With the introduction of the Co-operatives National Law (CNL), co-operatives registered under the previous legislation (Cooperatives Act 1999) are encouraged to review, update or adopt new rules as appropriate.
- A co-operative can include some or all of the relevant model rules in its own rules. A co-operative can make any additions or changes to the rules as appropriate. If a co-operative prepares its own rules, then it must ensure that they comply with the requirements of the CNL and related regulations.
Decision making
There are four ways in which a co-operative may make a decision:
- Ordinary resolution – a resolution passed by a simple majority of members at a general meeting of the co-operative
- Special resolution – a resolution passed by a two-thirds majority of members. The CNL requires certain decisions to be made by a special resolution.
- Ordinary and special resolution by postal ballot– votes conducted by mail
- Special postal ballot – certain decisions are required to be made by special postal ballot.
| Activities that must be approved by special ballot | Section of the Co-operatives National Law |
|---|---|
| converting a co-operative with share capital to a co-operative without share capital or vice versa | 35 |
| converting a distributing co-operative to a non-distributing co-operative or vice versa | 35 |
| requiring members to take up or subscribe for additional shares and/or deducting amounts for additional shares | 82 |
| requiring members to lend money to the co-operative | 343 |
acquiring or disposing of certain assets | 359 |
setting the maximum permissible level of share interest in a co-operative | 363 |
| making certain share offers | 374 |
| merging a co-operative with another co-operative | 396 and 476 |
| initiating a transfer of engagements | 396 and 476 |
| transferring the incorporation of a co-operative to another scheme | 404 |
| executing a compromise or arrangement between a co-operative and its members | 414 |
| voluntary winding-up the co-operative | 445 |
Under section 250 of the Co-operatives National Law, a co-operative may also request other decisions be decided by a postal ballot.
NOTE: A disclosure statement is required every time there is a special postal ballot.
Section 248 of the Co-operatives National Law details the information that must be included in the disclosure statement, including:
- the financial position of the co-operative
- the interests of the directors in the proposal
- payment of any compensation or consideration to officers or members in relation to the proposal
- any other matters the Registrar directs.
A draft disclosure statement must be submitted to the Registrar. This must be at least 28 days before the notice of the special postal ballot is given to members.
Pre-approval for rule changes
There are certain classes of rules that cannot be changed by the co-operative without prior approval of the Registrar. This applies to provisions in a co-operative’s rules relating to:
- active membership
- converting a non-distributing co-operative to a distributing co-operative
- the co-operative’s primary activities
- winding-up
- the issue or sale of shares or co-operative capital units.
Co-operatives should complete the Application for prior approval of rule amendment/s (PDF, 210.7 KB). List the rule amendments, deletions and/or additions that require pre-approval. Submit this form to the Registrar before the resolution amending the rules is passed by the co-operative.
Some rule changes do not need pre-approval. In this situation, hold a special resolution and submit an application to the Registrar.
Notice to members
Co-operative members must be given a minimum of 21 days' notice to consider the proposed amendment. The notice to members must state:
- the intention to propose the special resolution to amend the rules
- the reasons for proposing the change
- the effect it will have if the special resolution is passed.
If a co-operative proposes amending its active membership provision, the notice to members must also state:
- whether the member is eligible to vote on the resolution
- the full text of the proposed resolution
- a copy of section 156 of the CNL, about the cancellation of membership of an inactive member.
When a resolution is passed, a co-operative has 28 days to complete and lodge the Application for registration/approval of rule amendment/s (PDF, 249.3 KB).
After you lodge an application
An amendment to the rules does not have any effect until it is registered. Once your application has been registered Consumer Affairs Tasmania will:
- notify you of the approved changes or
- ask you to consider a different change or
- refuse to approve the change.
Once the changes have been approved, arrange the special resolution according to your co-operative's rules. Within 28 days of the resolution being passed, you must submit:
- an Application for registration/approval of rule amendment/s (PDF, 249.3 KB)
- a copy of the signed special resolution
- a complete copy of the rules, with the changes included.
Consumer Affairs Tasmania will advise the co-operative of the outcome of the application.