Rules for co-operatives
The rules are one of the most important documents any co-operative will create. The rules form the basis of everything a co-operative does, so taking time to be thorough, thinking them through and getting them right will pay dividends.
The rules form a binding contract between the co-operative and its members. All members and office holders of the co-operative must agree to follow the rules.
The rules provide the foundation for the way in which a co-operative is to operate. They include information on (but are not limited to):
- primary activity or activities;
- active membership requirements;
- qualifications for membership and directors;
- procedures to admit new members;
- how shares and fundraising will be handled (if any);
- any fines for breaking the rules;
- voting procedures;
- how surplus funds can be dealt with; and
- financial reporting and auditing requirements.
Rules passed by special resolution must be lodged with the Registrar as part of applying for registration of the co-operative.
You will need to download a copy of the Guide to developing compliant rules for your co-operative (the guide). This document contains necessary information on how to create compliant rules for your co-operative.
Schedule 1 of the Co-operatives Act 2009 requires the rules of a co-operative must state or otherwise make provision for the matters specified in Schedule 1 of the Co-operatives Act 2009.
Model rules are templates for co-operatives to help with the preparation of their own rules. The guide contains information on how to create compliant rules for your co-operative.
The rules of a co-operative can be changed by a special resolution of members.
If proposed changes alter the active membership provisions or will result in the conversion of a co-operative from a non-distributing to a distributing co-operative (or vice versa) the changes must be approved by the Registrar before they can be put to a vote of members. Approval is sought by lodging form 30 “Application for Approval of Proposed Alteration to Rules”.
Once members have approved the change to the rules by passing a special, the change must be registered by completing and submitting forms 32 “Application for Registration of Alteration of Rules” and 33 “Statutory Declaration in Support of the Application”. The change does not take effect until it has been registered.
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