection (4)): $500. 4
Part 3.3 Financial reports and audit 5
Note. Columns 1 and 2 of the following Table set out the Division numbers and Division 6
headings of this Part, and Columns 3 and 4 indicate (where relevant) provisions of Chapter 2M 7
of the Corporations Act that generally correspond to each Division of this Part. 8
Table 9
Column 1 Column 2 Column 3 Column 4
Division of Heading to Division Provisions of Location of
this Part Chapter 2M of provisions in
Corporations Chapter 2M of
Act to which Corporations
Division Act
generally
corresponds
Division 1 Preliminary -- --
Division 2 Financial records ss 286-290 Part 2M.2
Division 3 Annual financial reports and directors' ss 292-294 (also Part 2M.3, Div 1
reports generally s 315 (2)) (also Div 4)
Division 4 Annual financial reports ss 295-297, 301 Part 2M.3, Div 1
Division 5 Annual directors' reports ss 298-300A Part 2M.3, Div 1
Division 6 Half-year financial report and ss 302-306 Part 2M.3, Div 2
directors' report
Division 7 Audit and auditor's report ss 307-313 Part 2M.3, Div 3
Division 8 Annual financial reporting to members ss 314-318 Part 2M.3, Div 4
Division 9 Lodging reports and returns with ss 319-322 Part 2M.3, Div 5
Registrar
Division 10 Special provisions about consolidated ss 323-323C Part 2M.3, Div 6
financial statements
Division 11 Financial years and half-years s 323D Part 2M.3, Div 7
Division 12 Auditors ss 324AA-331 Part 2M.4,
(except s 327H) Divs 1-6
Page 150
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Column 1 Column 2 Column 3 Column 4
Division of Heading to Division Provisions of Location of
this Part Chapter 2M of provisions in
Corporations Chapter 2M of
Act to which Corporations
Division Act
generally
corresponds
Division 13 Accounting and auditing standards ss 337, 338 Part 2M.5
Division 14 Exemptions and modifications ss 340-343 Part 2M.6
Division 15 Miscellaneous s 344 Part 2M.7
Division 1 Preliminary 1
263 Interpretation 2
(1) In this Part: 3
accounting standard--see section 314. 4
audit means: 5
(a) an audit conducted for the purposes of this Law; or 6
(b) a review of a financial report conducted for the purposes of this 7
Law. 8
auditing standard--see section 314. 9
consolidated entity means a co-operative together with all the entities it 10
is required by the accounting standards to include in consolidated 11
financial statements. 12
directors' declaration--see section 273. 13
financial report means an annual financial report or a half-year 14
financial report prepared by a co-operative under this Part (and see 15
section 273). 16
financial statements--see section 273. 17
notes to the financial statements--see section 273. 18
(2) Terms used in this Part have the same meanings as they have in the 19
Corporations Act, and in particular in Chapter 2M of the Corporations 20
Act. 21
Note. Examples of terms covered by subsection (2) are authorised audit 22
company, entity, control and registered company auditor. 23
(3) Without limiting subsection (2), the term controlled entity used in this 24
Part has a meaning affected by section 50AA of the Corporations Act. 25
Page 151
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
264 General modifications to applied provisions of Chapter 2M of 1
Corporations Act 2
(1) This section applies to the provisions of Chapter 2M of the Corporations 3
Act as they apply under this Part. 4
(2) In those provisions: 5
(a) a reference to a company that is an auditor of a co-operative is to 6
be read as a reference to a company and not a co-operative; and 7
(b) a reference to a small proprietary company is to be read as a 8
reference to a small co-operative (which is defined in section 4 as 9
a co-operative of a class or description prescribed by the National 10
Regulations); and 11
(c) a reference to an order of exemption is to be read as a reference 12
to an exemption under Division 14 of this Part. 13
(3) Subsection (2) does not apply to the extent to which this Law or the 14
National Regulations provide otherwise, whether expressly or by 15
implication. 16
Division 2 Financial records 17
265 Obligation to keep financial records (cf Corporations Act s 286) 18
(1) A co-operative must keep written financial records that: 19
(a) correctly record and explain its transactions and financial 20
position and performance; and 21
(b) would enable true and fair financial statements to be prepared and 22
audited. 23
The obligation to keep financial records of transactions extends to 24
transactions undertaken as trustee. 25
Maximum penalty: $2,500. 26
(2) The co-operative must retain the financial records for 7 years after the 27
transactions covered by the records are completed. 28
Maximum penalty: $2,500. 29
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 30
266 Language requirements (cf Corporations Act s 287) 31
(1) The financial records may be kept in any language. 32
(2) A co-operative must ensure that an English translation of financial 33
records not kept in English is made available within a reasonable time 34
to a person who: 35
(a) is entitled to inspect the records; and 36
Page 152
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) asks for the English translation. 1
Maximum penalty: $2,500. 2
(3) An offence based on subsection (2) is an offence of strict liability. 3
267 Physical format (cf Corporations Act s 288) 4
(1) A co-operative must ensure that, if financial records are kept in 5
electronic form, they are to be convertible into hard copy. 6
(2) If financial records are kept in electronic form, the co-operative must 7
ensure that a hard copy is made available within a reasonable time to a 8
person who is entitled to inspect the records. 9
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 10
Maximum penalty: $2,500. 11
268 Place where records are kept (cf Corporations Act s 289) 12
(1) A co-operative may decide where to keep the financial records. 13
(2) If financial records about particular matters are kept outside this 14
jurisdiction, the co-operative must ensure that sufficient written 15
information about those matters are kept in this jurisdiction to enable 16
true and fair financial statements to be prepared. 17
Maximum penalty: $2,500. 18
(3) If financial records about particular matters are kept outside this 19
jurisdiction, the co-operative must give the Registrar written notice in 20
the approved form of the place where the information is kept. 21
Maximum penalty: $2,500. 22
(4) The Registrar may direct a co-operative to produce specified financial 23
records that are kept outside this jurisdiction. The co-operative must 24
comply with the direction. 25
Maximum penalty: $2,000. 26
(5) The direction must: 27
(a) be in writing; and 28
(b) specify a place in this jurisdiction where the records are to be 29
produced (the place must be reasonable in the circumstances); 30
and 31
(c) specify a day (at least 14 days after the direction is given) by 32
which the records are to be produced. 33
(6) An offence based on subsection (2), (3) or (4) is an offence of strict 34
liability. 35
Page 153
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
269 Director access (cf Corporations Act s 290) 1
(1) A director of a co-operative has a right of access to the financial records 2
at all reasonable times. 3
(2) On application by a director, the Supreme Court may authorise a person 4
to inspect the financial records on the director's behalf. 5
(3) A person authorised to inspect records may make copies of the records 6
unless the Supreme Court orders otherwise. 7
(4) The Supreme Court may make any other orders it considers appropriate, 8
including either or both of the following: 9
(a) an order limiting the use that a person who inspects the records 10
may make of information obtained during the inspection; 11
(b) an order limiting the right of a person who inspects the records to 12
make copies in accordance with subsection (3). 13
Division 3 Annual financial reports and directors' reports 14
generally 15
270 Who has to prepare annual financial reports and directors' reports 16
(1) Large co-operatives--requirement to prepare reports in accordance 17
with this Part (cf Corporations Act s 292 (1)) 18
A large co-operative must prepare a financial report and a directors' 19
report in accordance with this Part for each financial year. 20
(2) Small co-operatives--requirement to prepare reports if directed to do 21
so (cf Corporations Act s 292 (2)) 22
A small co-operative must prepare a financial report and a directors' 23
report if and as directed under section 271 or 272. 24
(3) Small co-operatives--where no direction 25
A small co-operative that is not the subject of a direction under either 26
section 271 or 272: 27
(a) is not required to prepare reports in accordance with this Part; and 28
(b) must comply with the requirements (if any) of the National 29
Regulations regarding the preparation and provision of reports to 30
members. 31
Note. The rules of a co-operative may provide for the preparation of financial 32
reports that would be additional to those required by the National Regulations. 33
Page 154
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
271 Small co-operative--direction by members (cf Corporations Act s 293 and 1
s 315 (2)) 2
(1) Direction to prepare reports (cf Corporations Act s 293 (1)) 3
Members with at least 5% of the votes in a small co-operative may give 4
the co-operative a direction to: 5
(a) prepare a financial report or directors' report or both for a 6
financial year in accordance with all or with specified 7
requirements of this Part; and 8
(b) send them to all members. 9
(2) Manner of giving direction (cf Corporations Act s 293 (2)) 10
The direction must be: 11
(a) signed by the members giving the direction; and 12
(b) made no later than 12 months after the end of the financial year 13
concerned. 14
(3) Matters that may be included in direction (cf Corporations Act s 293 (3)) 15
The direction may specify all or any of the following: 16
(a) that the financial report does not have to comply with some or all 17
of the accounting standards; 18
(b) that a directors' report or a part of that report need not be prepared 19
in accordance with this Part; 20
(c) that the financial report is to be audited or reviewed. 21
(4) Direction regarding auditing or review 22
If the direction specifies that the financial report is to be audited or 23
reviewed, the direction may specify that the audit or review is to be 24
conducted: 25
(a) in accordance with Division 3 of Part 2M.3 of the Corporations 26
Act (as applying under section 283); or 27
(b) in accordance with requirements prescribed by the National 28
Regulations. 29
(5) Direction given during financial year 30
If a direction is given to a small co-operative under this section before 31
the end of the financial year, the direction must specify the date by 32
which the documents have to be prepared, sent or lodged. The date must 33
be a reasonable one in view of the nature of the direction. 34
Page 155
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(6) Direction given after end of financial year (cf Corporations Act s 315 (2)) 1
If a direction is given to a small co-operative under this section after the 2
end of the financial year, the co-operative must report to members under 3
section 284 by the later of: 4
(a) 2 months after the date on which the direction is given; and 5
(b) 5 months after the end of the financial year. 6
272 Small co-operative--direction by Registrar (cf Corporations Act s 294) 7
(1) The Registrar may give a small co-operative a direction to comply with 8
all or specified requirements of this Division and Divisions 4, 5, 7, 8, 9 9
and 10 for a financial year. 10
(2) The small co-operative must comply with the direction. 11
Maximum penalty: $1,000. 12
(3) An offence based on subsection (2) is an offence of strict liability. 13
(4) The direction may specify any or all of the matters referred to in 14
section 271 (3) and (4). 15
(5) The direction may be general or may specify the particular requirements 16
that the co-operative is to comply with. 17
(6) The direction must specify the date by which the documents have to be 18
prepared, sent or lodged. The date must be a reasonable one in view of 19
the nature of the direction. 20
(7) The direction must: 21
(a) be made in writing; and 22
(b) specify the financial year concerned; and 23
(c) be made no later than 6 years after the end of that financial year. 24
Division 4 Annual financial reports 25
273 Contents of annual financial report (cf Corporations Act s 295) 26
(1) Basic contents 27
The financial report for a financial year consists of: 28
(a) the financial statements for the year; and 29
(b) the notes to the financial statements; and 30
(c) the directors' declaration about the statements and notes. 31
Page 156
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) Financial statements 1
The financial statements for the year are: 2
(a) the financial statements in relation to the entity reported on that 3
are required by the accounting standards; and 4
(b) if the accounting standards require financial statements in 5
relation to a consolidated entity--the financial statements in 6
relation to the consolidated entity that are required by the 7
accounting standards. 8
(3) Notes to financial statements 9
The notes to the financial statements are: 10
(a) disclosures required by the National Regulations; and 11
(b) notes required by the accounting standards; and 12
(c) any other information necessary to give a true and fair view (see 13
section 275). 14
(4) Directors' declaration 15
The directors' declaration is a declaration by the directors: 16
(a) whether, in the directors' opinion, there are reasonable grounds 17
to believe that the co-operative will be able to pay its debts as and 18
when they become due and payable; and 19
(b) whether, in the directors' opinion, the financial statements and 20
notes are in accordance with this Law, including: 21
(i) section 274; and 22
(ii) section 275; and 23
(c) if the co-operative has quoted securities--that the directors have 24
been given the declarations required by section 295A of the 25
Corporations Act (as applying under section 277). 26
Note. Section 295A of the Corporations Act (as applying under section 277) 27
requires the chief executive officer and chief financial officer of a co-operative 28
with quoted securities to make an additional declaration described in that 29
section. 30
(5) Directors' declaration--particular requirements 31
The directors' declaration must: 32
(a) be made in accordance with a resolution of the directors; and 33
(b) specify the date on which the declaration is made; and 34
(c) be signed by a director. 35
Page 157
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
274 Compliance with accounting standards and regulations (cf Corporations 1
Act s 296) 2
(1) The financial report for a financial year must comply with the 3
accounting standards. 4
(2) However, a small co-operative's financial report does not have to 5
comply with particular accounting standards if: 6
(a) the report is prepared in response to a direction under section 271 7
or 272; and 8
(b) the direction specifies that the report does not have to comply 9
with those accounting standards. 10
(3) The financial report must comply with any further requirements in the 11
National Regulations. 12
275 True and fair view (cf Corporations Act s 297) 13
(1) The financial statements and notes for a financial year must give a true 14
and fair view of: 15
(a) the financial position and performance of the co-operative; and 16
(b) if consolidated financial statements are required--the financial 17
position and performance of the consolidated entity. 18
(2) This section does not affect the obligation under section 274 for a 19
financial report to comply with accounting standards. 20
Note. If the financial statements and notes prepared in compliance with the 21
accounting standards would not give a true and fair view, additional information 22
must be included in the notes to the financial statements under 23
section 273 (3) (c). 24
276 Audit of annual financial report 25
(1) Large co-operative--audit to be conducted in accordance with applied 26
provisions of Corporations Act (cf Corporations Act s 301 (1)) 27
A large co-operative must have the financial report for a financial year 28
audited in accordance with Division 3 of Part 2M.3 of the Corporations 29
Act (as applying under section 283) and obtain an auditor's report. 30
(2) Small co-operative--where audit not required (cf Corporations Act 31
s 301 (2)) 32
A small co-operative's financial report for a financial year does not 33
have to be audited if: 34
(a) the report is prepared in response to a direction under section 271 35
or 272; and 36
(b) the direction did not ask for the financial report to be audited. 37
Page 158
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) Small co-operative--where manner of required audit is specified in 1
direction 2
If a small co-operative's financial report for a financial year is prepared 3
in response to a direction under section 271 or 272 and the direction 4
asked for the financial report to be audited: 5
(a) in accordance with Division 3 of Part 2M.3 of the Corporations 6
Act (as applying under section 283); or 7
(b) in some other specified manner; 8
the co-operative must have the financial reported audited as directed 9
and obtain an auditor's report. 10
(4) Small co-operative--where manner of required audit is not specified 11
in direction 12
If a small co-operative's financial report for a financial year is prepared 13
in response to a direction under section 271 or 272 and the direction 14
asked for the financial report to be audited without specifying the 15
manner in which the audit is to be conducted, the co-operative must 16
have the financial report audited in accordance with Division 3 of 17
Part 2M.3 of the Corporations Act (as applying under section 283) and 18
obtain an auditor's report. 19
277 Application of Corporations Act--co-operatives with quoted securities-- 20
declaration about financial statements by certain officers 21
A co-operative with quoted securities is declared to be an applied 22
Corporations legislation matter for the purposes of the Corporations 23
application legislation of this jurisdiction in relation to section 295A of 24
the Corporations Act, subject to the modifications referred to in 25
sections 13 (3) and 264 of this Law so far as they are relevant. 26
Note. See section 13, including Note 1 to that section. 27
Division 5 Annual directors' reports 28
278 Annual directors' report (cf Corporations Act s 298) 29
(1) A co-operative must prepare a directors' report for each financial year. 30
(2) The directors' report must include: 31
(a) the general information required by: 32
(i) section 279 of this Law (all co-operatives); and 33
(ii) section 299A of the Corporations Act (as applying under 34
section 281) (co-operatives with quoted securities); and 35
Page 159
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) the specific information required by: 1
(i) section 280 of this Law (all co-operatives); and 2
(ii) sections 300 and 300A of the Corporations Act (as 3
applying under section 281) (co-operatives with quoted 4
securities); and 5
(c) a copy of the auditor's declaration under section 307C of the 6
Corporations Act (as applying under section 283) in relation to 7
the audit for the financial year. 8
(3) If the financial report for a financial year includes additional 9
information under section 273 (3) (c) (information included to give a 10
true and fair view of financial position and performance), the directors' 11
report for the financial year must also: 12
(a) set out the directors' reasons for forming the opinion that the 13
inclusion of that additional information was necessary to give the 14
true and fair view required by section 275; and 15
(b) specify where that additional information can be found in the 16
financial report. 17
(4) The directors' report must: 18
(a) be made in accordance with a resolution of the directors; and 19
(b) specify the date on which the report is made; and 20
(c) be signed by a director. 21
(5) A small co-operative does not have to comply with subsection (1) for a 22
financial year if: 23
(a) it is preparing financial statements for that year in response to a 24
direction under section 271 or 272; and 25
(b) the direction specified that a directors' report need not be 26
prepared. 27
279 Annual directors' report--general information (cf Corporations Act s 299) 28
(1) General information about operations and activities 29
The directors' report for a financial year must: 30
(a) contain a review of operations during the year of the entity 31
reported on and the results of those operations; and 32
(b) give details of any significant changes in the entity's state of 33
affairs during the year; and 34
(c) state the entity's principal activities during the year and any 35
significant changes in the nature of those activities during the 36
year; and 37
Page 160
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(d) give details of any matter or circumstance that has arisen since 1
the end of the year that has significantly affected, or may 2
significantly affect: 3
(i) the entity's operations in future financial years; or 4
(ii) the results of those operations in future financial years; or 5
(iii) the entity's state of affairs in future financial years; and 6
(e) refer to likely developments in the entity's operations in future 7
financial years and the expected results of those operations; and 8
(f) if the entity's operations are subject to any particular and 9
significant environmental regulation under a law of the 10
Commonwealth or of a State or Territory--give details of the 11
entity's performance in relation to environmental regulation. 12
(2) The entity reported on is: 13
(a) the co-operative (if consolidated financial statements are not 14
required); or 15
(b) the consolidated entity (if consolidated financial statements are 16
required). 17
(3) Prejudicial information need not be disclosed 18
The directors' report may omit material that would otherwise be 19
included under subsection (1) (e) if it is likely to result in unreasonable 20
prejudice to: 21
(a) the co-operative; or 22
(b) if consolidated financial statements are required--the 23
consolidated entity or any entity (including the co-operative) that 24
is part of the consolidated entity. 25
(4) Statement of omission of material 26
If material is omitted, the directors' report must say so. 27
280 Annual directors' report--specific information 28
(1) Details to be included (cf Corporations Act s 300 (1)) 29
The directors' report for a financial year must include details of: 30
(a) dividends or distributions paid to members during the year; and 31
(b) dividends or distributions recommended or declared for payment 32
to members, but not paid, during the year; and 33
(c) the name of each person who has been a director of the 34
co-operative at any time during or since the end of the year and 35
the period for which they were a director; and 36
Page 161
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(d) the name of each person who: 1
(i) is an officer of the co-operative at any time during the year; 2
and 3
(ii) was a partner in an audit firm, or a director of an audit 4
company, that is an auditor of the co-operative for the year; 5
and 6
(iii) was such a partner or director at a time when the audit firm 7
or the audit company undertook an audit of the 8
co-operative; and 9
(e) options that are: 10
(i) granted over unissued shares or unissued interests during 11
or since the end of the year; and 12
(ii) granted to any of the directors or any of the 5 most highly 13
remunerated officers of the co-operative (other than the 14
directors); and 15
(iii) granted to them as part of their remuneration (see 16
subsections (4)-(6)); and 17
(f) unissued shares or interests under option as at the day the report 18
is made (see subsections (4) and (6)); and 19
(g) shares or interests issued during or since the end of the year as a 20
result of the exercise of an option over unissued shares or 21
interests (see subsections (4) and (7)); and 22
(h) indemnities given and insurance premiums paid during or since 23
the end of the year for a person who is or has been an officer or 24
auditor (see subsections (8) and (9)). 25
(2) Details included in financial report (cf Corporations Act s 300 (2)) 26
Details do not have to be included in the directors' report under this 27
section if they are included in the co-operative's financial report for the 28
financial year. 29
(3) Details included in financial report--to be identified as "Non-audit 30
services" (cf Corporations Act s 300 (2A)) 31
If subsection (2) is relied on to not include in the directors' report for a 32
financial year details that would otherwise be required to be included in 33
that report under section 300 (11B) (a) or (11C) (b) of the Corporations 34
Act (as applying under section 281), that report must specify, in the 35
section headed "Non-audit services", where those details may be found 36
in the co-operative's financial report for that financial year. 37
Page 162
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) Options (cf Corporations Act s 300 (3)) 1
Subsection (1) (e)-(g) cover: 2
(a) options over unissued shares and interests of the co-operative; 3
and 4
(b) if consolidated financial statements are required--options over 5
unissued shares and interests of any entity forming part of the 6
consolidated entity. 7
(5) Options details (cf Corporations Act s 300 (5)) 8
The details of an option granted are: 9
(a) the entity granting the option; and 10
(b) the name of the person to whom the option is granted; and 11
(c) the number and class of shares or interests over which the option 12
is granted. 13
(6) Option details--unissued shares or interests (cf Corporations Act 14
s 300 (6)) 15
The details of unissued shares or interests under option are: 16
(a) the entity that will issue shares or interests when the options are 17
exercised; and 18
(b) the number and classes of those shares or interests; and 19
(c) the issue price, or the method of determining the issue price, of 20
those shares or interests; and 21
(d) the expiry date of the options; and 22
(e) any rights that option holders have under the options to 23
participate in any share issue or interest issue of the co-operative 24
or any other entity. 25
(7) Shares or interests issued as a result of exercise of option (cf 26
Corporations Act s 300 (7)) 27
The details of shares or interests issued as a result of the exercise of an 28
option are: 29
(a) the entity issuing the shares or interests; and 30
(b) the number of shares or interests issued; and 31
(c) if the entity has different classes of shares or interests--the class 32
to which each of those shares or interests belongs; and 33
(d) the amount unpaid on each of those shares or interests; and 34
(e) the amount paid, or agreed to be considered as paid, on each of 35
those shares or interests. 36
Page 163
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(8) Indemnities and insurance premiums for officers or auditors (cf 1
Corporations Act s 300 (8)) 2
The directors' report for a co-operative must include details of: 3
(a) any indemnity that is given to a current or former officer or 4
auditor against a liability, or any relevant agreement under which 5
an officer or auditor may be given an indemnity of that kind; and 6
(b) any premium that is paid, or agreed to be paid, for insurance 7
against a current or former officer's or auditor's liability for legal 8
costs. 9
(9) Indemnities and insurance premiums--details required (cf 10
Corporations Act s 300 (9)) 11
The details required under subsection (8) are: 12
(a) for an officer--their name or the class of officer to which they 13
belong or belonged; and 14
(b) for an auditor--their name; and 15
(c) the nature of the liability; and 16
(d) for an indemnity given--the amount the co-operative paid and 17
any other action the co-operative took to indemnify the officer or 18
auditor; and 19
(e) for an agreement to indemnify--the amount that the relevant 20
agreement requires the co-operative to pay and any other action 21
the relevant agreement requires the co-operative to take to 22
indemnify the officer or auditor; and 23
(f) for an insurance premium--the amount of the premium. 24
The directors' report need not give details of the nature of the liability 25
covered by, or the amount of the premium payable under, a contract of 26
insurance to the extent that disclosure of those details is prohibited by 27
the insurance contract. 28
(10) Details relating to directors and secretary (cf Corporations Act 29
s 300 (10)) 30
The report for a co-operative must also include details of: 31
(a) each director's qualifications, experience and special 32
responsibilities; and 33
(b) the number of meetings of the board of directors held during the 34
year and each director's attendance at those meetings; and 35
(c) the number of meetings of each board committee held during the 36
year and each director's attendance at those meetings; and 37
(d) the qualifications and experience of each person who is the 38
secretary of the co-operative as at the end of the year. 39
Page 164
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(11) Proceedings on behalf of a co-operative--application for leave (cf 1
Corporations Act s 300 (14)) 2
The report for a co-operative must also include the following details of 3
any application for leave under Part 7.4 made in respect of the 4
co-operative: 5
(a) the applicant's name; 6
(b) a statement as to whether leave was granted. 7
(12) Proceedings on behalf of a co-operative--with leave granted (cf 8
Corporations Act s 300 (15)) 9
The report for a co-operative must also include the following details of 10
any proceedings that a person has brought or intervened in on behalf of 11
the co-operative with leave under Part 7.4: 12
(a) the person's name; 13
(b) the names of the parties to the proceedings; 14
(c) sufficient information to enable members to understand the 15
nature and status of the proceedings (including the cause of 16
action and any orders made by the court). 17
281 Application of Corporations Act--co-operatives with quoted securities-- 18
additional information to be provided in directors' annual report 19
A co-operative with quoted securities is declared to be an applied 20
Corporations legislation matter for the purposes of the Corporations 21
application legislation of this jurisdiction in relation to sections 299A, 22
300 (11)-(11E) and 300A of the Corporations Act, subject to the 23
modifications referred to in sections 13 (3) and 264 of this Law so far 24
as they are relevant. 25
Note. See section 13, including Note 1 to that section. 26
Division 6 Half-year financial report and directors' report 27
282 Application of Corporations Act--co-operatives that are disclosing 28
entities--half-year financial reports and directors' reports 29
A co-operative that is a disclosing entity within the meaning of the 30
Corporations Act is declared to be an applied Corporations legislation 31
matter for the purposes of the Corporations application legislation of 32
this jurisdiction in relation to Division 2 of Part 2M.3 of the 33
Corporations Act, subject to the modifications referred to in 34
sections 13 (3) and 264 of this Law so far as they are relevant. 35
Note. See section 13, including Note 1 to that section. 36
Page 165
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 7 Audit and auditor's report 1
283 Application of Corporations Act--audit and auditor's report 2
A co-operative is declared to be an applied Corporations legislation 3
matter for the purposes of the Corporations application legislation of 4
this jurisdiction in relation to Division 3 of Part 2M.3 of the 5
Corporations Act, subject to the following modifications: 6
(a) section 308 (3AA) of the applied provisions is to be read as if the 7
words "company limited by guarantee" were omitted and the 8
words "small co-operative" were substituted; 9
(b) section 311 (5) of the applied provisions is to be read as if the 10
reference to section 344 of the Corporations Act were a reference 11
to section 328 of this Law; 12
(c) the modifications referred to in sections 13 (3) and 264 of this 13
Law so far as they are relevant. 14
Note. See section 13, including Note 1 to that section. 15
Division 8 Annual financial reporting to members 16
284 Annual financial reporting to members 17
(1) Annual reports for members of large co-operatives (cf Corporations Act 18
s 314 (1)) 19
A large co-operative must report to members for a financial year by 20
providing either of the following in accordance with subsection (5) 21
or (9): 22
(a) all of the following reports: 23
(i) the financial report for the year; 24
(ii) the directors' report for the year; 25
(iii) the auditor's report on the financial report; 26
(b) a concise report for the year that complies with subsection (3). 27
Maximum penalty: $1,000. 28
(2) Annual reports for members of small co-operatives (cf Corporations Act 29
s 314 (1)) 30
Subject to any direction under section 271 or 272, a small co-operative 31
must provide financial reports to members for a financial year that 32
comply with any requirements prescribed by the National Regulations. 33
Maximum penalty: $1,000. 34
Page 166
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) Concise report (cf Corporations Act s 314 (2)) 1
A concise report of a large co-operative for a financial year consists of: 2
(a) a concise financial report for the year drawn up in accordance 3
with accounting standards applying for the purposes of this 4
paragraph; and 5
(b) the directors' report for the year; and 6
(c) a statement by the auditor: 7
(i) that the financial report has been audited; and 8
(ii) whether, in the auditor's opinion, the concise financial 9
report complies with the accounting standards applying for 10
the purposes of paragraph (a); and 11
(d) a copy of any qualification in, and of any statements included in 12
the emphasis of matter section of, the auditor's report on the 13
financial report; and 14
(e) a statement that the report is a concise report and that the full 15
financial report and auditor's report will be sent to the member 16
free of charge if the member asks for them. 17
(4) Where accounting standards require discussion and analysis for 18
concise financial report (cf Corporations Act s 314 (3)) 19
If the accounting standards applying for the purposes of 20
subsection (3) (a) require a discussion and analysis to be included in a 21
concise financial report: 22
(a) the auditor must report on whether the discussion and analysis 23
complies with the requirements that the accounting standards lay 24
down for the discussion and analysis; and 25
(b) the auditor does not otherwise need to audit the statements made 26
in the discussion and analysis. 27
(5) Manner of providing reports (cf Corporations Act s 314 (1AA)) 28
A co-operative may provide the reports, or the concise report, for a 29
financial year by doing all of the following: 30
(a) sending, to each member who has made the election referred to 31
in subsection (6) (a): 32
(i) a hard copy of the reports, or the concise report; or 33
(ii) if the member has elected to receive the reports, or the 34
concise report, as an electronic copy in accordance with 35
subsection (6) (c)--an electronic copy of the reports, or the 36
concise report; 37
(b) making a copy of the reports, or the concise report, readily 38
accessible on a website; 39
Page 167
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) directly notifying, in writing, all members who did not make the 1
election referred to in subsection (6) (a) that the copy is 2
accessible on the website, and specifying the direct address on the 3
website where the reports, or the concise report, may be accessed. 4
Note. A direct address may be specified, for example, by specifying the URL of 5
the reports or the concise report. 6
(6) Election by members as to how reports are to be provided (cf 7
Corporations Act s 314 (1AB)) 8
For the purposes of subsection (5) (a), a co-operative must, on at least 9
one occasion, directly notify in writing each member that: 10
(a) the member may elect to receive, free of charge, a copy of the 11
reports for each financial year, or a copy of the concise report for 12
each financial year; and 13
(b) if the member does not so elect--the member may access the 14
reports, or the concise report, on a specified website; and 15
(c) if the member does so elect and the co-operative offers to send the 16
report either as a hard copy or an electronic copy--the member 17
may elect to receive the copy as either a hard copy or an 18
electronic copy. 19
Maximum penalty: $1,000. 20
(7) Election continues until changed (cf Corporations Act s 314 (1AC)) 21
An election made under subsection (6) is a standing election for each 22
later financial year until the member changes his, her or its election. 23
Note. The member may request the co-operative not to send them material 24
under this section--see section 316 of the Corporations Act as applying under 25
this Part. 26
(8) Restriction on electronic notification of members (cf Corporations Act 27
s 314 (1AD)) 28
A member may, for the purposes of subsection (5) (c) or subsection (6), 29
be notified by electronic means only if the member has previously 30
nominated that means as one by which the member may be notified. 31
(9) Providing reports (cf Corporations Act s 314 (1AE)) 32
A co-operative may provide the reports, or the concise report, by 33
sending each member: 34
(a) a hard copy of the reports, or the concise report; or 35
(b) an electronic copy of the reports, or the concise report, if the 36
member has nominated that means as one by which the member 37
may be sent the reports or the concise report. 38
Page 168
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(10) Strict liability (cf Corporations Act s 314 (1A)) 1
An offence based on subsection (1), (2) or (6) is an offence of strict 2
liability. 3
285 Deadline for reporting to members 4
(1) General rule (cf Corporations Act s 315 (4)) 5
A co-operative must report to members under section 284 within 6
5 months after the end of the financial year, except where section 7
315 (1) of the Corporations Act as applying under subsection (2) applies 8
to the co-operative. 9
(2) Application of Corporations Act--rule for co-operatives that are 10
disclosing entities 11
A co-operative that is a disclosing entity within the meaning of the 12
Corporations Act is declared to be an applied Corporations legislation 13
matter for the purposes of the Corporations application legislation of 14
this jurisdiction in relation to section 315 (1) of the Corporations Act, 15
subject to the following modifications: 16
(a) the applied provision is to be read as if the words "four months" 17
were omitted and the words "5 months" were substituted; 18
(b) the modifications referred to in sections 13 (3) and 264 of this 19
Law so far as they are relevant. 20
Note. See section 13, including Note 1 to that section. 21
286 Member's choices for annual financial information 22
(1) Member's request (cf Corporations Act s 316 (1)) 23
A member may request the co-operative: 24
(a) not to send them the material required by section 284; or 25
(b) to send them a full financial report and the directors' report and 26
auditor's report. 27
A request may be a standing request or for a particular financial year. 28
The member is not entitled to a report for a financial year earlier than 29
the one before the financial year in which the request is made. 30
(2) Time for complying with request (cf Corporations Act s 316 (2)) 31
The co-operative must comply with a request under subsection (1) (b): 32
(a) within 7 days after the request is received; or 33
(b) by the deadline for reporting under section 285; 34
whichever is later. 35
Page 169
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) Reports to be sent free of charge (cf Corporations Act s 316 (3)) 1
When sending a full financial report, directors' report and auditor's 2
report, the co-operative must do so free of charge unless the member has 3
already received a copy of them free of charge. 4
(4) Strict liability (cf Corporations Act s 316 (4)) 5
An offence based on subsection (2) or (3) is an offence of strict liability. 6
Maximum penalty: $1,000 penalty units or imprisonment for 3 months, 7
or both. 8
287 Consideration of reports at annual general meeting (cf Corporations Act 9
s 317) 10
(1) The directors of a co-operative that is required to hold an annual general 11
meeting must lay before the annual general meeting: 12
(a) in the case of a large co-operative: 13
(i) the financial report; and 14
(ii) the directors' report; and 15
(iii) the auditor's report; or 16
(b) in the case of a small co-operative--the financial reports required 17
under section 284; 18
for the last financial year that ended before the annual general meeting. 19
Note. If the co-operative's first annual general meeting is held before the end of 20
its first financial year, there will be no reports to lay before the meeting. 21
Maximum penalty: $1,000 or imprisonment for 3 months, or both. 22
(2) An offence based on subsection (1) is an offence of strict liability. 23
288 Application of Corporations Act--additional reporting by debenture 24
issuers 25
A co-operative is declared to be an applied Corporations legislation 26
matter for the purposes of the Corporations application legislation of 27
this jurisdiction in relation to section 318 of the Corporations Act, 28
subject to the modifications referred to in sections 13 (3) and 264 of this 29
Law so far as they are relevant. 30
Note. See section 13, including Note 1 to that section. 31
Page 170
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 9 Lodging reports and returns with Registrar 1
289 Lodgment of annual reports by large co-operatives with Registrar (cf 2
Corporations Act s 319) 3
(1) A large co-operative that has to prepare or obtain a report for a financial 4
year under Divisions 3-5 must lodge the report with the Registrar. This 5
obligation extends to a concise report provided to members under 6
section 284. 7
Maximum penalty: $2,500. 8
(2) An offence based on subsection (1) is an offence of strict liability. 9
(3) The time for lodgment is: 10
(a) within 3 months after the end of the financial year for a 11
co-operative that is a disclosing entity within the meaning of the 12
Corporations Act; and 13
(b) within 5 months after the end of the financial year for any other 14
co-operative. 15
290 Lodgment of half-year reports with Registrar (cf Corporations Act s 320) 16
(1) A co-operative that has to prepare or obtain a report for a half-year 17
under Division 6 must lodge the report with the Registrar within 75 days 18
after the end of the half-year. 19
Maximum penalty: $2,500. 20
(2) An offence based on subsection (1) is an offence of strict liability. 21
291 Registrar's power to require lodgment (cf Corporations Act s 321) 22
(1) The Registrar may give a co-operative a direction to lodge with the 23
Registrar a copy of reports prepared or obtained by it under 24
Divisions 3-6, and the co-operative must comply with the direction. 25
Maximum penalty: $1,000. 26
(2) An offence based on subsection (1) is an offence of strict liability. 27
(3) The direction must: 28
(a) be made in writing; and 29
(b) specify the period or periods concerned; and 30
(c) be made no later than 6 years after the end of the period or 31
periods; and 32
(d) specify the date by which the documents have to be lodged. 33
(4) The date specified under subsection (3) (d) must be at least 14 days after 34
the date on which the direction is given. 35
Page 171
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
292 Relodgment if financial statements or directors' reports amended after 1
lodgment (cf Corporations Act s 322) 2
(1) If a financial report or directors' report is amended after it is lodged with 3
the Registrar, the co-operative must: 4
(a) lodge the amended report with the Registrar within 14 days after 5
the amendment; and 6
(b) give a copy of the amended report free of charge to any member 7
who asks for it. 8
Maximum penalty: $1,000. 9
(2) If the amendment is a material one, the co-operative must also notify 10
members as soon as practicable of: 11
(a) the nature of the amendment; and 12
(b) their right to obtain a copy of the amended report under 13
subsection (1). 14
Maximum penalty: $1,000. 15
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 16
293 Lodgment by small co-operatives of annual returns with Registrar 17
(1) A small co-operative must lodge an annual return with the Registrar for 18
each financial year. 19
Maximum penalty: $1,000. 20
(2) An offence based on subsection (1) is an offence of strict liability. 21
(3) The contents of an annual return are to be as prescribed by the National 22
Regulations. 23
(4) The time for lodgment is within 5 months after the end of the financial 24
year. 25
Division 10 Special provisions about consolidated financial 26
statements 27
294 Application of Corporations Act--special provisions about consolidated 28
statements 29
A co-operative is declared to be an applied Corporations legislation 30
matter for the purposes of the Corporations application legislation of 31
this jurisdiction in relation to Division 6 of Part 2M.3 of the 32
Corporations Act, subject to the modifications referred to in 33
sections 13 (3) and 264 of this Law so far as they are relevant. 34
Note. See section 13, including Note 1 to that section. 35
Page 172
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Division 11 Financial years and half-years 1
295 Financial year (cf Corporations Act s 323D) 2
(1) The financial year of a co-operative ends on the day in each year that is 3
provided for by the rules of the co-operative. 4
(2) The first financial year of a co-operative may extend from the date of its 5
registration to a date not more than 18 months after its registration. 6
(3) On an amendment of the rules of a co-operative amending its financial 7
year, the amendment may provide either: 8
(a) that the current financial year (as at the date of the amendment) 9
is to be extended for not more than 6 months; or 10
(b) that the next financial year is to be a period of more than one year 11
but not more than 18 months. 12
(4) Without limitation, the National Regulations may make provision for or 13
with respect to requiring the adoption by a co-operative of the same 14
financial year for each entity that the co-operative controls. 15
296 Half-year (cf Corporations Act s 323D (5)) 16
A half-year for a co-operative is the first 6 months of a financial year, 17
but the directors may determine that the half-year is to be shorter or 18
longer (but not by more than 7 days). 19
Division 12 Auditors 20
Subdivision 1 General provisions relating to auditors 21
297 Application of Corporations Act--auditors 22
(1) A co-operative is declared to be an applied Corporations legislation 23
matter for the purposes of the Corporations application legislation of 24
this jurisdiction in relation to Divisions 1-5 of Part 2M.4 of the 25
Corporations Act, subject to the following modifications: 26
(a) section 324BA in Division 2 of Part 2M.4 is to be read as if the 27
words "Subject to section 324BD," were omitted; 28
(b) section 324BD in Division 2 of Part 2M.4 is taken to be omitted; 29
(c) the modifications referred to in sections 13 (3) and 264 of this 30
Law so far as they are relevant. 31
Note. See section 13, including Note 1 to that section. 32
(2) A reference in the provisions of the Corporations Act as applying under 33
this section to a registered company auditor is taken to be a reference to 34
a registered company auditor within the meaning of the Corporations 35
Page 173
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Act (and accordingly a reference in that term to a company is not a 1
reference to a co-operative). 2
Subdivision 2 Appointment of auditors 3
298 Appointment of auditor of small co-operative (cf Corporations Act s 325) 4
(1) The directors of a small co-operative may appoint an auditor for the 5
co-operative if an auditor has not been appointed by the co-operative in 6
general meeting. 7
(2) An auditor appointed under subsection (1) holds office, subject to this 8
Part, until the co-operative's next annual general meeting. 9
299 Initial appointment of auditor of large co-operative (cf Corporations Act 10
s 327A) 11
(1) The directors of a large co-operative must appoint an auditor of the 12
co-operative within one month after the day on which it is registered as 13
a co-operative unless the co-operative at a general meeting has 14
appointed an auditor. 15
(2) Subject to this Part, an auditor appointed under subsection (1) holds 16
office until the co-operative's first annual general meeting. 17
(3) A director of a co-operative must take all reasonable steps to comply 18
with, or to secure compliance with, subsection (1). 19
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 20
300 Annual appointment at annual general meeting of auditor of large 21
co-operative to fill vacancy 22
(1) Large co-operative required to appoint auditor (cf Corporations Act 23
s 327B (1)) 24
A large co-operative must: 25
(a) appoint an auditor of the co-operative at its first annual general 26
meeting; and 27
(b) appoint an auditor of the co-operative to fill any vacancy in the 28
office of auditor at each subsequent annual general meeting. 29
Maximum penalty: $2,500. 30
(2) Tenure of auditor (cf Corporations Act s 327B (2)) 31
An auditor appointed under subsection (1) holds office until the auditor: 32
(a) dies; or 33
(b) is removed, or resigns, from office in accordance with 34
section 310; or 35
Page 174
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(c) ceases to be capable of acting as auditor because of Division 2 of 1
Part 2M.4 of the Corporations Act as applying under this Part; or 2
(d) ceases to be auditor under subsection (3), (4) or (5). 3
(3) Termination of appointment of individual auditor (cf Corporations Act 4
s 327B (2A)) 5
An individual auditor ceases to be auditor of a large co-operative under 6
this subsection if: 7
(a) on a particular day (the start day), the individual auditor: 8
(i) informs the Registrar of a conflict of interest situation in 9
relation to the co-operative under section 324CA (1A) of 10
the Corporations Act as applying under this Part; or 11
(ii) informs the Registrar of particular circumstances in 12
relation to the co-operative under section 324CE (1A) of 13
the Corporations Act as applying under this Part; and 14
(b) the individual auditor does not give the Registrar a notice, before 15
the notification day (see subsection (6)), that that conflict of 16
interest situation has, or those circumstances have, ceased to exist 17
before the end of the period (the remedial period) of 21 days, or 18
such longer period as the Registrar approves in writing, from the 19
start day. 20
(4) Termination of appointment of audit firm (cf Corporations Act 21
s 327B (2B)) 22
An audit firm ceases to be auditor of a large co-operative under this 23
subsection if: 24
(a) on a particular day (the start day), the Registrar is: 25
(i) informed of a conflict of interest situation in relation to the 26
co-operative under section 324CB (1A) of the 27
Corporations Act as applying under this Part; or 28
(ii) informed of particular circumstances in relation to the 29
co-operative under section 324CF (1A) of the 30
Corporations Act as applying under this Part; and 31
(b) the Registrar has not been given a notice on behalf of the audit 32
firm, before the notification day (see subsection (6)), that that 33
conflict of interest situation has, or those circumstances have, 34
ceased to exist before the end of the period (the remedial period) 35
of 21 days, or such longer period as the Registrar approves in 36
writing, from the start day. 37
Page 175
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(5) Termination of appointment of audit company (cf Corporations Act 1
s 327B (2C)) 2
An audit company ceases to be auditor of a large co-operative under this 3
subsection if: 4
(a) on a particular day (the start day), the Registrar is: 5
(i) informed of a conflict of interest situation in relation to the 6
co-operative under section 324CB (1A) or 324CC (1A) of 7
the Corporations Act as applying under this Part; or 8
(ii) informed of particular circumstances in relation to the 9
co-operative under section 324CF (1A) or 324CG (1A) 10
or (5A) of the Corporations Act as applying under this 11
Part; and 12
(b) the Registrar has not been given a notice on behalf of the audit 13
company, before the notification day (see subsection (6)), that 14
that conflict of interest situation has, or those circumstances have, 15
ceased to exist before the end of the period (the remedial period) 16
of 21 days, or such longer period as the Registrar approves in 17
writing, from the start day. 18
(6) Meaning of notification day (cf Corporations Act s 327B (2D)) 19
The notification day is: 20
(a) the last day of the remedial period; or 21
(b) such later day as the Registrar approves in writing (whether 22
before or after the remedial period ends). 23
(7) Compliance with requirement to appoint auditor (cf Corporations Act 24
s 327B (3)) 25
A director of a large co-operative must take all reasonable steps to 26
comply with, or to secure compliance with, subsection (1). 27
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 28
(8) Member of audit firm ceases to be auditor when firm ceases to be 29
auditor (cf Corporations Act s 327B (4)) 30
If an audit firm ceases to be the auditor of a large co-operative under 31
subsection (2) at a particular time, each member of the firm who: 32
(a) is taken to have been appointed as an auditor of the co-operative 33
under section 324AB (1) or 324AC (4) of the Corporations Act 34
as applying under this Part; and 35
(b) is an auditor of the co-operative immediately before that time; 36
ceases to be an auditor of the co-operative at that time. 37
Page 176
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
301 Appointment by directors or annual general meeting of auditor of large 1
co-operative to fill casual vacancy (cf Corporations Act s 327C) 2
(1) If: 3
(a) a vacancy occurs in the office of auditor of a large co-operative; 4
and 5
(b) the vacancy is not caused by the removal of an auditor from 6
office; and 7
(c) there is no surviving or continuing auditor of the co-operative; 8
the directors must, within one month after the vacancy occurs, appoint 9
an auditor to fill the vacancy unless the co-operative at a general 10
meeting has appointed an auditor to fill the vacancy. 11
(2) An auditor appointed under subsection (1) holds office, subject to this 12
Part, until the co-operative's next annual general meeting. 13
(3) A director of a large co-operative must take all reasonable steps to 14
comply with, or to secure compliance with, subsection (1). 15
Maximum penalty (for subsection (3)): $2,500 or imprisonment for 16
6 months, or both. 17
302 Appointment to replace auditor removed from office (cf Corporations Act 18
s 327D) 19
(1) This section deals with the situation in which an auditor of a 20
co-operative is removed from office at a general meeting in accordance 21
with section 310. 22
(2) The co-operative may at that general meeting (without adjournment), by 23
special resolution immediately appoint an individual, firm or company 24
as auditor of the co-operative if a copy of the notice of nomination has 25
been sent to the individual, firm or company under section 308 (3). 26
(3) If a special resolution under subsection (2): 27
(a) is not passed; or 28
(b) could not be passed merely because a copy of the notice of 29
nomination has not been sent to an individual, firm or company 30
under section 308 (3); 31
the general meeting may be adjourned and the co-operative may, at the 32
adjourned meeting, by ordinary resolution appoint an individual, firm or 33
company as auditor of the co-operative if: 34
(c) a member of the co-operative gives the co-operative notice of the 35
nomination of the individual, firm or company for appointment 36
as auditor; and 37
(d) the co-operative receives the notice at least 14 clear days before 38
the day to which the meeting is adjourned. 39
Page 177
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) The day to which the general meeting is adjourned must be: 1
(a) not earlier than 20 days after the day of the meeting; and 2
(b) not later than 30 days after the day of the meeting. 3
(5) Subject to this Part, an auditor appointed under subsection (2) or (3) 4
holds office until the co-operative's next annual general meeting. 5
303 Registrar to be notified of appointment of auditor 6
A co-operative must notify the Registrar in an approved form of the 7
appointment, by the co-operative or directors of the co-operative, of an 8
auditor of the co-operative within 28 days after the date of the 9
appointment. 10
Maximum penalty: $2,000. 11
304 Registrar may appoint auditor if auditor removed but not replaced (cf 12
Corporations Act s 327E) 13
(1) This section deals with the situation in which a large co-operative fails 14
to appoint an auditor under section 302 (2) or (3) (the auditor 15
replacement failure). 16
(2) The co-operative must give the Registrar written notice of the auditor 17
replacement failure within the period of 7 days commencing on the day 18
of the auditor replacement failure (the notification period). 19
(3) If the co-operative gives the Registrar the notice required by 20
subsection (2), the Registrar must appoint an auditor of the co-operative 21
as soon as practicable after receiving the notice. This subsection has 22
effect subject to section 306. 23
(4) If the co-operative does not give the Registrar the notice required by 24
subsection (2), the Registrar may appoint an auditor of the co-operative 25
at any time: 26
(a) after the end of the notification period; and 27
(b) before the Registrar receives notice of the auditor replacement 28
failure from the co-operative. 29
This subsection has effect subject to section 306. 30
Page 178
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) If the co-operative: 1
(a) does not give the Registrar the notice required by subsection (2); 2
and 3
(b) gives the Registrar notice of the auditor replacement failure after 4
the end of the notification period; 5
the Registrar must appoint an auditor of the co-operative as soon as 6
practicable after receiving the notice. This subsection has effect subject 7
to section 306. 8
(6) Subject to this Part, an auditor appointed under this section holds office 9
until the co-operative's next annual general meeting. 10
305 Registrar's general power to appoint auditor of large co-operative (cf 11
Corporations Act s 327F) 12
(1) The Registrar may appoint an auditor of a large co-operative if: 13
(a) the co-operative does not appoint an auditor when required by 14
this Law to do so; and 15
(b) a member of the co-operative applies to the Registrar in writing 16
for the appointment of an auditor under this section. 17
This subsection has effect subject to section 306. 18
(2) An individual, firm or company appointed as auditor of a co-operative 19
under subsection (1) holds office, subject to this Part, until the next 20
annual general meeting of the co-operative. 21
306 Restrictions on Registrar's powers to appoint auditor of large 22
co-operative (cf Corporations Act s 327G) 23
(1) The Registrar may appoint an individual, firm or company as auditor of 24
a co-operative under section 304 or 305 only if the individual, firm or 25
company consents to being appointed. 26
(2) The Registrar must not appoint an auditor of a co-operative under 27
section 304 or 305 if: 28
(a) there is another auditor of the co-operative (the continuing 29
auditor); and 30
(b) the Registrar is satisfied that the continuing auditor is able to 31
carry out the responsibilities of auditor alone; and 32
(c) the continuing auditor agrees to continue as auditor. 33
Page 179
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) The Registrar must not appoint an auditor of a co-operative under 1
section 304 or 305 if: 2
(a) the co-operative does not give the Registrar the notice required 3
by section 304 (2) before the end of the notification period; and 4
(b) the Registrar has already appointed an auditor of the co-operative 5
under section 304 after the end of the notification period. 6
307 Remaining auditors may act during vacancy (cf Corporations Act s 327I) 7
While a vacancy in the office of auditor of a co-operative continues, the 8
surviving or continuing auditor or auditors (if any) may act as auditors 9
of the co-operative. 10
308 Nomination of auditor (cf Corporations Act s 328B) 11
(1) Subject to this section, a co-operative may appoint an individual, firm 12
or company as auditor of the co-operative at its annual general meeting 13
only if a member of the co-operative gives the co-operative written 14
notice of the nomination of the individual, firm or company for 15
appointment as auditor: 16
(a) before the meeting was convened; or 17
(b) not less than 21 days before the meeting. 18
This subsection does not apply if an auditor is removed from office at 19
the annual general meeting. 20
(2) If a co-operative purports to appoint an individual, firm or company as 21
auditor of the co-operative in contravention of subsection (1): 22
(a) the purported appointment is of no effect; and 23
(b) the co-operative is guilty of an offence. 24
Maximum penalty: $2,500. 25
(3) If a member gives a co-operative notice of the nomination of an 26
individual, firm or company for appointment as auditor of the 27
co-operative, the co-operative must send a copy of the notice to: 28
(a) each individual, firm or company nominated; and 29
(b) each auditor of the co-operative; and 30
(c) each person entitled to receive notice of general meetings of the 31
co-operative; 32
and this is so whether the appointment is to be made at a meeting or an 33
adjourned meeting referred to in section 302 or at an annual general 34
meeting. 35
Page 180
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) The copy of the notice of nomination must be sent: 1
(a) not less than 7 days before the meeting; or 2
(b) at the time notice of the meeting is given. 3
309 Auditor's consent to appointment (cf Corporations Act s 328A) 4
(1) A co-operative or the directors of a co-operative must not appoint an 5
individual, firm or company as auditor of the co-operative unless that 6
individual, firm or company: 7
(a) has consented, before the appointment, to act as auditor; and 8
(b) has not withdrawn that consent before the appointment is made; 9
and for the purposes of this section, a consent, or the withdrawal of a 10
consent, must be given by written notice to the co-operative or the 11
directors. 12
(2) A notice under subsection (1) given by a firm must be signed by a 13
member of the firm who is a registered company auditor both: 14
(a) in the firm name; and 15
(b) in his or her own name. 16
(3) A notice under subsection (1) given by a company must be signed by a 17
director or senior manager of the company both: 18
(a) in the company's name; and 19
(b) in his or her own name. 20
(4) If a co-operative or the directors of a co-operative appoint an individual, 21
firm or company as auditor of a co-operative in contravention of 22
subsection (1): 23
(a) the purported appointment does not have any effect; and 24
(b) the co-operative is guilty of an offence. 25
Maximum penalty (for subsection (4)): $2,500. 26
Subdivision 3 Removal and resignation of auditors 27
310 Removal and resignation of auditors (cf Corporations Act s 329) 28
(1) An auditor of a co-operative may be removed from office by resolution 29
of the co-operative at a general meeting of which notice under 30
subsection (2) has been given, but not otherwise. 31
(2) Notice of intention to move the resolution must be given to the 32
co-operative at least 2 months before the meeting is to be held. 33
However, if the co-operative calls a meeting after the notice of intention 34
Page 181
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
is given under this subsection, the meeting may pass the resolution even 1
though the meeting is held less than 2 months after the notice of 2
intention is given. 3
(3) Where notice under subsection (2) of a resolution to remove an auditor 4
is received by a co-operative, it must as soon as possible send a copy of 5
the notice to the auditor and lodge a copy of the notice with the 6
Registrar. 7
(4) Within 7 days after receiving a copy of the notice, the auditor may make 8
representations in writing, not exceeding a reasonable length, to the 9
co-operative and request that, before the meeting at which the resolution 10
is to be considered, a copy of the representations be sent by the 11
co-operative at its expense to every member of the co-operative to 12
whom notice of the meeting is sent. 13
(5) Unless the Registrar on the application of the co-operative otherwise 14
orders, the co-operative must send a copy of the representations in 15
accordance with the auditor's request, and the auditor may, without 16
prejudice to his or her right to be heard orally or, where a firm is the 17
auditor, to have a member of the firm heard orally on its behalf, require 18
that the representations be read out at the meeting. 19
(6) An auditor of a co-operative may, by notice in writing given to the 20
co-operative, resign as auditor of the co-operative if: 21
(a) the auditor has, by notice in writing given to the Registrar, 22
applied for consent to the resignation and stated the reasons for 23
the application and, at or about the same time as the notice was 24
given to the Registrar, notified the co-operative in writing of the 25
application to the Registrar; and 26
(b) the consent of the Registrar has been given. 27
(7) The Registrar must, as soon as practicable after receiving a notice from 28
an auditor under subsection (6), notify the auditor and the co-operative 29
whether the Registrar consents to the resignation of the auditor. 30
(8) A statement made by an auditor in an application to the Registrar under 31
subsection (6) or in answer to an inquiry by the Registrar relating to the 32
reasons for the application: 33
(a) is not admissible in evidence in any civil or criminal proceedings 34
against the auditor; and 35
(b) may not be made the ground of a prosecution, action or suit 36
against the auditor; 37
and a certificate by the Registrar that the statement was made in the 38
application or in the answer to the inquiry by the Registrar is conclusive 39
evidence that the statement was so made. 40
Page 182
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(9) Subject to subsection (10), the resignation of an auditor takes effect: 1
(a) on the day (if any) specified for the purpose in the notice of 2
resignation; or 3
(b) on the day on which the Registrar gives its consent to the 4
resignation; or 5
(c) on the day (if any) fixed by the Registrar for the purpose; 6
whichever last occurs. 7
(10) The resignation of an auditor of a small co-operative does not require 8
the consent of the Registrar under subsection (6), and takes effect: 9
(a) on the day (if any) specified for the purpose in the notice of 10
resignation; or 11
(b) on the day on which the notice is received by the co-operative; 12
whichever is the later. 13
(11) Where on the retirement or withdrawal from a firm of a member the firm 14
will no longer be capable, by reason of the provisions of section 15
324BB (1) (b) (i) or (2) (b) (i) of the Corporations Act (as applying 16
under this Part) of acting as auditor of a co-operative, the member so 17
retiring or withdrawing is (if not disqualified from acting as auditor of 18
the co-operative) taken to be the auditor of the co-operative until he or 19
she obtains the consent of the Registrar to his or her retirement or 20
withdrawal. 21
(12) Within 14 days after: 22
(a) the removal from office of an auditor of a co-operative; or 23
(b) the receipt of a notice of resignation from an auditor of a 24
co-operative; 25
the co-operative must: 26
(c) lodge with the Registrar a notice of the removal or resignation in 27
the approved form; and 28
(d) where there is a trustee for the holders of debentures or CCUs of 29
the co-operative--give to the trustee a copy of the notice lodged 30
with the Registrar. 31
311 Effect of winding up on office of auditor (cf Corporations Act s 330) 32
An auditor of a co-operative ceases to hold office if: 33
(a) a special resolution is passed for the voluntary winding up of the 34
co-operative; or 35
(b) in a case to which paragraph (a) does not apply--an order is made 36
by the Supreme Court for the winding up of the co-operative. 37
Page 183
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Subdivision 4 Auditors' fees and expenses 1
312 Fees and expenses of auditors (cf Corporations Act s 331) 2
The reasonable fees and expenses of an auditor of a co-operative are 3
payable by the co-operative. 4
Subdivision 5 Protection of auditors 5
313 Protection of auditors 6
(1) An auditor of a co-operative has qualified privilege in proceedings for 7
defamation in relation to: 8
(a) a statement the auditor makes, orally or in writing, in the course 9
of his or her duties as auditor; or 10
(b) the giving of notice, or the sending of a copy of financial reports 11
or another report, to the Registrar under this Law. 12
(2) A person has qualified privilege in proceedings for defamation in 13
relation to: 14
(a) the publishing of a document prepared by an auditor in the course 15
of the auditor's duties and required under this Law to be filed 16
with the Registrar, whether or not the document has been so filed; 17
or 18
(b) the publishing of a statement made by an auditor as referred to in 19
subsection (1). 20
(3) This section does not limit or affect a right, privilege or immunity an 21
auditor or other person has, apart from this section, as defendant in 22
proceedings for defamation. 23
Division 13 Accounting and auditing standards 24
314 Accounting and auditing standards 25
(1) A reference in this Part (including provisions of the Corporations Act as 26
applying under this Part) to accounting or auditing standards is a 27
reference to: 28
(a) the accounting or auditing standards made for the purposes of the 29
Corporations Act, except as provided by paragraphs (b) and (c); 30
or 31
(b) the accounting or auditing standards referred to in paragraph (a) 32
but as modified by the National Regulations; or 33
(c) the accounting or auditing standards prescribed by or determined 34
under the National Regulations in substitution for all or any 35
accounting or auditing standards referred to in paragraph (a). 36
Page 184
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) If an accounting or auditing standard referred to in subsection (1) (a) 1
applies for the purposes of a particular provision of the Corporations 2
Act, the accounting or auditing standard is (subject to subsection (1) (b) 3
and (c)) taken to apply for the purposes of the corresponding provision 4
of this Law (if any). 5
(3) The National Regulations may provide that an accounting or auditing 6
standard referred to in subsection (1) (a) does not apply for the purposes 7
of: 8
(a) this Law; or 9
(b) a particular provision of this Law; or 10
(c) a particular aspect or application of this Law; 11
and may do so without substituting another accounting or auditing 12
standard. 13
315 Interpretation of accounting and auditing standards (cf Corporations Act 14
s 337) 15
In interpreting an accounting or auditing standard, unless the contrary 16
intention appears: 17
(a) expressions used in the standard have the same meanings as they 18
have in this Part or in Chapter 2M of the Corporations Act, as the 19
case requires; and 20
(b) the provisions of Part 1.2 of this Law or of Part 1.2 of the 21
Corporations Act apply as if the standard's provisions were 22
provisions of this Part or Chapter 2M of the Corporations Act, as 23
the case requires. 24
Division 14 Exemptions and modifications 25
316 Exemptions--individual co-operatives (cf Corporations Act s 340) 26
(1) On an application made in accordance with subsection (4) in relation to 27
a co-operative, the Registrar may, by designated instrument, exempt 28
any of the following from compliance with all or specified requirements 29
of the target provisions referred to in subsection (2): 30
(a) the directors; 31
(b) the co-operative; 32
(c) the auditor. 33
Note. For the criteria for granting exemptions under this section, see 34
section 318. 35
(2) The target provisions are: 36
(a) Divisions 2-11 of this Part, including provisions of the 37
Corporations Act (as applying under any of the provisions of 38
Page 185
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
those Divisions), but not including Division 4 of Part 2M.4 of the 1
Corporations Act as so applying; and 2
(b) sections 324BA, 324BB and 324BC of the Corporations Act (as 3
applying under section 297 of this Law). 4
Note. The target provisions generally correspond to the provisions of the 5
Corporations Act referred to in section 340 of that Act (being Parts 2M.2, 2M.3 6
and 2M.4 (other than Division 4)). 7
(3) The exemption may: 8
(a) be expressed to be subject to conditions; and 9
(b) be indefinite or limited to a specified period; and 10
(c) if indefinite, be expressed to commence on a specified date. 11
(4) The application must be: 12
(a) authorised by a resolution of the directors; and 13
(b) in writing and signed by a director; and 14
(c) lodged with the Registrar. 15
(5) The Registrar must give the applicant written notice of the granting, 16
revocation or suspension of the exemption. 17
317 Exemptions--classes of co-operatives (cf Corporations Act s 341) 18
(1) The Registrar may, by designated instrument in respect of a specified 19
class of co-operatives, exempt any of the following from compliance 20
with all or specified requirements of the target provisions referred to in 21
subsection (2): 22
(a) directors; 23
(b) the co-operatives themselves; 24
(c) auditors of the co-operatives. 25
Note. For the criteria for granting exemptions under this section, see 26
section 318. 27
(2) The target provisions are: 28
(a) Divisions 2-11 of this Part, including provisions of the 29
Corporations Act (as applying under any of the provisions of 30
those Divisions), but not including Division 4 of Part 2M.4 of the 31
Corporations Act as so applying; and 32
(b) sections 324BA, 324BB and 324BC of the Corporations Act (as 33
applying under section 297 of this Law). 34
Note. The target provisions generally correspond to the provisions of the 35
Corporations Act referred to in section 341 of that Act (being Parts 2M.2, 2M.3 36
and 2M.4 (other than Division 4)). 37
Page 186
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) The exemption may: 1
(a) be expressed to be subject to conditions; and 2
(b) be indefinite or limited to a specified period; and 3
(c) if indefinite, be expressed to commence on a specified date. 4
318 Exemptions--criteria for exemptions for individual co-operatives or 5
classes of co-operatives (cf Corporations Act s 342) 6
(1) To grant an exemption under section 316 or 317, the Registrar must be 7
satisfied that complying with the relevant requirements of the target 8
provisions would: 9
(a) make the financial report or other reports misleading; or 10
(b) be inappropriate in the circumstances; or 11
(c) impose unreasonable burdens. 12
(2) In deciding for the purposes of subsection (1) whether the audit 13
requirements for a small co-operative, or a class of small co-operatives, 14
would impose an unreasonable burden on the co-operative or 15
co-operatives, the Registrar is to have regard to: 16
(a) the expected costs of complying with the audit requirements; and 17
(b) the expected benefits of having the co-operative or co-operatives 18
comply with the audit requirements; and 19
(c) any practical difficulties that the co-operative or co-operatives 20
face in complying effectively with the audit requirements (in 21
particular, any difficulties that arise because a financial year is 22
the first one for which the audit requirements apply or because 23
the co-operative or co-operatives are likely to move frequently 24
between the small and large co-operative categories from one 25
financial year to another); and 26
(d) any unusual aspects of the operation of the co-operative or 27
co-operatives during the financial year concerned; and 28
(e) any other matters that the Registrar considers relevant. 29
(3) In assessing expected benefits under subsection (2), the Registrar is to 30
take account of: 31
(a) the number of creditors and potential creditors; and 32
(b) the position of creditors and potential creditors (in particular, 33
their ability to independently obtain financial information about 34
the co-operative or co-operatives); and 35
(c) the nature and extent of the liabilities of the co-operative or 36
co-operatives. 37
Page 187
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
319 Exemptions--non-auditor members and former members of audit firms, 1
and former employees of audit companies (cf Corporations Act s 342AA) 2
(1) On an application made in accordance with subsection (4) by any of the 3
following, the Registrar may, by designated instrument, exempt the 4
applicant from all or specified requirements of the target provisions 5
referred to in subsection (2): 6
(a) a member of the firm who is not a registered company auditor; 7
(b) a person who has ceased to be: 8
(i) a member of an audit firm; or 9
(ii) a director of an audit company; or 10
(iii) a professional employee of an audit company. 11
Note. For the criteria for granting exemptions under this section, see 12
section 321. 13
(2) The target provisions are the provisions of Division 3 of Part 2M.4 of 14
the Corporations Act (as applying under Division 12 of this Part). 15
Note. The target provisions correspond to the provisions of the Corporations 16
Act referred to in section 342AA of that Act. 17
(3) The exemption may: 18
(a) be expressed to be subject to conditions; and 19
(b) be indefinite or limited to a specified period; and 20
(c) if indefinite, be expressed to commence on a specified date. 21
(4) The application must be: 22
(a) in writing and signed by the applicant; and 23
(b) lodged with the Registrar. 24
(5) The Registrar must give the applicant written notice of the granting, 25
revocation or suspension of the exemption. 26
320 Exemptions--classes of non-auditor members etc (cf Corporations Act 27
s 342AB) 28
(1) The Registrar may, by designated instrument in respect of a specified 29
class of audit firms or audit companies, exempt any of the following 30
from all or specified requirements of the target provisions referred to in 31
subsection (2): 32
(a) members of firms who are not registered company auditors; 33
Page 188
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) persons who have ceased to be: 1
(i) members of audit firms; or 2
(ii) directors of audit companies; or 3
(iii) professional employees of audit companies. 4
Note. For the criteria for granting exemptions under this section, see 5
section 321. 6
(2) The target provisions are the provisions of Division 3 of Part 2M.4 of 7
the Corporations Act (as applying under Division 12 of this Part). 8
Note. The target provisions correspond to the provisions of the Corporations 9
Act referred to in section 342AB of that Act. 10
(3) The exemption may: 11
(a) be expressed to be subject to conditions; and 12
(b) be indefinite or limited to a specified period; and 13
(c) if indefinite, be expressed to commence on a specified date. 14
321 Exemptions--criteria for exemptions for non-auditor members etc (cf 15
Corporations Act s 342AC) 16
To grant an exemption under section 319 or 320, the Registrar must be 17
satisfied that complying with the relevant requirements of the target 18
provisions would: 19
(a) make the financial report or other reports misleading; or 20
(b) be inappropriate in the circumstances; or 21
(c) impose unreasonable burdens. 22
322 Exemptions from National Regulations 23
(1) The Registrar may, by designated instrument, exempt: 24
(a) a specified co-operative, a specified person or firm proposed to 25
be appointed as an auditor, or a specified director or auditor of a 26
co-operative; or 27
(b) a specified class of co-operatives, a specified class of persons or 28
firms proposed to be appointed as auditors, or a specified class of 29
directors or auditors of co-operatives; 30
from compliance with a provision of the National Regulations made 31
under this Part. 32
(2) The exemption may: 33
(a) be expressed to be subject to conditions; and 34
(b) be indefinite or limited to a specified period; and 35
(c) if indefinite, be expressed to commence on a specified date. 36
Page 189
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
323 Registrar's power to modify the operation of section 324DA of 1
Corporations Act (cf Corporations Act s 342A) 2
(1) On an application made in accordance with this section, the Registrar 3
may: 4
(a) declare that section 324DA (1) of the Corporations Act (as 5
applying under Division 12 of this Part) applies to a registered 6
company auditor, in relation to the audit of an audited body or a 7
class of audited bodies, as if the references in that subsection to 8
5 successive financial years were references to: 9
(i) 6 successive financial years; or 10
(ii) 7 successive financial years; or 11
(b) declare that section 324DA (2) of the Corporations Act (as 12
applying under Division 12 of this Part) applies to a registered 13
company auditor, in relation to the audit of an audited body or a 14
class of audited bodies during a particular period of 7 successive 15
financial years, as if the reference in that subsection to 5 out 16
of 7 successive financial years were a reference to 6 out 17
of 7 successive financial years. 18
(2) The following persons may apply for the declaration: 19
(a) the registered company auditor; 20
(b) a firm or company on whose behalf the registered company 21
auditor acts or would act in relation to the audit or audits; 22
and if the application is made by a firm or company, the declaration has 23
effect only in relation to activities undertaken by the registered 24
company auditor on behalf of that firm or company. 25
(3) The application must be: 26
(a) in writing; and 27
(b) signed by the applicant; and 28
(c) lodged with the Registrar. 29
(4) If the application is made by a registered company auditor who engages, 30
or is to engage, in audit activities on behalf of a firm or company, the 31
application must include the firm's or company's written consent to the 32
application. 33
(5) If the application is made by a firm or company in relation to a 34
registered company auditor, the application must include the registered 35
company auditor's written consent to the application. 36
(6) To make a declaration under subsection (1), the Registrar must be 37
satisfied that, without the modification, Division 4 of Part 2M.4 of the 38
Page 190
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Corporations Act (as applying under Division 12 of this Part) would 1
impose an unreasonable burden on: 2
(a) a registered company auditor; or 3
(b) a firm or company that is applying for the declaration; or 4
(c) the audited body or bodies in relation to which the application 5
was made. 6
(7) In deciding for the purposes of subsection (6) whether, without the 7
modification, Division 4 of Part 2M.4 of the Corporations Act (as 8
applying under Division 12 of this Part) would impose an unreasonable 9
burden on a person referred to in that subsection, the Registrar is to have 10
regard to: 11
(a) the nature of the audited body or bodies, including whether the 12
activity in which the audited body or bodies engage is such that 13
specialist knowledge about that activity is necessary to carry out 14
the audit properly; and 15
(b) the availability of other registered company auditors capable of 16
providing satisfactory audit services for the audited body or 17
bodies; and 18
(c) any other matters which the Registrar considers relevant. 19
(8) The Registrar must give the applicant written notice of the making, 20
revocation or suspension of the declaration. 21
324 Auditor to notify co-operative of declaration (cf Corporations Act s 342B) 22
(1) If a registered company auditor plays a significant role in the audit of a 23
co-operative in reliance on a declaration by the Registrar under 24
section 323, the auditor must give the co-operative written notice of the 25
declaration. 26
Maximum penalty: $500. 27
(2) The notice must specify: 28
(a) the name of the registered company auditor; and 29
(b) the additional financial years for which the registered company 30
auditor is, because of the declaration under section 323, eligible 31
to play a significant role in the audit of the co-operative. 32
(3) The notice must be given: 33
(a) as soon as practicable after the declaration is made if the auditor 34
has been appointed before the declaration is made; or 35
(b) before the auditor is appointed if the declaration is made before 36
the auditor is appointed. 37
Page 191
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
325 Modification by National Regulations (cf Corporations Act s 343) 1
(1) The National Regulations may modify the operation of this Part in 2
relation to: 3
(a) a specified co-operative; or 4
(b) all co-operatives of a specified kind. 5
(2) This section does not affect the power to make National Regulations 6
prescribing modifications to applied provisions. 7
326 Amendment, suspension or revocation of exemption 8
(1) The Registrar may amend, suspend or revoke an exemption granted 9
under this Division. 10
(2) The power to amend, suspend or revoke an exemption granted under 11
this Division is exercisable in the same way, and subject to the same 12
conditions, as the power to grant the exemption. 13
Division 15 Miscellaneous 14
327 Disclosure by directors 15
The directors of a co-operative must make the disclosures about the 16
affairs of the co-operative and of an entity the co-operative controls that 17
are required under the National Regulations. 18
Maximum penalty: $2,000. 19
328 Contravention by directors of provisions of this Part (cf Corporations Act 20
s 344) 21
(1) A director of a co-operative contravenes this subsection if they fail to 22
take all reasonable steps to comply with or to secure compliance with: 23
(a) section 272, 284 (1) or (2), 289, 290, 291, 292 or 293; or 24
(b) section 315 (1) of the Corporations Act as applying under 25
section 285 (2) of this Law; or 26
(c) section 318 of the Corporations Act as applying under 27
section 288 of this Law. 28
Note. This subsection is a civil penalty provision (see section 554). 29
(2) A person commits an offence if they contravene subsection (1) and the 30
contravention is dishonest. 31
Maximum penalty: $200,000 or imprisonment for 5 years, or both. 32
Page 192
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
329 Submission of financial reports to Financial Reporting Panel 1
Without limitation, the National Regulations may make provision for or 2
with respect to requiring the submission of financial reports to the 3
Financial Reporting Panel. 4
Note. The Financial Reporting Panel is established under the ASIC Act. 5
330 Notification of ASIC by Registrar of certain matters relating to auditor 6
independence 7
The Registrar may notify ASIC of any investigation or prosecution 8
undertaken for a contravention, or an alleged or possible contravention, 9
of section 324CA, 324CB, 324CC, 324CD, 324CE, 324CF or 324CG of 10
the Corporations Act as applying under this Law. 11
Part 3.4 Funds and property 12
Division 1 Power to raise money 13
331 Meaning of "obtaining of financial accommodation" 14
A reference in this Division to the obtaining of financial 15
accommodation includes a reference to the obtaining of credit and the 16
borrowing or raising of money by any means. 17
332 Fundraising to be in accordance with National Regulations 18
The National Regulations may impose requirements and restrictions on 19
the obtaining of financial accommodation and the giving of security for 20
obtaining financial accommodation by a co-operative. 21
333 Limits on deposit taking 22
A co-operative must not accept money on deposit unless: 23
(a) the co-operative is authorised by its rules to accept money on 24
deposit and was authorised by its rules immediately before the 25
commencement of this section in this jurisdiction to accept 26
money on deposit; or 27
(b) the co-operative was a deposit-taking corporation immediately 28
before it became a co-operative and it is authorised by its rules to 29
accept money on deposit; or 30
(c) for a merged co-operative--one or more of the co-operatives 31
involved in the merger was a deposit-taking co-operative 32
immediately before the registration of the merged co-operative 33
Page 193
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
and the merged co-operative is authorised by its rules to accept 1
money on deposit. 2
Note. Paragraph (a) prevents a co-operative from accepting money on deposit 3
unless it was authorised to do so before the commencement of this section. 4
Accordingly, co-operatives registered before that commencement but not so 5
authorised and all co-operatives registered after that commencement are 6
prevented from accepting money on deposit. Authorisation under previous 7
legislation commenced at various times in the various jurisdictions. 8
334 Members and other persons not required to see to application of money 9
A member or other person from whom a co-operative obtains financial 10
accommodation is not required to see to its application and is not 11
affected or prejudiced by the fact that in doing so the co-operative 12
contravened a provision of this Law, the National Regulations or the 13
rules of the co-operative. 14
335 Registrar's directions about obtaining financial accommodation 15
(1) The Registrar may, by written notice served on a co-operative, give a 16
direction to the co-operative as to the way in which it is to exercise its 17
functions in relation to the activities of the co-operative in obtaining 18
financial accommodation. 19
(2) A direction under subsection (1) may make provision for one or more 20
of the following matters: 21
(a) requiring the co-operative to stop obtaining financial 22
accommodation or to stop obtaining financial accommodation in 23
a particular way; 24
(b) requiring the co-operative to repay in accordance with the 25
direction all or part of financial accommodation obtained; 26
(c) requiring the co-operative to refinance in a stated way financial 27
accommodation repaid in accordance with the Registrar's 28
direction; 29
(d) the way in which the co-operative is permitted to invest or use the 30
proceeds of financial accommodation it obtains. 31
(3) The co-operative may, within 28 days after the direction is given, apply 32
to the designated tribunal for a review of the direction, and the 33
designated tribunal may confirm, modify or rescind the direction or 34
substitute another direction. 35
Page 194
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
336 Subordinated debt 1
(1) A co-operative may incur subordinated debt. 2
(2) Subordinated debt is debt incurred under an agreement under which, in 3
the event of the winding up of the co-operative, a claim of the creditor 4
against the co-operative for the debt is to rank in priority: 5
(a) equally with the claim of another creditor who is a party to a 6
similar agreement; and 7
(b) except as provided by paragraph (a)--after the claims of another 8
creditor of the co-operative and before the claims of members to 9
repayment of share capital in the co-operative. 10
(3) An agreement referred to in subsection (2) has effect despite the 11
provisions of Division 6 of Part 5.6 of the Corporations Act as applying 12
under this Law. 13
337 Application of Corporations Act--issues of debentures 14
(1) The debentures of a co-operative are declared to be applied 15
Corporations legislation matters for the purposes of the Corporations 16
application legislation of this jurisdiction in relation to Part 1.2A, 17
Chapters 2L, 6CA and 6D, and Part 7.10 of the Corporations Act, 18
subject to the following modifications: 19
(a) sections 111AS and 283I of the Corporations Act are taken to be 20
omitted; 21
(b) the modifications referred to in section 13 (3) of this Law so far 22
as they are relevant. 23
Note. See section 13, including Note 1 to that section. 24
(2) However, the provisions of the Corporations Act applying to debentures 25
of a co-operative by this section do not apply to: 26
(a) a loan to which section 343 applies; or 27
(b) an issue of debentures of a co-operative that is made: 28
(i) solely to members of the co-operative; or 29
(ii) solely to members and employees of the co-operative; or 30
(iii) to a person who on becoming an inactive member of the 31
co-operative has had his or her share capital converted to 32
debt. 33
(3) The following provisions of the Corporations Act as applying under this 34
section are civil penalty provisions under this Law (see section 554) and 35
are not civil penalty provisions under that Act: 36
(a) section 674 (2) and (2A); 37
(b) section 675 (2) and (2A); 38
Page 195
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) section 1041A; 1
(d) section 1041B (1); 2
(e) section 1041C (1); 3
(f) section 1041D; 4
(g) section 1043A (1) and (2). 5
(4) Words used in subsection (2) that are not defined in this Law have the 6
same meanings as they have in the Corporations Act. 7
338 Disclosure statement 8
(1) This section applies to the issue of debentures of a co-operative if the 9
issue is made: 10
(a) solely to members; or 11
(b) solely to members and employees of the co-operative; 12
but does not apply to the issue of debentures under section 108 (1), 13
128 (2) or 163 (2). 14
(2) Before issuing to a person debentures to which this section applies, a 15
co-operative must: 16
(a) inform the person in writing that the person is entitled to receive 17
a disclosure statement on request to the co-operative; and 18
(b) give the person a disclosure statement if the person requests it. 19
(3) The disclosure statement is a statement, approved by the Registrar, and 20
containing the information that is reasonably necessary to enable a 21
person to make an informed assessment of the financial prospects of the 22
co-operative, including: 23
(a) the purpose for which the money raised by the co-operative by 24
the issue of debentures is to be used; and 25
(b) the rights and liabilities attaching to the debentures; and 26
(c) the financial position of the co-operative; and 27
(d) the interests of the directors of the co-operative in the issue of the 28
debentures; and 29
(e) compensation or consideration to be paid to officers or members 30
of the co-operative in connection with the issue of debentures; 31
and 32
(f) other matters the Registrar directs. 33
(4) A draft disclosure statement must be submitted to the Registrar at least 34
28 days (or the shorter period the Registrar may allow in a particular 35
case) before the issue of debentures. 36
Page 196
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) Section 25 (except subsections (1), (2) and (3)) applies to a disclosure 1
statement under this section with any necessary modifications, and in 2
particular as if a reference in that section to a formation meeting were a 3
reference to the issue of debentures. 4
(6) The Registrar may, by designated instrument, exempt a co-operative or 5
class of co-operatives from complying with this section. 6
(7) An exemption may be given unconditionally or subject to conditions. 7
339 Restrictions on advertising and publicity 8
(1) A person must not: 9
(a) advertise; or 10
(b) publish a statement that directly or indirectly refers to; 11
an offer, or intended offer, of debentures in a co-operative unless a 12
disclosure statement relating to the debentures is approved by the 13
Registrar under section 338. 14
Maximum penalty: $1,000. 15
(2) A person does not contravene subsection (1) by publishing an 16
advertisement or statement if they publish it in the ordinary course of a 17
business of: 18
(a) publishing a newspaper or magazine; or 19
(b) broadcasting by radio or television; 20
and the person did not know and had no reason to suspect that its 21
publication would amount to a contravention of a provision of that 22
subsection. 23
(3) An offence based on subsection (1) is an offence of strict liability. 24
340 Application money to be held on trust (cf Corporations Act s 722) 25
(1) If a person offers debentures for issue under a disclosure statement, the 26
person must hold: 27
(a) all application money received from people applying for 28
debentures under the disclosure statement; and 29
(b) all other money paid by them on account of the debentures before 30
they are issued; 31
in trust under this section for the applicants until: 32
(c) the debentures are issued; or 33
(d) the money is returned to the applicants. 34
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 35
Page 197
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) If the application money needs to be returned to an applicant, the person 1
must return the money as soon as practicable. 2
Maximum penalty: $2,500 or imprisonment for 6 months, or both. 3
(3) An offence based on subsection (1) or (2) is an offence of strict liability. 4
341 Approval of board for transfer of debentures 5
A debenture of a co-operative cannot be sold or transferred except with 6
the consent of the board and under the rules of the co-operative. 7
342 Application of Corporations Act--reissue of redeemed debentures 8
Debentures issued by a co-operative to any of its members or employees 9
are declared to be applied Corporations legislation matters for the 10
purposes of the Corporations application legislation of this jurisdiction 11
in relation to section 563AAA of the Corporations Act, subject to the 12
following modifications: 13
(a) the section applies as if a co-operative were a company; 14
(b) the modifications referred to in section 13 (3) of this Law so far 15
as they are relevant. 16
Note. See section 13, including Note 1 to that section. 17
343 Compulsory loan by member to co-operative 18
(1) A co-operative may, by levy, require its members to lend money, with 19
or without security, to the co-operative, in accordance with a proposal 20
approved by special resolution of the co-operative passed by a special 21
postal ballot. 22
(2) The term of the loan cannot be for more than 7 years or any shorter 23
period prescribed in the National Regulations. 24
(3) The proposal must: 25
(a) be accompanied by a disclosure statement, approved by the 26
Registrar, explaining the purpose for which the money raised by 27
the co-operative under the proposal is to be used and including 28
the other information the Registrar directs; and 29
(b) clearly show the total amount of the loan to be raised by the 30
co-operative and the basis on which the money required to be lent 31
by each member is to be calculated; and 32
(c) be accompanied by a statement informing the member that the 33
member may inform the board by notice on or before the date of 34
closing of the ballot for the special postal ballot that the member 35
resigns on the registration of the special resolution. 36
Page 198
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) If the proposal allows, the board of the co-operative may, under the 1
terms of the proposal, deduct the money required to be lent by a member 2
to the co-operative from money payable from the co-operative to the 3
member for his or her dealings with the co-operative. 4
(5) A proposal to deduct money referred to in subsection (4) must, in 5
addition, clearly show: 6
(a) the basis on which the money is to be deducted; and 7
(b) the time and way of making the deductions. 8
(6) When the special resolution is registered, the proposal is binding on: 9
(a) all members of the co-operative at the date of passing of the 10
special resolution, other than a member who has given a notice of 11
resignation under subsection (3) (c); and 12
(b) all persons who become members of the co-operative after the 13
date and before the total amount of the loan to be raised under the 14
proposal has been raised. 15
(7) A draft disclosure statement must be submitted to the Registrar before 16
notice of the ballot is given to members. 17
(8) Section 25 (except subsections (1), (2) and (3)) applies to a disclosure 18
statement under this section with any necessary modifications, and in 19
particular as if a reference in that section to the holding of a formation 20
meeting were a reference to the giving of notice of the ballot to 21
members. 22
(9) The National Regulations may prescribe the maximum amount that may 23
be levied in any period of 12 months on either or both of the following: 24
(a) an individual member of the co-operative; 25
(b) all members of the co-operative or all members of a class of 26
members. 27
(10) The Registrar may, by designated instrument, exempt a co-operative or 28
class of co-operatives from complying with all or specified provisions 29
of this section. 30
(11) An exemption may be given unconditionally or subject to conditions. 31
344 Interest payable on compulsory loan 32
(1) The rate of interest payable by a co-operative for a loan under 33
section 343 during a period is: 34
(a) for a co-operative with share capital: 35
(i) the rate (or, if there is more than one rate, the higher or 36
highest rate) of dividend payable for the period on the 37
share capital of the co-operative; or 38
Page 199
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(ii) if the rate of dividend payable for the period has not been 1
decided--the rate (or the higher or highest rate) payable 2
for the immediately preceding period for which a rate has 3
been decided; or 4
(iii) if a rate of dividend has never been decided for the share 5
capital of the co-operative--the rate the board of the 6
co-operative considers reasonable; or 7
(b) for a co-operative without share capital--the rate the board of the 8
co-operative considers reasonable; or 9
(c) if the rules of the co-operative provide for a rate to be payable that 10
is higher than the rate applicable under paragraph (a) or (b)--the 11
higher rate. 12
(2) A member may agree to the rate of interest being less than what would 13
otherwise be payable under this section and may agree to no interest 14
being paid. 15
Division 2 Co-operative capital units (CCUs) 16
345 General nature of CCU 17
(1) A co-operative capital unit (in this Law referred to as a CCU) is an 18
interest issued by a co-operative conferring an interest in the capital (but 19
not the share capital) of the co-operative. 20
(2) A CCU: 21
(a) is personal property; and 22
(b) is transferable or transmissible as provided by this Law and the 23
rules of the co-operative, subject to the terms of issue of the CCU; 24
and 25
(c) is, subject to the rules of the co-operative, capable of devolution 26
by will or by operation of law. 27
(3) Subject to subsection (2): 28
(a) the laws applicable to ownership of and dealing with personal 29
property apply to a CCU in the same way as they apply to other 30
property; and 31
(b) equitable interests in respect of a CCU may be created, dealt with 32
and enforced as in the case of other personal property. 33
(4) A transferor of a CCU remains the holder of the CCU until the transfer 34
is registered and the name of the transferee is entered in the register of 35
CCUs and their holders (referred to in section 212 (1) (e)) in respect of 36
the CCU. 37
Page 200
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) Despite any rule of law or equity to the contrary, a condition subject to 1
which a CCU is issued is not invalid merely because the CCU is, by the 2
condition, made irredeemable or redeemable only on the happening of 3
a contingency however remote or at the end of a period however long. 4
346 Priority of CCUs on winding up 5
(1) On a winding up of a co-operative, a debt owed to a person as the holder 6
or former holder of a CCU issued by the co-operative is to rank for 7
priority of payment in accordance with the terms of issue of the CCU. 8
(2) Such a debt may rank as a secured debt if it is secured but if it is 9
unsecured may not rank in priority to other unsecured debts. 10
(3) Such a debt may rank equally with or behind unsecured debts and (if the 11
debt ranks behind unsecured debts) may rank in priority to, equally with 12
or behind debts due to contributories. 13
347 Financial accommodation provisions apply to issue of CCUs 14
(1) The issuing of CCUs is to be considered to be the obtaining of financial 15
accommodation and accordingly Division 1 applies to the issue of 16
CCUs. 17
(2) For the purpose of that Division, a CCU is to be considered to be a 18
debenture. 19
348 CCUs can be issued to non-members 20
CCUs may be issued to persons whether or not they are members of the 21
co-operative. 22
349 Minimum requirements for rules concerning CCUs 23
The rules of a co-operative that permit the co-operative to issue CCUs 24
must contain provision to the effect of the following provisions and 25
must not contain provisions that are inconsistent with the following 26
provisions: 27
(a) either (as specified in the rules): 28
(i) each holder of a CCU is entitled to one vote only at a 29
meeting of the holders of CCUs; or 30
(ii) each holder of a CCU is entitled to one vote per CCU held 31
at a meeting of the holders of CCUs; 32
(b) the rights of the holders of CCUs may be varied only in the 33
manner and to the extent provided by their terms of issue and 34
only with the consent of at least 75% of the holders of CCUs 35
given in writing or at a meeting; 36
Page 201
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) the holder of a CCU has, in the person's capacity as a holder, 1
none of the rights or entitlements of a member of the 2
co-operative; 3
(d) the holder of a CCU is entitled to receive notice of all meetings 4
of the co-operative and all other documents in the same manner 5
as the holder of a debenture of the co-operative. 6
350 CCUs not to be issued unless terms of issue approved by Registrar 7
(1) A co-operative is not to issue CCUs unless: 8
(a) the terms of issue have been approved by a special resolution of 9
the co-operative; and 10
(b) the issue is made pursuant to an offer accompanied by a copy of 11
a statement approved by the Registrar for the purposes of the 12
issue; and 13
(c) the Registrar approves of the terms of the issue. 14
(2) The terms of issue must specify the following (but this subsection does 15
not limit the contents of the terms of issue): 16
(a) details of entitlement to repayment of capital; 17
(b) details of entitlement to participate in surplus assets and profits; 18
(c) details of entitlement to interest on capital (whether cumulative 19
or non-cumulative interest); 20
(d) details of how capital and interest on capital are to rank for 21
priority of payment on a winding up; 22
(e) whether there is a limit on the total holding of CCUs that may be 23
acquired by persons who are not members of the co-operative 24
and, if there is a limit, what the limit is. 25
(3) The statement approved by the Registrar for the purposes of the issue is 26
to set out the terms of the issue, the rights of the holders of CCUs, the 27
terms of redemption and the manner of transferability of CCUs. 28
(4) The Registrar is not to approve of the terms of issue unless satisfied that 29
they will not result in a failure to comply with co-operative principles 30
and are not contrary to the rules of the co-operative or this Law. 31
351 Directors' duties concerning CCUs 32
In discharging their duties, it is proper for the directors of a co-operative 33
to take into account that the holders of CCUs, in their capacity as 34
holders of CCUs, have none of the rights and entitlements of, and are 35
not entitled to be regarded as, members of the co-operative. 36
Page 202
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
352 Redemption of CCUs 1
(1) The redemption of CCUs is not to be considered to be a reduction in the 2
share capital of the co-operative. 3
(2) A co-operative may redeem CCUs but only on the terms and in the way 4
that are provided by the terms of their issue and only if they are fully 5
paid up. 6
(3) CCUs may not be redeemed except out of: 7
(a) profits; or 8
(b) the proceeds of a fresh issue of shares, or an approved issue of 9
CCUs, made for the purpose of the redemption. 10
(4) An issue of CCUs is an approved issue for the purposes of 11
subsection (3) if there is the same entitlement to priority of payment of 12
capital and dividend in relation to shares in the co-operative as there was 13
for the redeemed CCUs. 14
(5) Any premium payable on redemption is to be provided for out of profits 15
or out of the share premium account or an account created for that 16
purpose. 17
353 Capital redemption reserve 18
(1) This section applies if CCUs are redeemed out of profits. 19
(2) Out of profits there is to be transferred to a reserve called the capital 20
redemption reserve a sum equal to the nominal amount of the CCUs 21
redeemed. 22
(3) Subject to subsection (5), the provisions of this Law relating to the 23
reduction of share capital of a co-operative apply as if the capital 24
redemption reserve were paid up share capital of the co-operative. 25
(4) Subject to subsection (5), the capital redemption reserve may be applied 26
in paying up unissued shares of the co-operative to be issued to 27
members of the co-operative as fully paid bonus shares. 28
(5) Subsections (3) and (4) do not apply to a non-distributing co-operative. 29
Note. Section 448 provides that, on a winding up of a non-distributing 30
co-operative, the surplus property of the co-operative must be distributed as 31
required by the rules of the co-operative. 32
354 Issue of shares in substitution for redemption 33
(1) If a co-operative has redeemed or is about to redeem CCUs held by an 34
active member of the co-operative, it may: 35
(a) issue shares to the member up to the sum of the nominal value of 36
the CCUs redeemed or to be redeemed, as if those CCUs had 37
never been issued; or 38
Page 203
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) pay up amounts unpaid on shares held by the member up to the 1
sum of the nominal value of the CCUs redeemed or to be 2
redeemed, as if those CCUs had never been issued. 3
(2) This section applies only if the terms of issue of the CCUs provide for 4
the conversion of CCUs held by an active member of the co-operative 5
into shares of the co-operative. 6
Division 3 Disposal of surplus from activities 7
355 Retention of surplus for benefit of co-operative 8
The board of a co-operative may resolve to retain all or part of the 9
surplus arising in a year from the business of the co-operative to be 10
applied for the benefit of the co-operative. 11
356 Application for charitable purposes or approved activities 12
(1) A co-operative may apply a part of the surplus arising in a year from the 13
business of the co-operative for any charitable purpose. 14
(2) A distributing co-operative may apply a part of the surplus arising in a 15
year from the business of the co-operative for supporting an activity 16
approved by the co-operative. 17
(3) The rules of a co-operative must limit the amount that may be applied 18
under subsection (1) or (2) to a stated proportion of the surplus. 19
357 Distribution of surplus or reserves to members 20
(1) A distributing co-operative may apply a part of the surplus arising in a 21
year from the business of the co-operative or a part of the reserves of the 22
co-operative by: 23
(a) distribution to members as a rebate in proportion to: 24
(i) the value of business done by each member with the 25
co-operative; or 26
(ii) profits earned by the co-operative on business done by 27
each member with the co-operative; or 28
(b) the issue to members of bonus shares in proportion to: 29
(i) the value of business done by each member with the 30
co-operative; or 31
(ii) profits earned by the co-operative on business done by 32
each member with the co-operative; or 33
(iii) shares held by each member; or 34
(c) the issue to members of a limited dividend for shares held by each 35
member. 36
Page 204
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) The amount of a rebate payable to a member under subsection (1) (a) 1
may be applied: 2
(a) in payment for the issue to the member of bonus shares, with the 3
consent of the member; or 4
(b) as a loan to the co-operative: 5
(i) with the consent of the member; or 6
(ii) if the rules of the co-operative authorise the amount of a 7
rebate payable to a member under subsection (1) (a) to be 8
applied as a loan to the co-operative. 9
(3) The amount of a dividend payable to a member under subsection (1) (c) 10
may be applied: 11
(a) in payment for the issue to the member of bonus shares, with the 12
consent of the member; or 13
(b) as a loan to the co-operative: 14
(i) with the consent of the member; or 15
(ii) if the rules of the co-operative authorise the amount of a 16
dividend payable to a member under subsection (1) (c) to 17
be applied as a loan to the co-operative. 18
(4) A loan to the co-operative authorised by the rules (as referred to in 19
subsection (2) (b) (ii) or (3) (b) (ii)) is repayable at call and must bear 20
interest at a rate not lower than the rate prescribed by the National 21
Regulations. 22
(5) In this section: 23
limited dividend means a dividend that is not more than the amount 24
prescribed by the National Regulations. 25
358 Application of surplus to other persons 26
(1) Part of the surplus arising in a year from the business of a distributing 27
co-operative may be credited to a person who is not a member, but is 28
qualified to be a member, by way of rebate in proportion to the value of 29
business done by the person with the co-operative or to the profit earned 30
by the co-operative, if: 31
(a) the person was a member when the business was done and the 32
membership has lapsed; or 33
(b) the person has applied for membership after the business was 34
done. 35
(2) Nothing in this section precludes the payment of a bonus to an employee 36
under the terms of his or her employment. 37
Page 205
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 4 Acquisition and disposal of assets 1
359 Acquisition and disposal of assets 2
(1) A co-operative must not do any of the following things except as 3
approved by special resolution by a special postal ballot: 4
(a) sell or lease the undertaking of the co-operative as a going 5
concern; 6
(b) sell or lease a part of the undertaking of the co-operative that 7
relates to its primary activities and the value of which represents 8
a percentage prescribed by the National Regulations or more of 9
the total book value of the undertaking; 10
(c) acquire from or dispose of to: 11
(i) a director or employee of the co-operative; or 12
(ii) a relative (within the meaning of the Corporations Act) of 13
a director or employee of the co-operative or of the spouse 14
or de facto partner of a director or employee of the 15
co-operative; 16
property the value of which represents a percentage prescribed by 17
the National Regulations or more of the total book value of all the 18
assets of the co-operative relating to its primary activities; 19
(d) acquire an asset the value of which represents a percentage 20
prescribed by the National Regulations or more of the total book 21
value of the undertaking of the co-operative, if the acquisition 22
would result in the co-operative commencing to carry on an 23
activity that is not one of its primary activities; 24
(e) dispose of an asset, if the disposal would result: 25
(i) in the co-operative ceasing to carry on a primary activity 26
of the co-operative; or 27
(ii) in the ability of the co-operative to carry on a primary 28
activity of the co-operative being substantially impaired. 29
Maximum penalty: $6,000. 30
(2) If a co-operative contravenes this section, each person who is a member 31
of the board of the co-operative is taken to have committed the offence, 32
if the person: 33
(a) was in a position to influence the conduct of the co-operative in 34
relation to the commission of the offence by it; and 35
(b) did not use all due diligence to prevent the commission of the 36
offence by it. 37
Page 206
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) The Registrar may, by designated instrument, exempt a co-operative 1
from compliance with a provision of this section and section 248 in 2
relation to a matter to which this section applies. 3
(4) An exemption may be given unconditionally or subject to conditions. 4
(5) In this section: 5
undertaking of a co-operative means all the assets of the co-operative. 6
Note. This section applies to non-distributing co-operatives as well as to 7
distributing co-operatives. 8
Part 3.5 Restrictions on acquisition of interests in 9
co-operatives 10
Division 1 Restrictions on share and voting interests 11
360 Notice required to be given of voting interest 12
(1) A person (whether or not a member of the co-operative) must give 13
notice to a co-operative within 5 business days after becoming aware 14
the person has a relevant interest in the right to vote of a member of the 15
co-operative. 16
Maximum penalty: $2,000. 17
(2) A person (whether or not a member of the co-operative) who has ceased 18
to have a relevant interest in the right to vote of a member of a 19
co-operative must give notice to the co-operative within 5 business days 20
after becoming aware of the fact. 21
Maximum penalty: $2,000. 22
(3) Section 233 provides for the effect of a person having a relevant interest 23
in the right to vote of a member of a co-operative. 24
Note. See Part 1 of Schedule 2 for the term "relevant interest". 25
361 Notice required to be given of substantial share interest 26
(1) A person must give notice to a co-operative within 5 business days after 27
becoming aware the person has a substantial share interest in the 28
co-operative. 29
Maximum penalty: $2,000. 30
(2) A person who has a substantial share interest in a co-operative must give 31
notice to the co-operative within 5 business days after becoming aware 32
a substantial change has occurred in the share interest. 33
Maximum penalty: $2,000. 34
Page 207
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) A person who has ceased to have a substantial share interest in a 1
co-operative must give notice to the co-operative within 5 business days 2
after becoming aware the person has ceased to have the interest. 3
Maximum penalty: $2,000. 4
(4) A person has a substantial share interest in a co-operative if the 5
nominal value of the shares in the co-operative in which the person has 6
a relevant interest represents 5% or more of the nominal value of the 7
issued share capital of the co-operative. 8
(5) A substantial change takes place in a person's share interest in a 9
co-operative if there is an increase or decrease in the number of shares 10
in the co-operative in which the person has a relevant interest and the 11
increase or decrease represents at least 1% of the nominal value of the 12
issued share capital of the co-operative. 13
362 Requirements for notices 14
A notice required under this Division must: 15
(a) be in the approved form; and 16
(b) state the particulars prescribed by the National Regulations of the 17
interest or change being notified. 18
363 Maximum permissible level of share interest 19
(1) A person must not have a relevant interest in shares of a co-operative 20
the nominal value of which is more than a maximum of 20% of the 21
nominal value of the issued share capital of the co-operative. 22
(2) The Registrar may, by designated instrument, state a maximum greater 23
than 20% as the maximum for subsection (1) for a particular 24
co-operative or class of co-operatives. 25
Note. For example, a co-operative group may not have enough members to 26
allow each member to comply with subsection (1). 27
(3) The maximum of 20% stated by subsection (1) may be increased for a 28
particular person by special resolution of the co-operative concerned 29
passed by a special postal ballot. 30
(4) A resolution under subsection (3) does not have effect unless it is 31
approved by the Registrar. 32
(5) The Registrar's approval of the resolution may be given subject to 33
conditions. 34
364 Shares to be forfeited to remedy contravention 35
(1) If a person has a relevant interest in a share of a co-operative in 36
contravention of this Division that is not remedied within 14 days of a 37
notice of that contravention being issued by the board, the board of the 38
Page 208
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
co-operative must declare to be forfeited enough of the shares in which 1
the person has a relevant interest to remedy the contravention. 2
(2) The shares to be forfeited are: 3
(a) the shares nominated by the person for the purpose; or 4
(b) in the absence of that nomination, the shares in which the person 5
has had a relevant interest for the shortest time. 6
(3) A declaration of the board that shares are forfeited operates to forfeit the 7
shares concerned. 8
(4) Sections 163, 164 and 165 apply to shares forfeited under this section as 9
if the shares had been forfeited under Part 2.6. 10
365 Powers of board in response to suspected contravention 11
(1) If the board of a co-operative is satisfied on reasonable grounds that a 12
person has contravened section 361 in relation to the co-operative, the 13
board may do either or both of the following: 14
(a) refuse to register a share transfer involving the person; 15
(b) suspend a stated right or entitlement a person has as a member of 16
the co-operative or attaching to any shares of the co-operative in 17
which the person has a relevant interest. 18
(2) The board may ask a person who it suspects has a relevant interest in 19
shares of the co-operative to give stated information to the board about 20
the interest. 21
(3) A failure by a person to comply with a request under subsection (2) is a 22
reasonable ground for being satisfied the person has contravened 23
section 361. 24
366 Powers of Supreme Court about contravention 25
(1) If a person has contravened section 360 or 361 in relation to a 26
co-operative, the Supreme Court may, on the application of the 27
co-operative or the Registrar, make any order it considers appropriate. 28
(2) Without limiting subsection (1), an order may include: 29
(a) a remedial order; and 30
(b) for securing compliance with any other order made under this 31
section--an order directing the co-operative or another person to 32
do or refrain from doing a stated act. 33
(3) An order may be made whether or not the contravention continues. 34
Page 209
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) Proof to the satisfaction of the Supreme Court at the hearing of an 1
application that: 2
(a) a person has a relevant interest in a share of a co-operative 3
because an associate (within the meaning of Part 2 of Schedule 2) 4
of the person has a relevant interest in a share; and 5
(b) the associate became entitled to the relevant interest within 6
6 months before the application was filed with the court; 7
is evidence that the associate was an associate of the person from the 8
time the person first had the relevant interest until the date of the 9
hearing. 10
367 Co-operative to inform Registrar of interest over 20% 11
(1) A co-operative must inform the Registrar in writing within 14 days after 12
the board becomes aware that: 13
(a) a particular person has a relevant interest in shares of the 14
co-operative the nominal value of which is more than 20% of the 15
nominal value of the issued share capital of the co-operative; or 16
(b) there has been a change in the number of shares in which a person 17
referred to in paragraph (a) holds a relevant interest. 18
(2) The notification must give details of the relevant interest or change 19
concerned. 20
368 Co-operative to keep register 21
(1) A co-operative must keep a register of notifiable interests. 22
(2) The co-operative must enter in the register the names of persons from 23
whom the co-operative has received a notice under this Division 24
together with the information contained in the notice. 25
(3) The register must be open for inspection by a member of the 26
co-operative free of charge. 27
369 Unlisted companies to provide list of shareholders etc 28
(1) This section applies to a company registered under the Corporations Act 29
that is not a listed corporation (within the meaning of that Act). 30
(2) The Registrar or the board of a co-operative may at any time request a 31
company to which this section applies that is a member of a 32
co-operative to give the Registrar and the board a list showing: 33
(a) the name of each member of the company; and 34
Page 210
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) if the company is limited by shares (or by shares and by 1
guarantee): 2
(i) the number of shares in the company held by each 3
member; and 4
(ii) the name of each person who has a relevant interest in a 5
share of the company together with details of the interest; 6
and 7
(c) the name of each person who is an associate (within the meaning 8
of the Corporations Act) of the company. 9
(3) A list under subsection (2) must be given within 28 days after a written 10
request for the list is made to the company by the Registrar or board. 11
(4) The details to be shown on the list are the details as at the date stated in 12
the request. 13
Note. Section 91 provides that the board of a co-operative may give directions 14
about disclosure of relevant interests and instructions. 15
370 Excess share interest not to affect loan liability 16
(1) This section applies if a co-operative has made a loan to a member and 17
the member had or has a relevant interest in shares of the co-operative 18
in contravention of this Division. 19
(2) Until the amount lent to the member has been repaid to the co-operative 20
(with the interest payable), the member is liable to make to the 21
co-operative the payments the member would be liable to make if all the 22
shares concerned were lawfully held by the member. 23
(3) Security for the repayment of the loan is not affected by a contravention 24
of this Division. 25
371 Extent of operation of this Division 26
This Division: 27
(a) applies to all individuals, whether resident in this jurisdiction or 28
in Australia or not and whether Australian citizens or not, and to 29
all bodies corporate or unincorporated, whether incorporated or 30
carrying on business in this jurisdiction or in Australia or not; and 31
(b) extends to acts done or omitted to be done outside this 32
jurisdiction, whether in Australia or not. 33
372 Exemptions 34
(1) The Registrar may, by designated instrument, exempt a person or class 35
of persons from the operation of this Division. 36
(2) An exemption may be given unconditionally or subject to conditions. 37
Page 211
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division 2 Restrictions on certain share offers 1
373 Share offers to which this Division applies 2
(1) This Division applies to the following offers to purchase shares in a 3
co-operative: 4
(a) an offer made as part of a proposal for, or that is conditional on, 5
the sale of the business or part of the business, as a going concern, 6
of the co-operative; 7
(b) an offer made as part of a proposal for, or that is conditional on, 8
the registration of the co-operative as a company under the 9
Corporations Act; 10
(c) an offer made as part of a proposal for, or that is conditional on, 11
the winding up of the co-operative; 12
(d) an offer that would result in a contravention of section 363 were 13
the offerer to be registered (immediately after the offer is made) 14
as the holder of the shares that are the subject of the offer; 15
(e) an offer that would lead to the offerer having a substantial share 16
interest in the co-operative, or to a substantial change taking 17
place in a substantial share interest the offerer has in the 18
co-operative, were the offerer to be registered (immediately after 19
the offer is made) as the holder of the shares that are the subject 20
of the offer. 21
(2) In subsection (1) (e), substantial share interest and substantial change 22
have the same meanings as they have in section 361. 23
374 Requirements to be satisfied before offer can be made 24
(1) A person must not make an offer to which this Division applies unless 25
the making of the offer has been approved: 26
(a) by special resolution by a special postal ballot; and 27
(b) by the Registrar. 28
(2) Despite subsection (1), an offer referred to in section 373 (1) (e) can be 29
made even if it has not been approved as referred to in subsection (1) if 30
it is made in circumstances stated in, and in accordance with the 31
requirements of, the National Regulations. 32
375 Some offers totally prohibited if they discriminate 33
An offer referred to in section 373 (1) (a)-(d) must not be made at all if 34
it operates or would operate to discriminate between members who are 35
active members and members who are not active members. 36
Page 212
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
376 Offers to be submitted to board first 1
(1) A proposal to make an offer to which this Division applies must in the 2
first instance be submitted to the board of the co-operative. 3
(2) The board may decline to put a proposed offer to a special postal ballot 4
unless arrangements satisfactory to the board have been made for 5
payment to the co-operative of the expenses involved in holding the 6
ballot. 7
(3) The board may require payment under subsection (2) in advance. 8
(4) A requisition for a special postal ballot for this Division cannot be 9
served unless the board has had a reasonable opportunity to consider the 10
proposed offer concerned. 11
(5) A period of 28 days is a reasonable opportunity for considering a 12
proposed offer but the Registrar may extend the period in a particular 13
case, whether before or after the end of the 28 days, by written notice to 14
the co-operative. 15
377 Announcements of proposed takeovers about proposed company 16
(1) This section applies to an offer to purchase shares in a co-operative 17
made as part of a proposal for, or that is conditional on, the registration 18
of the co-operative as a company (the proposed company) under the 19
Corporations Act. 20
(2) A person must not make a public announcement to the effect the person 21
proposes, or the person and another person or other persons together 22
propose, to make takeover offers, or to cause a takeover announcement 23
to be made, in relation to the proposed company if: 24
(a) the person knows the announcement is false or is recklessly 25
indifferent as to whether it is true or false; or 26
(b) the person has no reasonable grounds for believing the person, or 27
the person and the other person or persons, will be able to 28
perform obligations arising under the scheme or announcement 29
or under the Corporations Act in relation to the scheme or 30
announcement if a substantial proportion of the offers or the 31
offers made under the announcement are accepted. 32
Maximum penalty: $20,000 or imprisonment for 5 years, or both. 33
(3) If a person makes a public announcement to the effect the person 34
proposes, or the person and another person or other persons together 35
propose, to make a takeover bid in relation to the proposed company, 36
the person must proceed to make a takeover bid in relation to shares in 37
the company in accordance with the public announcement within 38
2 months after the day on which the company is incorporated. 39
Maximum penalty: $10,000 or imprisonment for 2 years, or both. 40
Page 213
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) A person is not liable to be convicted of more than one offence under 1
subsection (3) for any one public announcement. 2
(5) A person who contravenes this section (whether or not the person is 3
convicted of an offence for the contravention) is liable to pay 4
compensation to a person who suffered loss because of entering into a 5
share transaction in reliance on the public announcement concerned. 6
(6) The amount of the compensation is the difference between the price of 7
the shares at which the transaction was entered into and the price of the 8
shares at which the transaction would have been likely to have been 9
entered into if the person had not made the public announcement. 10
(7) A person does not contravene subsection (3) and is not liable to pay 11
compensation for the contravention if it is proved the person could not 12
reasonably have been expected to make the takeover bid concerned: 13
(a) because of circumstances that existed when the public 14
announcement was made but of which the person had no 15
knowledge and could not reasonably have been expected to have 16
knowledge; or 17
(b) because of a change in circumstances after the announcement 18
was made, other than a change in circumstances caused directly 19
or indirectly by the person. 20
(8) Expressions used in this section have the same meanings as they had in 21
section 746 of the Corporations Law as applying on 12 March 2000. 22
378 Additional disclosure requirements for offers involving conversion to 23
company 24
If an offer is part of a proposal for, or is conditional on, the registration 25
of the co-operative as a company under the Corporations Act, the 26
disclosure statement required to be sent to members for the special 27
postal ballot must contain the following additional information: 28
(a) full particulars of any proposal by which a director will acquire a 29
relevant interest in a share of the company to be formed; 30
(b) other information that: 31
(i) is material to the making of a decision by a member 32
whether or not to agree to the making of the offer; and 33
(ii) is within the knowledge of the directors; and 34
(iii) has not previously been disclosed to the members; 35
(c) other information the Registrar directs. 36
Page 214
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
379 Consequences of prohibited offer 1
(1) If a person makes an offer to purchase shares in a co-operative in 2
contravention of this Division: 3
(a) the person cannot be registered as the holder of the shares 4
concerned; and 5
(b) if the transfer of the shares is registered--the person cannot vote 6
at a meeting of the co-operative. 7
(2) A vote cast by or for a member when the member cannot vote because 8
of this section must be disregarded. 9
380 Exemptions 10
(1) The Registrar may, by designated instrument, exempt a co-operative 11
from compliance with a provision of this Division and section 248 in 12
relation to a matter to which this Division applies. 13
(2) An exemption may be given unconditionally or subject to conditions. 14
Page 215
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Chapter 4 Structural and other events for 1
co-operatives 2
Part 4.1 Appointment of administrator 3
Division 1 Introductory 4
381 Operation of this Part 5
This Part provides 2 methods for the administration of a co-operative, 6
as follows: 7
(a) administration under the Corporations Act as applying under 8
Division 2; 9
(b) administration under Division 3. 10
Division 2 Administration under Corporations Act 11
382 Application of Corporations Act--administration of co-operative 12
A co-operative is declared to be an applied Corporations legislation 13
matter for the purposes of the Corporations application legislation of 14
this jurisdiction in relation to Part 5.3A and Division 3 of Part 5.9 of the 15
Corporations Act, subject to the following modifications: 16
(a) a reference in the provisions to sections 128 and 129 of the 17
Corporations Act is to be read as a reference to Division 3 of 18
Part 2.2 of this Law; 19
(b) a reference in section 436D of the Corporations Act to "section 20
436A, 436B or 436C" is to be read as including a reference to 21
section 385 of this Law; 22
(c) a reference in section 436E (4) (a) or 448B of the Corporations 23
Act to an administrator is to be read as not including a reference 24
to an administrator appointed under section 385 of this Law; 25
(d) a reference in section 440D (2) (b) of the Corporations Act to 26
prescribed proceedings is to be read as a reference to proceedings 27
prescribed by the local regulations; 28
(e) section 444GA of the Corporations Act is taken to include a 29
provision to the effect that the section has effect subject to 30
Divisions 7 and 8 of Part 2.4 of this Law; 31
(f) section 446B of the Corporations Act is taken to be omitted; 32
Page 216
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(g) the reference in section 600H (2) of the Corporations Act to "a 1
compromise or arrangement under part 5.1" is to be read as a 2
reference to a compromise or arrangement under Part 4.4 of this 3
Law; 4
(h) the modifications referred to in section 13 (3) of this Law so far 5
as they are relevant. 6
Note. See section 13, including Note 1 to that section. 7
383 Appointment of administrator by Registrar in the case of insolvency 8
(1) The Registrar may appoint a person as an administrator for the purposes 9
of Part 5.3A of the Corporations Act (as applying under this Division) 10
if the Registrar is of the opinion that the co-operative is insolvent or 11
likely to become insolvent at some future time. 12
(2) The person appointed by the Registrar must be a registered liquidator 13
within the meaning of the Corporations Act, but the Registrar may 14
appoint a person who is not a registered liquidator if the Registrar forms 15
the view that the likely costs of administration by a registered liquidator 16
are excessive taking into account the known assets of the co-operative 17
and the expected extent of debt of the co-operative. 18
Division 3 Administration--alternative procedure 19
384 Operation of this Division 20
(1) The provisions of the Corporations Act as applying under Division 2 do 21
not apply to the appointment of an administrator under this Division or 22
to an administrator so appointed. 23
(2) This Division does not apply to the appointment of an administrator 24
under section 383 or to an administrator so appointed. 25
385 Appointment of administrator by Registrar 26
(1) The Registrar may, by written notice, appoint an administrator to 27
conduct the affairs of a co-operative. 28
(2) A notice of appointment must state: 29
(a) the date of appointment; and 30
(b) the appointee's name; and 31
(c) the appointee's business address. 32
(3) If the appointee's name or business address changes, the appointee must 33
immediately give written notice of the change to the Registrar. 34
(4) The Registrar must not appoint an administrator unless the necessary 35
grounds for taking the action exist, as referred to in section 455. 36
Page 217
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
386 Effect of appointment of administrator 1
(1) On the appointment of an administrator of a co-operative: 2
(a) the directors of the co-operative cease to hold office; and 3
(b) all contracts for the provision of secretarial or administrative 4
services for the co-operative are terminated; and 5
(c) the administrator may terminate any contract of employment 6
with the co-operative or any contract for providing other services 7
to the co-operative. 8
(2) An administrator of a co-operative has the functions of the board of the 9
co-operative, including the board's powers of delegation. 10
(3) A director of a co-operative must not be appointed or elected while the 11
administrator is in office except as provided by this Division. 12
387 Revocation of appointment 13
(1) An administrator holds office until the administrator's appointment is 14
revoked. 15
(2) The Registrar may, by written notice, revoke the appointment of an 16
administrator. 17
(3) When a liquidator of a co-operative is appointed, the appointment of an 18
administrator of the co-operative is automatically revoked. 19
(4) Immediately on the revocation of an administrator's appointment, the 20
administrator must prepare and give to the Registrar a report showing 21
how the administration was carried out, and for that purpose an 22
administrator has access to the co-operative's books. 23
(5) On giving the report and accounting fully for the administration of the 24
co-operative to the satisfaction of the Registrar, the administrator is 25
released from any further duty to account for the administration of the 26
co-operative other than because of fraud, dishonesty, negligence or 27
wilful failure to comply with this Law. 28
(6) Before revoking the appointment of an administrator of a co-operative, 29
the Registrar must: 30
(a) appoint another administrator; or 31
(b) appoint a liquidator; or 32
(c) ensure directors of the co-operative have been elected under the 33
rules of the co-operative at a meeting called by the administrator 34
under the rules of the co-operative; or 35
(d) appoint directors of the co-operative. 36
Page 218
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(7) Directors elected or appointed under subsection (6): 1
(a) take office on revocation of the administrator's appointment; and 2
(b) in the case of directors appointed under subsection (6)--hold 3
office until the next annual general meeting of the co-operative 4
after the revocation of the administrator's appointment. 5
(8) This section has effect subject to section 390. 6
388 Expenses of administration 7
(1) The expenses of and incidental to the conduct of a co-operative's affairs 8
by an administrator are payable from the co-operative's funds. 9
(2) The expenses of conducting a co-operative's affairs include: 10
(a) if the administrator is not a public sector official--remuneration 11
of the administrator at a rate approved by the Registrar; or 12
(b) if the administrator is a public sector official--the amount the 13
Registrar certifies should be paid to the Registrar as repayment of 14
the administrator's remuneration. 15
(3) An amount certified under subsection (2) (b) may be recovered by the 16
Registrar in a court of competent jurisdiction. 17
(4) An administrator has, in relation to the expenses referred to in 18
subsection (1), the same priority on the winding up of a co-operative as 19
a liquidator appointed under the Corporations Act as applying under this 20
Law has. 21
Note. Subdivision D of Division 6 of Part 5.6 of the Corporations Act contains 22
provisions relating to the priority of payments. 23
389 Liabilities arising from administration 24
(1) If a co-operative incurs loss because of fraud, dishonesty, negligence or 25
wilful failure to comply with this Law or the rules of the co-operative 26
by an administrator, the administrator is liable for the loss. 27
(2) An administrator is not liable for a loss that is not a loss to which 28
subsection (1) applies but must account for the loss in a report given 29
under section 387. 30
390 Additional powers of Registrar 31
(1) If the Registrar appoints directors of a co-operative under section 387, 32
the Registrar may, by written notice given to the co-operative, state: 33
(a) a time during which this section is to apply to the co-operative; 34
and 35
(b) the terms on which all or any of the directors hold office; and 36
(c) the rules that are to be the rules of the co-operative. 37
Page 219
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) While this section applies to a co-operative, the Registrar may: 1
(a) remove and appoint directors; and 2
(b) vary, revoke or state new terms in place of all or any of the terms 3
stated under subsection (1); and 4
(c) amend all or any of the rules stated under subsection (1). 5
(3) The Registrar may, by written notice given to the co-operative, extend 6
the time for which this section is to apply to a co-operative. 7
(4) A rule stated by the Registrar under this section to be a rule of a 8
co-operative: 9
(a) must not to be amended other than in the way set out in this 10
section; and 11
(b) if it is inconsistent with another rule of the co-operative-- 12
prevails over the other rule (and the other rule is inoperative to the 13
extent of the inconsistency); and 14
(c) has the same evidentiary value as is by this Law accorded to the 15
rules of the co-operative and to copies of them. 16
391 Stay of proceedings 17
(1) If the Registrar appoints an administrator to conduct a co-operative's 18
affairs, a person must not begin or continue proceedings in a court 19
against the co-operative until the administrator's appointment is 20
revoked other than with the leave of the designated tribunal and, if the 21
tribunal gives leave, in accordance with any terms the tribunal imposes. 22
(2) A person intending to apply for leave of the designated tribunal under 23
subsection (1) must give the Registrar at least 10 days notice of 24
intention to apply. 25
(3) On the hearing of an application under subsection (1), the Registrar may 26
be represented and may oppose the application. 27
392 Administrator to report to Registrar 28
On receipt of a request from the Registrar, the administrator of a 29
co-operative must, without delay, prepare and give to the Registrar a 30
report showing how the administration is being carried out. 31
Page 220
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Part 4.2 Receivers and other controllers of property 1
393 Application of Corporations Act--receivers and other controllers of 2
property of co-operatives 3
A co-operative is declared to be an applied Corporations legislation 4
matter for the purposes of the Corporations application legislation of 5
this jurisdiction in relation to Part 5.2 of the Corporations Act, subject 6
to the following modifications: 7
(a) section 416 of the applied provisions is to be read as including the 8
following definitions: 9
administrator means an administrator of a deed of 10
arrangement appointed under Part 5.3A of the 11
Corporations Act, as applying under section 382 of 12
the Co-operatives National Law. 13
senior manager: 14
(a) of a co-operative--means a person referred to 15
in paragraph (b) of the definition of officer in 16
section 4 of the Co-operatives National Law; 17
or 18
(b) of a corporation other than a co-operative-- 19
means a senior manager within the meaning 20
of the Corporations Act. 21
(a) section 416 of the applied provisions is to be read as if the 22
following definition were substituted for the definition of officer: 23
officer of a co-operative has the meaning given by 24
section 4 of the Co-operatives National Law and, in 25
relation to a participating co-operative, includes a 26
local agent of the participating co-operative. 27
(a) section 417 of the applied provisions is taken to be omitted and 28
the following section substituted: 29
417 Application of Part 30
Except so far as the contrary intention appears, this 31
Part applies in relation to a receiver of property of a 32
co-operative who is appointed after the 33
commencement of section 393 of the Co-operatives 34
National Law in this jurisdiction, even if the 35
appointment arose out of a transaction entered into, 36
or an act or thing done, before that commencement. 37
(a) section 418A (1) of the applied provisions is to be read as if 38
"23 June 1993" wherever occurring were omitted and "the 39
commencement of section 393 of the Co-operatives National 40
Law in this jurisdiction" were substituted; 41
Page 221
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) section 429 (1) of the applied provisions is to be read as if the 1
following definition were substituted for the definition of 2
reporting officer: 3
reporting officer, in relation to a co-operative for 4
property of which a person is controller, means a 5
person who was on the control day: 6
(a) for a co-operative--a director or secretary of 7
the co-operative; or 8
(b) for a participating co-operative--a local 9
agent of the participating co-operative. 10
(a) a reference in section 432 of the applied provisions to ASIC is to 11
be read as a reference to the Registrar, but this paragraph does not 12
limit the operation of section 15 of this Law; 13
(b) the modifications referred to in section 13 (3) of this Law so far 14
as they are relevant. 15
Note. See section 13, including Note 1 to that section. 16
Part 4.3 Mergers and transfers of engagements 17
Division 1 Merger or transfer of engagements 18
394 Application of this Division 19
This Division does not apply to a merger or transfer of engagements to 20
which Chapter 5 applies. 21
395 Mergers and transfers of engagements of local co-operatives 22
Any 2 or more co-operatives may consolidate all or any of their assets, 23
liabilities and undertakings by way of merger or transfer of 24
engagements approved under this Division. 25
396 Requirements before application can be made 26
(1) Before co-operatives can apply for approval under this Division of a 27
merger or transfer of engagements, the proposed merger or transfer 28
must have been approved by each of the co-operatives by: 29
(a) a special resolution passed by a special postal ballot; or 30
(b) if permitted by subsection (2)--a resolution of the board of the 31
co-operative. 32
(2) The proposed merger or transfer of engagements may be approved by 33
resolution of the board of a co-operative if the Registrar consents to the 34
procedure applying in the particular case. 35
Page 222
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
397 Disclosure statement required 1
(1) A resolution of a co-operative is not effective for the purposes of this 2
Division unless this section has been complied with. 3
(2) Each co-operative must send to each of its members a disclosure 4
statement approved by the Registrar stating: 5
(a) the financial position of each co-operative concerned in the 6
proposed merger or transfer of engagements as shown in 7
financial statements prepared as at a date not more than 6 months 8
before the date of the statement; and 9
(b) any interest any officer of each co-operative has in the proposed 10
merger or transfer of engagements; and 11
(c) compensation or other consideration proposed to be paid, or other 12
incentive proposed to be given, to any officer or member of each 13
co-operative in relation to the proposed merger or transfer of 14
engagements; and 15
(d) whether the proposal is a merger or transfer of engagements and 16
the reason for the merger or transfer of engagements; and 17
(e) for a transfer of engagements--whether it is a total or partial 18
transfer of engagements; and 19
(f) other information the Registrar directs. 20
(3) The disclosure statement must be sent to the members of each 21
co-operative so that it will, in the ordinary course of post, reach each 22
member who is entitled to vote on the special resolution no later than 23
21 days before the day on or before which the ballot papers must be 24
returned by members voting in the special postal ballot. 25
(4) The Registrar may, by designated instrument, exempt a co-operative 26
from complying with this section. 27
(5) The Registrar may give an approval or an exemption under this section 28
unconditionally or subject to conditions. 29
398 Making an application 30
(1) An application for approval of a merger or transfer of engagements 31
under this Division must be made to the Registrar in the approved form. 32
(2) An application for approval of a merger must be accompanied by 33
2 copies of the proposed rules of the merged co-operative and other 34
particulars required by the Registrar. 35
Page 223
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
399 Approval of merger 1
(1) The Registrar must approve a merger under an application under this 2
Division if satisfied: 3
(a) this Division and the National Regulations have been complied 4
with in relation to the application; and 5
(b) the proposed rules of the merged co-operative are consistent with 6
this Law and may reasonably be approved; and 7
(c) the certificates of registration of the co-operatives have been 8
surrendered to the Registrar; and 9
(d) there is no good reason why the merged co-operative and its rules 10
should not be registered. 11
(2) On approving an application for merger, the Registrar must: 12
(a) cancel the registration of the co-operatives involved in the 13
merger; and 14
(b) register the merged co-operative and its rules; and 15
(c) issue to the merged co-operative a certificate of registration under 16
this Law. 17
(3) A merger takes effect on the issue of the certificate of registration for 18
the merged co-operative. 19
400 Approval of transfer of engagements 20
(1) The Registrar must approve a transfer of engagements under an 21
application under this Division if satisfied: 22
(a) this Division has been complied with in relation to the 23
application; and 24
(b) the rules or proposed rules of the transferee co-operative are 25
adequate; and 26
(c) for a total transfer of engagements from a co-operative--the 27
certificate of registration of the co-operative has been 28
surrendered to the Registrar; and 29
(d) there is no good reason why the transfer of engagements should 30
not take effect. 31
(2) A transfer of engagements takes effect on the day stated in the approval 32
of the Registrar. 33
Page 224
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
401 Transfer of engagements by direction of Registrar 1
(1) The Registrar may, with the approval of the Minister, direct a 2
co-operative: 3
(a) to transfer its engagements to a co-operative approved by the 4
Registrar; and 5
(b) within a period fixed by the Registrar when giving the direction, 6
or the further period the Registrar allows, to enter into an 7
agreement approved by the Registrar to give effect to the transfer 8
of engagements directed. 9
(2) The Registrar must not give the direction to a co-operative unless the 10
necessary grounds exist for giving the direction, as referred to in 11
section 455. 12
(3) The transfer of engagements must make provision in a way approved by 13
the Registrar for the members of the transferor co-operative who wish 14
to do so to become members of the transferee co-operative. 15
(4) If a co-operative fails to comply with a direction under this section, the 16
Registrar may elect to treat the failure as the necessary grounds: 17
(a) for winding up the co-operative on a certificate of the Registrar; 18
or 19
(b) for appointing an administrator of the co-operative. 20
(5) The Registrar must notify the co-operative of the Registrar's decision 21
under subsection (4). 22
(6) The Registrar may revoke a direction under this section at any time up 23
until the co-operative has agreed under the direction to transfer its 24
engagements. 25
(7) A transfer of engagements directed under this section takes effect on a 26
day notified by the Registrar by designated instrument. 27
(8) An officer of a co-operative must not: 28
(a) fail to take all reasonable steps to secure compliance by the 29
co-operative with a direction given under this section; or 30
(b) by a wilful act or omission be the cause of a failure by the 31
co-operative to comply with a direction given under this section. 32
Maximum penalty (for subsection (8)): $2,000. 33
Division 2 Transfer of incorporation 34
402 Meaning of "new body" and "transfer" 35
The registration or incorporation of a co-operative as a corporation 36
because of an application under this Division is referred to in this 37
Page 225
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Division as its transfer and the corporation concerned is referred to in 1
this Division as the new body. 2
403 Application for transfer 3
A co-operative may, subject to obtaining any necessary approvals under 4
this Division, apply to become registered, incorporated or otherwise 5
established as one of the following: 6
(a) a company under the Corporations Act; 7
(b) a corporation under legislation of this or any other jurisdiction 8
that is prescribed by the National Regulations or the local 9
regulations. 10
404 Requirements before application can be made 11
(1) Before an application is made under section 403, the co-operative must, 12
by special resolution passed by a special postal ballot: 13
(a) approve the proposed application; and 14
(b) decide under what name the co-operative is to apply to be 15
registered, incorporated or otherwise established; and 16
(c) adopt constituent documents that may be necessary or considered 17
desirable. 18
(2) An application cannot be made under section 403 in respect of a 19
co-operative without share capital unless: 20
(a) the application is made at least 2 weeks after a notice has been 21
published in a newspaper circulating generally in the district in 22
which the registered office of the co-operative is situated 23
advising of the proposal to submit the proposed special resolution 24
to members of the co-operative; and 25
(b) either: 26
(i) in a case where the new body will have share capital--all 27
the members of the co-operative will have an equal 28
shareholding; or 29
(ii) in any case--the Registrar approves in writing of the 30
making of the application. 31
(3) The name applied for need not be the same as that of the co-operative 32
and must not include the word "Co-operative" or another word or 33
abbreviation importing a similar meaning. 34
(4) The Registrar may, by designated instrument, exempt a co-operative 35
from compliance with a provision of this section and section 248 in 36
relation to a matter to which this section applies. 37
(5) An exemption may be given unconditionally or subject to conditions. 38
Page 226
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
405 New body ceases to be registered as co-operative 1
On the transfer of a co-operative under this Division, it ceases to be 2
registered as a co-operative under this Law. 3
406 Transfer not to impose greater liability etc 4
(1) The constituent documents adopted in the transfer must not: 5
(a) impose on the members of the new body who were members of 6
the co-operative at the date of transfer any greater or different 7
liability to contribute to the assets of the new body than the 8
liability to which they were subject as members of the 9
co-operative; or 10
(b) deprive a member of the new body of preferential rights to 11
dividends or capital to which the member was entitled as a 12
member of the co-operative at the date of transfer. 13
(2) The transfer must result in all persons who were members of the 14
co-operative at the date of transfer becoming members of the new body. 15
(3) In the case of a transfer of a co-operative having share capital to a new 16
body having share capital, the transfer must result in every member of 17
the co-operative at the date of transfer who held shares in the 18
co-operative being the holder of shares in the capital of the new body 19
equal in number and nominal value to the shares held by the member as 20
a member of the co-operative. 21
Note. Section 168 (1) provides that "Even though a person's shares in a 22
co-operative have been forfeited under [Part 2.6], the person is to be taken to 23
be the holder of shares in the co-operative (the same in all respects as those 24
that were forfeited) for the following purposes: [...] (b) the entitlement of a 25
shareholder when the co-operative becomes registered as a company if the 26
relevant special resolution under section 404 is passed within 2 years after the 27
person's shares were forfeited". 28
407 Effect of new certificate 29
A certificate of registration, incorporation or establishment as the new 30
body issued by the appropriate officer under the law applicable to the 31
new body is evidence that all requirements of this Division about the 32
registration, incorporation or establishment have been complied with. 33
408 Copy of new certificate to be given to Registrar 34
On the transfer of a co-operative under this Division, the new body must 35
immediately give the Registrar a copy of its new certificate of 36
registration, incorporation or establishment. 37
Maximum penalty: $1,000. 38
Page 227
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
409 New body is a continuation of the co-operative 1
(1) When a co-operative transfers to a new body, the corporation 2
constituted by the new body is taken to be the same entity as the 3
corporation constituted by the co-operative. 4
Note. Division 3 also applies to a transfer of incorporation under this Division-- 5
see section 412. 6
(2) If the new body is a company under the Corporations Act, 7
subsection (1) and Division 3 have effect subject to the provisions of 8
section 601BM of that Act. 9
Note. Section 601BM of the Corporations Act provides that the registration of a 10
body as a company under Part 5B.1 of that Act does not: 11
(a) create a new legal entity; or 12
(b) affect the body's existing property, rights or obligations (except as 13
against the members of the body in their capacity as members); or 14
(c) render defective any legal proceedings by or against the body or its 15
members. 16
Division 3 Effect of merger or transfer on assets and 17
liabilities 18
410 How this Division applies to a merger 19
(1) This Division applies to a merger of co-operatives under Division 1. 20
(2) In the application of this Division to the merger: 21
new body means the co-operative resulting from the merger. 22
original body means each co-operative that is a party to the merger. 23
relevant day means the day on which the merged co-operative is 24
registered under this Law. 25
411 How this Division applies to a transfer of engagements 26
(1) This Division applies to a transfer of engagements of a co-operative to 27
another co-operative under Division 1. 28
(2) In the application of this Division to the transfer of engagements: 29
new body means the co-operative to which the engagements are 30
transferred. 31
original body means the co-operative that transfers its engagements. 32
relevant day means the day on which the transfer of engagements takes 33
effect. 34
412 How this Division applies to a transfer of incorporation 35
(1) This Division applies to a transfer of incorporation under Division 2. 36
Page 228
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) In the application of this Division to the transfer of incorporation: 1
new body means the corporation resulting from the transfer. 2
original body means the co-operative transferring its incorporation. 3
relevant day means the day on which the transfer takes effect. 4
413 Effect of merger or transfer on assets and liabilities 5
(1) In this section: 6
assets means a legal or equitable estate or interest (whether present or 7
future, whether vested or contingent and whether personal or 8
assignable) in real or personal property of any description (including 9
money), and includes securities, choses in action and documents. 10
instrument means an instrument (other than this Law) that creates, 11
changes or extinguishes rights or liabilities (or would do so if filed or 12
registered under any law), and includes a judgment, order and process 13
of a court. 14
liabilities means liabilities, debts and obligations (whether present or 15
future, whether vested or contingent and whether personal or 16
assignable). 17
rights means any rights, powers, privileges or immunities (whether 18
present or future, whether vested or contingent and whether personal or 19
assignable). 20
(2) On and from the relevant day for an event to which this Division 21
applies: 22
(a) the assets of the original body vest in the new body without the 23
need for a conveyance, transfer, assignment or assurance; and 24
(b) the rights and liabilities of the original body become the rights 25
and liabilities of the new body; and 26
(c) all proceedings by or against the original body pending 27
immediately before the relevant day are taken to be proceedings 28
pending by or against the new body; and 29
(d) an act, matter or thing done or omitted to be done by, to or in 30
relation to the original body before the relevant day is (to the 31
extent to which the act, matter or thing has any force or effect) 32
taken to have been done or omitted by, to or in relation to the new 33
body; and 34
(e) a reference in an instrument or in a document of any kind to the 35
original body is to be read as, or as including, a reference to the 36
new body. 37
(3) The operation of this section is not to be regarded: 38
Page 229
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(a) as a breach of contract or confidence or otherwise as a civil 1
wrong; or 2
(b) as a breach of a contractual provision prohibiting, restricting or 3
regulating the assignment or transfer of assets, rights or 4
liabilities; or 5
(c) as giving rise to a remedy by a party to an instrument, or as 6
causing or permitting the termination of an instrument, because 7
of a change in the beneficial or legal ownership of an asset, right 8
or liability. 9
Part 4.4 Compromises and arrangements 10
Division 1 General requirements 11
414 Requirements for binding compromise or arrangement 12
(1) A compromise or arrangement is binding only if it is approved by order 13
of the Supreme Court and it is agreed to: 14
(a) if the compromise or arrangement is between the co-operative 15
and any of its creditors--at a court ordered meeting by a majority 16
in number of the creditors concerned who are present and voting 17
(in person or by proxy), being a majority whose debts or claims 18
against the co-operative amount to at least 75% of the total of the 19
debts and claims of all creditors who are present and voting (in 20
person or by proxy); or 21
(b) if the compromise or arrangement is between the co-operative 22
and any of its members--by the members concerned, by special 23
resolution passed by a special postal ballot. 24
(2) The court ordered meeting referred to in subsection (1) (a) is a meeting 25
called in accordance with an order of the Supreme Court under this Part. 26
(3) The Supreme Court may give its approval to a compromise or 27
arrangement subject to the amendments or conditions it considers 28
appropriate. 29
(4) An order of the Supreme Court approving a compromise or arrangement 30
does not have effect until an office copy of the order is filed with the 31
Registrar. 32
(5) On the copy being filed, the order takes effect from the date of filing or 33
the earlier date the Supreme Court states in the order. 34
415 Court ordered meeting of creditors 35
(1) If a compromise or arrangement is proposed between a co-operative and 36
any of its creditors, the Supreme Court may, on application by an 37
Page 230
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
appropriate person, order a meeting or meetings of the creditors 1
concerned. 2
(2) An appropriate person to apply for an order is: 3
(a) the co-operative; or 4
(b) a member of the co-operative; or 5
(c) one of the creditors concerned; or 6
(d) for a co-operative being wound up--the liquidator. 7
(3) The meeting must be called in the way and be held in the place or places 8
(in this jurisdiction or elsewhere) the Supreme Court directs. 9
(4) In considering whether to make an order for a meeting to be held in 10
another jurisdiction, the Supreme Court may have regard to where 11
creditors concerned reside. 12
416 Registrar to be given notice and opportunity to make submissions 13
(1) The Supreme Court may make an order under this Division if the court 14
is satisfied: 15
(a) at least 14 days notice of the hearing of the application for the 16
order, or a shorter period of notice the court or the Registrar 17
permits, has been given to the Registrar; and 18
(b) the Registrar has had a reasonable opportunity to examine the 19
terms of, and make submissions to the court in relation to, the 20
proposed compromise or arrangement concerned and a draft 21
explanatory statement relating to it. 22
(2) In this section: 23
draft explanatory statement means a statement: 24
(a) explaining the effect of the proposed compromise or arrangement 25
and, in particular, stating: 26
(i) material interests of the directors of the co-operative, 27
whether as directors, as members or creditors of the 28
co-operative or otherwise; and 29
(ii) the effect on the interests of the proposed compromise or 30
arrangement in so far as the effect is different from the 31
effect on the like interests of other persons; and 32
(b) setting out information prescribed by the National Regulations; 33
and 34
(c) setting out other information that: 35
(i) is material to the making of a decision by a creditor or 36
member of the co-operative whether or not to agree to the 37
proposed compromise or arrangement; and 38
Page 231
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(ii) is within the knowledge of the directors of the 1
co-operative; and 2
(iii) has not previously been disclosed to the creditors or 3
members of the co-operative. 4
417 Results of 2 or more meetings 5
If the Supreme Court orders 2 or more meetings of creditors to be held 6
in relation to a proposed compromise or arrangement: 7
(a) the meetings are taken to form a single meeting; and 8
(b) the votes in favour of the proposed compromise or arrangement 9
cast at each of the meetings are to be totalled; and 10
(c) the votes against the proposed compromise or arrangement cast 11
at each of the meetings are to be totalled. 12
418 Persons disqualified from administering compromise or arrangement 13
(1) Except with the leave of the Supreme Court, a person must not be 14
appointed to administer, and must not administer, a compromise or 15
arrangement approved under this Law between a co-operative and any 16
of its creditors or members, whether by the terms of the compromise or 17
arrangement or under a power given by the terms of a compromise or 18
arrangement, if the person: 19
(a) is a mortgagee of a property of the co-operative; or 20
(b) is an auditor or an officer of the co-operative; or 21
(c) is an officer of a corporation that is a mortgagee of property of the 22
co-operative; or 23
(d) is not a registered liquidator, unless the person is a corporation 24
authorised under a law of this jurisdiction to administer the 25
compromise or arrangement concerned; or 26
(e) is an officer of a corporation related to the co-operative; or 27
(f) unless the Registrar directs in writing that this paragraph does not 28
apply in relation to the person and the co-operative--has within 29
the last year been an officer or promoter of the co-operative or of 30
a related corporation. 31
(2) This section does not disqualify a person from administering a 32
compromise or arrangement under an appointment validly made before 33
the commencement of this section in this jurisdiction. 34
419 Application of Corporations Act to person appointed to administer 35
compromise or arrangement 36
The provisions of sections 425, 427 (1A) and (2), 428, 432 and 434 of 37
the Corporations Act as applying under this Law apply to a person 38
Page 232
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
appointed to administer a compromise or arrangement in relation to a 1
co-operative, as if: 2
(a) the appointment were an appointment of the person as a receiver 3
and manager of property of the co-operative; and 4
(b) a reference in those sections to a receiver were a reference to the 5
person. 6
420 Application of Corporations Act--person appointed to administer 7
compromise or arrangement 8
A person appointed to administer a compromise or arrangement is 9
declared to be an applied Corporations legislation matter for the 10
purposes of the Corporations application legislation of this jurisdiction 11
in relation to section 536 of the Corporations Act, subject to the 12
following modifications: 13
(a) that section applies as if the appointment were an appointment of 14
the person as a liquidator of the co-operative; 15
(b) a reference in that section to a liquidator is taken to be a reference 16
to the person; 17
(c) the modifications referred to in section 13 (3) of this Law so far 18
as they are relevant. 19
Note. See section 13, including Note 1 to that section. 20
421 Copy of order to be attached to rules 21
(1) A co-operative must ensure a copy of an order of the Supreme Court 22
approving a compromise or arrangement is attached to each copy of the 23
rules of the co-operative issued after the order is made. 24
Maximum penalty: $2,000. 25
(2) The Supreme Court may, by order, exempt a co-operative from 26
compliance with this section or decide the period during which the 27
co-operative must comply. 28
422 Directors to arrange for reports 29
(1) When a compromise or arrangement (whether or not for a scheme for 30
the reconstruction of a co-operative or the merger of 2 or more 31
co-operatives) has been proposed, the directors of the co-operative 32
must: 33
(a) if a meeting of the members of the co-operative by resolution 34
directs--instruct the accountants or Australian legal practitioners 35
or both named in the resolution to report on the proposals and 36
send their report or reports to the directors as soon as practicable; 37
and 38
Page 233
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) make the report or reports available at the registered office of the 1
co-operative for inspection by the members and creditors of the 2
co-operative at least 7 days before the day of the meeting ordered 3
by the Supreme Court or the holding of the special postal ballot, 4
as appropriate. 5
(2) If this section is not complied with, each director of the co-operative 6
commits an offence. 7
Maximum penalty: $2,000. 8
(3) An offence based on subsection (2) is an offence of strict liability. 9
423 Power of Court to restrain further proceedings 10
(1) If a proposed compromise or arrangement is made between a 11
co-operative and any of its creditors and no order has been made or 12
resolution passed for the winding up of the co-operative, the Supreme 13
Court may restrain further proceedings in an action or other civil 14
proceedings against the co-operative except by leave of the court and on 15
the terms the court imposes. 16
(2) The Supreme Court's power under this section is in addition to any of 17
its other powers and must not be exercised except on application by the 18
co-operative or a creditor or member of the co-operative. 19
424 Court need not approve compromise or arrangement takeovers 20
(1) The Supreme Court need not approve a compromise or arrangement 21
unless: 22
(a) it is satisfied the compromise or arrangement has not been 23
proposed for enabling a person to avoid the operation of any 24
provision of Division 2 of Part 3.5; and 25
(b) there is produced to the court a written statement by the Registrar 26
stating the Registrar has no objection to the compromise or 27
arrangement. 28
(2) The Supreme Court need not approve a compromise or arrangement 29
merely because a statement by the Registrar stating the Registrar has no 30
objection to the compromise or arrangement has been produced to the 31
court. 32
425 Provisions for facilitating reconstructions and mergers 33
(1) This section applies if an application is made to the Supreme Court 34
under this Division for the approval of a compromise or arrangement 35
and it is shown to the court that: 36
(a) the compromise or arrangement has been proposed for a scheme 37
for the reconstruction of a co-operative or the merger of a 38
Page 234
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
co-operative with another co-operative or another corporation; 1
and 2
(b) under the scheme all or part of the business or of the property of 3
a co-operative concerned in the scheme (the transferor) is to be 4
transferred to another corporation (the transferee), except a 5
company within the meaning of the Corporations Act. 6
(2) If this section applies, the Supreme Court may, either by the order 7
approving the compromise or arrangement or by a later order, provide 8
for any one or more of the following: 9
(a) the transfer to the transferee of all or part of the business and the 10
property or liabilities of the transferor; 11
(b) the allotting or appropriation by the transferee of shares, 12
debentures, policies or other interests in the transferee that, under 13
the compromise or arrangement, are to be allotted or appropriated 14
by the transferee to or for a person; 15
(c) the continuation by or against the transferee of legal proceedings 16
pending by or against the transferor; 17
(d) the deregistration, without winding up, of the transferor; 18
(e) provision to be made for persons who, within the time and in the 19
way the court directs, dissent from the compromise or 20
arrangement; 21
(f) the transfer or allotment of an interest in property to a person 22
concerned in the compromise or arrangement; 23
(g) the incidental, consequential and supplemental matters necessary 24
to ensure the reconstruction or merger is fully and effectively 25
carried out. 26
(3) If an order made under this section provides for the transfer of property 27
or liabilities, then, by virtue of the order: 28
(a) the property is transferred to and vests in the transferee free, for 29
a particular property if the order so directs, from a security 30
interest that is under the compromise or arrangement to cease to 31
have effect; and 32
(b) the liabilities are transferred to and become the liabilities of the 33
transferee. 34
(4) If an order is made under this section, each body to which the order 35
relates must, within 14 days after the making of the order, file with the 36
Registrar an office copy of the order. 37
(5) In this section: 38
co-operative includes a participating co-operative registered, formed or 39
incorporated under a law of another jurisdiction. 40
Page 235
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
liabilities includes duties of any description, including duties that are of 1
a personal character or are incapable under the general law of being 2
assigned or performed vicariously. 3
property includes rights and powers of any description, including rights 4
and powers that are of a personal character and are incapable under the 5
general law of being assigned or performed vicariously. 6
426 Costs for Registrar 7
Without limiting any power of the Supreme Court to award costs, the 8
court may make an order as to costs in favour of the Registrar in 9
connection with an appearance by or on behalf of the Registrar in 10
proceedings under this Division. 11
Division 2 Explanatory statements 12
427 Explanatory statement required to accompany notice of meeting etc 13
(1) An explanatory statement must accompany every notice sent: 14
(a) to a creditor of a co-operative calling the court ordered meeting 15
to obtain agreement to the compromise or arrangement; or 16
(b) to a member of a co-operative for the conduct of the special postal 17
ballot to obtain agreement to the compromise or arrangement. 18
(2) In every notice of a meeting referred to in subsection (1) given by 19
advertisement, there must be included either a copy of the explanatory 20
statement or notification of the place at which and the way in which 21
creditors entitled to attend the meeting may obtain copies of the 22
explanatory statement. 23
(3) The explanatory statement must: 24
(a) explain the effect of the compromise or arrangement and, in 25
particular, state: 26
(i) material interests of the directors, whether as directors, as 27
members or creditors of the co-operative or otherwise; and 28
(ii) the effect on the interests of the compromise or 29
arrangement in so far as the effect is different from the 30
effect on the like interests of other persons; and 31
(b) state the information prescribed by the National Regulations; and 32
(c) state other information that: 33
(i) is material to the making of a decision by a creditor or 34
member whether or not to agree to the compromise or 35
arrangement; and 36
(ii) is within the knowledge of the directors; and 37
Page 236
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(iii) has not previously been disclosed to the creditors or 1
members. 2
(4) Subsection (1) (a) does not apply to a creditor whose debt is not more 3
than $200 (or another amount prescribed by the National Regulations) 4
unless the Supreme Court otherwise orders. 5
(5) The notice calling the meeting sent to a creditor referred to in 6
subsection (1) (a) must state a place at which a copy of the explanatory 7
statement can be obtained on request. 8
(6) The co-operative must comply with a request under subsection (5) as 9
soon as practicable. 10
428 Requirements for explanatory statement 11
(1) An explanatory statement must be as approved by the Registrar. 12
(2) If the compromise or arrangement affects the rights of debenture 13
holders, the explanatory statement must state: 14
(a) material interests of the trustees for the debenture holders, 15
whether as trustees for the debenture holders, as members or 16
creditors of the co-operative or otherwise; and 17
(b) the effect on the interests of the compromise or arrangement to 18
the extent that the effect is different from the effect on the like 19
interests of other persons. 20
(3) If a notice given by advertisement includes a notification that copies of 21
the explanatory statement can be obtained in a particular way, the 22
co-operative must give a copy of the statement free of charge to each 23
creditor or member entitled to attend the meeting or vote in the ballot 24
who applies for it in the appropriate way. 25
(4) Each person who is a director or trustee for debenture holders must give 26
notice to the co-operative of the matters relating to the person required 27
to be included in the explanatory statement. 28
429 Contravention of this Division--offence by co-operative 29
(1) If a provision of this Division is contravened, the co-operative 30
concerned and any other person involved in the contravention commits 31
an offence. 32
Maximum penalty: $2,000. 33
Note. Section 9 defines "involved" in a contravention. 34
(2) It is a defence to a prosecution for an offence under subsection (1) if it 35
is proved the contravention was because of the failure of a person (other 36
than the defendant), who is a director of the co-operative or a trustee for 37
Page 237
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
debenture holders of the co-operative, to supply for the explanatory 1
statement particulars of the person's interests. 2
Division 3 Acquisition of shares of dissenting shareholders 3
430 Definitions 4
In this Division: 5
dissenting shareholder, in relation to a scheme or contract, means a 6
shareholder who has not assented to the scheme or contract or who has 7
failed to transfer the shareholder's shares under the scheme or contract. 8
excluded shares, in relation to a scheme or contract involving a transfer 9
to a person of shares in a class of shares in a co-operative, means shares 10
in the class that, when the offer relating to the scheme or contract is 11
made, are held by: 12
(a) in any case--the person or a nominee of the person; or 13
(b) if the person is a corporation--a subsidiary of the corporation. 14
431 Schemes and contracts to which this Division applies 15
(1) This Division applies to a scheme or contract involving a transfer of 16
shares in a co-operative (the transferor) to a person (the transferee) that 17
has, within 4 months after the making of the offer relating to the scheme 18
or contract by the transferee, been approved by the holders of at least 19
90% in nominal value of all the shares concerned (other than excluded 20
shares). 21
(2) This Division does not apply to a scheme or contract arising out of the 22
making of an offer to which Division 2 of Part 3.5 applies. 23
432 Acquisition of shares pursuant to notice to dissenting shareholder 24
(1) The transferee under the scheme or contract may, within 2 months after 25
the offer is approved, give notice as prescribed by the National 26
Regulations (a compulsory acquisition notice) to a dissenting 27
shareholder that the transferee wishes to acquire the shares held by the 28
shareholder. 29
(2) If a compulsory acquisition notice is given, the dissenting shareholder 30
may, by written notice given to the transferee within one month after the 31
day the compulsory acquisition notice was given, ask for a statement in 32
writing of the names and addresses of all other dissenting shareholders 33
as shown in the register of members and the transferee must give the 34
statement. 35
(3) Having given the compulsory acquisition notice, the transferee is, 36
unless the Supreme Court orders to the contrary, entitled and bound to 37
acquire those shares on the terms on which, under the scheme or 38
Page 238
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
contract, the shares of the approving shareholders are to be transferred 1
to the transferee. 2
(4) The Supreme Court may give an order to the contrary only on the 3
application of the dissenting shareholder made within the later of 4
28 days after the compulsory acquisition notice was given or 14 days 5
after any statement asked for under subsection (2) was given. 6
(5) If alternative terms are offered to the approving shareholders: 7
(a) the dissenting shareholder is entitled to elect which of the terms 8
are preferred but must make the election within the time allowed 9
for making an application to the Supreme Court under 10
subsection (4); and 11
(b) if the dissenting shareholder fails to make the election within the 12
time--the transferee may, unless the Supreme Court otherwise 13
orders, decide which of the terms is to apply to the acquisition of 14
the shares of the dissenting shareholder. 15
433 Restrictions when excluded shares are more than 10% 16
If the nominal value of excluded shares is more than 10% of the total 17
nominal value of all the shares (including excluded shares) to be 18
transferred under the scheme or contract, section 432 does not apply 19
unless: 20
(a) the transferee offers the same terms to all holders of the shares 21
(other than excluded shares) to be transferred under the scheme 22
or contract; and 23
(b) the holders who approve the scheme or contract together hold at 24
least 90% in nominal value of the shares (other than excluded 25
shares) to be transferred under the scheme or contract and are also 26
at least 75% in number of the holders of the shares (with joint 27
owners of shares being counted as one person). 28
434 Remaining shareholders may require acquisition 29
(1) If, under a scheme or contract to which this Division applies, the 30
transferee becomes beneficially entitled to shares in the transferor that, 31
together with other shares in the transferor to which the transferee or a 32
corporation related to the transferee is beneficially entitled, comprise or 33
include 90% in nominal value of the shares concerned: 34
(a) the transferee must, within 28 days after becoming beneficially 35
entitled to the shares, give notice of the fact as prescribed by the 36
National Regulations to the holders of the remaining shares 37
concerned who, when the notice was given, had not: 38
(i) assented to the scheme or contract; or 39
Page 239
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(ii) been given a compulsory acquisition notice by the 1
transferee under this Division; and 2
(b) a holder referred to in paragraph (a) may, within 3 months after 3
being given the notice, by notice to the transferee require the 4
transferee to acquire the holder's shares and, if alternative terms 5
were offered to the approving shareholders, elect which of the 6
terms the holder will accept. 7
(2) If a shareholder gives notice under this section in relation to the 8
shareholder's shares, the transferee is entitled and bound to acquire 9
them: 10
(a) on the terms on which under the scheme or contract the shares of 11
the approving shareholders were transferred to the transferee and, 12
if alternative terms were offered to the shareholders, on the terms 13
for which the shareholder has elected, or, if no election is made, 14
for whichever of the terms the transferee decides; or 15
(b) on other terms that may be agreed or as the Supreme Court, on 16
the application of the transferee or of the shareholder, considers 17
appropriate to order. 18
435 Transfer of shares pursuant to compulsory acquisition 19
(1) A transferee who has given a compulsory acquisition notice must: 20
(a) send a copy of the notice to the transferor together with an 21
instrument of transfer for the shares the transferee is entitled to 22
acquire under this Division and executed, on the shareholder's 23
behalf, by a person appointed by the transferee and, on the 24
transferee's own behalf, by the transferee; and 25
(b) pay, allot or transfer to the transferor the consideration for the 26
shares. 27
(2) The transferee must do so within 14 days after whichever of the 28
following happens last: 29
(a) the period of 28 days after the day on which the compulsory 30
acquisition notice was given ends; 31
(b) the period of 14 days after a statement of the names and addresses 32
of dissenting shareholders is supplied under this Division ends; 33
(c) if an application has been made to the Supreme Court by a 34
dissenting shareholder--the application is disposed of. 35
(3) When the transferee has complied with this section, the transferor must 36
register the transferee as the holder of the shares. 37
(4) This section does not apply if the Supreme Court, on the application of 38
the dissenting shareholder, orders to the contrary. 39
Page 240
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
436 Disposal of consideration for shares compulsorily acquired 1
(1) Amounts received to be paid to ADI account and held in trust 2
Amounts received by the transferor under this Division must be paid 3
into a separate authorised deposit-taking institution account and the 4
amounts, and any other consideration received, are to be held by the 5
transferor in trust for the persons entitled to the shares in relation to 6
which they were respectively received. 7
(2) Transfer of amounts or property to Registrar after 2 years 8
If an amount or other property received by the transferor under this 9
Division has been held in trust by the transferor for a person for at least 10
2 years, the transferor must pay the amount or transfer the 11
consideration, and any accretions to it and any property that may 12
become substituted for it or for part of it, to the Registrar. 13
(3) Application of Corporations Act 14
Anything paid or transferred to the Registrar under subsection (2) is 15
declared to be an applied Corporations legislation matter for the 16
purposes of the Corporations application legislation of this jurisdiction 17
in relation to Part 9.7 of the Corporations Act, subject to the following 18
modifications: 19
(a) a reference in the provisions to unclaimed property is to be read 20
as a reference to whatever was paid or transferred to the Registrar 21
under subsection (2); 22
(b) if the Co-operatives National Law Act of this jurisdiction or the 23
local regulations so provide: 24
(i) references in section 1339 of the Corporations Act to 25
crediting an amount to the Companies and Unclaimed 26
Moneys Special Account are to be read as references to 27
dealing with the amount in a manner specified in the 28
Co-operatives National Law Act of this jurisdiction or the 29
local regulations for the purposes of this subparagraph; or 30
(ii) section 1341 (1) and (2) of the Corporations Act are taken 31
to be omitted and replaced by provisions specified in the 32
Co-operatives National Law Act of this jurisdiction or the 33
local regulations for the purposes of this subparagraph; 34
or both; 35
(c) the modifications referred to in section 13 (3) of this Law so far 36
as they are relevant. 37
Note. See section 13, including Note 1 to that section. 38
Page 241
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) Timing for transfer to Registrar 1
The transferor must comply with subsection (2) before the end of 2
10 years after the day on which the amount was paid, or the 3
consideration was allotted or transferred, to the transferor. 4
Division 4 Miscellaneous 5
437 Notification of appointment of scheme manager 6
Within 14 days after being appointed to administer a compromise or 7
arrangement approved under this Part, a person must file with the 8
Registrar a written notice of the appointment. 9
Maximum penalty: $1,000. 10
438 Power of Supreme Court to require reports 11
If an application is made to the Supreme Court under this Part in relation 12
to a proposed compromise or arrangement, the court may: 13
(a) before making an order on the application, require the Registrar 14
or another person to give to the court a report as to: 15
(i) the terms of the compromise or arrangement or of the 16
scheme for, or in relation to, which the compromise or 17
arrangement has been proposed; and 18
(ii) the conduct of the officers of the body or bodies 19
concerned; and 20
(iii) any other matters that, in the opinion of the Registrar or the 21
person, ought to be brought to the attention of the court; 22
and 23
(b) in deciding the application, have regard to anything contained in 24
the report; and 25
(c) make any order as to the payment of the costs of preparing and 26
giving the report as the court considers appropriate. 27
439 Effect of out-of-jurisdiction compromise or arrangement 28
(1) A compromise or arrangement that is binding on any creditors of a 29
participating co-operative because of a provision of the law of another 30
jurisdiction that corresponds to this Part is also binding on the creditors 31
of the participating co-operative whose debts are recoverable by action 32
in a court of this jurisdiction. 33
(2) If a court of another jurisdiction makes an order under a provision of the 34
law of that jurisdiction that corresponds to a provision of this Part, the 35
order is taken to have been made by the Supreme Court of this 36
Page 242
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
jurisdiction under the corresponding provision of this Law, and has 1
effect and may be enforced accordingly. 2
440 Jurisdiction to be exercised in harmony with Corporations Act 3
jurisdiction 4
The jurisdiction of the Supreme Court under this Part is intended to 5
complement the Supreme Court's jurisdiction under the Corporations 6
Act (as applying under this Law) and should be exercised in harmony 7
with the jurisdiction. 8
441 Registrar may appear and be heard 9
In proceedings before the Supreme Court under this Part, the Registrar 10
is entitled to appear and be heard, either in person or by the Registrar's 11
properly appointed representative. 12
Part 4.5 Winding up 13
442 Methods of winding up 14
A co-operative may be wound up: 15
(a) on a certificate of the Registrar; or 16
(b) voluntarily; or 17
(c) by the Supreme Court. 18
443 Winding up on Registrar's certificate 19
(1) A co-operative may be wound up on a certificate of the Registrar only 20
if the necessary grounds for taking the action exist, as referred to in 21
section 455. 22
(2) A winding up on a certificate of the Registrar starts when the certificate 23
is given. 24
(3) On the giving of a certificate, the Registrar may appoint a person to be 25
the liquidator of the co-operative. 26
(4) The person appointed by the Registrar must be a registered liquidator 27
within the meaning of the Corporations Act, but the Registrar may 28
appoint a person who is not a registered liquidator if the Registrar forms 29
the view that the likely costs of administration by a registered liquidator 30
are excessive taking into account the known assets of the co-operative 31
and the expected extent of debt of the co-operative. 32
(5) The liquidator must, within 10 days after appointment, give notice of his 33
or her appointment by designated instrument. 34
Page 243
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(6) A vacancy occurring in the office of liquidator is to be filled by a person 1
appointed by the Registrar. 2
(7) The Registrar may fix: 3
(a) the security to be given by a liquidator; and 4
(b) the fees payable to a liquidator. 5
444 Application of Corporations Act--voluntary winding up and 6
court-ordered winding up 7
(1) Application of this section 8
This section applies to the winding up of a co-operative: 9
(a) voluntarily; or 10
(b) by the Supreme Court. 11
(2) Winding up of co-operatives 12
A co-operative may be wound up in the same way and in the same 13
circumstances as a company under the Corporations Act may be wound 14
up. 15
(3) Application of Corporations Act 16
The winding up of a co-operative is declared to be an applied 17
Corporations legislation matter for the purposes of the Corporations 18
application legislation of this jurisdiction in relation to Parts 5.4, 5.4A, 19
5.4B, 5.5 and 5.6 of the Corporations Act, subject to the following 20
modifications: 21
(a) a reference in section 459B or 459C of the Corporations Act to 22
section 234 of that Act is to be read as a reference to section 133 23
of this Law; 24
(b) section 462 (2) (h) of the Corporations Act is taken to be omitted; 25
(c) the reference in section 464 of the Corporations Act to an 26
investigation under Division 1 of Part 3 of the ASIC Act is to be 27
read as a reference or an investigation or inquiry under this Law; 28
(d) a reference in section 467B of the Corporations Act to 29
section 233 is to be read as a reference to section 134 of this Law; 30
(e) section 470 (3) of the Corporations Act is to be read as if the 31
words ", and subsection 1274 (2) applies in relation to the 32
document containing those particulars and to the office copy as if 33
they were documents lodged with ASIC" were omitted; 34
(f) section 495 of the Corporations Act is to be read as being subject 35
to section 445 of this Law; 36
Page 244
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(g) section 513B of the Corporations Act is to be read as if it were 1
amended by inserting after paragraph (d): 2
(da) if, when the resolution was passed, a winding 3
up of the co-operative on the certificate of the 4
Registrar was already in progress--on the 5
date that the certificate was given; or 6
(h) section 516 of the Corporations Act is to be read as if it were 7
amended by inserting after "past member", "together with any 8
charges payable by him or her to the co-operative in accordance 9
with the rules of the co-operative"; 10
(i) section 521 of the Corporations Act is to be read as being subject 11
to section 450 of this Law; 12
(j) references in section 544 of the Corporations Act to dealing with 13
money under Part 9.7 of that Act are to be read as references to 14
dealing with the money under Part 9.7 of that Act as applying 15
under section 436 of this Law; 16
(k) references in sections 565-567 of the Corporations Act to 17
23 June 1993 are, if the Co-operatives National Law Act of this 18
jurisdiction so provides, to be read as references to a date 19
specified in that Act of this jurisdiction for the purposes of this 20
paragraph; 21
(l) the definition of external administration matter in section 580 of 22
the Corporations Act is taken to be omitted and the following 23
definition substituted: 24
external administration matter means a matter 25
relating to a winding up of a co-operative or 26
participating co-operative under Part 4.5 of the 27
Co-operatives National Law. 28
(a) section 15 (2) (g) of this Law does not apply to the definition of 29
prescribed country in section 580 of the Corporations Act; 30
Note. The meaning of the term "prescribed country" accordingly is 31
determined by regulations under the Corporations Act. 32
(b) a reference in the provisions to a registered liquidator is to be read 33
as including a reference to a person approved by the Registrar as 34
a liquidator of a co-operative; 35
(c) a reference in the provisions to any provision of Part 2F.1 of the 36
Corporations Act is to be read as a reference to the appropriate 37
provision of Division 4 of Part 2.5 of this Law; 38
(d) for the purposes of the application of the provisions to a winding 39
up on the certificate of the Registrar, the winding up is to be 40
considered to be a voluntary winding up (but section 490 of the 41
Corporations Act does not apply); 42
Page 245
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(e) the provisions are to be read subject to sections 121 and 450 of 1
this Law for the purposes of determining the liability of members 2
and former members to contribute on a winding up of a 3
co-operative; 4
(f) the modifications referred to in section 13 (3) of this Law so far 5
as they are relevant. 6
Note. See section 13, including Note 1 to that section. 7
(4) Where applied provisions of Corporations Act prevail over other 8
provisions of this Law 9
Despite any other provisions of this Law: 10
(a) a copy of a special resolution for the voluntary winding up of a 11
co-operative referred to in section 491 (2) (a) of the Corporations 12
Act as applying under this section is to be filed with the Registrar: 13
(i) within the period referred to in that paragraph (and not the 14
period of 28 days referred to in section 243 (2) of this 15
Law); or 16
(ii) within a longer period approved by the Registrar; and 17
(b) the form of a notice or account required to be given or lodged by 18
a liquidator under section 496, 497, 537 or 539 of the 19
Corporations Act as applying under this section is the form 20
required under the section concerned but with any necessary 21
modifications (and not a form approved under this Law); and 22
(c) the quorum for a meeting referred to in section 509 of the 23
Corporations Act as applying under this section is the quorum 24
referred to in that section (and not a quorum determined under 25
section 255 of this Law); and 26
(d) the time when a voluntary winding up is taken to commence is to 27
be determined under section 513B of the Corporations Act as 28
applying under this section and is not affected by section 242 of 29
this Law. 30
(5) Where other provisions of this Law prevail over applied provisions of 31
Corporations Act 32
The provisions of the Corporations Act applying under this section have 33
effect subject to any other sections of this Part. 34
445 Voluntary winding up--restrictions 35
(1) A co-operative may be wound up voluntarily only: 36
(a) by a creditors' voluntary winding up; or 37
(b) if a special resolution is passed by a special postal ballot in favour 38
of voluntary winding up. 39
Page 246
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) When a special postal ballot is held, the members may, by means of the 1
same ballot, by simple majority: 2
(a) appoint one or more liquidators to wind up the affairs and 3
distribute the assets of the co-operative; and 4
(b) fix the remuneration to be paid to the liquidator. 5
(3) The Registrar may, by designated instrument, exempt a co-operative or 6
class of co-operatives from compliance with a provision of this section 7
or section 248. 8
(4) An exemption may be given unconditionally or subject to conditions. 9
446 Voluntary winding up--start of members' voluntary winding up 10
A members' voluntary winding up of a co-operative starts when the 11
result of the special postal ballot is noted in the minutes by the secretary 12
of the co-operative. 13
447 Voluntary winding up--liquidator vacancy may be filled by Registrar 14
If a co-operative is being wound up voluntarily, a vacancy occurring in 15
the office of liquidator is to be filled by a person appointed by the 16
Registrar. 17
448 Distribution of surplus--non-distributing co-operatives 18
(1) On a winding up of a non-distributing co-operative, the surplus property 19
of the co-operative must be distributed as required by the rules of the 20
co-operative. 21
(2) The rules of a non-distributing co-operative must make provision for the 22
way in which the surplus property of the co-operative is to be distributed 23
in a winding up. 24
(3) In this section: 25
surplus property means property of the co-operative remaining after 26
satisfaction of the debts and liabilities of the co-operative and the costs, 27
charges and expenses of the winding up. 28
449 Review of liquidator's remuneration 29
(1) A member or creditor of a co-operative or the liquidator may, at any 30
time before the completion of the winding up of the co-operative, apply 31
to: 32
(a) the Supreme Court, except where paragraph (b) applies; or 33
(b) the Registrar, where the liquidator was appointed by the 34
Registrar; 35
to review the amount of the remuneration of the liquidator. 36
Page 247
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) The Supreme Court or the Registrar, respectively, may review the 1
remuneration and (if thought fit) vary the amount of the remuneration. 2
450 Liability of member to contribute in a winding up if shares forfeited etc 3
(1) If a person's membership of a co-operative is cancelled under Part 2.6 4
within 2 years before the start of the winding up of the co-operative, the 5
person is liable on the winding up to contribute to the property of the 6
co-operative the nominal value of shares forfeited under that 7
cancellation (being their nominal value immediately before 8
cancellation). 9
(2) If, under section 107, a co-operative: 10
(a) purchases a share of a member in the co-operative; or 11
(b) repays to a member the whole or part of the amount paid up on a 12
share held by a member; 13
within 2 years before the start of the winding up of the co-operative, the 14
member or former member is liable on the winding up to contribute to 15
the property of the co-operative the amount paid by the co-operative to 16
the member or former member for the purchase or repayment, together 17
with any amount unpaid on the shares immediately before the purchase 18
or repayment. 19
(3) If a person contributes to the property of a co-operative under a liability 20
under this section, the amount contributed is, for the purposes of the 21
winding up, to be treated as having been paid up by the person on shares 22
of the co-operative. 23
(4) The liability of a member or former member of a co-operative under this 24
section is in addition to any other liability of the member or former 25
member to contribute to the property of the co-operative on a winding 26
up of the co-operative. 27
Part 4.6 Insolvency 28
451 Application of Corporations Act--insolvent co-operatives 29
(1) A co-operative is declared to be an applied Corporations legislation 30
matter for the purposes of the Corporations application legislation of 31
this jurisdiction in relation to Part 5.7B of the Corporations Act, subject 32
to the following modifications: 33
(a) a reference in the provisions to any provision of sections 286-290 34
of the Corporations Act is to be read as a reference to the 35
appropriate provision of Division 2 of Part 3.3 (sections 36
265-269) of this Law; 37
Page 248
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) section 588G of the Corporations Act is to be read as if item 2 of 1
the table to section 588G (1A) of that Act were omitted; 2
(c) section 588G of the Corporations Act is to be read as if item 3 of 3
the table to section 588G (1A) of that Act read as follows: 4
"repaying share capital when the obligation to repay
share capital is effective
receiving the resignation of a when the resignation is effective
member under the rules of the
co-operative
expelling a member when the expulsion occurs";
(d) section 588G of the Corporations Act is to be read as if a 5
reference (however expressed) in items 4 and 5 of the table to 6
section 588G (1A) of that Act to redeemable preference shares 7
were a reference to CCUs; 8
(e) a reference (however expressed) in section 588V or 588W of the 9
Corporations Act to a corporation that is the holding company of 10
a company is to be read as if the reference to: 11
(i) a corporation were a reference to a co-operative (as 12
provided in section 15 (2) of this Law); and 13
(ii) "the holding company" were a reference to that 14
co-operative; and 15
(iii) "a company" were a reference to a company that is a 16
subsidiary of that co-operative (and accordingly that 17
reference to a "company" is not to be read as a reference to 18
a co-operative); 19
(f) the reference in section 588Z (b) of the Corporations Act to 20
23 June 1993 is, if the Co-operatives National Law Act of this 21
jurisdiction so provides, to be read as a reference to a date 22
specified in that Act of this jurisdiction for the purposes of this 23
paragraph; 24
(g) the modifications referred to in section 13 (3) of this Law so far 25
as they are relevant. 26
Note. See section 13, including Note 1 to that section. 27
(2) Section 588G (2) of the Corporations Act as applying under this section 28
is a civil penalty provision under this Law (see section 554) and is not a 29
civil penalty provision under that Act. 30
Page 249
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 4.7 Deregistration 1
452 Method of deregistration 2
A co-operative may be deregistered under: 3
(a) the Corporations Act as applying under section 453; or 4
(b) section 454. 5
453 Application of Corporations Act--deregistration 6
The deregistration of a co-operative and a deregistered co-operative are 7
declared to be applied Corporations legislation matters for the purposes 8
of the Corporations application legislation of this jurisdiction in relation 9
to Part 5A.1 of the Corporations Act, subject to the following 10
modifications: 11
(a) references in sections 601AA and 601AB of the Corporations Act 12
to ASIC database are to be read as references to the register of 13
co-operatives kept under section 599 of this Law; 14
(b) section 601AB (1A) of the Corporations Act is taken to be 15
omitted; 16
(c) the reference in section 601AC (1) (a) of the Corporations Act to 17
section 413 (1) (d) of that Act is to be read as a reference to 18
section 425 (2) (d) of this Law; 19
(d) references in sections 601AD-601AF of the Corporations Act to 20
the Commonwealth are to be read as references to an entity 21
specified in the Co-operatives National Law Act of this 22
jurisdiction for the purposes of this paragraph; 23
(e) references in section 601AE of the Corporations Act to crediting 24
an amount to a Special Account (within the meaning of the 25
Financial Management and Accountability Act 1997 of the 26
Commonwealth) are to be read as references to dealing with the 27
amount in a manner specified in the Co-operatives National Law 28
Act of this jurisdiction or the local regulations for the purposes of 29
this paragraph; 30
(f) the modifications referred to in section 13 (3) of this Law so far 31
as they are relevant. 32
Note. See section 13, including Note 1 to that section. 33
454 Deregistration of co-operative ceasing to exist 34
(1) As soon as practicable after a co-operative ceases to exist, other than on 35
deregistration of the co-operative under section 444, the Registrar must 36
deregister the co-operative by registering the cessation and cancelling 37
the registration of the co-operative. 38
Page 250
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) The Registrar may remove from a register kept by the Registrar the 1
name of a co-operative that has been deregistered or otherwise ceased 2
to exist. 3
(3) A co-operative that has transferred its engagements to another 4
co-operative is taken to have ceased to exist. 5
Part 4.8 Grounds for certain actions 6
455 Grounds for appointment of administrator, transfer of engagements or 7
winding up of co-operative 8
(1) This section applies to the following actions: 9
(a) the appointment of an administrator of a co-operative by the 10
Registrar under Division 3 of Part 4.1; 11
(b) a direction by the Registrar to a co-operative to transfer its 12
engagements under section 401; 13
(c) the winding up of a co-operative on a certificate of the Registrar 14
under section 443. 15
(2) The necessary grounds for taking action to which this section applies 16
exist if the Registrar certifies: 17
(a) the number of members is reduced to less than the minimum 18
number of persons allowed by or under section 119; or 19
(b) the co-operative has not started business within one year of 20
registration or has suspended business for more than 6 months; or 21
(c) the registration of the co-operative has been obtained by mistake 22
or fraud; or 23
(d) the co-operative exists for an illegal purpose; or 24
(e) the co-operative has wilfully and after notice from the Registrar 25
violated the provisions of this Law or the rules of the 26
co-operative; or 27
(f) the board of the co-operative has, after notice from the Registrar, 28
failed to ensure the rules of the co-operative contain active 29
membership provisions required under Part 2.6; or 30
(g) there are, and have been for one month immediately before the 31
date of the Registrar's certificate, insufficient directors of the 32
co-operative to form a quorum under the rules of the 33
co-operative; or 34
(h) after an inquiry under this Law into the affairs of a co-operative 35
or the working and financial condition of a co-operative--in the 36
interests of members or creditors of the co-operative or the 37
public, the action concerned should be taken. 38
Page 251
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) Alternatively, the necessary grounds for winding up a co-operative on a 1
certificate of the Registrar exist if the Registrar certifies: 2
(a) the period (if any) fixed for the duration of the co-operative by its 3
rules has ended; or 4
(b) an event (to be stated in the certificate) has occurred on the 5
occurrence of which the National Regulations or the rules 6
provide the co-operative is to be wound up. 7
(4) The Registrar must not certify under this section as to a matter unless 8
the matter has been proved to the Registrar's satisfaction. 9
Page 252
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Chapter 5 Participating co-operatives 1
Part 5.1 Introductory 2
456 What constitutes carrying on business 3
For the purposes of this Chapter and without limiting the definition of 4
carry on business in section 4 in its application to a participating 5
co-operative, a participating co-operative carries on business in this 6
jurisdiction if it: 7
(a) solicits for members in this jurisdiction; or 8
(b) seeks share capital in this jurisdiction, takes deposits in this 9
jurisdiction or offers other securities in the co-operative in this 10
jurisdiction (including the issue of CCUs and debentures). 11
Part 5.2 Participating co-operatives carrying on 12
business in this jurisdiction 13
457 Operation of participating co-operatives in this jurisdiction 14
A participating co-operative must not carry on business in this 15
jurisdiction as a co-operative unless it is authorised under this Part to do 16
so. 17
Maximum penalty: $24,000. 18
458 Authorisation to carry on business in this jurisdiction 19
A participating co-operative is, by this Law, authorised to carry on 20
business in this jurisdiction unless it ceases to be so authorised under 21
section 460. 22
459 Authorisation to carry on business in this jurisdiction is subject to 23
conditions and restrictions of participating jurisdiction 24
The authorisation of a participating co-operative is subject to the same 25
conditions or restrictions that apply to the carrying on of its business 26
under its registration in the participating jurisdiction. 27
460 Ceasing to be authorised to carry on business in this jurisdiction 28
A participating co-operative ceases to be authorised to carry on business 29
in this jurisdiction if: 30
(a) it is deregistered or otherwise ceases to exist as a co-operative 31
under the laws of the place in which it is registered, incorporated 32
or formed; or 33
Page 253
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) its authorisation to carry on business in this jurisdiction is 1
withdrawn under section 461. 2
461 Withdrawal of authorisation to carry on business 3
(1) The Registrar may give written notice to a participating co-operative 4
requiring it to show cause (a show cause notice), within the period 5
specified in the notice, why its authorisation to carry on business in this 6
jurisdiction should not be withdrawn on any one or more of the 7
following grounds: 8
(a) that the name under which the co-operative carries on business or 9
proposes to carry on business in this jurisdiction does not comply 10
with this Part; 11
(b) that the co-operative has, after notice from the Registrar, failed to 12
comply with: 13
(i) provisions of this Law or of a corresponding co-operatives 14
law applicable to the co-operative; or 15
(ii) provisions of the rules of the co-operative; 16
(c) that the co-operative has contravened a direction given to it under 17
section 468. 18
(2) A show cause notice may be given if the Registrar is of the opinion that 19
there are reasonable grounds to do so. 20
(3) The show cause notice must specify the period, being at least 14 days, 21
within which it must be complied with. 22
(4) The participating co-operative may, within the period specified in the 23
show cause notice, make oral or written submissions to the Registrar 24
and provide evidence with respect to any of the matters to which the 25
notice relates. 26
(5) The Registrar must consider any submissions made, or evidence 27
adduced, within the period required by the show cause notice and may, 28
if the Registrar is satisfied that any of the grounds referred to in 29
subsection (1) have been established in relation to the participating 30
co-operative, give the co-operative a written notice withdrawing its 31
authorisation to carry on business in this jurisdiction. 32
(6) The Registrar may withdraw a show cause notice or other notice given 33
under this section. 34
(7) The Registrar may, on application or otherwise, by notice given to a 35
participating co-operative, revoke the cancellation of its authorisation to 36
carry on business in this jurisdiction. The co-operative is taken to be 37
authorised to carry on business in this jurisdiction on and from the date 38
the notice is given to the co-operative or a later date specified in the 39
notice. 40
Page 254
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
462 Name of participating co-operative 1
A participating co-operative carrying on business in this jurisdiction 2
must do so under a name that is not likely to be confused with the name 3
of a body corporate or a registered business name. 4
463 Application of Law and National Regulations to participating 5
co-operatives 6
(1) A participating co-operative that is authorised to carry on business in 7
this jurisdiction under this Chapter must comply with such provisions 8
of this Law and the National Regulations as are prescribed by the 9
National Regulations (including any modifications prescribed by the 10
National Regulations). 11
(2) The provisions referred to in subsection (1) are in addition to the 12
provisions of this Chapter, and any other provisions of this Law or the 13
National Regulations, that are expressed to apply to participating 14
co-operatives. 15
Note. For example, Part 6.4 applies to a participating co-operative. 16
Part 5.3 General 17
464 False copies of rules 18
(1) A person must not give to: 19
(a) a member of a participating co-operative; or 20
(b) a person intending or applying to become a member of a 21
participating co-operative; 22
a copy of any rules or any amendments of rules of the participating 23
co-operative, other than those that have been registered under the 24
relevant corresponding co-operatives law, representing that they are 25
binding on the members of the participating co-operative. 26
(2) A person must not circulate a copy of any rules of a participating 27
co-operative after they have been registered under the relevant 28
corresponding co-operatives law if the copy contains amendments that 29
have not been so registered and the person represents that they have 30
been so registered when they have not been. 31
Maximum penalty: $1,000. 32
Page 255
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
465 False copy of documents 1
(1) A person who, in purported compliance with a provision of the relevant 2
corresponding co-operatives law that corresponds to section 122: 3
(a) gives a person intending or applying to become a member of a 4
participating co-operative a document as a copy of: 5
(i) a special resolution of the co-operative; or 6
(ii) the last annual report of the co-operative; and 7
(b) knows or ought to know that, in a material respect, it is not a true 8
copy of the resolution or report; and 9
(c) does not indicate to that person that it is not a true copy; 10
is guilty of an offence. 11
Note. Section 464 deals with false copies of rules. 12
(2) A person who, in purported compliance with a provision of the relevant 13
corresponding co-operatives law that corresponds to section 122: 14
(a) makes available for inspection by a person intending or applying 15
to become a member of a participating co-operative a document 16
as a copy of: 17
(i) a special resolution of the co-operative; or 18
(ii) the last annual report of the co-operative; and 19
(b) knows or ought to know that, in a material respect, it is not a true 20
copy of the resolution or report; and 21
(c) does not indicate to that person that it is not a true copy; 22
is guilty of an offence. 23
Maximum penalty: $1,000. 24
466 Restrictions on advertising and publicity--shares (cf Corporations Act 25
s 734) 26
(1) A person must not: 27
(a) advertise; or 28
(b) publish a statement that directly or indirectly refers to; 29
an offer, or intended offer, of shares in a participating co-operative that 30
is a distributing co-operative within the meaning of the relevant 31
corresponding co-operatives law of another jurisdiction unless: 32
(c) a current disclosure statement relating to the shares is: 33
(i) registered with the Registrar for the other jurisdiction 34
under a provision of that corresponding co-operatives law 35
that corresponds to section 68; or 36
(ii) lodged with that Registrar for registration under that 37
provision; and 38
Page 256
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(d) any other applicable requirements specified in the National 1
Regulations for the purposes of this section are complied with. 2
Maximum penalty: $1,000. 3
(2) Subsection (1) applies in relation to shares in a distributing co-operative 4
only if: 5
(a) the shares are offered to persons who are not shareholders in the 6
co-operative; or 7
(b) the invitation is made to persons who are not shareholders in the 8
co-operative. 9
(3) A person does not contravene subsection (1) by publishing an 10
advertisement or statement if they publish it in the ordinary course of a 11
business of: 12
(a) publishing a newspaper or magazine; or 13
(b) broadcasting by radio or television; 14
and the person did not know and had no reason to suspect that its 15
publication would amount to a contravention of a provision of that 16
subsection. 17
(4) An offence based on subsection (1) is an offence of strict liability. 18
467 Restrictions on advertising and publicity--debentures or CCUs 19
(1) A person must not: 20
(a) advertise; or 21
(b) publish a statement that directly or indirectly refers to; 22
an offer, or intended offer, of debentures or CCUs in a participating 23
co-operative unless: 24
(c) a disclosure statement relating to the debentures or CCUs is 25
approved under a provision of the relevant corresponding 26
co-operatives law of another jurisdiction that corresponds to 27
section 338 by the Registrar for the other jurisdiction; and 28
(d) any other applicable requirements specified in the National 29
Regulations for the purposes of this section are complied with. 30
Maximum penalty: $1,000. 31
(2) A person does not contravene subsection (1) by publishing an 32
advertisement or statement if they publish it in the ordinary course of a 33
business of: 34
(a) publishing a newspaper or magazine; or 35
Page 257
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) broadcasting by radio or television; 1
and the person did not know and had no reason to suspect that its 2
publication would amount to a contravention of a provision of that 3
subsection. 4
(3) An offence based on subsection (1) is an offence of strict liability. 5
468 Registrar's directions about obtaining financial accommodation 6
(1) The Registrar may, by written notice served on a participating 7
co-operative, give a direction to the co-operative as to the way in which 8
it is to exercise its functions in relation to the activities of the 9
co-operative in obtaining financial accommodation in this jurisdiction. 10
(2) A direction under subsection (1) may make provision for one or more 11
of the following matters: 12
(a) requiring the co-operative to stop obtaining financial 13
accommodation or to stop obtaining financial accommodation in 14
a particular way; 15
(b) requiring the co-operative to repay in accordance with the 16
direction all or part of financial accommodation obtained; 17
(c) requiring the co-operative to refinance in a stated way financial 18
accommodation repaid in accordance with the Registrar's 19
direction; 20
(d) the way in which the co-operative is permitted to invest or use the 21
proceeds of financial accommodation it obtains. 22
(3) The co-operative may, within 28 days after the direction is given, apply 23
to the designated tribunal for a review of the direction, and the 24
designated tribunal may confirm, modify or rescind the direction or 25
substitute another direction. 26
469 Name and place of origin to appear on business and other documents 27
(1) A participating co-operative must ensure its name, the jurisdiction of its 28
registration and any other information prescribed by the National 29
Regulations appear in legible characters: 30
(a) on each seal of the co-operative; and 31
(b) in all notices, advertisements and other official publications of 32
the participating co-operative; and 33
(c) in all its business documents. 34
Maximum penalty: $2,000. 35
Page 258
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) An officer of a participating co-operative or a person on its behalf must 1
not: 2
(a) use any seal of the co-operative; or 3
(b) issue or authorise the issue of a notice, advertisement or other 4
official publication of the co-operative; or 5
(c) sign or authorise to be signed on behalf of the co-operative any 6
business document of the co-operative; 7
in or on which the co-operative's name or place of origin does not 8
appear in legible characters. 9
Maximum penalty: $2,000. 10
(3) A director of a participating co-operative must not knowingly authorise 11
or permit a contravention of this section. 12
Maximum penalty: $2,000. 13
(4) An offence based on subsection (1) is an offence of strict liability. 14
(5) In this section: 15
business document of a participating co-operative means a document 16
that is issued, signed or endorsed by or on behalf of the co-operative and 17
is: 18
(a) a business letter, statement of account, invoice or order for goods 19
or services; or 20
(b) a bill of exchange, promissory note, cheque or other negotiable 21
instrument; or 22
(c) a receipt or letter of credit issued by the co-operative; or 23
(d) a document of a class prescribed by the National Regulations as 24
a class of business documents. 25
Part 5.4 Winding up of participating co-operatives in 26
this jurisdiction 27
470 Winding up to relate to activities in this jurisdiction 28
(1) This Part applies to the winding up of the affairs of a participating 29
co-operative in or in relation to this jurisdiction. 30
(2) A participating co-operative may be wound up under this Part even 31
though it has been wound up or deregistered or has otherwise ceased to 32
exist as a co-operative under or because of the laws of the place in which 33
it is registered, incorporated or formed. 34
Page 259
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) This Part has effect in addition to, and not in derogation of, any other 1
provisions of this Law or any other law with respect to the winding up 2
of co-operatives. 3
471 Supreme Court may order winding up 4
(1) The Supreme Court may order the winding up of a participating 5
co-operative if: 6
(a) the co-operative's authorisation to carry on business in this 7
jurisdiction has been withdrawn under this Law; or 8
(b) the co-operative has been deregistered or has ceased to exist as a 9
co-operative in the place in which it was registered, incorporated 10
or formed or has ceased to carry on business in that place. 11
(2) The Registrar may apply to the Supreme Court for the winding up of a 12
participating co-operative on any of the grounds referred to in 13
subsection (1). 14
(3) The Registrar must give a copy of an application made under this 15
section to the participating co-operative the subject of the application if 16
it is still in existence. 17
472 Application of Corporations Act--winding up of participating 18
co-operatives in this jurisdiction 19
(1) The winding up or deregistration of a participating co-operative is 20
declared to be an applied Corporations legislation matter for the 21
purposes of the Corporations application legislation of this jurisdiction 22
in relation to Parts 5.4B and 5.6 of the Corporations Act, subject to the 23
following modifications: 24
(a) a reference in those provisions of the Corporations Act to an 25
application to wind up a company under section 464 or Part 5.4A 26
is to be read as a reference to an application by the Registrar 27
under Part 5.4 of this Law; 28
(b) a reference in those provisions to a winding up ordered by the 29
court under a provision of Part 5.4A is a reference to a winding 30
up ordered by the Supreme Court under Part 5.4 of this Law; 31
(c) a reference in those provisions to an order under a provision of 32
Part 5.4A is a reference to an order under section 471 of this Law; 33
(d) for the purposes of an application by the Registrar to wind up a 34
participating co-operative, those provisions apply, with such 35
modifications as the circumstances require, as if a winding up 36
application had been made by the co-operative; 37
(e) those provisions apply as if a ground specified in section 471 of 38
this Law were a ground for winding up by the court specified in 39
section 461 of the Corporations Act; 40
Page 260
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(f) a reference in those provisions to an official liquidator is to be 1
read as a reference to a person approved by the Registrar as a 2
liquidator of a co-operative; 3
(g) sections 467 (4) and (5), 480 (d), 481 (5) (b), 513B, 517, 518, 523 4
and 524 of the Corporations Act do not apply; 5
(h) a reference in section 485 (2) of the Corporations Act to persons 6
entitled to any surplus is a reference to a person entitled to the 7
surplus under section 473 of this Law; 8
(i) section 516 of the Corporations Act is to be read as if "together 9
with any charges payable by the member to the co-operative in 10
accordance with the rules" were inserted after "past member"; 11
(j) Subdivision C of Division 6 of Part 5.6 of the Corporations Act 12
does not apply; 13
(k) a reference in Parts 5.4B and 5.6 of the Corporations Act to 14
section 233 is to be read as a reference to Division 4 of Part 2.5 15
of this Law; 16
(l) those provisions of the Corporations Act are to be read subject to 17
sections 121 and 450 of this Law for the purposes of determining 18
the liability of members and past members to contribute on a 19
winding up of a co-operative; 20
(m) the modifications referred to in section 13 (3) of this Law so far 21
as they are relevant. 22
Note. See section 13, including Note 1 to that section. 23
(2) The fact that a participating co-operative has been deregistered or has 24
ceased to exist as a co-operative in the place in which it was registered, 25
incorporated or formed does not affect the liability of a member or 26
former member as a contributory on a winding up under this Part. 27
473 Outstanding property of participating co-operative 28
(1) This section applies if, after the winding up of a participating 29
co-operative in this jurisdiction, outstanding property of the 30
co-operative remains in this jurisdiction. 31
(2) The estate and interest in the property, at law or in equity, of the 32
participating co-operative or its liquidator at that time, together with all 33
claims, rights and remedies that the co-operative or its liquidator then 34
had in respect of the property, vest by force of this section in the person 35
entitled to the property under the law of the place in which the 36
co-operative was registered, formed or incorporated. 37
Page 261
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 5.5 Mergers and transfers of engagements 1
affecting participating co-operatives 2
474 Definitions 3
In this Part: 4
appropriate Registrar, in relation to a proposed merger or transfer of 5
engagements, means: 6
(a) the local Registrar--if the merger is to result in a local 7
co-operative or the transfer is to a local co-operative; or 8
(b) the participating Registrar--if the merger is to result in a 9
co-operative under the co-operatives law of the participating 10
jurisdiction concerned or the transfer is to such a co-operative. 11
assets has the same meaning as it has in section 413. 12
instrument has the same meaning as it has in section 413. 13
liabilities has the same meaning as it has in section 413. 14
local co-operative means a co-operative registered in this jurisdiction. 15
original co-operative means: 16
(a) in the case of a transfer of engagements--the transferor 17
co-operative; or 18
(b) in the case of a merger--each of the co-operatives that are 19
merging. 20
rights has the same meaning as it has in section 413. 21
successor co-operative means: 22
(a) in the case of a transfer of engagements--the transferee 23
co-operative; or 24
(b) in the case of a merger--the co-operative formed by the merger. 25
475 Authority for merger or transfer of engagements 26
A local co-operative and a participating co-operative may consolidate 27
all or any of their assets, liabilities and undertakings by way of merger 28
or transfer of engagements approved under this Part. 29
476 Requirements before application can be made 30
(1) Before a local co-operative and a participating co-operative can apply 31
for approval under this Part of a merger or transfer of engagements, the 32
proposed merger or transfer must have been approved by each of the 33
co-operatives: 34
(a) by a special resolution passed by special postal ballot; or 35
Page 262
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) if permitted by subsection (2), by a special resolution, or by a 1
resolution of the board, of the co-operative. 2
(2) The proposed merger or transfer of engagements may be approved by 3
special resolution, or by resolution of the board, of the co-operative if: 4
(a) the local Registrar consents to that procedure applying in the 5
particular case; and 6
(b) the participating Registrar also consents to that procedure 7
applying in the particular case. 8
(3) A consent referred to in subsection (2) may be granted subject to 9
conditions, including any condition that a disclosure statement be 10
provided to members or directors. 11
(4) A co-operative that contravenes a condition of a consent is taken not to 12
have been given consent. 13
477 Disclosure statement required 14
(1) A special resolution of the local co-operative or participating 15
co-operative is not effective for the purposes of this Part unless this 16
section has been complied with. 17
(2) Each co-operative must send to each of its members a disclosure 18
statement approved by the appropriate Registrar specifying the 19
following: 20
(a) the financial position of the local co-operative and the 21
participating co-operative as shown in financial statements that 22
have been prepared as at a date that is not more than 6 months 23
before the date of the statement; 24
(b) any interest that any officer of the local co-operative or the 25
participating co-operative has in the proposed merger or transfer 26
of engagements; 27
(c) any compensation or other consideration proposed to be paid, or 28
any other incentive proposed to be given, to any officer or 29
member of the local co-operative or participating co-operative in 30
relation to the proposed merger or transfer of engagements; 31
(d) whether the proposal is a merger or transfer of engagements and 32
the reason for the merger or transfer of engagements; 33
(e) in the case of a transfer of engagements--whether it is a total or 34
partial transfer of engagements; 35
(f) in the case of a merger--whether the merged co-operative will 36
result in a local co-operative or a co-operative under the 37
co-operatives law of the participating jurisdiction concerned; 38
(g) any other information that the appropriate Registrar directs. 39
Page 263
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) The disclosure statement must be sent to the members of the local 1
co-operative or participating co-operative so that it will in the ordinary 2
course of post reach each member who is entitled to vote on the special 3
resolution not later than: 4
(a) if the resolution is to be decided at a meeting--21 days before the 5
date of the meeting; or 6
(b) if the resolution is to be decided by a postal ballot--21 days 7
before the day on or before which the ballot papers must be 8
returned by members voting in the ballot. 9
(4) The appropriate Registrar may exempt the local co-operative or 10
participating co-operative from complying with this section. 11
(5) The appropriate Registrar may give an approval or an exemption under 12
this section unconditionally or subject to conditions. 13
478 Making an application 14
(1) An application for approval of a merger or transfer of engagements 15
under this Part must be made to the local Registrar and, if the merger or 16
transfer of engagements affects a participating co-operative, to the 17
participating Registrar in the manner and form required by the Registrar 18
concerned. 19
(2) An application for approval of a merger must be accompanied by: 20
(a) 2 copies of the proposed rules of the merged co-operative; and 21
(b) any other information required by the Registrar to whom the 22
application is made. 23
479 Approval of merger 24
(1) If the local Registrar is the appropriate Registrar, he or she must 25
approve a merger pursuant to an application under this Part if satisfied 26
that: 27
(a) this Part has been complied with in relation to the application; 28
and 29
(b) the proposed rules of the merged co-operative are adequate; and 30
(c) the certificate of registration of the local co-operative has been 31
surrendered to the local Registrar; and 32
(d) the certificate of registration of the participating co-operative has 33
been surrendered to the Registrar for the participating jurisdiction 34
concerned; and 35
(e) there is no good reason why the merged co-operative and its rules 36
should not be registered. 37
Page 264
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) If the local Registrar is not the appropriate Registrar, he or she must 1
approve a merger pursuant to an application under this Part if satisfied 2
that the merger has been approved under the provision of the 3
co-operatives law of the participating jurisdiction that corresponds with 4
subsection (1). 5
(3) On approving an application for merger, the local Registrar must: 6
(a) cancel the registration of the local co-operative involved in the 7
merger; and 8
(b) if the merger is to result in a local co-operative, register the 9
merged co-operative and its rules and issue to it a certificate of 10
registration under this Law. 11
(4) A merger takes effect on the issue of the certificate of registration for 12
the merged co-operative (whether under this Law or under the 13
co-operatives law of the participating jurisdiction concerned). 14
480 Approval of transfer of engagements 15
(1) If the local Registrar is the appropriate Registrar, he or she must 16
approve a transfer of engagements pursuant to an application under this 17
Part if satisfied that: 18
(a) this Part has been complied with in relation to the application; 19
and 20
(b) the rules or proposed rules of the transferee co-operative are 21
adequate; and 22
(c) in the case of a total transfer of engagements from a participating 23
co-operative--the certificate of registration of the participating 24
co-operative has been surrendered to the participating Registrar; 25
and 26
(d) there is no good reason why the transfer of engagements should 27
not take effect. 28
(2) If the local Registrar is not the appropriate Registrar, he or she must 29
approve a transfer of engagements pursuant to an application under this 30
Part if satisfied that the transfer has been approved under the provision 31
of the co-operatives law of the participating jurisdiction that 32
corresponds with subsection (1). 33
(3) A transfer of engagements takes effect on the day specified in the 34
approval of the local Registrar. 35
Page 265
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
481 Effect of merger or transfer of engagements 1
(1) When a merger or transfer of engagements takes effect under this Part 2
(the transfer day), the following provisions apply to the extent 3
necessary to give effect to the merger or transfer: 4
(a) persons who were members of the original co-operative 5
immediately before the transfer day are members of the successor 6
co-operative in accordance with its rules; 7
(b) the assets of the original co-operative vest in the successor 8
co-operative without the need for any conveyance, transfer, 9
assignment or assurance; 10
(c) the rights and liabilities of the original co-operative become the 11
rights and liabilities of the successor co-operative; 12
(d) all proceedings by or against the original co-operative that are 13
pending immediately before the transfer day are taken to be 14
proceedings pending by or against the successor co-operative; 15
(e) any act, matter or thing done or omitted to be done by, to or in 16
respect of the original co-operative before the transfer day is (to 17
the extent to which that act, matter or thing has any force or 18
effect) to be taken to have been done or omitted by, to or in 19
respect of the successor co-operative; 20
(f) a reference in an instrument or in any document of any kind to the 21
original co-operative is to be read as, or as including, a reference 22
to the successor co-operative. 23
(2) The operation of this section is not to be regarded: 24
(a) as a breach of contract or confidence or otherwise as a civil 25
wrong; or 26
(b) as a breach of any contractual provision prohibiting, restricting or 27
regulating the assignment or transfer of assets, rights or 28
liabilities; or 29
(c) as giving rise to any remedy by a party to an instrument, or as 30
causing or permitting the termination of any instrument, because 31
of a change in the beneficial or legal ownership of any asset, right 32
or liability. 33
482 Part applies instead of certain other provisions of this Law 34
(1) This Part applies instead of Division 1 of Part 4.3, in respect of the 35
merger of a local co-operative with a participating co-operative. 36
(2) This Part applies instead of Division 1 of Part 4.3, in respect of a transfer 37
of engagements between a local co-operative and a participating 38
co-operative. 39
Page 266
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Chapter 6 Supervision and protection of 1
co-operatives 2
Part 6.1 Introductory 3
483 Application of Chapter 4
Parts 6.4-6.6 apply to this jurisdiction except to the extent (if any) that 5
the Co-operatives National Law Act of this jurisdiction provides 6
otherwise, and with the modifications (if any) made by that Act. 7
Part 6.2 Prevention of fraud and other activities 8
484 Falsification of books 9
(1) Offence regarding securities or books (cf Corporations Act s 1307 (1)) 10
An officer, former officer, employee, former employee, member or 11
former member of a co-operative who engages in conduct that results in 12
the concealment, destruction, mutilation or falsification of: 13
(a) any securities of or belonging to the co-operative; or 14
(b) any books affecting or relating to affairs of the co-operative; or 15
(c) any record required to be sent, kept or delivered under this Law; 16
is guilty of an offence. 17
Maximum penalty: $10,000 or imprisonment for 2 years, or both. 18
(2) Offence--computerised and other books (cf Corporations Act s 1307 (2)) 19
Where matter that is used or intended to be used in connection with the 20
keeping of any books affecting or relating to affairs of a co-operative is 21
recorded or stored in an illegible form by means of a mechanical device, 22
an electronic device or any other device, a person who: 23
(a) records or stores by means of that device matter that the person 24
knows to be false or misleading in a material particular; or 25
(b) engages in conduct that results in the destruction, removal or 26
falsification of matter that is recorded or stored by means of that 27
device, or has been prepared for the purpose of being recorded or 28
stored, or for use in compiling or recovering other matter to be 29
recorded or stored by means of that device; or 30
Page 267
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) having a duty to record or store matter by means of that device, 1
fails to record or store the matter by means of that device: 2
(i) with intent to falsify any entry made or intended to be 3
compiled, wholly or in part, from matter so recorded or 4
stored; or 5
(ii) knowing that the failure so to record or store the matter 6
will render false or misleading in a material particular 7
other matter so recorded or stored; 8
is guilty of an offence. 9
Maximum penalty: $10,000 or imprisonment for 2 years, or both. 10
(3) Defence (cf Corporations Act s 1307 (3)) 11
It is a defence to a charge arising under subsection (1) or (2) if the 12
defendant proves that he, she or it acted honestly and that in all the 13
circumstances the act or omission constituting the offence should be 14
excused. 15
485 Fraud or misappropriation 16
(1) A person must not: 17
(a) by false representation or imposition obtain possession of any 18
property of a co-operative; or 19
(b) having property of a co-operative in his or her possession, 20
withhold or misapply it or wilfully apply part of it to purposes 21
other than purposes authorised by the rules of the co-operative or 22
this Law. 23
Maximum penalty: $6,000. 24
(2) A person who is found guilty of an offence under subsection (1) must, 25
if ordered to do so by the court, deliver up all the property and repay all 26
money improperly applied. 27
Maximum penalty (for subsection (2)): $6,000 or imprisonment for 28
6 months, or both. 29
486 Offering or paying commission 30
A person must not offer or pay commission, fee or reward, whether 31
pecuniary or otherwise, to an officer of a co-operative in relation to a 32
transaction or proposed transaction between the person and the 33
co-operative. 34
Maximum penalty: $6,000 or imprisonment for 6 months, or both. 35
Page 268
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
487 Accepting commission 1
(1) An officer of a co-operative must not accept a commission, fee or 2
reward, whether pecuniary or otherwise, from a person in relation to a 3
transaction or proposed transaction between the person and the 4
co-operative. 5
Maximum penalty: $6,000 or imprisonment for 6 months, or both. 6
(2) An officer of a co-operative who is found guilty of an offence under 7
subsection (1) is also liable to make good to the co-operative double the 8
value or amount of the commission, fee or reward. 9
488 False statements in loan application etc 10
(1) A person must not in, or in relation to, an application, request, or 11
demand for money made to or of a co-operative: 12
(a) give information or make a statement to the co-operative or an 13
officer, employee or agent of the co-operative knowing it to be 14
false or misleading in a material particular; or 15
(b) proffer to the co-operative or an officer, employee or agent of the 16
co-operative any information or statement provided by another 17
person knowing it to be false or misleading in a material 18
particular. 19
Maximum penalty: $6,000 or imprisonment for 6 months, or both. 20
(2) If a person is found guilty of an offence under subsection (1), a 21
co-operative from which money has been obtained by the person in 22
relation to the commission of the offence may exercise all rights under 23
a mortgage or other security given to it by the person to secure the 24
repayment of money that it could exercise if there were a breach of a 25
covenant or of a term of a contract by which the security was given. 26
(3) The co-operative may exercise the rights whether the mortgage or other 27
security was executed by the person alone or by the person and another 28
person or other persons. 29
Part 6.3 Examining a person about a co-operative 30
489 Application of Corporations Act--court-directed examinations 31
A co-operative is declared to be an applied Corporations legislation 32
matter for the purposes of the Corporations application legislation of 33
this jurisdiction in relation to Division 1 of Part 5.9 of the Corporations 34
Act, subject to the modifications referred to in section 13 (3) of this Law 35
so far as they are relevant. 36
Note. See section 13, including Note 1 to that section. 37
Page 269
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 6.4 Supervision and inspection 1
490 Definitions 2
In this Part: 3
co-operative venture means: 4
(a) a corporation or unit trust formed by a co-operative or in the 5
formation of which a co-operative participated; or 6
(b) a partnership, joint venture or association of persons or bodies 7
formed or entered into by a co-operative. 8
place includes all or part of a structure, building, aircraft, vehicle, vessel 9
and place (whether built on or not). 10
relevant documents means books or other documents relating to the 11
promotion, formation, membership, control, transactions, dealings, 12
business or property of a co-operative. 13
491 Co-operative includes subsidiaries, participating co-operatives and 14
co-operative ventures 15
A reference in this Part to a co-operative includes a reference to each of 16
the following: 17
(a) a participating co-operative; 18
(b) a subsidiary of a co-operative or participating co-operative; 19
(c) a co-operative venture; 20
(d) a co-operative or participating co-operative, or a subsidiary of 21
either, or a co-operative venture, that is in the course of being 22
wound up or has been deregistered. 23
492 Appointment of inspectors 24
The designated authority may appoint a person as an inspector under 25
this Law if: 26
(a) the designated authority considers the person has the necessary 27
expertise or experience to be an inspector; or 28
(b) the person has satisfactorily finished training approved by the 29
designated authority. 30
493 Registrar and investigators have functions of inspectors 31
The Registrar, and an investigator exercising functions under Part 6.5, 32
have and may exercise all the functions of an inspector and for the 33
purpose are taken to be inspectors. 34
Page 270
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
494 Inspector's identity card 1
(1) The designated authority must give each inspector an identity card. 2
(2) The identity card must: 3
(a) contain a recent photo of the person; and 4
(b) be signed by the person; and 5
(c) identify the person as an inspector. 6
(3) A person who stops being an inspector must return the person's identity 7
card to the designated authority as soon as possible (but within 21 days) 8
after the person stops being an inspector, unless the person has a 9
reasonable excuse. 10
Maximum penalty: $2,000. 11
(4) This section does not prevent the giving of a single identity card to a 12
person for this Law and other legislation or for other purposes. 13
495 Production or display of inspector's identity card 14
(1) An inspector may exercise a power in relation to someone only if: 15
(a) the inspector first produces the inspector's identity card for the 16
other person's inspection; or 17
(b) the inspector has the inspector's identity card displayed so it is 18
clearly visible to the other person. 19
(2) However, if for any reason it is not practicable to comply with 20
subsection (1) before exercising the power, the inspector must produce 21
the identity card for inspection by the person at the first reasonable 22
opportunity. 23
496 Powers of inspector 24
(1) An inspector is subject to the directions of the Registrar. 25
(2) The powers of an inspector may be limited: 26
(a) under a local regulation; or 27
(b) under a condition of appointment; or 28
(c) by written notice given by the Registrar to the inspector. 29
497 Inspector's appointment conditions 30
(1) An inspector holds office on the conditions stated in the instrument of 31
appointment. 32
(2) An inspector: 33
(a) if the appointment provides for a term of appointment--stops 34
holding office at the end of the term; and 35
Page 271
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) if the conditions of appointment provide--stops holding office 1
when the inspector stops holding another office stated in the 2
appointment conditions (the main office); and 3
(c) may resign by signed notice of resignation given to the Registrar. 4
(3) However, an inspector may not resign from the office under this Law 5
(the secondary office) if a term of employment to the main office 6
requires the person to hold the secondary office. 7
498 Entry of place 8
(1) An inspector may enter a place if: 9
(a) its occupier consents to the entry; or 10
(b) the entry is authorised by a warrant; or 11
(c) it is a place at which the affairs or activities of a co-operative are 12
managed or conducted. 13
(2) An inspector, without the occupier's consent or a warrant, may enter the 14
land around the premises to ask its occupier for consent to enter the 15
premises. 16
499 Consent to entry 17
(1) This section applies if an inspector intends to ask an occupier of a place 18
to consent to the inspector or another inspector entering the place. 19
(2) Before asking for the consent, the inspector must inform the occupier: 20
(a) of the purpose of the entry; and 21
(b) that the occupier is not required to consent. 22
(3) If the consent is given, the inspector may ask the occupier to sign an 23
acknowledgment of the consent. 24
(4) The acknowledgment must state: 25
(a) that the occupier was informed: 26
(i) of the purpose of the entry; and 27
(ii) that the occupier is not required to consent; and 28
(b) that the occupier gives an inspector consent to enter the place and 29
exercise powers under this Law or under or referred to in the 30
Co-operatives National Law Act of this jurisdiction; and 31
(c) the time and date the consent was given. 32
(5) If the occupier signs an acknowledgment of consent, the inspector must 33
immediately give a copy to the occupier. 34
Page 272
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(6) If: 1
(a) a question arises, in proceedings in or before the court, as to 2
whether the occupier of a place consented to an inspector 3
entering the place under this Law; and 4
(b) an acknowledgment under this section is not produced in 5
evidence for the entry; and 6
(c) it is not proved the occupier consented to the entry; 7
the court may presume the occupier did not consent. 8
500 Inspectors may require certain persons to appear, answer questions and 9
produce documents 10
(1) An inspector may, by notice in the approved form: 11
(a) require a co-operative to produce to the inspector at a time and 12
place stated in the notice stated relevant documents relating to the 13
co-operative; and 14
(b) require a person who is involved in the activities of a co-operative 15
to produce to the inspector at a time and place stated in the notice 16
stated relevant documents relating to the co-operative; and 17
(c) require a person who is involved in the activities of a 18
co-operative: 19
(i) to attend before the inspector at a time and place stated in 20
the notice; and 21
(ii) to answer questions put to the person by the inspector 22
relating to the promotion, formation, membership, control, 23
transactions, dealings, business or property of the 24
co-operative. 25
(2) A person is considered to be involved in the activities of a co-operative 26
if the person: 27
(a) is or has been an officer or employee of, or an agent, authorised 28
deposit-taking institution, Australian legal practitioner, auditor or 29
other person acting in any capacity for, the co-operative; or 30
(b) has a relevant document relating to the co-operative in the 31
person's possession or control; or 32
(c) was a party to the creation of a relevant document relating to the 33
co-operative. 34
501 Powers of inspectors at place entered 35
An inspector has the following powers at a place the inspector is 36
authorised to enter: 37
(a) power to search for evidence of a contravention of this Law; 38
Page 273
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) power to search for relevant documents and to require a person at 1
the place to produce to the inspector any relevant document in the 2
person's custody or under the person's control; 3
(c) power to require a person at the place who is apparently involved 4
in the management or conduct of the affairs or activities of a 5
co-operative to answer questions or provide information; 6
(d) power to exercise the functions of an inspector under section 502 7
in relation to a relevant document found at the place or produced 8
to the inspector. 9
502 Functions of inspectors in relation to relevant documents 10
(1) An inspector has the following powers in relation to a relevant 11
document found by an inspector at a place entered by the inspector or 12
produced to the inspector under a requirement made under this Part: 13
(a) power to take possession of the document or secure it against 14
interference; 15
(b) power to make copies of, or take extracts from, the document; 16
(c) power to require a person who was party to the creation of the 17
document to make a statement giving any explanation the person 18
is able to give as to any matter relating to the creation of the 19
document or as to any matter to which the document relates; 20
(d) power to retain possession of the document for the period 21
necessary to enable the document to be inspected, and copies of, 22
or extracts from, the document to be made or taken. 23
(2) While an inspector retains possession of a document, the inspector must 24
permit a person who would be entitled to inspect the document were it 25
not in the possession of the inspector to inspect the document at a 26
reasonable time and make a copy of, or take extracts from, the 27
document. 28
(3) If an inspector takes possession of or secures against interference a 29
relevant document and a person has a lien on the document, the 30
inspector's actions do not prejudice the lien. 31
503 Protection from incrimination 32
(1) A person is not excused from making a statement under a requirement 33
under this Part on the ground the statement might tend to incriminate 34
him or her. 35
(2) However, if the person claims before making a statement that the 36
statement might tend to incriminate him or her, the statement is not 37
admissible in evidence against him or her in criminal proceedings, other 38
than proceedings under this Part. 39
Page 274
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) Except as provided by subsection (2), a statement made by a person in 1
compliance with a requirement under this Part may be used in evidence 2
in any criminal or civil proceedings against the person. 3
504 Warrants 4
(1) An inspector may apply to the designated authority for a warrant to 5
enter a place. 6
(2) The application must be sworn and state the grounds on which the 7
warrant is sought. 8
(3) The designated authority may refuse to consider the application until the 9
inspector gives the designated authority all the information the 10
designated authority requires about the application in the way the 11
designated authority requires. 12
Note. The designated authority may, for example, require additional information 13
supporting the application to be given by statutory declaration. 14
(4) The designated authority may issue the warrant only if satisfied there 15
are reasonable grounds for suspecting: 16
(a) the affairs or activities of a co-operative are being managed or 17
conducted at the place; or 18
(b) there are relevant documents at the place; or 19
(c) there is a particular thing or activity (the evidence) that may 20
provide evidence of an offence against this Law; or 21
(d) the evidence is at the place, or may be at the place, within the next 22
7 days. 23
(5) The warrant must state: 24
(a) that the inspector may, with reasonable and necessary help and 25
force, enter the place and exercise the inspector's powers under 26
this Law; and 27
(b) the suspected offence (if any) for which the warrant was issued; 28
and 29
(c) any evidence that may be seized under the warrant; and 30
(d) the hours when the place may be entered; and 31
(e) the date, within 7 days after the warrant's issue, when the warrant 32
ends. 33
(6) A police officer may accompany an inspector executing a warrant 34
issued under this section and may take all reasonable steps to assist in 35
the exercise of the functions of the inspector under this Law. 36
Page 275
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
505 Warrants--applications made otherwise than in person 1
(1) An inspector may apply for a warrant by phone, fax, radio or another 2
form of communication if the inspector considers it necessary because 3
of: 4
(a) urgent circumstances; or 5
(b) other special circumstances, including, for example, the 6
inspector's remote location. 7
(2) Before applying for the warrant, the inspector must prepare an 8
application stating the grounds on which the warrant is sought. 9
(3) The inspector may apply for the warrant before the application is sworn. 10
(4) After issuing the warrant, the designated authority must immediately 11
provide by fax or another form of communication a copy to the 12
inspector if it is reasonably practicable to do so. 13
(5) If it is not reasonably practicable to provide a copy to the inspector: 14
(a) the designated authority must: 15
(i) tell the inspector what the terms of the warrant are; and 16
(ii) tell the inspector the date and time the warrant was issued; 17
and 18
(b) the inspector must complete a form of warrant (the warrant 19
form) and write on it: 20
(i) the designated authority's name; and 21
(ii) the date and time the designated authority issued the 22
warrant; and 23
(iii) the warrant's terms. 24
(6) The copy of the warrant, or the warrant form properly completed by the 25
inspector, authorises the entry and the exercise of the other powers 26
stated by the warrant issued by the designated authority. 27
(7) The inspector must, at the first reasonable opportunity, send the 28
designated authority: 29
(a) the sworn application; and 30
(b) if the inspector completed a warrant form--the completed 31
warrant form. 32
(8) On receiving the documents, the designated authority must attach them 33
to the warrant. 34
Page 276
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(9) Subsection (10) applies to a court if: 1
(a) a question arises, in proceedings in or before the court, whether a 2
power exercised by an inspector was authorised by a warrant 3
issued under this section; and 4
(b) the warrant is not produced in evidence. 5
(10) The court may presume the exercise of the power was not authorised by 6
a warrant issued under this section, unless the contrary is proved. 7
506 Requirements before executing warrant 8
(1) Before executing a warrant, the inspector named in the warrant or a 9
person assisting the inspector must announce that he or she is authorised 10
by the warrant to enter the premises and give any person at the premises 11
an opportunity to allow entry to the premises. 12
(2) The inspector or a person assisting the inspector need not comply with 13
subsection (1) if he or she believes on reasonable grounds that 14
immediate entry to the premises is required to ensure the effective 15
execution of the warrant is not frustrated. 16
(3) If an occupier or another person who apparently represents the occupier 17
is present at a place when a warrant is being executed, the inspector 18
must: 19
(a) identify himself or herself to the person by producing his or her 20
identity card for inspection by the person; and 21
(b) give to the person a copy of the execution copy of the warrant. 22
507 General powers after entering places 23
(1) This section applies to an inspector who enters a place under this Part. 24
(2) For the purpose of monitoring or enforcing compliance with this Law, 25
the inspector may: 26
(a) search any part of the place; or 27
(b) examine, inspect, photograph or film anything at the place; or 28
(c) copy a document at the place; or 29
(d) take into or onto the place any persons, equipment and materials 30
the inspector reasonably requires for exercising a power under 31
this Part; or 32
(e) require a person in the place to give the inspector reasonable help 33
to exercise the powers referred to in paragraphs (a)-(d). 34
(3) A person required to give reasonable help under subsection (2) (e) must 35
comply with the requirement, unless the person has a reasonable excuse. 36
Maximum penalty: $2,000. 37
Page 277
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) If the help is required to be given to an inspector by: 1
(a) answering a question; or 2
(b) producing a document, other than a document required to be kept 3
under this Law; 4
it is a reasonable excuse for the person to fail to answer the question, or 5
produce the document, if complying with the requirement might tend to 6
incriminate the person. 7
508 Power to seize evidence 8
(1) An inspector who enters a place under this Part other than under a 9
warrant may seize a thing in the place if: 10
(a) the inspector reasonably believes the thing is evidence of an 11
offence against this Law or the Co-operatives National Law Act 12
of this jurisdiction; and 13
(b) seizure of the thing is consistent with the purpose of entry as told 14
to the occupier. 15
(2) An inspector who enters a place under this Part under a warrant may 16
seize the evidence for which the warrant was issued. 17
(3) An inspector may also seize anything else in a place referred to in 18
subsection (1) or (2) if the inspector reasonably believes: 19
(a) the thing is evidence of an offence against this Law or the 20
Co-operatives National Law Act of this jurisdiction; and 21
(b) the seizure is necessary to prevent the thing being hidden, lost or 22
destroyed or used to continue or repeat the offence. 23
509 Receipt for seized things 24
(1) As soon as possible after an inspector seizes a thing, the inspector must 25
give a receipt for it to the person from whom it was seized. 26
(2) However, if for any reason it is not practicable to comply with 27
subsection (1), the inspector must leave the receipt at the place of 28
seizure, in a reasonably secure way and in a conspicuous position. 29
(3) The receipt must describe generally each thing seized and its condition. 30
510 Return of seized things 31
(1) An inspector must return a seized thing to its owner at the end of: 32
(a) 6 months; or 33
(b) if proceedings for an offence involving it is started within the 34
6 months--the proceedings and any appeal from the 35
proceedings. 36
Page 278
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) Despite subsection (1), the inspector must return the seized thing to the 1
person immediately the inspector stops being satisfied its retention as 2
evidence is necessary. 3
511 Power to require name and address 4
(1) This section applies if: 5
(a) an inspector finds a person committing an offence against this 6
Law or the Co-operatives National Law Act of this jurisdiction; 7
or 8
(b) an inspector finds a person in circumstances that lead, or has 9
information that leads, the inspector to reasonably suspect the 10
person has just committed an offence against this Law or the 11
Co-operatives National Law Act of this jurisdiction. 12
(2) The inspector may require the person to state the person's name and 13
address. 14
(3) When making the requirement, the inspector must warn the person it is 15
an offence to fail to state the person's name or address, unless the person 16
has a reasonable excuse. 17
(4) The inspector may require the person to give evidence of the correctness 18
of the stated name or address if the inspector reasonably suspects the 19
stated name or address is false. 20
(5) A person must comply with a requirement under subsection (2) or (4), 21
unless the person has a reasonable excuse. 22
Maximum penalty: $2,000. 23
(6) A person does not commit an offence against subsection (5) if: 24
(a) the person was required to state the person's name and address by 25
an inspector who suspected the person had committed an offence 26
against this Law or the Co-operatives National Law Act of this 27
jurisdiction; and 28
(b) the person is not proved to have committed the offence referred 29
to in paragraph (a). 30
512 False or misleading statements 31
(1) A person must not state anything to an inspector the person knows is 32
false or misleading in a material particular. 33
Maximum penalty: $12,000 or imprisonment for 1 year, or both. 34
(2) It is sufficient for a complaint for an offence against subsection (1) to 35
state the statement made was false or misleading to the person's 36
knowledge without stating which. 37
Page 279
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
513 Power to require production of documents 1
(1) An inspector may require a person to produce to the inspector, for 2
inspection, a document this Law requires the person to hold or keep. 3
(2) The person must produce the document, unless the person has a 4
reasonable excuse for not producing it. 5
Maximum penalty: $12,000 or imprisonment for 1 year, or both. 6
(3) The inspector may keep a document that is produced: 7
(a) to take an extract from the document; or 8
(b) to make a copy of it. 9
(4) The inspector must return the document to the person as soon as 10
practicable after taking the extract or making the copy. 11
514 False or misleading documents 12
(1) A person must not give to the Registrar or an inspector a document 13
containing information the person knows is false or misleading in a 14
material particular. 15
Maximum penalty: $12,000 or imprisonment for 1 year, or both. 16
(2) Subsection (1) does not apply to a person who, when giving the 17
document: 18
(a) tells the Registrar or inspector, to the best of the person's ability, 19
how it is false, misleading or incomplete; and 20
(b) if the person has, or can reasonably get, the correct information-- 21
gives the correct information to the Registrar or inspector. 22
(3) It is sufficient for a complaint against a person for an offence against 23
subsection (1) to state the document was false, misleading or 24
incomplete to the person's knowledge without stating which. 25
515 Obstruction of inspectors 26
(1) A person must not obstruct an inspector, or a person helping an 27
inspector, in the exercise of a power under this Law, unless the person 28
has a reasonable excuse. 29
Maximum penalty: $12,000 or imprisonment for 1 year, or both. 30
(2) If a person obstructs an inspector in the exercise of a power under this 31
Law and the inspector decides to exercise the power, the inspector must 32
warn the person. 33
Page 280
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) In warning the person, the inspector must tell the person: 1
(a) it is an offence to obstruct the inspector, unless the person has a 2
reasonable excuse; and 3
(b) the inspector considers the person's conduct is an obstruction. 4
(4) In this section: 5
obstruct includes hinder and attempt to obstruct. 6
516 Copies or extracts of records to be admitted in evidence 7
(1) In any legal proceedings (whether under this Law or otherwise), a copy 8
of or extract from a record relating to affairs of a co-operative is 9
admissible in evidence as if it were the original record or the relevant 10
part of the original record. 11
(2) However, a copy of or extract from a record is not admissible in 12
evidence under subsection (1) unless it is proved the copy or extract is 13
a true copy of the record or of the relevant part of the record. 14
(3) For the purposes of subsection (2), evidence that a copy of or extract 15
from a record is a true copy of the record or of part of the record may be 16
given either orally or by an affidavit or statutory declaration by a person 17
who has compared the copy or extract with the record or the part of the 18
record. 19
517 Privilege 20
(1) An Australian legal practitioner is entitled to refuse to comply with a 21
requirement under section 500 or 502 relating to a relevant document if: 22
(a) the document contains a privileged communication made by or 23
on behalf of or to the practitioner in his or her capacity as an 24
Australian legal practitioner; or 25
(b) the practitioner is not able to comply with the requirement 26
without disclosing a privileged communication made by or on 27
behalf of or to the practitioner in his or her capacity as an 28
Australian legal practitioner. 29
(2) The practitioner is not entitled to refuse to comply with the requirement 30
to the extent he or she is able to comply with it without disclosing the 31
privileged communication. 32
(3) The practitioner is also not entitled to refuse to comply with the 33
requirement if the person by or on behalf of whom the communication 34
was made or (if the person is under administration under Part 5.3A of 35
the Corporations Act, as applying under this Law, or in the course of 36
being wound up) the administrator or the liquidator agrees to the 37
practitioner complying with the requirement. 38
Page 281
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) If the practitioner refuses to comply with the requirement, he or she 1
must immediately give in writing to the Registrar: 2
(a) the name and address of the person to whom or by or on behalf of 3
whom the communication was made (if known to the 4
practitioner); and 5
(b) sufficient particulars to identify the document containing the 6
communication (if the communication was made in writing). 7
Maximum penalty: $6,000. 8
518 Machinery and other provisions for warrants 9
It is intended that the Co-operatives National Law Act of this 10
jurisdiction may contain machinery and other provisions for 11
applications for, the issue of, and the execution of, warrants. 12
Part 6.5 Inquiries 13
519 Definitions 14
In this Part: 15
affairs of a co-operative includes: 16
(a) the promotion, formation, membership, control, transactions, 17
dealings, business and property of the co-operative; and 18
(b) loans made to the co-operative; and 19
(c) matters that are concerned with identifying people who are, or 20
have been, financially interested in the success or failure, or 21
apparent success or failure, of the co-operative or who are, or 22
have been, able to control or influence materially the policies of 23
the co-operative; and 24
(d) the circumstances in which a person placed, withdrew or 25
disposed of funds with, or loans to, the co-operative. 26
costs of an inquiry under this Part includes: 27
(a) the expenses of, and incidental to, the inquiry; and 28
(b) the expenses payable by the Registrar in proceedings instituted 29
by the Registrar under this Part in the name of the co-operative 30
the subject of the inquiry; and 31
(c) the part of the remuneration of a public sector official that the 32
Minister decides is attributable to matters connected with the 33
inquiry. 34
involved person, in relation to an inquiry into the affairs of a 35
co-operative, means: 36
(a) an officer of the co-operative; or 37
Page 282
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) a person who acts, or has at any time acted, as authorised 1
deposit-taking institution, Australian legal practitioner, auditor or 2
actuary, or in another capacity, for the co-operative; or 3
(c) a person who has, or at any time had, in his or her possession 4
property of the co-operative; or 5
(d) a person who is indebted to the co-operative; or 6
(e) a person who is capable of giving information relating to the 7
affairs of the co-operative; or 8
(f) a person whom an investigator believes on reasonable grounds to 9
be a person referred to in paragraphs (a)-(e). 10
520 Appointment of investigators 11
(1) The designated authority may appoint a person or persons to hold an 12
inquiry into the affairs of a co-operative if the designated authority 13
considers it is desirable to do so for the protection or otherwise in the 14
interests of the public or of members or creditors of the co-operative. 15
(2) The designated authority may vary the terms of appointment of an 16
investigator if the investigator agrees to the variation. 17
(3) In the course of an inquiry into the affairs of a co-operative, an 18
investigator may inquire into the affairs of a subsidiary of the 19
co-operative that, if the subsidiary were the co-operative, would be 20
affairs of the co-operative. 21
(4) An inquiry into the affairs of a subsidiary of a co-operative may be 22
conducted as if the subsidiary were the co-operative. 23
521 Powers of investigators 24
(1) An investigator inquiring into the affairs of a co-operative may, by 25
giving an involved person a notice in the approved form, require the 26
person: 27
(a) to produce any document of which the person has custody or 28
control and that relates to those affairs; or 29
(b) to give the investigator all reasonable help in the inquiry; or 30
(c) to appear before the investigator for examination on oath or 31
affirmation. 32
(2) An investigator may administer an oath or affirmation to an involved 33
person given a notice under subsection (1). 34
(3) An investigator may take possession of a document produced by an 35
involved person under subsection (1) and retain it for the period the 36
investigator decides is necessary for the inquiry. 37
Page 283
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) While an investigator retains possession of a document, the investigator 1
must permit a person who would be entitled to inspect the document 2
were it not in the investigator's possession to inspect the document at 3
any reasonable time and make a copy of, or take extracts from, the 4
document. 5
522 Examination of involved person 6
(1) An Australian legal practitioner acting for an involved person: 7
(a) may attend an examination of the involved person by an 8
investigator; and 9
(b) may, to the extent the investigator permits, address the 10
investigator and examine the involved person. 11
(2) An involved person is not excused from answering a question asked by 12
the investigator even if seeking to be excused on the ground of possible 13
self-incrimination. 14
(3) If an involved person answers a question of an investigator after having 15
claimed possible self-incrimination by doing so, neither the question 16
nor the answer is admissible in evidence in criminal proceedings other 17
than: 18
(a) proceedings under section 524 for giving a false or misleading 19
answer to the question; or 20
(b) proceedings on a charge of perjury in relation to the answer. 21
(4) An involved person who attends for examination by an investigator is 22
entitled to be paid the allowance and the expenses: 23
(a) prescribed by the National Regulations, except to the extent 24
paragraph (b) applies; or 25
(b) prescribed by the local regulations. 26
523 Privilege 27
(1) An involved person who is an Australian legal practitioner is entitled to 28
refuse to produce a document to an investigator if the document 29
contains a privileged communication made by or on behalf of or to the 30
practitioner in his or her capacity as an Australian legal practitioner. 31
(2) The practitioner is not entitled to refuse to produce the document if the 32
person by or on behalf of whom the communication was made or (if the 33
person is under administration under Part 5.3A of the Corporations Act, 34
as applying under this Law, or in the course of being wound up) the 35
administrator or liquidator agrees to the practitioner producing the 36
document. 37
Page 284
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) If the practitioner refuses to comply with the requirement to produce a 1
document, he or she must immediately give in writing to the 2
investigator: 3
(a) the name and address of the person to whom or by or on behalf of 4
whom the communication was made (if known to the 5
practitioner); and 6
(b) sufficient particulars to identify the document. 7
Maximum penalty: $6,000. 8
524 Offences by involved person 9
(1) An involved person must not: 10
(a) fail to comply with a lawful requirement of an investigator 11
without showing reasonable cause for the failure; or 12
(b) give an investigator information knowing the information to be 13
false or misleading in a material particular; or 14
(c) when appearing before an investigator: 15
(i) make a statement knowing the statement to be false or 16
misleading in a material particular; or 17
(ii) fail to be sworn or to make an affirmation. 18
Maximum penalty: $24,000 or imprisonment for 2 years, or both. 19
(2) If an investigator considers a failure by a person to comply with a 20
requirement of the investigator is an offence under subsection (1) (a), 21
the investigator may certify the failure to the Supreme Court and the 22
court may then: 23
(a) order the involved person to comply with the requirement of the 24
investigator within a stated period; or 25
(b) instead of, or in addition to, making the order, punish the 26
involved person as for a contempt of the Supreme Court if 27
satisfied there was no lawful excuse for the failure to comply with 28
the requirement of the investigator. 29
525 Offences relating to documents 30
If an inquiry into the affairs of a co-operative is being held under this 31
Part, a person who: 32
(a) conceals, destroys, mutilates or alters a document relating to the 33
co-operative; or 34
Page 285
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) sends, or causes to be sent, out of this jurisdiction a document or 1
other property belonging to, or under the control of, the 2
co-operative; 3
commits an offence, unless it is established the person charged did not 4
intend to defeat, delay or obstruct the inquiry. 5
Maximum penalty: $12,000 or imprisonment for 1 year, or both. 6
526 Record of examination 7
(1) Except as provided by section 522, a record of an examination may be 8
used in proceedings against the person examined, but this does not 9
preclude the admission of other written or oral evidence. 10
(2) A person examined is, on written application made to the investigator, 11
entitled to a free copy of the record of examination. 12
(3) The Registrar may give an Australian legal practitioner a copy of a 13
record of examination made by an investigator if the Registrar is 14
satisfied the practitioner is conducting, or is in good faith 15
contemplating, proceedings about affairs of the co-operative to which 16
the record relates. 17
(4) An Australian legal practitioner must not: 18
(a) use a copy of a record of examination otherwise than for the 19
preparation for, institution of, or conduct of, proceedings; or 20
(b) publish or communicate the record or part of it for another 21
purpose. 22
Maximum penalty: $6,000. 23
527 Report of investigator 24
(1) An investigator may, and if directed by the Registrar to do so must, 25
make interim reports to the Registrar on any inquiry being held by the 26
investigator. 27
(2) As soon as practicable after the end of an inquiry, the investigator must 28
report to the Registrar: 29
(a) the opinion of the investigator in relation to the affairs of the 30
co-operative the subject of the inquiry; and 31
(b) the findings on which the opinion is based. 32
(3) An investigator's report may include a recommendation as to whether: 33
(a) a direction should be given under section 530 (3); or 34
(b) an application should be made under section 530 (4) or (5); or 35
(c) both a direction should be given and an application should be 36
made. 37
Page 286
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(4) A report by an investigator may be accompanied by any document of 1
which the investigator has taken possession after being produced under 2
this Part, in which case the Registrar: 3
(a) may retain the document for the period the Registrar considers 4
necessary to decide whether proceedings should be instituted as 5
a result of the inquiry; and 6
(b) may retain the document for the further period the Registrar 7
considers necessary to enable proceedings to be instituted and 8
prosecuted; and 9
(c) may permit the use of the document for proceedings instituted as 10
a result of the inquiry; and 11
(d) must permit inspection of the document by a person who would 12
be entitled to inspect it if it were returned to its former custody; 13
and 14
(e) may permit inspection of the document by another person while 15
it is in the possession of the Registrar, but only if the Registrar 16
considers the person has an interest in the inquiry and, because of 17
the interest, refusal of the inspection would be unjust. 18
528 Proceedings following inquiry 19
(1) If proceedings are to be, or have been, instituted by the Registrar as a 20
result of an inquiry under this Part, the Registrar may, by written notice, 21
require a person who, in relation to the inquiry, was an involved person 22
to give all the assistance in the proceedings the person is reasonably able 23
to give. 24
(2) The Supreme Court may, on the application of the Registrar, order a 25
person to comply with a notice under subsection (1) if the person has 26
failed to do so. 27
(3) If the Registrar considers, as a result of an inquiry under this Part, 28
proceedings should, in the public interest, be instituted by a 29
co-operative for the recovery of: 30
(a) damages for fraud or other misconduct in the affairs of the 31
co-operative; or 32
(b) property of the co-operative; 33
the proceedings may be instituted and prosecuted in the name of the 34
co-operative. 35
Page 287
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
529 Admission of investigator's report as evidence 1
(1) A document certified by the Registrar as being a copy of a report of an 2
inquiry under this Part is admissible as evidence of any findings made 3
by the investigator. 4
(2) Subsection (1) does not authorise the admission of evidence that is 5
inadmissible under section 522. 6
530 Costs of inquiry 7
(1) The costs of an inquiry under this Part are to be paid out of money 8
appropriated by the Legislature of this jurisdiction. 9
(2) At the direction of the Minister, the Registrar must act under one or 10
more of subsections (3), (4) and (5). 11
(3) The Registrar may, by written notice given to a co-operative, direct the 12
co-operative to pay to: 13
(a) the Registrar, unless paragraph (b) applies; or 14
(b) the entity prescribed by the Co-operatives National Law Act of 15
this jurisdiction for the purposes of this paragraph; 16
all or part of the costs of an inquiry under this Part into the affairs of the 17
co-operative. 18
(4) If proceedings are instituted by the Registrar under section 528 in the 19
name of a co-operative, the court may, in the course of the proceedings 20
and on the application of the Registrar, order all or part of the costs of 21
the inquiry that led to the proceedings be paid to the Registrar by a 22
stated party to the proceedings. 23
(5) If a person is convicted of an offence in proceedings certified by the 24
Registrar to be the result of an inquiry into the affairs of a co-operative, 25
the court may, on the application of the Registrar made at the time of the 26
conviction or within 14 days later, order the convicted person to pay to 27
the Registrar all or part of the costs of the inquiry. 28
(6) An order under this section must state: 29
(a) the amount to be paid; and 30
(b) the time or times for payment; and 31
(c) the manner of payment. 32
(7) An amount that has not been paid by a person in accordance with an 33
order under this section is recoverable from the person by the Registrar 34
as a debt. 35
Page 288
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Part 6.6 Special meetings and inquiries 1
531 Application for special meeting or inquiry 2
(1) The Registrar must, on the application of a majority of the members of 3
the board or of not less than one-third in number of the members of a 4
co-operative: 5
(a) call a special meeting of the co-operative; or 6
(b) hold, or appoint an inspector to hold, an inquiry into the affairs of 7
the co-operative or of a subsidiary of the co-operative. 8
(2) An application must be supported by the evidence the Registrar directs 9
to show the applicants have good reason for requiring the meeting or 10
inquiry and the application is made without malicious motive. 11
(3) Notice of the application must be given to the co-operative as the 12
Registrar directs. 13
(4) The applicants must give security for the expenses of the meeting or 14
inquiry as directed by the Registrar. 15
532 Holding of special meeting 16
(1) The Registrar may direct the time and place at which a special meeting 17
is to be held and the matters to be discussed and decided at the meeting. 18
(2) The Registrar must give the notice to members of the holding of the 19
special meeting that the Registrar considers appropriate (despite a 20
provision in the rules of the co-operative as to the giving of notice). 21
(3) The special meeting has all the powers of a meeting called under the 22
rules of the co-operative and has power to appoint its own chairperson 23
(despite a rule of the co-operative to the contrary). 24
(4) The Registrar or another person nominated by the Registrar may attend 25
and address the meeting. 26
533 Expenses of special meeting or inquiry 27
The expenses of and incidental to a meeting called or an inquiry held 28
under this Part (including under section 534) must be defrayed in the 29
proportions the Registrar directs: 30
(a) by the applicants (if any); or 31
(b) out of the funds of the co-operative to which the meeting or 32
inquiry related or whose subsidiary was the subject of the 33
inquiry; or 34
(c) by an officer, member, former officer or former member of the 35
co-operative. 36
Page 289
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
534 Power to hold special inquiry into co-operative 1
The Registrar may without an application hold, or appoint an inspector 2
to hold, an inquiry into the working and financial condition of a 3
co-operative or a subsidiary of a co-operative. 4
535 Special meeting following inquiry 5
(1) After an inquiry under this Part, the Registrar may call a special meeting 6
of the co-operative. 7
(2) Sections 532 and 533 apply to the meeting. 8
Page 290
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Chapter 7 Legal proceedings and other matters 1
Part 7.1 Offences, enforcement and remedies 2
536 Notice to be given of conviction for offence 3
If a co-operative or an officer of a co-operative is convicted of an 4
offence against a provision of this Law or of a corresponding 5
co-operatives law, the co-operative must, within 28 days after the 6
conviction is recorded, give to each member of the co-operative notice 7
of: 8
(a) the conviction; and 9
(b) any penalty imposed; and 10
(c) the nature of the offence. 11
537 Secrecy 12
(1) A person who is, or at any time was, engaged in the administration of 13
this Law or a former Act must not, other than as provided by this 14
section, record, make use of or divulge information obtained in the 15
course of the administration. 16
Maximum penalty: $6,000. 17
(2) Subsection (1) does not apply to: 18
(a) the recording, making use of or divulging of information in the 19
course of the administration of this Law; or 20
(b) the recording or making use of information for the purpose of 21
divulging it as permitted by subsection (3) or (4); or 22
(c) the divulging of information as permitted by subsection (3) or (4). 23
(3) Information may be divulged: 24
(a) for the purposes of criminal proceedings; or 25
(b) for the purposes of proceedings under this Law or a 26
corresponding co-operatives law or of an inquiry authorised by 27
legislation of this jurisdiction or of another jurisdiction; or 28
(c) with the consent of the person to whom the information relates; or 29
(d) under a requirement imposed under legislation of this jurisdiction 30
or of another jurisdiction; or 31
(e) under a reciprocal arrangement under sections 616 and 617. 32
(4) Information may be divulged to: 33
(a) the Minister; or 34
(b) the Registrar or a participating Registrar; or 35
Page 291
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) a person specified in the Co-operatives National Law Act of this 1
jurisdiction (subject to any conditions or limitations specified in 2
that Act) for the purposes of this paragraph; or 3
Note. This paragraph is intended to cover the Treasurer, 4
Auditor-General, Independent Commission Against Corruption, etc. 5
(d) the person who, under a law of this jurisdiction or another 6
jurisdiction, administers a law of the jurisdiction that relates to 7
taxation or the imposition of a duty; or 8
(e) the Commissioner of Taxation, a Second Commissioner of 9
Taxation or a Deputy Commissioner of Taxation holding office 10
under a law of the Commonwealth; or 11
(f) ASIC; or 12
(g) a person nominated by a person referred to in paragraphs (a)-(f); 13
or 14
(h) a person seeking information under a reciprocal arrangement 15
under section 616 or 617; or 16
(i) a police officer exercising functions as a police officer; or 17
(j) a person, to whom the Registrar considers it is in the public 18
interest that the information be divulged. 19
(5) For the purposes of this section, a person is, or was, engaged in the 20
administration of this Law or a former Act if the person exercises, or at 21
any time exercised, a function as: 22
(a) the Registrar holding office under this Law or a former Act; or 23
(b) an inspector appointed under this Law or a former Act; or 24
(c) an investigator appointed under this Law or a former Act; or 25
(d) a person appointed or employed for the purposes of this Law or a 26
former Act. 27
(6) In this section: 28
divulge information means: 29
(a) communicate the information orally; or 30
(b) make available a document containing the information; or 31
(c) make available anything from which, by electronic process or 32
otherwise, the information may be obtained; or 33
(d) communicate the information in another way. 34
former Act means an Act specified in the Co-operatives National Law 35
Act of this jurisdiction for the purposes of this definition. 36
Page 292
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
538 False or misleading statements 1
(1) A person must not, in a document required for the purposes of this Law 2
or filed with the Registrar, make, or authorise the making of, a statement 3
knowing it to be false or misleading in a material particular. 4
Maximum penalty: $12,000. 5
(2) A person must not, from a document required for the purposes of this 6
Law or filed with the Registrar, omit, or authorise the omission of, 7
anything knowing that the omission makes the document false or 8
misleading in a material particular. 9
Maximum penalty: $12,000. 10
(3) A person who, in a document required for the purposes of this Law or 11
filed with the Registrar, makes, or authorises the making of, a statement 12
that is false or misleading in a material particular commits an offence, 13
unless it is proved that the person had taken reasonable precautions 14
aimed at avoiding the making or authorising of false or misleading 15
statements in the document. 16
Maximum penalty: $6,000. 17
(4) If an omission makes a document required for the purposes of this Law 18
or filed with the Registrar false or misleading in a material particular, a 19
person who made or authorised the omission commits an offence, 20
unless it is proved that the person had taken reasonable precautions 21
aimed at avoiding the making or authorising of omissions that would 22
make the document false or misleading. 23
Maximum penalty (for subsection (4)): $6,000. 24
539 Further offence for failure to do required act 25
(1) If a provision of this Law requires an act to be done, the obligation to do 26
the act continues until the act is done: 27
(a) even if the person has been convicted of an offence for the failure 28
to do the act; and 29
(b) even if the provision required the act to be done within a 30
particular period or before a particular time and the period has 31
ended or the time passed. 32
(2) If a person is convicted of an offence (a primary conviction) for a 33
failure to do an act (whether it is the first or a second or subsequent 34
offence in relation to the failure) and the failure to do the act continues 35
after the time of the conviction, the person commits a further offence for 36
the continuing failure. 37
(3) The further offence is constituted by the failure to do the act during the 38
period (the further offence period) that starts with the primary 39
Page 293
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
conviction and ends when proceedings for the further offence are started 1
or the act concerned is done (whichever happens first). 2
(4) Proceedings for a further offence are taken to be started on the day the 3
information or other initiating process for the further offence is laid or 4
commenced or an earlier day stated in the information or process for the 5
purpose. 6
(5) The maximum penalty for the further offence is the penalty worked out 7
by multiplying $50 by the number of days in the further offence period. 8
540 Civil remedies 9
(1) If a co-operative in making, guaranteeing or raising a loan or receiving 10
a deposit contravenes this Law or a rule of the co-operative, the civil 11
rights and liabilities of the co-operative or another person in relation to 12
the recovery of the loan or deposit are not affected or prejudiced by the 13
contravention, but the money becomes immediately payable. 14
(2) The same remedies may be had for the recovery of the loan or deposit 15
and for the enforcement of any security for it as if there had not been a 16
contravention of this Law or the rules of the co-operative. 17
541 Order against person concerned with co-operative (cf Corporations Act 18
s 598) 19
(1) Subject to subsection (2), where, on application by an eligible applicant, 20
the Supreme Court is satisfied that: 21
(a) a person is guilty of fraud, negligence, default, breach of trust or 22
breach of duty in relation to a co-operative; and 23
(b) the co-operative has suffered, or is likely to suffer, loss or damage 24
as a result of the fraud, negligence, default, breach of trust or 25
breach of duty; 26
the court may make such order or orders as it thinks appropriate against 27
or in relation to the person (including either or both of the orders 28
specified in subsection (3)) and may so make an order against or in 29
relation to a person even though the person may have committed an 30
offence in respect of the matter to which the order relates. 31
(2) The Supreme Court must not make an order against a person under 32
subsection (1) unless the court has given the person the opportunity: 33
(a) to give evidence; and 34
(b) to call witnesses to give evidence; and 35
(c) to bring other evidence in relation to the matters to which the 36
application relates; and 37
(d) to employ, at the person's own expense, an Australian legal 38
practitioner to put to the person, or to any other witness, such 39
Page 294
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
questions as the court considers just for the purpose of enabling 1
the person to explain or qualify any answers or evidence given by 2
the person. 3
(3) The orders that may be made under subsection (1) against a person 4
include: 5
(a) an order directing the person to pay money or transfer property to 6
the co-operative; and 7
(b) an order directing the person to pay to the co-operative the 8
amount of the loss or damage. 9
(4) Nothing in this section prevents any person from instituting any other 10
proceedings in relation to matters in respect of which an application 11
may be made under this section. 12
(5) In this section: 13
eligible applicant, in relation to a co-operative, means: 14
(a) the Registrar; or 15
(b) a liquidator or provisional liquidator of the co-operative; or 16
(c) an administrator of the co-operative; or 17
(d) an administrator of a deed executed by the co-operative under 18
section 382; or 19
(e) a person authorised in writing by the Registrar to make an 20
application under this section in relation to the co-operative. 21
Note. Section 561 provides that the Supreme Court must not make a 22
declaration of contravention or a pecuniary penalty order against a person for a 23
contravention if the person has been convicted of an offence constituted by 24
conduct that is substantially the same as the conduct constituting the 25
contravention. 26
542 Injunctions 27
(1) This section applies to conduct that constituted, constitutes or would 28
constitute: 29
(a) a contravention of this Law; or 30
(b) attempting to contravene this Law; or 31
(c) aiding, abetting, counselling or procuring a person to contravene 32
this Law; or 33
(d) inducing or attempting to induce, whether by threats, promises or 34
otherwise, a person to contravene this Law; or 35
(e) being in any way, directly or indirectly, knowingly concerned in, 36
or party to, the contravention by a person of this Law; or 37
(f) conspiring with others to contravene this Law. 38
Page 295
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) On the application of: 1
(a) the Registrar; or 2
(b) a person whose interests have been, are or would be affected by 3
conduct that another person has engaged in, is engaging in or is 4
proposing to engage in, 5
the Supreme Court, if satisfied that the conduct is conduct to which this 6
section applies, may grant an injunction, on the terms the court 7
considers appropriate, restraining a person from engaging in the 8
conduct and, if the court considers it desirable to do so, requiring the 9
person to do any act or thing. 10
(3) If the Supreme Court considers it desirable to do so, the court may grant 11
an interim injunction pending decision of the application. 12
(4) The Supreme Court may discharge or vary an injunction granted under 13
this section. 14
(5) The power of the Supreme Court to grant an injunction restraining a 15
person from engaging in conduct may be exercised: 16
(a) whether or not it appears to the court that the person intends to 17
engage again, or to continue to engage, in the conduct; and 18
(b) whether or not the person has previously engaged in the conduct; 19
and 20
(c) whether or not there is an imminent danger of substantial damage 21
to a person if the first-mentioned person engages in the conduct. 22
(6) The power of the Supreme Court to grant an injunction requiring a 23
person to do an act or thing may be exercised: 24
(a) whether or not it appears to the court that the person intends to 25
refuse or fail again, or to continue to refuse or fail, to do the act 26
or thing; and 27
(b) whether or not the person has previously refused or failed to do 28
the act or thing; and 29
(c) whether or not there is an imminent danger of substantial damage 30
to any person if the first-mentioned person refuses or fails to do 31
the act or thing. 32
(7) If the Supreme Court has power under this section to grant an injunction 33
restraining a person from engaging in particular conduct, or requiring a 34
person to do a particular act or thing, the court may, either in addition to 35
or in substitution for the grant of the injunction, order the person to pay 36
damages to another person. 37
Page 296
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
543 Undertakings 1
(1) The Registrar may accept a written undertaking given by a person in 2
connection with a matter relating to a contravention of this Law or 3
where the Registrar has reasonable grounds to believe there may be a 4
contravention of this Law. 5
(2) Without limiting subsection (1), the Registrar may accept a written 6
undertaking given by the person that the person will do either or both of 7
the following: 8
(a) refrain from conduct that constitutes a contravention of this Law; 9
(b) take action to prevent or remedy a contravention of this Law. 10
(3) The person may withdraw or vary an undertaking at any time, if the 11
person has first obtained the consent of the Registrar. 12
(4) The consent of the Registrar is required for the purposes of 13
subsection (3) even if the undertaking purports to authorise a 14
withdrawal or variation of the undertaking without that consent. 15
(5) If the Registrar accepts an undertaking given by a person, the Registrar 16
must not proceed against the person in respect of the conduct specified 17
in the undertaking, unless it appears to the Registrar that the person has 18
contravened the undertaking. 19
(6) Subsection (5) does not apply to an application by the Registrar for an 20
order under section 545. 21
544 Offence for contravention of undertaking 22
A person who contravenes an undertaking accepted by the Registrar 23
commits an offence. 24
Maximum penalty: $6,000. 25
545 Enforcement order on application with consent of person giving 26
undertaking 27
(1) The Registrar, with the consent of the person who gave an undertaking, 28
may apply, at any time, to the designated tribunal for an order directing 29
the person to comply with the undertaking. 30
(2) On an application under subsection (1), the designated tribunal may by 31
order direct the person to comply with the undertaking. 32
(3) This section does not limit section 546. 33
Page 297
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
546 Enforcement orders after contravention of undertaking 1
(1) If the designated tribunal is satisfied, on the application of the Registrar, 2
that a person has contravened an undertaking accepted by the Registrar, 3
the tribunal may make any or all of the following orders: 4
(a) an order prohibiting the person from engaging in specified 5
conduct; 6
(b) an order directing the person to take specified action to comply 7
with the undertaking; 8
(c) an order directing the person to pay to the Registrar an amount up 9
to the amount of any financial benefit that the person has obtained 10
directly or indirectly and that is reasonably attributable to the 11
contravention of the undertaking; 12
(d) any order that the tribunal considers appropriate directing the 13
person to compensate any other person who has suffered loss, 14
injury or damage as a result of the contravention of the 15
undertaking; 16
(e) any other order that the tribunal considers appropriate. 17
(2) The designated tribunal may make an interim order under 18
subsection (1) (a) pending final determination of the application. 19
(3) The designated tribunal may, on the application of the Registrar or the 20
person in respect of whom the order was made, vary or discharge an 21
order under subsection (1) (a). 22
(4) An order under subsection (1) (a) may be made subject to such 23
conditions as the designated tribunal thinks appropriate. 24
(5) The designated tribunal must not make an order under this section 25
(other than an interim order) unless satisfied on the balance of 26
probabilities that proper grounds for the order have been established. 27
(6) If a co-operative or other corporation is found to have contravened an 28
undertaking, each officer of the co-operative or other corporation is 29
taken to have so breached the undertaking if the officer knowingly 30
authorised or permitted the breach, and the court may make, against the 31
officer, all or any of the orders specified in subsection (1) that the court 32
thinks appropriate. 33
547 Copy of undertaking 34
The Registrar must give a copy of an undertaking under section 543 to 35
the person who gave the undertaking. 36
Page 298
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
548 Registration of undertakings 1
(1) The Registrar must register each undertaking in the register of 2
co-operatives. 3
(2) The register of co-operatives must include the following: 4
(a) the name and address of the person who gave the undertaking; 5
(b) the date of the undertaking; 6
(c) a copy of the undertaking. 7
(3) The Registrar may withhold information relating to an undertaking 8
from inclusion in the register of co-operatives if the Registrar is 9
satisfied that: 10
(a) the information consists of personal details of an individual not 11
involved in a contravention or possible contravention to which 12
the undertaking relates; or 13
(b) the information is commercial-in-confidence; or 14
(c) disclosure of the information would be against the public interest. 15
Note. Section 9 defines "involved" in a contravention. 16
(4) If information is withheld under this section from inclusion in the 17
register of co-operatives, the register must include a statement that 18
information has been withheld in relation to the undertaking concerned 19
and of the grounds on which it has been withheld. 20
(5) For the purposes of this section, information is 21
commercial-in-confidence if: 22
(a) its disclosure would place a person at a substantial commercial 23
disadvantage in relation to present or potential contractual 24
negotiations or arrangements; or 25
(b) it is of a kind prescribed by the National Regulations as being 26
commercial-in-confidence. 27
549 Double jeopardy 28
If: 29
(a) an act or omission constitutes an offence under this Law and 30
under a co-operatives law of a participating jurisdiction; and 31
(b) the offender has been punished for that offence under the 32
co-operatives law of the participating jurisdiction; 33
the offender is not liable to be punished for the offence under this Law. 34
Page 299
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
550 Strict liability 1
(1) If a provision of this Law that creates an offence provides that the 2
offence is an offence of strict liability: 3
(a) there are no fault elements for any of the physical elements of the 4
offence; and 5
(b) the defence of mistake of fact is available. 6
(2) If a provision of this Law that creates an offence provides that strict 7
liability applies to a particular physical element of the offence: 8
(a) there are no fault elements for that physical element; and 9
(b) the defence of mistake of fact is available in relation to that 10
physical element. 11
(3) The existence of strict liability does not make any other defence 12
unavailable. 13
(4) Subsections (1)-(3) do not apply in relation to an offence under the 14
Corporations Act as applying under this Law. 15
551 Time limit for starting proceedings for offence 16
Proceedings for an offence under this Law or the National Regulations 17
may be started no later than 5 years after the alleged commission of the 18
offence. 19
552 Authorisation to start proceedings for offence 20
Proceedings for an offence under this Law or the National Regulations 21
may be started only by the Registrar or a person authorised in writing 22
by the Registrar to start the proceedings. 23
Part 7.2 Civil consequences of contravening civil 24
penalty provisions 25
553 Definitions (cf Corporations Act s 1317DA) 26
In this Law: 27
civil penalty provision means a provision referred to in section 554. 28
compensation order means an order under section 557. 29
pecuniary penalty order means an order under section 556. 30
554 Declarations of contravention (cf Corporations Act s 1317E) 31
(1) If the Supreme Court is satisfied that a person has contravened one of 32
the following provisions, it must make a declaration of contravention: 33
(a) section 192 (1) (Care and diligence); 34
Page 300
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) section 193 (1) (Good faith); 1
(c) section 193 (2); 2
(d) section 194 (1) (Use of position); 3
(e) section 194 (2); 4
(f) section 195 (1) (Use of information); 5
(g) section 195 (3); 6
(h) section 328 (1) (Contravention by directors of provisions of 7
Part 3.3); 8
(i) without limiting paragraph (h): 9
(i) section 315 (1) of the Corporations Act (Deadline for 10
reporting to members) as applying under section 285 (2) or 11
328 (1) of this Law; 12
(ii) section 318 of the Corporations Act (Additional reporting 13
by debenture issuers) as applying under section 288 or 14
328 (1) of this Law; 15
(j) any of the following provisions of the Corporations Act relating 16
to debentures as applying under section 337 of this Law: 17
(i) section 674 (2) (Continuous disclosure--listed disclosing 18
entity bound by a disclosure requirement in market listing 19
rules); 20
(ii) section 674 (2A); 21
(iii) section 675 (2) (Continuous disclosure--other disclosing 22
entities); 23
(iv) section 675 (2A); 24
(v) section 1041A (Market manipulation); 25
(vi) section 1041B (1) (False trading and market rigging-- 26
creating a false or misleading appearance of active trading 27
etc); 28
(vii) section 1041C (1) (False trading and market rigging-- 29
artificially maintaining etc. trading price); 30
(viii) section 1041D (Dissemination of information about illegal 31
transactions); 32
(ix) section 1043A (1) (Prohibited conduct by person in 33
possession of inside information); 34
(x) section 1043A (2); 35
(k) section 588G (2) of the Corporations Act (Director's duty to 36
prevent insolvent trading by company) as applying under 37
section 451 of this Law. 38
Page 301
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) A declaration of contravention must specify the following: 1
(a) the court that made the declaration; 2
(b) the civil penalty provision that was contravened; 3
(c) the person who contravened the provision; 4
(d) the conduct that constituted the contravention. 5
555 Declaration of contravention is conclusive evidence (cf Corporations Act 6
s 1317F) 7
A declaration of contravention is conclusive evidence of the matters 8
referred to in section 554 (2). 9
556 Pecuniary penalty orders (cf Corporations Act s 1317G) 10
(1) The Supreme Court may order a person to pay a pecuniary penalty of up 11
to $200,000 if: 12
(a) a declaration of contravention by the person has been made under 13
section 554; and 14
(b) the contravention: 15
(i) materially prejudices the interests of the co-operative or its 16
members; or 17
(ii) materially prejudices the co-operative's ability to pay its 18
creditors; or 19
(iii) is serious. 20
(2) A pecuniary penalty ordered to be paid in this jurisdiction is to be paid 21
and treated in accordance with the Co-operatives National Law Act of 22
this jurisdiction. 23
557 Compensation orders (cf Corporations Act s 1317H) 24
(1) Compensation for damage suffered 25
The Supreme Court may order a person to compensate a co-operative 26
for damage suffered by the co-operative if: 27
(a) the person has contravened a civil penalty provision in relation to 28
the co-operative; and 29
(b) the damage resulted from the contravention. 30
The order must specify the amount of the compensation and may be 31
made under this subsection whether or not a declaration of 32
contravention has been made under section 554. 33
Page 302
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) Damage includes profits 1
In determining the damage suffered by the co-operative for the purposes 2
of making a compensation order, profits made by any person resulting 3
from the contravention or the offence are to be included. 4
(3) Recovery of damage 5
A compensation order may be enforced as if it were a judgment of the 6
Supreme Court. 7
558 Who may apply for a declaration or order (cf Corporations Act s 1317J) 8
(1) The Registrar may apply for a declaration of contravention, a pecuniary 9
penalty order or a compensation order. 10
(2) The co-operative may apply for a compensation order. 11
(3) The co-operative may intervene in an application for a declaration of 12
contravention or a pecuniary penalty order in relation to the 13
co-operative. The co-operative is entitled to be heard on all matters 14
other than whether the declaration or order should be made. 15
(4) No person may apply for a declaration of contravention, a pecuniary 16
penalty order or a compensation order unless permitted by this section. 17
(5) It is intended that the Co-operatives National Law Act of this 18
jurisdiction may provide that subsection (4) does not exclude the 19
operation of any specified law. 20
(6) An application for a compensation order may be made whether or not a 21
declaration of contravention has been made under section 554. 22
559 Time limit for application for a declaration or order (cf Corporations Act 23
s 1317K) 24
Proceedings for a declaration of contravention, a pecuniary penalty 25
order, or a compensation order, may be started no later than 6 years after 26
the contravention. 27
560 Civil evidence and procedure rules for declarations of contravention and 28
civil penalty orders (cf Corporations Act s 1317L) 29
The Supreme Court must apply the rules of evidence and procedure for 30
civil matters when hearing proceedings for: 31
(a) a declaration of contravention; or 32
(b) a pecuniary penalty order. 33
561 Civil proceedings after criminal proceedings (cf Corporations Act s 317M) 34
The Supreme Court must not make a declaration of contravention or a 35
pecuniary penalty order against a person for a contravention if the 36
Page 303
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
person has been convicted of an offence constituted by conduct that is 1
substantially the same as the conduct constituting the contravention. 2
562 Criminal proceedings during civil proceedings (cf Corporations Act s 1317N) 3
(1) Proceedings for a declaration of contravention or pecuniary penalty 4
order against a person are stayed if: 5
(a) criminal proceedings are started or have already been started 6
against the person for an offence; and 7
(b) the offence is constituted by conduct that is substantially the 8
same as the conduct alleged to constitute the contravention. 9
(2) The proceedings for the declaration or order may be resumed if the 10
person is not convicted of the offence. Otherwise, the proceedings for 11
the declaration or order are dismissed. 12
563 Criminal proceedings after civil proceedings (cf Corporations Act s 1317P) 13
Criminal proceedings may be started against a person for conduct that 14
is substantially the same as conduct constituting a contravention of a 15
civil penalty provision regardless of whether: 16
(a) a declaration of contravention has been made against the person; 17
or 18
(b) a pecuniary penalty order has been made against the person; or 19
(c) a compensation order has been made against the person; or 20
(d) the person has been disqualified from managing a co-operative 21
under Division 2 of Part 3.1. 22
564 Evidence given in proceedings for penalty not admissible in criminal 23
proceedings (cf Corporations Act s 1317Q) 24
Evidence of information given or evidence of production of documents 25
by an individual is not admissible in criminal proceedings against the 26
individual if: 27
(a) the individual previously gave the evidence or produced the 28
documents in proceedings for a pecuniary penalty order against 29
the individual for a contravention of a civil penalty provision 30
(whether or not the order was made); and 31
(b) the conduct alleged to constitute the offence is substantially the 32
same as the conduct that was claimed to constitute the 33
contravention. 34
However, this does not apply to a criminal proceeding in respect of the 35
falsity of the evidence given by the individual in the proceedings for the 36
pecuniary penalty order. 37
Page 304
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
565 Relief from liability for contravention of civil penalty provision (cf 1
Corporations Act s 1317S) 2
(1) In this section: 3
eligible proceedings: 4
(a) means proceedings for a contravention of a civil penalty 5
provision, including: 6
(i) proceedings under section 557 of this Law; and 7
(ii) proceedings under section 588M or 588W of the 8
Corporations Act as applying under this Law (see 9
section 451); and 10
(b) does not include proceedings for an offence, except so far as the 11
proceedings relate to the question whether the Supreme Court 12
should make an order under: 13
(i) section 557 of this Law; or 14
(ii) section 588K of the Corporations Act as applying under 15
this Law (see section 451). 16
(2) If: 17
(a) eligible proceedings are brought against a person; and 18
(b) in the proceedings it appears to the Supreme Court that the person 19
has, or may have, contravened a civil penalty provision but that: 20
(i) the person has acted honestly; and 21
(ii) having regard to all the circumstances of the case 22
(including, where applicable, those connected with the 23
person's appointment as an officer, or employment as an 24
employee, of a co-operative), the person ought fairly to be 25
excused for the contravention; 26
the Supreme Court may relieve the person either wholly or partly 27
from a liability to which the person would otherwise be subject, 28
or that might otherwise be imposed on the person, because of the 29
contravention. 30
(3) In determining under subsection (2) whether a person ought fairly to be 31
excused for a contravention of section 588G of the Corporations Act as 32
applying under this Law, the matters to which regard is to be had 33
include, but are not limited to: 34
(a) any action the person took with a view to appointing an 35
administrator of the co-operative; and 36
(b) when that action was taken; and 37
(c) the results of that action. 38
Page 305
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(4) If a person thinks that eligible proceedings will or may be begun against 1
them, they may apply to the Supreme Court for relief. 2
(5) On an application under subsection (4), the court may grant relief under 3
subsection (2) as if the eligible proceedings had been begun in the court. 4
(6) For the purposes of subsection (2) as applying for the purposes of a case 5
tried by a judge with a jury: 6
(a) a reference in that subsection to the Supreme Court is a reference 7
to the judge; and 8
(b) the relief that may be granted includes withdrawing the case in 9
whole or in part from the jury and directing judgment to be 10
entered for the defendant on such terms as to costs as the judge 11
thinks appropriate. 12
(7) Nothing in this section limits, or is limited by, section 566. 13
566 Power to grant relief (cf Corporations Act s 1318) 14
(1) If, in any civil proceeding against a person to whom this section applies 15
for negligence, default, breach of trust or breach of duty in a capacity as 16
such a person, it appears to the Supreme Court: 17
(a) that the person is or may be liable in respect of the negligence, 18
default or breach but that the person has acted honestly; and 19
(b) that, having regard to all the circumstances of the case, including 20
those connected with the person's appointment, the person ought 21
fairly to be excused for the negligence, default or breach; 22
the Supreme Court may relieve the person either wholly or partly from 23
liability on such terms as the court thinks fit. 24
(2) Where a person to whom this section applies has reason to apprehend 25
that any claim will or might be made against the person in respect of any 26
negligence, default, breach of trust or breach of duty in a capacity as 27
such a person: 28
(a) the person may apply to the Supreme Court for relief; and 29
(b) the Supreme Court has the same power to relieve the person as it 30
would have had under subsection (1) if it had been a court before 31
which proceedings against the person for negligence, default, 32
breach of trust or breach of duty had been brought. 33
(3) Where a case to which subsection (1) applies is being tried by a judge 34
with a jury, the judge after hearing the evidence may: 35
(a) if he or she is satisfied that the defendant ought pursuant to that 36
subsection to be relieved either wholly or partly from the liability 37
sought to be enforced against the person, withdraw the case in 38
whole or in part from the jury; and 39
Page 306
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) forthwith direct judgment to be entered for the defendant on such 1
terms as to costs or otherwise as the judge thinks proper. 2
(4) This section applies to a person who is: 3
(a) an officer or employee of a co-operative; or 4
(b) an auditor of a co-operative, whether or not the person is an 5
officer or employee of the co-operative; or 6
(c) an expert in relation to a matter: 7
(i) relating to a co-operative; and 8
(ii) in relation to which the civil proceeding has been taken or 9
the claim will or might arise; or 10
(d) a receiver, receiver and manager, liquidator or other person 11
appointed or directed by the Supreme Court to carry out any duty 12
under this Law in relation to a co-operative. 13
567 Irregularities (cf Corporations Act s 1322) 14
(1) In this section, unless the contrary intention appears: 15
(a) a reference to a proceeding under this Law is a reference to any 16
proceeding whether a legal proceeding or not; and 17
(b) a reference to a procedural irregularity includes a reference to: 18
(i) the absence of a quorum at a meeting of a co-operative, at 19
a meeting of directors or creditors of a co-operative, or at 20
a joint meeting of creditors and members of a co-operative; 21
and 22
(ii) a defect, irregularity or deficiency of notice or time. 23
(2) A proceeding under this Law is not invalidated because of any 24
procedural irregularity unless the Supreme Court is of the opinion that 25
the irregularity has caused or may cause substantial injustice that cannot 26
be remedied by any order of the court and by order declares the 27
proceeding to be invalid. 28
(3) A meeting held for the purposes of this Law, or a meeting notice of 29
which is required to be given in accordance with the provisions of this 30
Law, or any proceeding at such a meeting, is not invalidated only 31
because of the accidental omission to give notice of the meeting or the 32
non-receipt by any person of notice of the meeting, unless the Supreme 33
Court, on the application of the person concerned, a person entitled to 34
attend the meeting or the Registrar, declares proceedings at the meeting 35
to be void. 36
(4) A meeting held for the purposes of this Law, or a meeting notice of 37
which is required to be given in accordance with the provisions of this 38
Law, or any proceeding at such a meeting, is not invalidated only 39
Page 307
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
because of the inability of a person to access the notice of meeting, 1
unless the Supreme Court, on the application of the person concerned, 2
a person entitled to attend the meeting or the Registrar, declares 3
proceedings at the meeting to be void. 4
(5) If a member does not have a reasonable opportunity to participate in a 5
meeting of members, or part of a meeting of members, held at 2 or more 6
venues, the meeting will only be invalid on that ground if: 7
(a) the Supreme Court is of the opinion that: 8
(i) a substantial injustice has been caused or may be caused; 9
and 10
(ii) the injustice cannot be remedied by any order of the 11
Supreme Court; and 12
(b) the Supreme Court declares the meeting or proceeding (or that 13
part of it) invalid. 14
(6) Subject to the following provisions of this section but without limiting 15
the generality of any other provision of this Law, the Supreme Court 16
may, on application by any interested person, make all or any of the 17
following orders, either unconditionally or subject to such conditions as 18
the court imposes: 19
(a) an order declaring that any act, matter or thing purporting to have 20
been done, or any proceeding purporting to have been instituted 21
or taken, under this Law or in relation to a co-operative is not 22
invalid by reason of any contravention of a provision of this Law 23
or a provision of the constitution of a co-operative; 24
(b) an order directing the rectification of any register kept by the 25
Registrar under this Law; 26
(c) an order relieving a person in whole or in part from any civil 27
liability in respect of a contravention or failure of a kind referred 28
to in paragraph (a); 29
(d) an order extending the period for doing any act, matter or thing 30
or instituting or taking any proceeding under this Law or in 31
relation to a co-operative (including an order extending a period 32
where the period concerned ended before the application for the 33
order was made) or abridging the period for doing such an act, 34
matter or thing or instituting or taking such a proceeding; 35
and may make such consequential or ancillary orders as the court thinks 36
fit. 37
(7) An order may be made under subsection (6) (a) or (c) notwithstanding 38
that the contravention or failure referred to in the paragraph concerned 39
resulted in the commission of an offence. 40
Page 308
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(8) The Supreme Court must not make an order under this section unless it 1
is satisfied: 2
(a) in the case of an order referred to in subsection (6) (a): 3
(i) that the act, matter or thing, or the proceeding, referred to 4
in that paragraph is essentially of a procedural nature; or 5
(ii) that the person or persons concerned in or party to the 6
contravention or failure acted honestly; or 7
(iii) that it is just and equitable that the order be made; and 8
(b) in the case of an order referred to in subsection (6) (c)--that the 9
person subject to the civil liability concerned acted honestly; and 10
(c) in every case--that no substantial injustice has been or is likely 11
to be caused to any person. 12
568 Civil proceedings not to be stayed (cf Corporations Act s 1331) 13
No civil proceedings under this Law are to be stayed merely because the 14
proceeding discloses, or arises out of, the commission of an offence. 15
569 Standard of proof (cf Corporations Act s 1332) 16
Where, in proceedings other than proceedings for an offence, it is 17
necessary to establish, or for the court to be satisfied, for any purpose 18
relating to a matter arising under this Law, that: 19
(a) a person has contravened a provision of this Law; or 20
(b) default has been made in complying with a provision of this Law; 21
or 22
(c) an act or omission was unlawful by virtue of a provision of this 23
Law; or 24
(d) a person has been in any way, by act or omission, directly or 25
indirectly, knowingly concerned in or party to a contravention of, 26
or a default in complying with, a provision of this Law; 27
it is sufficient if the matter referred to in paragraph (a), (b), (c) or (d) is 28
established, or the court is so satisfied, as the case may be, on the 29
balance of probabilities. 30
Part 7.3 Appeals and review 31
570 Operation of Part--appeal includes review 32
A reference in this Part to an appeal against a decision of the Registrar 33
includes a reference to a review of the decision. 34
Page 309
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
571 Appeal against refusal to approve draft rules 1
(1) The person who submitted draft rules to the Registrar under section 23 2
may appeal to the designated tribunal against a decision of the Registrar 3
to refuse to approve the rules. 4
(2) A failure of the Registrar to approve draft rules is taken to be a decision 5
of the Registrar to refuse to approve the rules. 6
572 Appeal against refusal to approve disclosure statement 7
(1) The person who submitted a draft disclosure statement to the Registrar 8
may appeal to the designated tribunal against a decision of the Registrar 9
to refuse to approve the statement under this Law. 10
Note. See sections 25, 248, 338, 343, 397 and 477 concerning approval of 11
disclosure statements. 12
(2) A failure of the Registrar to approve a draft disclosure statement is taken 13
to be a decision of the Registrar to refuse to approve the statement. 14
573 Appeal against refusal to register co-operative 15
(1) The applicants for registration of a proposed co-operative may appeal to 16
the designated tribunal against a decision of the Registrar to refuse to 17
register the co-operative under this Law. 18
(2) A failure of the Registrar to register a co-operative is taken to be a 19
decision of the Registrar to refuse to register the co-operative. 20
574 Appeal against refusal to approve amendment of rules 21
(1) A co-operative may appeal to the designated tribunal against a decision 22
of the Registrar to refuse to approve an amendment of its rules under 23
this Law. 24
(2) A failure of the Registrar to approve an amendment of rules is taken to 25
be a decision of the Registrar to refuse to approve the amendment. 26
575 Appeal against refusal to register amendment 27
(1) A co-operative may appeal to the designated tribunal against a decision 28
of the Registrar to refuse to register an amendment of its rules under this 29
Law. 30
(2) A failure of the Registrar to register an amendment of rules is taken to 31
be a decision of the Registrar to refuse to register the amendment. 32
576 Appeal against decision of Registrar about remuneration of liquidator 33
(1) An applicant under section 449 for a review by the Registrar of the 34
amount of the remuneration of a liquidator may appeal to the designated 35
tribunal against the decision of the Registrar on the review. 36
Page 310
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) A failure of the Registrar to undertake or complete a review is taken to 1
be a decision of the Registrar not to vary the amount of the 2
remuneration. 3
577 Appeal against notice that participating co-operative not authorised to 4
carry on business in this jurisdiction 5
A participating co-operative may appeal to the designated tribunal 6
against a decision of the Registrar to give written notice to the 7
co-operative under section 461 (5) withdrawing its authorisation to 8
carry on business in this jurisdiction. 9
578 Provisions relating to appeals 10
(1) An appeal is to be made in accordance with rules of the designated 11
tribunal. 12
(2) The designated tribunal may make any order it considers appropriate to 13
dispose of an appeal under this Part. 14
(3) The Registrar must comply with an order of the designated tribunal on 15
an appeal under this Part. 16
Part 7.4 Proceedings in relation to co-operatives 17
579 Bringing, or intervening in, proceedings on behalf of co-operative 18
(1) Bringing or intervening in proceedings (cf Corporations Act s 236 (1)) 19
A person may bring proceedings on behalf of a co-operative, or 20
intervene in any proceedings to which a co-operative is a party for the 21
purpose of taking responsibility on behalf of the co-operative for those 22
proceedings, or for a particular step in those proceedings (for example, 23
compromising or settling them), if: 24
(a) the person is: 25
(i) a member, former member, or person entitled to be 26
registered as a member, of the co-operative or of a related 27
corporation; or 28
(ii) an officer or former officer of the co-operative; or 29
(iii) the Registrar; and 30
(b) the person is acting with leave granted under section 580. 31
(2) Bringing proceedings in co-operative's name (cf Corporations Act 32
s 236 (2)) 33
Proceedings brought on behalf of a co-operative may be brought in the 34
co-operative's name. 35
Page 311
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
580 Applying for and granting leave 1
(1) Applying for leave (cf Corporations Act s 237 (1)) 2
A person referred to in section 579 (1) (a) may apply to the Supreme 3
Court for leave to bring, or to intervene in, proceedings. 4
(2) Granting leave (cf Corporations Act s 237 (2)) 5
The Supreme Court may grant the application if it is satisfied that: 6
(a) it is probable the co-operative will not itself bring the 7
proceedings, or properly take responsibility for them, or for the 8
steps in them; and 9
(b) the applicant is acting in good faith; and 10
(c) it is in the best interests of the co-operative that the applicant be 11
granted leave; and 12
(d) if the applicant is applying for leave to bring proceedings--there 13
is a serious question to be tried; and 14
(e) either: 15
(i) at least 14 days before making the application, the 16
applicant gave written notice to the co-operative of the 17
intention to apply for leave and the reasons for applying; or 18
(ii) it is appropriate to grant leave even if subparagraph (i) is 19
not satisfied. 20
581 Substitution of another person for the person granted leave 21
(1) Applying for substitution (cf Corporations Act s 238 (1)) 22
Any of the following persons may apply to the Supreme Court for an 23
order that the person be substituted for a person to whom leave has been 24
granted under section 580: 25
(a) a member, former member, or person entitled to be registered as 26
a member, of the co-operative or of a related corporation; 27
(b) an officer, or former officer, of the co-operative; 28
(c) the Registrar. 29
(2) Application may be made whether or not the applicant has already 30
brought the proceedings or intervened 31
The application may be made whether or not the applicant has already 32
brought the proceedings or made the intervention. 33
Page 312
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) Making the order (cf Corporations Act s 238 (2)) 1
The Supreme Court may make the order if it is satisfied that: 2
(a) the applicant is acting in good faith; and 3
(b) in all the circumstances, it is appropriate to make the order. 4
(4) Effect of order (cf Corporations Act s 238 (3)) 5
An order substituting one person for another person has the effect that: 6
(a) the grant of leave is taken to have been made in favour of the 7
substituted person; and 8
(b) if the other person has already brought the proceedings or 9
intervened--the substituted person is taken to have brought those 10
proceedings or to have made that intervention. 11
582 Effect of ratification by members (cf Corporations Act s 239) 12
(1) A ratification or approval of conduct by members of a co-operative: 13
(a) does not prevent a person from bringing or intervening in 14
proceedings with leave under section 580 or from applying for 15
leave under that section; and 16
(b) does not have the effect that proceedings brought or intervened in 17
with leave under section 580 must be decided in favour of the 18
defendant, or that an application for leave under that section must 19
be refused. 20
(2) The Supreme Court may take into account a ratification or an approval 21
of the conduct by members of a co-operative in deciding what order or 22
judgment (including as to damages) to make in proceedings brought or 23
intervened in with leave under section 580 or in relation to an 24
application for leave under that section. 25
(3) In taking a ratification or approval into account under subsection (2), the 26
Supreme Court may have regard to: 27
(a) how well informed about the conduct the members were when 28
deciding whether to ratify or approve the conduct; and 29
(b) whether the members who ratified or approved the conduct were 30
acting for proper purposes. 31
583 Leave to discontinue, compromise or settle proceedings brought, or 32
intervened in, with leave (cf Corporations Act s 240) 33
Proceedings brought or intervened in with leave must not be 34
discontinued, compromised or settled without the leave of the Supreme 35
Court. 36
Page 313
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
584 General powers of Supreme Court 1
(1) Orders and directions (cf Corporations Act s 241 (1)) 2
The Supreme Court may make any orders, and give any directions, it 3
thinks just in relation to proceedings brought or intervened in with 4
leave, or in relation to an application for leave, including: 5
(a) interim orders; and 6
(b) directions about the conduct of the proceedings, including 7
requiring mediation; and 8
(c) an order directing the co-operative, or an officer of the 9
co-operative, to do, or not to do, any act; and 10
(d) an order appointing an independent person to investigate, and 11
report to the court on: 12
(i) the financial affairs of the co-operative; or 13
(ii) the facts or circumstances that gave rise to the cause of 14
action the subject of the proceedings; or 15
(iii) the costs incurred in the proceedings by the parties to the 16
proceedings and the person granted leave. 17
(2) Appointee entitled to inspect and copy books (cf Corporations Act 18
s 241 (2)) 19
A person appointed by the Supreme Court under subsection (1) (d) is 20
entitled, on giving reasonable notice to the co-operative, to inspect and 21
make copies of any books of the co-operative for any purpose connected 22
with the person's appointment. 23
585 Power of Supreme Court to make costs orders (cf Corporations Act s 242) 24
At any time, the Supreme Court may, in relation to proceedings brought 25
or intervened in with leave under section 580 or an application for leave 26
under that section, make any order it thinks just about the costs of the 27
person who applied for or was granted leave, the co-operative or any 28
other party to the proceedings or application, including an order 29
requiring indemnification for costs. 30
586 Power of Registrar to intervene in proceedings 31
(1) The Registrar may intervene in proceedings relating to a matter arising 32
under this Law. 33
(2) When the Registrar intervenes in proceedings, the Registrar is taken to 34
be a party to the proceedings and, subject to this Law, has all the rights, 35
duties and liabilities of a party to the proceedings. 36
Page 314
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) The Registrar may appear and be represented in proceedings in which 1
the Registrar wishes to intervene under this section: 2
(a) by a person or body to whom the Registrar has delegated the 3
Registrar's functions under this Law or the functions relating to 4
a matter to which the proceedings relate; or 5
(b) by a public sector official who is engaged in the administration of 6
this Law; or 7
(c) by an Australian legal practitioner. 8
Part 7.5 Evidentiary matters 9
587 Certificate of registration 10
(1) A certificate of registration of a co-operative issued under this Law is 11
evidence that the co-operative is incorporated under this Law and that 12
all the requirements of this Law for registration have been complied 13
with. 14
(2) This section does not affect a provision of this Law for the winding up 15
or deregistration of the co-operative or the cancellation of its 16
registration. 17
588 Certificate evidence 18
(1) If a function under this Law is conferred or imposed on the Registrar as 19
a consequence of something being done or omitted to be done within a 20
specified period, the Registrar may certify that: 21
(a) the thing had or had not been done within that period; or 22
(b) the thing had or had not been done by a specified date. 23
(2) The Registrar may issue a certificate stating that a requirement of this 24
Law specified in the certificate: 25
(a) had, or had not, been complied with at a date or within a period 26
specified in the certificate; or 27
(b) had been complied with at a date specified in the certificate but 28
not before the date. 29
(3) The Registrar may issue a certificate stating that on a date specified in 30
the certificate a body specified in the certificate was not or had ceased 31
to be registered as a co-operative under this Law. 32
(4) A certificate given by the Registrar under this section is evidence of the 33
matters stated in the certificate. 34
Page 315
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
589 Records kept by co-operatives 1
(1) A record kept by a co-operative under a requirement of this Law is 2
admissible in evidence in proceedings and is evidence of a matter stated 3
or recorded in the record. 4
(2) A document purporting to be a record kept by a co-operative is, unless 5
the contrary is proved, taken to be a record kept by the co-operative 6
under a requirement of this Law. 7
(3) A copy of an entry in a record regularly kept by a co-operative in the 8
course of its business is, if verified by statutory declaration of the 9
secretary of the co-operative to be a true copy of the entry, to be 10
received in evidence in any case where and to the same extent as the 11
original entry itself is admissible. 12
590 Minutes 13
(1) Every entry in the minutes purporting to be a minute of the business 14
transacted at a meeting of a co-operative or of the board, and purporting 15
to have been signed by the chairperson at a subsequent meeting, is 16
evidence that the business recorded in the minute was transacted at the 17
meeting and that the meeting was properly convened and held. 18
(2) An entry in the minutes of a meeting of a co-operative to the effect that 19
a resolution was carried or carried unanimously, or was lost, is evidence 20
of the fact without proof of the number or proportion of votes recorded 21
for or against the resolution. 22
591 Official certificates 23
(1) A certificate of registration given by the Registrar must be received in 24
evidence as if it were the original certificate. 25
(2) A certificate of registration or other official document relating to a 26
co-operative signed by or bearing the seal of the Registrar is to be 27
received in evidence without further proof. 28
(3) A copy of rules certified by the Registrar to be a true copy of the rules 29
of a co-operative is evidence of the registered rules of the co-operative. 30
592 The Registrar and proceedings 31
(1) Judicial notice must be taken of the signature or the fax of the signature 32
(by whatever process it is produced) and seal of a person who holds or 33
has held the office of Registrar, if the signature or fax signature or seal 34
purports to be attached to a certificate or other official document. 35
(2) This section extends to a copy of the rules of a co-operative certified by 36
the Registrar to be a true copy of its registered rules. 37
Page 316
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) In proceedings, no proof is required (until evidence is given to the 1
contrary) of the appointment of the Registrar or a former Registrar. 2
593 Rules 3
A printed copy of the rules of a co-operative verified by statutory 4
declaration of the secretary of the co-operative to be a true copy of its 5
registered rules is, in proceedings, evidence of the rules. 6
594 Co-operative's registers 7
The register of directors and the register of members of a co-operative 8
are each evidence of the particulars directed or authorised under this 9
Law to be inserted in the register. 10
Page 317
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Chapter 8 General 1
Part 8.1 Administrative and other matters 2
595 Registrar of Co-operatives and other officials 3
It is intended that the Co-operatives National Law Act of this 4
jurisdiction will provide for the appointment or designation of persons 5
as the Registrar of Co-operatives and other staff and for the protection 6
of officials from liability in the exercise of their functions under this 7
Law in relation to this jurisdiction. 8
596 Registrar's functions 9
(1) Subject to this Law, the Registrar is responsible for the general 10
administration of this Law, and has the functions expressed to be 11
conferred or imposed on the Registrar under this Law. 12
(2) The Registrar may have a seal of office. 13
(3) The Registrar may enter into a written agreement with an entity to act 14
as the agent of the Registrar in the carrying out of the Registrar's 15
functions. 16
597 Functions conferred on Registrar under corresponding co-operatives 17
laws 18
The Registrar or another person or body who has functions under this 19
Law as applying in this jurisdiction may exercise any function conferred 20
on the Registrar or other person or body by or under a corresponding 21
co-operatives law. 22
598 Delegation by Registrar 23
(1) The Registrar may delegate to any person or body any of the Registrar's 24
functions under this Law. 25
(2) A delegate may sub-delegate to another person or body any function 26
delegated under this section if the delegate is authorised by the terms of 27
the delegation to do so. 28
Page 318
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
599 Register of co-operatives 1
(1) The Registrar is to maintain a register of co-operatives. 2
(2) The register is to record: 3
(a) information or documents prescribed by the National 4
Regulations relating to: 5
(i) co-operatives; and 6
(ii) undertakings; and 7
(b) information or documents relating to anything else: 8
(i) that is required by this Law or the National Regulations to 9
be recorded in the register; or 10
(ii) that the Registrar considers should be recorded in the 11
register for the purposes of this Law. 12
600 Keeping of register of co-operatives 13
(1) The register of co-operatives is to be kept in accordance with 14
arrangements approved by the Registrar. 15
(2) The Registrar may correct any error or omission in the register of 16
co-operatives by: 17
(a) inserting an entry; or 18
(b) amending an entry; or 19
(c) omitting an entry; 20
if the Registrar decides that the correction is necessary. 21
(3) The Registrar must not omit an entry in the register of co-operatives 22
unless satisfied that the whole of the entry was included in error. 23
601 Inspection of register of co-operatives 24
(1) A person may: 25
(a) inspect the register of co-operatives on payment of the prescribed 26
fee (if any); and 27
(b) inspect documents kept by the Registrar relating to a co-operative 28
and prescribed by the National Regulations on payment of the 29
prescribed fee (if any); and 30
(c) obtain, on payment of the prescribed fee, an extract from the 31
register of co-operatives inspected under paragraph (a); and 32
(d) obtain, on payment of the prescribed fee, a certified copy of a 33
document that the person may inspect under paragraph (b); and 34
(e) obtain, on payment of the prescribed fee, a copy of a document 35
that the person may inspect under paragraph (b). 36
Page 319
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(2) The local regulations may prescribe the manner in which, or the times 1
and places at which, or both, a person may do any of the things referred 2
to in subsection (1). 3
(3) A person may pay a fee, in advance or in arrears, under an arrangement 4
approved by the designated authority. 5
(4) If a reproduction or transparency of a document or an extract of 6
information contained in a document and recorded in the register is 7
produced for inspection, a person is not entitled under subsection (1) to 8
require the production of the original of the document. 9
(5) In this section: 10
prescribed fee means the fee: 11
(a) prescribed by the National Regulations, unless paragraph (b) 12
applies; or 13
(b) prescribed by the local regulations. 14
602 Retention of records by Registrar 15
Subject to section 603, a document filed with, given to or registered by 16
the Registrar under this Law must be kept in the office of the Registrar 17
or at another place approved by the Registrar. 18
603 Disposal of records by Registrar 19
Subject to any law relating to the retention and disposal of records 20
(including any law specified for the purposes of this section in the 21
Co-operatives National Law Act of this jurisdiction), the Registrar may, 22
if the Registrar considers it is no longer necessary or desirable for them 23
to be retained, destroy or dispose of any of the following: 24
(a) an annual report or balance sheet filed more than 7 years ago; 25
(b) a document (other than the rules or a document affecting the rules 26
of a co-operative) filed, given or registered more than 15 years 27
ago; 28
(c) a document filed, given or registered in relation to a co-operative 29
that was deregistered or ceased to be registered more than 30
15 years ago; 31
(d) a document of which a transparency or electronic image has been 32
incorporated with a register kept by the Registrar or is otherwise 33
kept in the office of the Registrar. 34
Page 320
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
604 Filing of documents 1
A document is not filed under this Law unless: 2
(a) all information required to be provided in or with the document 3
is provided; and 4
(b) the fee (if any): 5
(i) prescribed by the National Regulations, except to the 6
extent subparagraph (ii) applies; or 7
(ii) prescribed by the local regulations; 8
has been paid. 9
605 Way of filing 10
(1) Subject to section 604, it is sufficient compliance with a requirement 11
under this Law that a document be filed with the Registrar if the 12
Registrar receives a copy of the document by fax or electronic 13
transmission. 14
(2) If the Registrar receives from a person a copy of a document under 15
subsection (1), the Registrar may require the person to produce and file 16
the original within the time specified by the Registrar. 17
(3) If the person does not comply with a requirement of the Registrar within 18
the specified time, the person is to be taken not to have filed the 19
document. 20
606 Power of Registrar to refuse to register or reject documents 21
(1) The Registrar may refuse to register or may reject a document submitted 22
to the Registrar if the Registrar considers the document: 23
(a) contains matter contrary to law; or 24
(b) contains matter that is false or misleading in a material particular 25
in the form or context in which it is included; or 26
(c) because of an omission or misdescription, has not been properly 27
completed; or 28
(d) does not comply with the requirements of this Law; or 29
(e) contains an error, amendment or erasure; or 30
(f) has been submitted by electronic transmission in a form that is 31
not readily or satisfactorily accessible by the Registrar. 32
(2) If the Registrar refuses to register or rejects a document under 33
subsection (1), the Registrar may ask that: 34
(a) the document be appropriately amended; or 35
Page 321
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) a fresh document be submitted in its place; or 1
(c) if the document has not been properly completed--a 2
supplementary document in the approved form be submitted. 3
607 Approvals by Registrar 4
(1) This section applies to any provision of this Law imposing a 5
requirement for the Registrar's approval of an action or thing. 6
(2) The Registrar may indicate in writing to an applicant for the approval 7
that the approval is taken to have been granted at the end of a specified 8
period unless the Registrar informs the applicant in writing within the 9
period that the approval has not been granted or is still being considered. 10
(3) An approval is to be given or otherwise dealt with by designated 11
instrument, except so far as provision is made under this Law or the 12
local regulations for it to be given or otherwise dealt with in a different 13
way. 14
608 Information and evidence 15
(1) On an application for registration of a co-operative or registration or 16
approval of a rule or document under this Law, the Registrar may 17
require from the applicant reasonable information and evidence to show 18
the application should be granted. 19
(2) The Registrar may require from a co-operative reasonable information 20
and evidence to show the co-operative is genuinely carrying on business 21
under the provisions of this Law. 22
(3) The Registrar may require from a co-operative evidence the Registrar 23
considers appropriate of all matters required to be done and of the 24
entries in a document required to be given to the Registrar under this 25
Law. 26
609 Extension or shortening of time 27
(1) The Registrar may grant an extension of, or may shorten, a time for 28
doing anything required to be done by a co-operative or participating 29
co-operative by this Law or by a co-operative by the rules of the 30
co-operative on the terms (if any) the Registrar decides. 31
(2) The Registrar may grant an extension of time even if the time for doing 32
the thing has ended. 33
Page 322
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Part 8.2 Service of documents 1
610 Service of documents on co-operative or participating co-operative 2
(1) A document may be served on a co-operative or participating 3
co-operative: 4
(a) by posting it to the registered office of the co-operative or 5
participating co-operative; or 6
(b) by leaving it at the registered office of the co-operative or 7
participating co-operative with a person who appears to be of or 8
above the age of 16 years; or 9
(c) by delivering a copy of the document personally to a director of 10
the co-operative or participating co-operative who resides in 11
Australia; or 12
(d) if a liquidator or administrator of the co-operative or participating 13
co-operative has been appointed--by post; or 14
(e) if a liquidator or administrator of the co-operative or participating 15
co-operative has been appointed by the Registrar: 16
(i) if the liquidator or administrator (as the case may be) is 17
registered with ASIC--by leaving it at the address of the 18
office of the liquidator or administrator (as the case may 19
be) in the most recent notice of that address lodged with 20
ASIC; or 21
(ii) if the liquidator or administrator (as the case may be) is not 22
registered with ASIC--by leaving it at the address of the 23
office of the liquidator or administrator (as the case may 24
be) in the most recent notice of that address lodged with 25
the Registrar; or 26
(f) if a liquidator or administrator of the co-operative or participating 27
co-operative has been appointed by someone else--by leaving it 28
at the address of the office of the liquidator or administrator (as 29
the case may be) in the most recent notice of that address lodged 30
with ASIC. 31
(2) For the purpose of serving a document under this section by post, it is 32
properly addressed if it is addressed to the registered office of the 33
co-operative or participating co-operative. 34
(3) This section does not affect the operation of a provision of a law or of 35
the rules of a court authorising a document to be served on a 36
co-operative or a participating co-operative in another way. 37
Page 323
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
611 Service on member of co-operative 1
(1) A notice required under this Law to be given to a member of a 2
co-operative must be in writing. 3
(2) A notice or other document required under this Law to be given to a 4
member of a co-operative may be given: 5
(a) personally; or 6
(b) by post; or 7
(c) by publishing the notice in a newspaper circulating generally in 8
this jurisdiction or in the area served by the co-operative, if: 9
(i) the co-operative is a non-distributing co-operative; and 10
(ii) the member's whereabouts are unknown to the 11
co-operative; and 12
(iii) the Registrar permits notice to be given to members of the 13
co-operative in that way. 14
(3) This section does not limit any provision of this Law, or of legislation 15
or rules of court of this jurisdiction, that provides for the service of 16
notices. 17
Part 8.3 Co-operatives National Regulations 18
612 Power to make Co-operatives National Regulations 19
(1) For the purposes of this section, the designated authority is the 20
Governor of the State of New South Wales, or other person for the time 21
being administering the Government of that State, acting with the 22
advice of the Executive Council of that State and on the 23
recommendation of the Ministerial Council. 24
(2) The designated authority may make regulations for the purposes of this 25
Law, which are to be known as the Co-operatives National Regulations 26
and are referred to in this Law as the National Regulations. 27
(3) In particular, the National Regulations may make provision for or with 28
respect to the following: 29
(a) the making of applications for the exercise of a power by the 30
Registrar; 31
(b) how to file documents with the Registrar, including electronic 32
filing and filing by fax; 33
Page 324
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(c) fees to be paid in relation to the administration of this Law, 1
including: 2
(i) fees for the filing of a document under this Law; and 3
(ii) additional fees for late filing of a document under this 4
Law; 5
(d) any other matter that is necessary or convenient to be prescribed 6
for carrying out or giving effect to this Law. 7
(4) Regulations relating to fees: 8
(a) may prescribe different fees for different classes of cases; and 9
(b) may authorise the waiver, reduction or refund of fees in particular 10
cases or classes of cases. 11
(5) The National Regulations may create offences and impose penalties of 12
not more than $2,000 for an offence. 13
613 National Regulations for savings or transitional matters 14
(1) The National Regulations may contain provisions of a savings or 15
transitional nature consequent on the enactment of legislation setting 16
out, applying or amending this Law. 17
(2) Any such provision may, if the National Regulations so provide, take 18
effect retrospectively. 19
(3) To the extent to which any such provision takes effect retrospectively, 20
the provision does not operate so as: 21
(a) to affect, in a manner prejudicial to any person (other than an 22
authority of a jurisdiction), the rights of that person existing 23
before the date of its publication; or 24
(b) to impose liabilities on any person (other than an authority of a 25
jurisdiction) in respect of anything done or omitted to be done 26
before the date of its publication. 27
614 Publication and commencement of National Regulations 28
(1) The National Regulations are to be published on the NSW legislation 29
website. 30
(2) A National Regulation commences on the day or days specified in, or 31
ascertained in accordance with, the regulation for its commencement 32
(being not earlier than the date it is so published), but this subsection 33
does not prevent a regulation taking effect retrospectively where 34
permitted under this Law. 35
Page 325
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 8.4 Miscellaneous 1
615 Disclosure statements 2
A disclosure statement under this Law may only include a statement by 3
a person, or a statement said in the disclosure statement to be based on 4
a statement by a person, if: 5
(a) the person has consented to the statement being included in the 6
disclosure statement in the form and context in which it is 7
included; and 8
(b) the disclosure statement states that the person has given this 9
consent; and 10
(c) the person has not withdrawn this consent before the disclosure 11
statement is approved by, or registered with, the Registrar. 12
616 Supply of information between jurisdictions 13
(1) The Registrar must, at the request of a participating Registrar, give free 14
of charge to the participating Registrar information, or copies of 15
documents, held by the Registrar relating to a co-operative or a 16
participating co-operative. 17
(2) The Registrar may request a participating Registrar to give the Registrar 18
information, or copies of documents, held by the participating Registrar 19
relating to a co-operative or a participating co-operative. 20
(3) Subsections (1) and (2) apply regardless of whether a reciprocal 21
arrangement referred to in section 617 exists and regardless of the terms 22
of such an arrangement. 23
617 Supply of information under reciprocal arrangements 24
(1) If a reciprocal arrangement (see subsection (2)) with another 25
jurisdiction or country is in force, the Registrar: 26
(a) may, at the request of the appropriate official of the other 27
jurisdiction or country, give to the official information, or copies 28
of documents, held by the Registrar relating to a co-operative or 29
a participating co-operative; and 30
(b) may request the appropriate official of the other jurisdiction or 31
country to give the Registrar information, or copies of 32
documents, held by the official relating to an organisation that, 33
under the arrangement, is an organisation corresponding to a 34
co-operative or a participating co-operative; 35
in accordance with the terms of the arrangement. 36
Page 326
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) A reciprocal arrangement with another jurisdiction is an arrangement 1
made between the Minister and a representative of the government of 2
the other jurisdiction or country under which it is agreed: 3
(a) that the Registrar will comply with a request referred to in 4
subsection (1) (a); and 5
(b) that a request made by the Registrar to an official designated in 6
the arrangement as the appropriate official for the purposes of 7
subsection (1) (b) will be complied with. 8
618 Translations of documents 9
A requirement imposed under this Law to give, file or submit a 10
document or make a document available for inspection is, in the case of 11
a document that is not in the English language, taken to include a 12
requirement that a translation of the document be given, filed, submitted 13
or made available for inspection at the same time. 14
619 Qualified privilege 15
(1) If this Law provides that a person has qualified privilege for an act, 16
matter or thing, the person, in relation to the act, matter or thing: 17
(a) has qualified privilege in proceedings for defamation; and 18
(b) is not, in the absence of malice on the person's part, liable to an 19
action for defamation at the suit of a person. 20
(2) In subsection (1): 21
malice includes ill-will to the person concerned or any other improper 22
motive. 23
(3) Neither this section nor a provision of this Law that provides as referred 24
to in subsection (1) limits or affects any right, privilege or immunity a 25
person has, apart from this section or that type of provision, as a 26
defendant in proceedings for defamation. 27
620 Stamp duty and registration fees 28
It is intended that the Co-operatives National Law Act of this 29
jurisdiction may provide for documents or instruments executed or 30
registered for specified purposes in connection with this Law are not 31
liable to stamp duty or to registration fees, or both, under any Act for 32
registration. 33
621 Procedures regarding giving of exemptions 34
The local regulations may make provision for or with respect to the 35
procedure for the giving of exemptions that are provided for under this 36
Law. 37
Page 327
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
622 Approval of forms 1
The designated authority may approve forms for use under this Law. 2
623 Exclusion of bodies 3
It is intended that the Co-operatives National Law Act of this 4
jurisdiction may provide that this Law or specified provisions of this 5
Law do not apply to specified bodies or specified classes of bodies. 6
624 Savings and transitional provisions 7
Schedule 3 contains savings and transitional provisions. 8
Page 328
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Schedule 1 Matters for which rules of co-operative 1
must make provision 2
(Section 56 of this Law) 3
1 Requirements for all co-operatives 4
The rules of a co-operative must set out or make provision for each of 5
the following: 6
(a) the name of the co-operative; 7
(b) active membership provisions; 8
(c) the mode and conditions of admission to membership, and the 9
payment to be made, or the share or interest to be acquired, before 10
rights of membership are exercised; 11
(d) the rights and liabilities of members, and of the estates of 12
deceased members, and the rights and liabilities of 13
representatives of members under bankruptcy or mental 14
incapacity; 15
(e) the circumstances in which members may be expelled or 16
suspended, and the rights and liabilities of expelled and 17
suspended members; 18
(f) the circumstances in which membership ceases; 19
(g) the charges or subscriptions payable by a member to the 20
co-operative; 21
(h) the circumstances in which fines and forfeitures may be imposed 22
on members of the co-operative, and the amount of the fines, 23
being not more than the maximum amount prescribed by the 24
National Regulations; 25
(i) the grievance procedures for settling disputes between the 26
co-operative and any of its members as defined in section 129, or 27
between a member and another member; 28
(j) the restrictions (if any) on the powers of the co-operative and the 29
board; 30
(k) the number of directors, the qualification of directors, the way of 31
electing, remunerating and removing directors and filling a 32
vacancy, the period for which directors are to hold office, 33
whether directors are to retire by rotation or otherwise, and the 34
holding of annual elections; 35
(l) the quorum for and the procedure at meetings of the board; 36
(m) the device, custody and use of the seal of the co-operative; 37
Page 329
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(n) how the funds of the co-operative are to be managed, and in 1
particular the mode of drawing and signing cheques, drafts, bills 2
of exchange, promissory notes, and other negotiable instruments 3
for the co-operative; 4
(o) the custody of securities belonging to the co-operative; 5
(p) how debentures may be transferred; 6
(q) the date on which the financial year of the co-operative ends; 7
(r) the preparation of financial reports of the co-operative, the 8
provision of those reports to members of the co-operative, and 9
whether and how those reports are to be audited or reviewed; 10
(s) how a loss that may result from the transactions of the 11
co-operative is to be provided for; 12
(t) the procedure for calling general and special meetings, the 13
requisite notices of meetings, and the quorum for meetings, of the 14
co-operative; 15
(u) the procedure at meetings of the co-operative, including the 16
following: 17
(i) the rights of members in voting at meetings; 18
(ii) the way of voting; 19
(iii) the majority necessary for carrying resolutions, and any 20
special majority in addition to that required under this Law 21
necessary for carrying specified resolutions; 22
(v) the method of conducting postal ballots (including special postal 23
ballots), including the following: 24
(i) the sending and filing of information and votes by fax or 25
electronic means; 26
(ii) the way of voting; 27
(iii) the majority necessary for carrying resolutions, and any 28
special majority in addition to that required under this Law 29
necessary for carrying specified resolutions; 30
(w) the way of amending the rules; 31
(x) how the co-operative may be wound up; 32
(y) a matter prescribed by the National Regulations for the purposes 33
of this clause; 34
(z) other matters that appear necessary or desirable to the 35
co-operative. 36
Page 330
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
2 Additional matters--co-operatives with share capital 1
In addition to the matters specified in clause 1, the rules of a 2
co-operative with share capital must set out or make provision for each 3
of the following: 4
(a) the nominal value of each share in the co-operative; 5
(b) the amount of the contingent liability (if any) attaching to shares; 6
(c) the terms on which shares, not including bonus shares, but 7
including shares (if any) with a contingent liability attached to 8
them are to be issued; 9
(d) the periodic subscriptions by which or the manner in which 10
shares are to be paid for; 11
(e) for a distributing co-operative--how any surplus may be 12
distributed; 13
(f) the allocation of a deficiency on the winding up of a co-operative; 14
(g) the forfeiture of shares on expulsion or on failure to pay any 15
subscription or call, the extent to which members whose shares 16
have been forfeited are to remain liable for any amount still 17
unpaid for them, and the sale or cancellation of forfeited shares; 18
(h) how shares may be transferred; 19
(i) a matter prescribed by the National Regulations for the purposes 20
of this clause. 21
3 Additional matters--non-distributing co-operatives 22
In addition to the matters specified in clauses 1 and 2, the rules of a 23
non-distributing co-operative must provide: 24
(a) that there must be no return or distribution of surplus or share 25
capital to members other than the nominal value of shares (if any) 26
at winding up; and 27
(b) for the way of distribution of the surplus property at winding up. 28
Page 331
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Schedule 2 Relevant interests, associates, and 1
related corporations 2
(Section 4 of this Law) 3
Part 1 Relevant interests 4
1 Terminology used in this Part 5
(1) This clause applies for the purposes of this Part. 6
(2) Power to vote in relation to a right to vote is power to exercise, or to 7
control the exercise of, the right to vote. 8
(3) A reference to power to dispose of a share includes a reference to power 9
to exercise control over the disposal of the share. 10
(4) A reference to power or control includes a reference to power or control 11
that is direct or indirect or is, or can be, exercised because of, by means 12
of, in breach of, or by revocation of, trusts, agreements and practices, or 13
any of them, whether or not they are enforceable. 14
(5) Power to vote in relation to a right to vote, or power to dispose of a 15
share, that is exercisable by 2 or more persons jointly is taken to be 16
exercisable by either or any of those persons. 17
(6) A reference to a controlling interest includes a reference to an interest 18
that gives control. 19
2 Basic rules--relevant interests 20
(1) In this Law (unless otherwise provided), relevant interest has a 21
meaning determined under this Part. 22
(2) A person who has power to vote in relation to a right to vote has a 23
relevant interest in the right to vote. 24
(3) A person who has power to dispose of a share has a relevant interest in 25
the share. 26
3 Control of corporation having power in relation to a share 27
If a corporation has, or is by this Part taken to have: 28
(a) power to vote in relation to a right to vote; or 29
(b) power to dispose of a share; 30
Page 332
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
a person is taken for the purposes of this Part to have in relation to the 1
right to vote or share the same power as the corporation has, or is taken 2
to have, if: 3
(c) the corporation is, or its directors are, accustomed or under an 4
obligation, whether formal or informal, to act under the 5
directions, instructions or wishes of the person in relation to the 6
exercise of the power referred to in paragraph (a) or (b); or 7
(d) the person has a controlling interest in the corporation. 8
4 Control of 20% of voting power in corporation having power in relation 9
to a share 10
If a corporation or an associate of a corporation has, or is by this Part 11
(other than this clause) taken to have: 12
(a) power to vote in relation to a right to vote; or 13
(b) power to dispose of a share; 14
a person is taken for the purposes of this Part to have in relation to the 15
right to vote or share the same power as the corporation or associate has, 16
or is taken to have, if: 17
(c) the person has; or 18
(d) an associate of the person has; or 19
(e) associates of the person together have; or 20
(f) the person and an associate or associates of the person together 21
have; 22
power to vote in relation to the right to vote attached to not less than 23
20% of the voting shares in the corporation. 24
5 Deemed relevant interest in advance of performance of agreement that 25
will give rise to a relevant interest 26
If: 27
(a) a person: 28
(i) has entered into an agreement with another person with 29
respect to an issued share or right to vote in which the other 30
person has a relevant interest; or 31
(ii) has a right enforceable against another person in relation to 32
an issued share or right to vote in which the other person 33
has a relevant interest, whether the right is enforceable 34
presently or in the future and whether or not it is 35
enforceable on the fulfilment of a condition; or 36
Page 333
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(iii) has an option granted by another person, or has granted to 1
another person an option, with respect to an issued share or 2
right to vote in which the other person has a relevant 3
interest; and 4
(b) the first-mentioned person would have a relevant interest in the 5
share or right to vote on performance of the agreement, 6
enforcement of the right, or exercise of the option; 7
the first-mentioned person is taken for the purposes of this Part to have 8
that relevant interest in the share or right to vote. 9
6 Control of corporation having a relevant interest by virtue of clause 5 10
If a corporation is taken under clause 5 to have a relevant interest in a 11
share in or right to vote at meetings of a co-operative, a person is taken 12
for the purposes of this Part to have a relevant interest in the share or 13
right to vote if: 14
(a) the corporation is, or its directors are, accustomed or under an 15
obligation, whether formal or informal, to act under the 16
directions, instructions or wishes of the person in relation to the 17
exercise of power to vote in relation to the right to vote or power 18
to dispose of the shares; or 19
(b) the person has a controlling interest in the corporation; or 20
(c) the person has power to vote in relation to the right to vote 21
attached to not less than 20% of the voting shares in the 22
corporation. 23
7 Matters not affecting application of Part 24
(1) It is immaterial for the purposes of this Part whether or not power to 25
vote in relation to a right to vote, or power to dispose of a share: 26
(a) is express or implied or formal or informal; or 27
(b) is exercisable by a person alone or jointly with another person or 28
persons; or 29
(c) cannot be related to a particular share; or 30
(d) is, or can be made, subject to restraint or restriction. 31
(2) A relevant interest in a share or right to vote is not to be disregarded 32
merely because of either or both of the following: 33
(a) its remoteness; 34
(b) how it arose. 35
Page 334
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
8 Corporation may have a relevant interest in its own shares 1
A corporation may, by virtue of this Part, be considered to have a 2
relevant interest in a share in or right to vote arising from membership 3
of the corporation itself. 4
9 Exclusions--money-lenders 5
A relevant interest of a person in a share or right to vote is to be 6
disregarded if: 7
(a) the person's ordinary business includes lending money; and 8
(b) the person has authority to exercise powers as the holder of the 9
relevant interest only because of a security given for a transaction 10
entered into in the ordinary course of business in connection with 11
lending money, other than a transaction entered into with an 12
associate of the person. 13
10 Exclusions--certain trustees 14
A relevant interest of a person in a share or right to vote is to be 15
disregarded if: 16
(a) the share or right is subject to a trust; and 17
(b) the person has the relevant interest as a trustee of the trust; and 18
(c) either: 19
(i) a beneficiary under the trust is taken under clause 5 to have 20
a relevant interest in the share or right because the 21
beneficiary has a presently enforceable and unconditional 22
right referred to in clause 5 (b); or 23
(ii) the person is a bare trustee. 24
11 Exclusions--instructions to securities dealer to dispose of share 25
A relevant interest of a person in a share or right to vote is to be 26
disregarded if: 27
(a) the person's ordinary business includes dealing in securities; and 28
(b) the person has authority to exercise powers as the holder of the 29
relevant interest only because of instructions given to the person, 30
by or on behalf of another person, to dispose of the share on the 31
other person's behalf in the ordinary course of the business. 32
12 Exclusions--honorary proxies 33
A relevant interest of a person in a share or right to vote is to be 34
disregarded if the person has it only because of having been appointed, 35
otherwise than for valuable consideration given by the person or an 36
Page 335
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
associate of the person, to vote as a proxy or representative at a meeting 1
of members, or of a class of members, of a corporation. 2
13 Exclusions--holders of prescribed offices 3
A relevant interest of a person in a share or right to vote is to be 4
disregarded if the person has it because of holding an office prescribed 5
by the National Regulations. 6
14 Prescribed exclusions 7
The National Regulations may provide that a relevant interest in a share 8
is, in specified circumstances and subject to specified conditions (if 9
any), to be disregarded for the purposes of a provision of this Law. 10
15 Effect of Schedule 11
(1) Nothing in this Schedule limits the generality of anything else in it. 12
(2) A person does not have a relevant interest in a share of a co-operative 13
or a right to vote in relation to a co-operative except as provided in this 14
Schedule. 15
16 Relevant interest--corporation other than co-operative 16
A reference in this Law (including this Schedule) to a relevant interest 17
in a share of a corporation other than a co-operative or a right to vote in 18
relation to a corporation other than a co-operative is to be construed 19
under the Corporations Act. 20
Part 2 Associates 21
17 Effect of Part 22
(1) In this Law (unless otherwise provided), associate has a meaning 23
determined under this Part. 24
(2) A person is not an associate of another person except as provided by this 25
Part. 26
18 Associates of a corporation 27
The associates of a corporation include the following: 28
(a) a director or secretary of the corporation; 29
(b) a related corporation; 30
(c) a director or secretary of a related corporation. 31
Page 336
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
19 Matters relating to voting rights 1
(1) If a reference to an associate of a person relates to: 2
(a) the extent of power to exercise, or to control the exercise of, the 3
voting power attached to voting shares in or arising from 4
membership of a corporation; or 5
(b) the person's entitlement to shares in a corporation; or 6
(c) an offer to purchase shares to which Division 2 of Part 3.5 7
applies; 8
the reference includes a reference to another person with whom the 9
person has entered into, or proposes to enter into, an agreement referred 10
to in subclause (2). 11
(2) Subclause (1) applies to an agreement: 12
(a) because of which one of the persons referred to in subclause (1) 13
has, or will have, power (even if it is in any way qualified): 14
(i) to exercise; or 15
(ii) to control, directly or indirectly, the exercise of; or 16
(iii) to influence substantially the exercise of; 17
any voting power attached to shares in the corporation; or 18
(b) for the purpose of controlling or influencing: 19
(i) the composition of the corporation's board; or 20
(ii) the conduct of affairs of the corporation; or 21
(c) under which one of the persons: 22
(i) will or may acquire; or 23
(ii) may be required by the other to acquire; 24
shares in the corporation in which the other has a relevant 25
interest; or 26
(d) under which one of the persons may be required to dispose of 27
shares in the corporation in accordance with the other's 28
directions. 29
(3) Subclause (1) applies despite any other effect the agreement may have. 30
(4) In relation to a matter relating to shares in a corporation, a person may 31
be an associate of the corporation and the corporation may be an 32
associate of a person. 33
20 General 34
(1) A reference to an associate of a person includes a reference to: 35
(a) another person in concert with whom the person is acting or 36
proposes to act; and 37
Page 337
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) another person who, under the National Regulations, is, for the 1
purposes of the provision in which the reference occurs, an 2
associate of the person; and 3
(c) another person with whom the person is or proposes to become 4
associated, whether formally or informally, in any other way; 5
in relation to the matter to which the reference relates. 6
(2) If a person has entered, or proposes to enter, into a transaction, or has 7
done, or proposes to do, an act or thing, in order to become associated 8
with another person as referred to in an applicable provision of this Part, 9
a reference to an associate of the person includes a reference to the other 10
person. 11
21 Exclusions 12
A person is not an associate of another person by virtue of clause 19 or 13
20 (1), or by virtue of clause 20 (2) as it applies in relation to clause 19 14
or 20 (1), merely because of one or more of the following: 15
(a) one gives advice to the other, or acts on the other's behalf, in the 16
proper performance of the functions attaching to a professional 17
capacity or a business relationship; 18
(b) one, a client, gives specific instructions to the other, whose 19
ordinary business includes dealing in securities, to acquire shares 20
on the client's behalf in the ordinary course of that business; 21
(c) one has made, or proposes to make, to the other an offer to which 22
Division 2 of Part 3.5 applies, in relation to shares held by the 23
other; 24
(d) one has appointed the other, otherwise than for valuable 25
consideration given by the other or by an associate of the other, 26
to vote as a proxy or representative at a meeting of members, or 27
of a class of members, of a corporation. 28
Part 3 Related corporations 29
22 Related corporations 30
For the purposes of this Law, a corporation is taken to be related to: 31
(a) another corporation that is its subsidiary; and 32
(b) another corporation of which it is a subsidiary; and 33
(c) another corporation if both it and that other corporation are 34
subsidiaries of the same corporation. 35
Page 338
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
Schedule 3 Savings and transitional provisions 1
(Section 624 of this Law) 2
1 Entitlements of former members of trading or distributing co-operatives 3
It is intended that the Co-operatives National Law Act of this 4
jurisdiction may provide that a reference in Division 5 of Part 2.6 of this 5
Law to the period of 2 years is taken to be a reference to another period 6
in a case where the cancellation of membership concerned occurred 7
before the commencement of that Division in this jurisdiction. 8
2 Application of Chapter 5 to existing registered foreign co-operatives not 9
incorporated under corresponding law 10
(1) This clause applies to a body that was a foreign co-operative registered 11
under the repealed legislation of this jurisdiction immediately before the 12
commencement of this clause in this jurisdiction but that is not 13
registered and incorporated under a corresponding co-operatives law. 14
(2) The co-operative is taken to be a participating co-operative authorised 15
to carry on business in this jurisdiction under Chapter 5, and that 16
Chapter applies accordingly. 17
3 Maximum permissible level of share interest 18
(1) This clause applies where, immediately before the commencement of 19
this clause in this jurisdiction: 20
(a) a person lawfully had a relevant interest in shares of a 21
co-operative; and 22
(b) the nominal value of the person's shares was a percentage (the 23
relevant percentage) of the issued share capital of the 24
co-operative that is more than 20% of the nominal value of the 25
issued share capital. 26
(2) The maximum of 20% stated by section 363 (1) is taken to be increased 27
for the person by force of this clause to a maximum equal to the relevant 28
percentage. 29
4 Receivers of property 30
Nothing in section 418 of the Corporations Act as applying under 31
section 393 prevents a person from acting as receiver of property of a 32
co-operative under an appointment validly made before the 33
commencement of this clause in this jurisdiction. 34
Page 339
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Schedule 4 Miscellaneous provisions relating to 1
interpretation 2
(Section 5 of this Law) 3
Part 1 Preliminary 4
1 Displacement of Schedule by contrary intention 5
The application of this Schedule may be displaced, wholly or partly, by 6
a contrary intention appearing in this Law. 7
Part 2 General 8
2 Law to be construed not to exceed legislative power of Legislature 9
(1) This Law is to be construed as operating to the full extent of, but so as 10
not to exceed, the legislative power of the Legislature of this 11
jurisdiction. 12
(2) If a provision of this Law, or the application of a provision of this Law 13
to a person, subject matter or circumstance, would, but for this clause, 14
be construed as being in excess of the legislative power of the 15
Legislature of this jurisdiction: 16
(a) it is a valid provision to the extent to which it is not in excess of 17
the power; and 18
(b) the remainder of this Law, and the application of the provision to 19
other persons, subject matters or circumstances, is not affected. 20
(3) This clause applies to this Law in addition to, and without limiting the 21
effect of, any provision of this Law. 22
3 Every section to be a substantive enactment 23
Every section of this Law has effect as a substantive enactment without 24
introductory words. 25
4 Material that is, and is not, part of this Law 26
(1) The heading to a Chapter, Part, Division or Subdivision into which this 27
Law is divided is part of this Law. 28
(2) A Schedule to this Law is part of this Law. 29
(3) Punctuation in this Law is part of this Law. 30
(4) A heading to a section or subsection of this Law does not form part of 31
this Law. 32
Page 340
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(5) Notes included in this Law (including footnotes and endnotes) are part 1
of this Law. 2
5 References to particular Acts and to enactments 3
In this Law: 4
(a) an Act of this jurisdiction may be cited: 5
(i) by its short title; or 6
(ii) by reference to the year in which it was passed and its 7
number; and 8
(b) a Commonwealth Act may be cited: 9
(i) by its short title; or 10
(ii) in another way sufficient in a Commonwealth Act for the 11
citation of such an Act; 12
together with a reference to the Commonwealth; and 13
(c) an Act of another jurisdiction may be cited: 14
(i) by its short title; or 15
(ii) in another way sufficient in an Act of the jurisdiction for 16
the citation of such an Act; 17
together with a reference to the jurisdiction. 18
6 References taken to be included in Law or Act citation etc 19
(1) A reference in this Law to this Law or an Act includes a reference to: 20
(a) this Law or the Act as originally enacted, and as amended from 21
time to time since its original enactment; and 22
(b) if this Law or the Act has been repealed and re-enacted (with or 23
without modification) since the enactment of the reference--the 24
Act as re-enacted, and as amended from time to time since its 25
re-enactment. 26
(2) A reference in this Law to a provision of this Law or of an Act includes 27
a reference to: 28
(a) the provision as originally enacted, and as amended from time to 29
time since its original enactment; and 30
(b) if the provision has been omitted and re-enacted (with or without 31
modification) since the enactment of the reference--the 32
provision as re-enacted, and as amended from time to time since 33
its re-enactment. 34
(3) Subclauses (1) and (2) apply to a reference in this Law to a law of the 35
Commonwealth or another jurisdiction in the same way as they apply to 36
a reference in this Law to an Act and to a provision of an Act. 37
Page 341
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
7 Interpretation best achieving Law's purpose or object 1
(1) In the interpretation of a provision of this Law, the interpretation that 2
will best achieve the purpose or object of this Law is to be preferred to 3
any other interpretation. 4
(2) Subclause (1) applies whether or not the purpose or object is expressly 5
stated in this Law. 6
8 Use of extrinsic material in interpretation 7
(1) In this clause: 8
extrinsic material means relevant material not forming part of this Law, 9
including, for example: 10
(a) material that is set out in the document containing the text of this 11
Law as printed by the Government Printer; and 12
(b) a relevant report of a Royal Commission, Law Reform 13
Commission, commission or committee of inquiry, or a similar 14
body, that was laid before the Legislature or a House of the 15
Legislature of this jurisdiction before the provision concerned 16
was enacted; and 17
(c) a relevant report of a committee of the Legislature or a House of 18
the Legislature of this jurisdiction that was made before the 19
provision concerned was enacted; and 20
(d) a treaty or other international agreement that is referred to in this 21
Law; and 22
(e) an explanatory note or memorandum relating to the Bill that 23
contained the provision concerned, or any relevant document, 24
that was laid before, or given to the members of, the Legislature 25
or a House of the Legislature of this jurisdiction by the member 26
introducing or bringing in the Bill before the provision was 27
enacted; and 28
(f) the speech made to the Legislature or a House of the Legislature 29
of this jurisdiction by the member in moving a motion that the 30
Bill be read a second time; and 31
(g) material in the votes and proceedings or other official records of 32
the Legislature or a House of the Legislature of this jurisdiction 33
of the proceedings of or debates in the Legislature or House; and 34
(h) a document that is declared by this Law to be a relevant document 35
for the purposes of this clause. 36
ordinary meaning means the ordinary meaning conveyed by a 37
provision having regard to its context in this Law and to the purpose of 38
this Law. 39
Page 342
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) Subject to subclause (3), in the interpretation of a provision of this Law 1
consideration may be given to extrinsic material capable of assisting in 2
the interpretation: 3
(a) if the provision is ambiguous or obscure--to provide an 4
interpretation of it; or 5
(b) if the ordinary meaning of the provision leads to a result that is 6
manifestly absurd or is unreasonable--to provide an 7
interpretation that avoids such a result; or 8
(c) in any other case--to confirm the interpretation conveyed by the 9
ordinary meaning of the provision. 10
(3) In determining whether consideration should be given to extrinsic 11
material, and in determining the weight to be given to extrinsic material, 12
regard is to be had to: 13
(a) the desirability of a provision being interpreted as having its 14
ordinary meaning; and 15
(b) the undesirability of prolonging proceedings without 16
compensating advantage; and 17
(c) other relevant matters. 18
9 Effect of change of drafting practice 19
If: 20
(a) a provision of this Law expresses an idea in particular words; and 21
(b) a provision enacted later appears to express the same idea in 22
different words for the purpose of implementing a different 23
legislative drafting practice, including, for example: 24
(i) the use of a clearer or simpler style; or 25
(ii) the use of gender-neutral language; 26
the ideas must not be taken to be different merely because different 27
words are used. 28
10 Use of examples 29
If this Law includes an example of the operation of a provision: 30
(a) the example is not exhaustive; and 31
(b) the example does not limit, but may extend, the meaning of the 32
provision; and 33
(c) the example and the provision are to be read in the context of each 34
other and the other provisions of this Law, but, if the example and 35
the provision so read are inconsistent, the provision prevails. 36
Page 343
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
11 Compliance with forms 1
(1) If a form is prescribed or approved by or for the purpose of this Law, 2
strict compliance with the form is not necessary and substantial 3
compliance is sufficient. 4
(2) If a form prescribed or approved by or for the purpose of this Law 5
requires: 6
(a) the form to be completed in a specified way; or 7
(b) specified information or documents to be included in, attached to 8
or given with the form; or 9
(c) the form, or information or documents included in, attached to or 10
given with the form, to be verified in a specified way; 11
the form is not properly completed unless the requirement is complied 12
with. 13
Part 3 Terms and references 14
12 Definitions 15
(1) In this Law: 16
Act means an Act of the Legislature of this jurisdiction. 17
adult means an individual who is of or above the age of 18 years. 18
affidavit, in relation to a person allowed by law to affirm, declare or 19
promise, includes affirmation, declaration and promise. 20
amend includes: 21
(a) omit or substitute; or 22
(b) alter or vary; or 23
(c) amend by implication. 24
appoint includes reappoint. 25
Australia means the Commonwealth of Australia but, when used in a 26
geographical sense, does not include an external Territory. 27
business day means a day that is not: 28
(a) a Saturday or Sunday; or 29
(b) a public holiday, special holiday or bank holiday in the place in 30
which any relevant act is to be or may be done. 31
Page 344
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
calendar month means a period starting at the beginning of any day of 1 1
of the 12 named months and ending: 2
(c) immediately before the beginning of the corresponding day of the 3
next named month; or 4
(d) if there is no such corresponding day--at the end of the next 5
named month. 6
calendar year means a period of 12 months beginning on 1 January. 7
commencement, in relation to this Law or an Act or a provision of this 8
Law or an Act, means the time at which this Law, the Act or provision 9
comes into operation. 10
Commonwealth means the Commonwealth of Australia but, when used 11
in a geographical sense, does not include an external Territory. 12
confer, in relation to a duty, includes impose. 13
contravene includes fail to comply with. 14
country includes: 15
(a) a federation; or 16
(b) a state, province or other part of a federation. 17
date of assent, in relation to an Act, means the day on which the Act 18
receives the Royal Assent. 19
definition means a provision of this Law (however expressed) that: 20
(a) gives a meaning to a word or expression; or 21
(b) limits or extends the meaning of a word or expression. 22
document means any record of information, and includes: 23
(a) any paper or other material on which there is writing; or 24
(b) any paper or other material on which there are marks, figures, 25
symbols or perforations having a meaning for a person qualified 26
to interpret them; or 27
(c) any computer, disc, tape or other article or any material from 28
which sounds, images, writings or messages are capable of being 29
reproduced (with or without the aid of another article or device); 30
or 31
(d) a map, plan, drawing or photograph. 32
electronic communication means: 33
(a) a communication of information in the form of data, text or 34
images by means of guided or unguided electromagnetic energy, 35
or both; or 36
(b) a communication of information in the form of sound by means 37
of guided or unguided electromagnetic energy, or both, where the 38
Page 345
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
sound is processed at its destination by an automated voice 1
recognition system. 2
estate includes easement, security interest, right, title, claim, demand or 3
encumbrance, whether at law or in equity. 4
exercise a function includes perform a function. 5
expire includes lapse or otherwise cease to have effect. 6
external Territory means a Territory, other than an internal Territory, 7
for the government of which as a Territory provision is made by a 8
Commonwealth Act. 9
fail includes refuse. 10
financial year means a period of 12 months beginning on 1 July. 11
foreign country means a country (whether or not an independent 12
sovereign State) outside Australia and the external Territories. 13
function includes a power, authority or duty. 14
Gazette means the Government Gazette of this jurisdiction. 15
Gazette notice means a notice published in the Gazette. 16
gazetted means published in the Gazette. 17
Government Printer means the Government Printer of a jurisdiction, 18
and includes any other person authorised by the Government of a 19
jurisdiction to print an Act or instrument. 20
House of a Legislature includes, in the case of a Territory, the 21
Legislative Assembly of that Territory. 22
individual means a natural person. 23
information system means a system for generating, sending, receiving, 24
storing or otherwise processing electronic communications. 25
insert, in relation to a provision of this Law, includes substitute. 26
instrument includes a statutory instrument. 27
interest, in relation to land or other property, means: 28
(a) a legal or equitable estate in the land or other property; or 29
(b) a right, power or privilege over, or in relation to, the land or other 30
property. 31
internal Territory means the Australian Capital Territory, the Jervis 32
Bay Territory or the Northern Territory. 33
Jervis Bay Territory means the Territory referred to in the Jervis Bay 34
Territory Acceptance Act 1915 of the Commonwealth. 35
make includes issue or grant. 36
minor means an individual who is under the age of 18 years. 37
modification includes addition, omission or substitution. 38
Page 346
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
month means a calendar month. 1
named month means 1 of the 12 months of the year. 2
Northern Territory means the Northern Territory of Australia. 3
number means: 4
(a) a number expressed in figures or words; or 5
(b) a letter; or 6
(c) a combination of a number so expressed and a letter. 7
oath, in relation to a person allowed by law to affirm, declare or 8
promise, includes affirmation, declaration or promise. 9
office includes position. 10
omit, in relation to a provision of this Law or an Act, includes repeal. 11
party includes an individual or a body politic or corporate. 12
penalty includes forfeiture or punishment. 13
person includes an individual or a body politic or corporate. 14
power includes authority. 15
prescribed means prescribed by, or by regulations made or in force for 16
the purposes of or under, this Law. 17
printed includes typewritten, lithographed or reproduced by any 18
mechanical means. 19
proceedings means legal or other action or proceedings. 20
property means any legal or equitable estate or interest (whether present 21
or future, vested or contingent, or tangible or intangible) in real or 22
personal property of any description (including money), and includes 23
things in action. 24
provision, in relation to this Law or an Act, means words or other matter 25
that form or forms part of this Law or the Act, and includes: 26
(a) a Chapter, Part, Division, Subdivision, section, subsection, 27
paragraph, subparagraph, sub-subparagraph or Schedule of or to 28
this Law or the Act; or 29
(b) a clause, subclause, section, subsection, item, column, table or 30
form of or in a Schedule to this Law or the Act; or 31
(c) the long title and any preamble to the Act. 32
record includes information stored or recorded by means of a computer. 33
repeal includes: 34
(a) revoke or rescind; or 35
(b) repeal by implication; or 36
Page 347
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(c) abrogate or limit the effect of this Law or the instrument 1
concerned; or 2
(d) exclude from, or include in, the application of this Law or the 3
instrument concerned any person, subject matter or 4
circumstance. 5
sign includes the affixing of a seal or the making of a mark. 6
statutory declaration means a declaration made under an Act, or under 7
a Commonwealth Act or an Act of another jurisdiction, that authorises 8
a declaration to be made otherwise than in the course of judicial 9
proceedings. 10
statutory instrument means an instrument (including a regulation) 11
made or in force under or for the purposes of this Law, and includes an 12
instrument made or in force under any such instrument. 13
swear, in relation to a person allowed by law to affirm, declare or 14
promise, includes affirm, declare or promise. 15
word includes any symbol, figure or drawing. 16
writing includes any mode of representing or reproducing words in a 17
visible form. 18
year, without specifying the type of year, means calendar year. 19
(2) In a statutory instrument: 20
the Law means this Law. 21
13 Provisions relating to defined terms and gender and number 22
(1) If this Law defines a word or expression, other parts of speech and 23
grammatical forms of the word or expression have corresponding 24
meanings. 25
(2) Definitions in or applicable to this Law apply except so far as the 26
context or subject matter otherwise indicates or requires. 27
(3) In this Law, words indicating a gender include each other gender. 28
(4) In this Law: 29
(a) words in the singular include the plural; and 30
(b) words in the plural include the singular. 31
14 Meaning of may and must etc 32
(1) In this Law, the word "may", or a similar word or expression, used in 33
relation to a power indicates that the power may be exercised or not 34
exercised, at discretion. 35
(2) In this Law, the word "must", or a similar word or expression, used in 36
relation to a power indicates that the power is required to be exercised. 37
Page 348
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(3) This clause has effect despite any rule of construction to the contrary. 1
15 Words and expressions used in statutory instruments 2
(1) Words and expressions used in a statutory instrument have the same 3
meanings as they have, from time to time, in this Law or relevant 4
provisions of this Law, under or for the purposes of which the 5
instrument is made or in force. 6
(2) This clause has effect in relation to an instrument except so far as the 7
contrary intention appears in the instrument. 8
16 Effect of express references to bodies corporate and individuals 9
In this Law, a reference to a person generally (whether the expression 10
"person", "party", "someone", "anyone", "no-one", "one", "another" or 11
"whoever" or another expression is used): 12
(a) does not exclude a reference to a body corporate or an individual 13
merely because elsewhere in this Law there is particular 14
reference to a body corporate (however expressed); and 15
(b) does not exclude a reference to an individual or a body corporate 16
merely because elsewhere in this Law there is particular 17
reference to an individual (however expressed). 18
17 Production of records kept in computers etc 19
If a person who keeps a record of information by means of a 20
mechanical, electronic or other device is required by or under this Law: 21
(a) to produce the information or a document containing the 22
information to a court, tribunal or person; or 23
(b) to make a document containing the information available for 24
inspection by a court, tribunal or person; 25
then, unless the court, tribunal or person otherwise directs: 26
(c) the requirement obliges the person to produce or make available 27
for inspection, as the case may be, a document that reproduces the 28
information in a form capable of being understood by the court, 29
tribunal or person; and 30
(d) the production to the court, tribunal or person of the document in 31
that form complies with the requirement. 32
18 References to this jurisdiction to be implied 33
In this Law: 34
(a) a reference to an officer, office or statutory body is a reference to 35
such an officer, office or statutory body in and for this 36
jurisdiction; and 37
Page 349
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(b) a reference to a locality or other matter or thing is a reference to 1
such a locality or other matter or thing in and of this jurisdiction. 2
19 References to officers and holders of offices 3
In this Law, a reference to a particular officer, or to the holder of a 4
particular office, includes a reference to the person for the time being 5
occupying or acting in the office concerned. 6
20 Reference to certain provisions of Law 7
(1) If a provision of this Law refers: 8
(a) to a Chapter, Part, section or Schedule by a number and without 9
reference to this Law--the reference is a reference to the Chapter, 10
Part, section or Schedule, designated by the number, of or to this 11
Law; or 12
(b) to a Schedule without reference to it by a number and without 13
reference to this Law--the reference, if there is only one 14
Schedule to this Law, is a reference to the Schedule; or 15
(c) to a Division, Subdivision, subsection, paragraph, subparagraph, 16
sub-subparagraph, clause, subclause, item, column, table or form 17
by a number and without reference to this Law--the reference is 18
a reference to: 19
(i) the Division, designated by the number, of the Part in 20
which the reference occurs; and 21
(ii) the Subdivision, designated by the number, of the Division 22
in which the reference occurs; and 23
(iii) the subsection, designated by the number, of the section in 24
which the reference occurs; and 25
(iv) the paragraph, designated by the number, of the section, 26
subsection, Schedule or other provision in which the 27
reference occurs; and 28
(v) the paragraph, designated by the number, of the clause, 29
subclause, item, column, table or form of or in the 30
Schedule in which the reference occurs; and 31
(vi) the subparagraph, designated by the number, of the 32
paragraph in which the reference occurs; and 33
(vii) the sub-subparagraph, designated by the number, of the 34
subparagraph in which the reference occurs; and 35
(viii) the clause, subclause, item, column, table or form, 36
designated by the number, of or in the Schedule in which 37
the reference occurs; 38
as the case requires. 39
Page 350
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(2) If a provision of a Schedule to this Law refers to a section by a number 1
and without reference to this Law and the Schedule is divided into 2
sections--the reference is (despite subclause (1) (a)) a reference to the 3
section designated by that number of the Schedule. 4
21 Reference to provisions of this Law or an Act is inclusive 5
In this Law, a reference to a portion of this Law or an Act includes: 6
(a) a reference to the Chapter, Part, Division, Subdivision, section, 7
subsection or other provision of this Law or the Act referred to 8
that forms the beginning of the portion; and 9
(b) a reference to the Chapter, Part, Division, Subdivision, section, 10
subsection or other provision of this Law or the Act referred to 11
that forms the end of the portion. 12
Note. For example, a reference to "sections 5 to 9" includes both section 5 and 13
section 9. It is not necessary to refer to "sections 5 to 9 (both inclusive)" to 14
ensure that the reference is given an inclusive interpretation. 15
Part 4 Functions 16
22 Exercise of statutory functions 17
(1) If this Law confers a function on a person or body, the function may be 18
exercised from time to time as occasion requires. 19
(2) If this Law confers a function on a particular officer or the holder of a 20
particular office, the function may be exercised by the person for the 21
time being occupying or acting in the office concerned. 22
(3) If this Law confers a function on a body (whether or not incorporated), 23
the exercise of the function is not affected merely because of vacancies 24
in the membership of the body. 25
23 Power to make instrument or decision includes power to amend or 26
repeal 27
If this Law authorises or requires the making of an instrument or 28
decision: 29
(a) the power includes power to amend or repeal the instrument or 30
decision; and 31
(b) the power to amend or repeal the instrument or decision is 32
exercisable in the same way, and subject to the same conditions, 33
as the power to make the instrument or decision. 34
Page 351
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
24 Matters for which statutory instruments may make provision 1
(1) If this Law authorises or requires the making of a statutory instrument 2
in relation to a matter, a statutory instrument made under this Law may 3
make provision for the matter by applying, adopting or incorporating 4
(with or without modification) the provisions of: 5
(a) an Act or statutory instrument; or 6
(b) another document (whether of the same or a different kind); 7
as in force at a particular time or as in force from time to time. 8
(2) If a statutory instrument applies, adopts or incorporates the provisions 9
of a document, the statutory instrument applies, adopts or incorporates 10
the provisions as in force from time to time, unless the statutory 11
instrument otherwise expressly provides. 12
(3) A statutory instrument may: 13
(a) apply generally throughout this jurisdiction or be limited in its 14
application to a particular part of this jurisdiction; or 15
(b) apply generally to all persons, matters or things or be limited in 16
its application to: 17
(i) particular persons, matters or things; or 18
(ii) particular classes of persons, matters or things; or 19
(c) otherwise apply generally or be limited in its application by 20
reference to specified exceptions or factors. 21
(4) A statutory instrument may: 22
(a) apply differently according to different specified factors; or 23
(b) otherwise make different provision in relation to: 24
(i) different persons, matters or things; or 25
(ii) different classes of persons, matters or things. 26
(5) A statutory instrument may authorise a matter or thing to be from time 27
to time determined, applied or regulated by a specified person or body. 28
(6) If this Law authorises or requires a matter to be regulated by statutory 29
instrument, the power may be exercised by prohibiting by statutory 30
instrument the matter or any aspect of the matter. 31
(7) If this Law authorises or requires provision to be made with respect to 32
a matter by statutory instrument, a statutory instrument made under this 33
Law may make provision with respect to a particular aspect of the 34
matter despite the fact that provision is made by this Law in relation to 35
another aspect of the matter or in relation to another matter. 36
Page 352
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(8) A statutory instrument may provide for the review of, or a right of 1
appeal against, a decision made under the statutory instrument, or this 2
Law, and may, for that purpose, confer jurisdiction on any court, 3
tribunal, person or body. 4
(9) A statutory instrument may require a form prescribed by or under the 5
statutory instrument, or information or documents included in, attached 6
to or given with the form, to be verified by statutory declaration. 7
25 Presumption of validity and power to make statutory instrument 8
(1) All conditions and preliminary steps required for the making of a 9
statutory instrument are presumed to have been satisfied and performed 10
in the absence of evidence to the contrary. 11
(2) A statutory instrument is taken to be made under all powers under which 12
it may be made, even though it purports to be made under this Law or a 13
particular provision of this Law. 14
26 Appointments may be made by name or office 15
(1) If this Law authorises or requires a person or body: 16
(a) to appoint a person to an office; or 17
(b) to appoint a person or body to exercise a power; or 18
(c) to appoint a person or body to do another thing; 19
the person or body may make the appointment by: 20
(d) appointing a person or body by name; or 21
(e) appointing a particular officer, or the holder of a particular office, 22
by reference to the title of the office concerned. 23
(2) An appointment of a particular officer, or the holder of a particular 24
office, is taken to be the appointment of the person for the time being 25
occupying or acting in the office concerned. 26
27 Acting appointments 27
(1) If this Law authorises a person or body to appoint a person to act in an 28
office, the person or body may, in accordance with this Law, appoint: 29
(a) a person by name; or 30
(b) a particular officer, or the holder of a particular office, by 31
reference to the title of the office concerned; 32
to act in the office. 33
(2) The appointment may be expressed to have effect only in the 34
circumstances specified in the instrument of appointment. 35
Page 353
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) The appointer may: 1
(a) determine the terms and conditions of the appointment, including 2
remuneration and allowances; and 3
(b) terminate the appointment at any time. 4
(4) The appointment, or the termination of the appointment, must be in, or 5
evidenced by, writing signed by the appointer. 6
(5) The appointee must not act for more than one year during a vacancy in 7
the office. 8
(6) If the appointee is acting in the office otherwise than because of a 9
vacancy in the office and the office becomes vacant, then, subject to 10
subclause (2), the appointee may continue to act until: 11
(a) the appointer otherwise directs; or 12
(b) the vacancy is filled; or 13
(c) the end of a year from the day of the vacancy; 14
whichever happens first. 15
(7) The appointment ceases to have effect if the appointee resigns by 16
writing signed and delivered to the appointer. 17
(8) While the appointee is acting in the office: 18
(a) the appointee has all the powers and other functions of the holder 19
of the office; and 20
(b) this Law and other laws apply to the appointee as if the appointee 21
were the holder of the office. 22
(9) Anything done by or in relation to a person purporting to act in the 23
office is not invalid merely because: 24
(a) the occasion for the appointment had not arisen; or 25
(b) the appointment had ceased to have effect; or 26
(c) the occasion for the person to act had not arisen or had ceased. 27
(10) If this Law authorises the appointer to appoint a person to act during a 28
vacancy in the office, an appointment to act in the office may be made 29
by the appointer whether or not an appointment has previously been 30
made to the office. 31
28 Powers of appointment imply certain incidental powers 32
(1) If this Law authorises or requires a person or body to appoint a person 33
to an office: 34
(a) the power may be exercised from time to time as occasion 35
requires; and 36
Page 354
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(b) the power includes: 1
(i) power to remove or suspend, at any time, a person 2
appointed to the office; and 3
(ii) power to appoint another person to act in the office if a 4
person appointed to the office is removed or suspended; 5
and 6
(iii) power to reinstate or reappoint a person removed or 7
suspended; and 8
(iv) power to appoint a person to act in the office if it is vacant 9
(whether or not the office has ever been filled); and 10
(v) power to appoint a person to act in the office if the person 11
appointed to the office is absent or is unable to discharge 12
the functions of the office (whether because of illness or 13
otherwise). 14
(2) The power to remove or suspend a person under subclause (1) (b) may 15
be exercised even if this Law provides that the holder of the office to 16
which the person was appointed is to hold office for a specified period. 17
(3) The power to make an appointment under subclause (1) (b) may be 18
exercised from time to time as occasion requires. 19
(4) An appointment under subclause (1) (b) may be expressed to have effect 20
only in the circumstances specified in the instrument of appointment. 21
29 Delegations 22
(1) If this Law authorises a person or body to delegate a function, the person 23
or body may, in accordance with this Law and any other applicable law, 24
delegate the function to: 25
(a) a person or body by name; or 26
(b) a specified officer, or the holder of a specified office, by 27
reference to the title of the office concerned. 28
(2) The delegation may be: 29
(a) general or limited; and 30
(b) made from time to time; and 31
(c) revoked, wholly or partly, by the delegator. 32
(3) The delegation, or a revocation of the delegation, must be in, or 33
evidenced by, writing signed by the delegator or, if the delegator is a 34
body, by a person authorised by the body for the purpose. 35
(4) A delegated function may be exercised only in accordance with any 36
conditions to which the delegation is subject. 37
Page 355
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(5) The delegate may, in the exercise of a delegated function, do anything 1
that is incidental to the delegated function. 2
(6) A delegated function that purports to have been exercised by the 3
delegate is taken to have been properly exercised by the delegate unless 4
the contrary is proved. 5
(7) A delegated function that is properly exercised by the delegate is taken 6
to have been exercised by the delegator. 7
(8) If, when exercised by the delegator, a function is dependent on the 8
delegator's opinion, belief or state of mind, then, when exercised by the 9
delegate, the function is dependent on the delegate's opinion, belief or 10
state of mind. 11
(9) If: 12
(a) the delegator is a specified officer or the holder of a specified 13
office; and 14
(b) the person who was the specified officer or holder of the specified 15
office when the delegation was made ceases to be the holder of 16
the office; 17
then: 18
(c) the delegation continues in force; and 19
(d) the person for the time being occupying or acting in the office 20
concerned is taken to be the delegator for the purposes of this 21
clause. 22
(10) If: 23
(a) the delegator is a body; and 24
(b) there is a change in the membership of the body; 25
then: 26
(c) the delegation continues in force; and 27
(d) the body as constituted for the time being is taken to be the 28
delegator for the purposes of this clause. 29
(11) If a function is delegated to a specified officer or the holder of a 30
specified office: 31
(a) the delegation does not cease to have effect merely because the 32
person who was the specified officer or the holder of the specified 33
office when the function was delegated ceases to be the officer or 34
the holder of the office; and 35
(b) the function may be exercised by the person for the time being 36
occupying or acting in the office concerned. 37
Page 356
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
(12) A function that has been delegated may, despite the delegation, be 1
exercised by the delegator. 2
(13) The delegation of a function does not relieve the delegator of the 3
delegator's obligation to ensure that the function is properly exercised. 4
(14) Subject to subclause (15), this clause applies to a subdelegation of a 5
function in the same way as it applies to a delegation of a function. 6
(15) If this Law authorises the delegation of a function, the function may be 7
subdelegated only if the Law expressly authorises the function to be 8
subdelegated. 9
30 Exercise of powers between enactment and commencement 10
(1) If a provision of this Law (the empowering provision) that does not 11
commence on its enactment would, had it commenced, confer a power: 12
(a) to make an appointment; or 13
(b) to make a statutory instrument of a legislative or administrative 14
character; or 15
(c) to do another thing; 16
then: 17
(d) the power may be exercised; and 18
(e) anything may be done for the purpose of enabling the exercise of 19
the power or of bringing the appointment, instrument or other 20
thing into effect; 21
before the empowering provision commences. 22
(2) If a provision of a New South Wales Act (the empowering provision) 23
that does not commence on its enactment would, had it commenced, 24
amend a provision of this Law so that it would confer a power: 25
(a) to make an appointment; or 26
(b) to make a statutory instrument of a legislative or administrative 27
character; or 28
(c) to do another thing; 29
then: 30
(d) the power may be exercised; and 31
(e) anything may be done for the purpose of enabling the exercise of 32
the power or of bringing the appointment, instrument or other 33
thing into effect; 34
before the empowering provision commences. 35
Page 357
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
(3) If: 1
(a) this Law has commenced and confers a power to make a statutory 2
instrument (the basic instrument-making power); and 3
(b) a provision of a New South Wales Act that does not commence 4
on its enactment would, had it commenced, amend this Law so as 5
to confer additional power to make a statutory instrument (the 6
additional instrument-making power); 7
then: 8
(c) the basic instrument-making power and the additional 9
instrument-making power may be exercised by making a single 10
instrument; and 11
(d) any provision of the instrument that required an exercise of the 12
additional instrument-making power is to be treated as made 13
under subclause (2). 14
(4) If an instrument, or a provision of an instrument, is made under 15
subclause (1) or (2) that is necessary for the purpose of: 16
(a) enabling the exercise of a power referred to in the subclause; or 17
(b) bringing an appointment, instrument or other thing made or done 18
under such a power into effect; 19
the instrument or provision takes effect: 20
(c) on the making of the instrument; or 21
(d) on such later day (if any) on which, or at such later time (if any) 22
at which, the instrument or provision is expressed to take effect. 23
(5) If: 24
(a) an appointment is made under subclause (1) or (2); or 25
(b) an instrument, or a provision of an instrument, made under 26
subclause (1) or (2) is not necessary for a purpose referred to in 27
subclause (4); 28
the appointment, instrument or provision takes effect: 29
(c) on the commencement of the relevant empowering provision; or 30
(d) on such later day (if any) on which, or at such later time (if any) 31
at which, the appointment, instrument or provision is expressed 32
to take effect. 33
(6) Anything done under subclause (1) or (2) does not confer a right, or 34
impose a liability, on a person before the relevant empowering 35
provision commences. 36
(7) After the enactment of a provision referred to in subclause (2) but before 37
the provision's commencement, this clause applies as if the references 38
in subclauses (2) and (5) to the commencement of the empowering 39
Page 358
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
provision were references to the commencement of the provision 1
referred to in subclause (2) as amended by the empowering provision. 2
(8) In the application of this clause to a statutory instrument, a reference to 3
the enactment of the instrument is a reference to the making of the 4
instrument. 5
Part 5 Distance, time and age 6
31 Matters relating to distance, time and age 7
(1) In the measurement of distance for the purposes of this Law, the 8
distance is to be measured along the shortest road ordinarily used for 9
travelling. 10
(2) If a period beginning on a given day, act or event is provided or allowed 11
for a purpose by this Law, the period is to be calculated by excluding 12
the day, or the day of the act or event, and: 13
(a) if the period is expressed to be a specified number of clear days 14
or at least a specified number of days--by excluding the day on 15
which the purpose is to be fulfilled; and 16
(b) in any other case--by including the day on which the purpose is 17
to be fulfilled. 18
(3) If the last day of a period provided or allowed by this Law for doing 19
anything is not a business day in the place in which the thing is to be or 20
may be done, the thing may be done on the next business day in the 21
place. 22
(4) If the last day of a period provided or allowed by this Law for the filing 23
or registration of a document is a day on which the office is closed 24
where the filing or registration is to be or may be done, the document 25
may be filed or registered at the office on the next day that the office is 26
open. 27
(5) If no time is provided or allowed for doing anything, the thing is to be 28
done as soon as possible, and as often as the prescribed occasion 29
happens. 30
(6) If, in this Law, there is a reference to time, the reference is, in relation 31
to the doing of anything in a jurisdiction, a reference to the legal time in 32
the jurisdiction. 33
(7) For the purposes of this Law, a person attains an age in years at the 34
beginning of the person's birthday for the age. 35
Page 359
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
Part 6 Effect of repeal, amendment or expiration 1
32 Time of Law ceasing to have effect 2
If a provision of this Law is expressed: 3
(a) to expire on a specified day; or 4
(b) to remain or continue in force, or otherwise have effect, until a 5
specified day; 6
the provision has effect until the last moment of the specified day. 7
33 Repealed Law provisions not revived 8
If a provision of this Law is repealed or amended by a New South Wales 9
Act, or a provision of a New South Wales Act, the provision is not 10
revived merely because the Act or the provision of the Act: 11
(a) is later repealed or amended; or 12
(b) later expires. 13
34 Saving of operation of repealed Law provisions 14
(1) The repeal, amendment or expiry of a provision of this Law does not: 15
(a) revive anything not in force or existing at the time the repeal, 16
amendment or expiry takes effect; or 17
(b) affect the previous operation of the provision or anything 18
suffered, done or begun under the provision; or 19
(c) affect a right, privilege or liability acquired, accrued or incurred 20
under the provision; or 21
(d) affect a penalty incurred in relation to an offence arising under 22
the provision; or 23
(e) affect an investigation, proceedings or remedy in relation to such 24
a right, privilege, liability or penalty. 25
(2) Any such penalty may be imposed and enforced, and any such 26
investigation, proceedings or remedy may be begun, continued or 27
enforced, as if the provision had not been repealed or amended or had 28
not expired. 29
35 Continuance of repealed provisions 30
If a New South Wales Act repeals some provisions of this Law and 31
enacts new provisions in substitution for the repealed provisions, the 32
repealed provisions continue in force until the new provisions 33
commence. 34
Page 360
Co-operatives (Adoption of National Law) Bill 2012
Co-operatives National Law Appendix
36 Law and amending Acts to be read as one 1
This Law and all New South Wales Acts amending this Law are to be 2
read as one. 3
Part 7 Instruments under this Law 4
37 Schedule applies to statutory instruments 5
(1) This Schedule applies to a statutory instrument, and to things that may 6
be done or are required to be done under a statutory instrument, in the 7
same way as it applies to this Law, and things that may be done or are 8
required to be done under this Law, except so far as the context or 9
subject matter otherwise indicates or requires. 10
(2) The fact that a provision of this Schedule refers to this Law and not also 11
to a statutory instrument does not, by itself, indicate that the provision 12
is intended to apply only to this Law. 13
Part 8 Application to coastal sea 14
38 Application 15
This Law has effect in and in relation to the coastal sea of this 16
jurisdiction as if that coastal sea were part of this jurisdiction. 17
Part 9 Offences under this Law 18
39 Penalty at foot of provision 19
In this Law, a penalty specified at the foot of: 20
(a) a section (whether or not the section is divided into subsections); 21
or 22
(b) a subsection (but not at the end of a section); or 23
(c) a section or subsection and expressed in such a way as to indicate 24
that it applies only to part of the section or subsection; 25
indicates that an offence referred to in the section, subsection or part is 26
punishable on conviction or, if no offence is mentioned, a contravention 27
of the section, subsection or part constitutes an offence against the 28
provision that is punishable, on conviction, by a penalty not more than 29
the specified penalty. 30
Page 361
Co-operatives (Adoption of National Law) Bill 2012
Appendix Co-operatives National Law
40 Penalty other than at foot of provision 1
In this Law, a penalty specified for an offence, or a contravention of a 2
provision, indicates that the offence is punishable on conviction, or that 3
the contravention constitutes an offence against the provision that is 4
punishable, on conviction, by a penalty not more than the specified 5
penalty. 6
Page 362
[Index] [Search] [Download] [Related Items] [Help]