A co-operative is a voluntary trading organisation owned and managed by its members for a common benefit.
- a company – can be formed by at least five people or are registered corporations
- open to people who use its services and are willing to be active members
- democratic – members have equal voting rights and share in making policies and decisions.
There are two different types of co-operative:
- Distributing – can give surplus funds to its members
- Non-distributing – uses extra funds to support its activities and can’t distribute funds to members.
Co-operatives must keep written financial records that show transactions, its financial position and performance. Refer to Accounts and audits in a co-operative for details about annual audits and financial reports.
Name of the co-operative
By law, all co-operatives – including those registered in another state – must have their full name:
- on the cooperative’s seal
- in all notices
- on advertisements
- in official publications
- on all business documents.
The co-operative must begin its activities within one year of registration.
Co-operatives from other states must make sure their name can’t be confused with registered co-operatives or businesses in South Australia (SA).
Any director can call a meeting of the board of directors. At least half of the directors – a quorum – need to be at the meeting to conduct business. Board meetings must be held every three months.
Active membership resolutions
Members must be given at least 21 days’ notice of a meeting where an active membership resolution is proposed. The notice must show the reasons for the resolution and how it affects members. The notice must also include:
- if the member is eligible to vote
- the full text of the proposed resolution
- information about cancelling memberships.
The board can call general meetings at any time and members must be given at least 14 days’ notice. A general meeting can also be called if at least 20% of all active voters ask for the meeting, unless the rules state a different percentage.
Annual general meetings
Members must be given at least 14 days’ notice of the annual general meeting (AGM). The meeting must take place no later than five months after the end of financial year. If it doesn’t, a report must be given to members within the same time period.
At least 21 days’ notice is needed if there is a special resolution being considered. You will need to tell members the reason for resolution and how it affects the co-operative.
Ordinary business of an AGM includes:
- confirming the minutes of the previous general meeting
- presenting annual reports
- electing directors and deciding on their salary
- appointing an auditor, if necessary.
Minutes of all meetings
Minutes of the meeting must be entered:
- in the official books
- within 28 days and signed by the chair
- in English – or with an attached English transcript.
Co-operatives must have at least five ‘active members’ – an individual, joint or body corporate. At least 40% of the total membership must be able to show they are active through their use or support of the co-operative’s main activities.
Consumer and Business Services (CBS) must approve changes to rules related to active membership before members vote.
Directors are elected at the co-operative’s formation meeting. A board must have at least three directors and two must live in SA. The board manages the affairs of the co-operative. Depending on the size of the co-operative, this can include:
- making decisions
- overseeing and managing the processes for member’s decisions
- supervising policy
- carrying out specific duties set out in the rules.
The secretary is appointed by the board and is the main administration officer for the co-operative. They must be:
- 18 years or older
- a resident of SA.
Advise CBS within 28 days if the secretary changes using the Co-operative change of details form (PDF 119KB).
People who are employed by the co-operative can also be active members.
Cancelling a membership
The board can cancel a membership if the person hasn’t been active for three years. Any shares can be forfeited at the same time. The inactive member must be given at least 28 days’ notice of the cancellation.
The board can defer the cancellation, by resolution, for up to 12 months in special circumstances.
Disclosure statements help members make decisions when something new is introduced or when changes are proposed to the co-operative. This can include:
- Finances eg – shares, distributions, assets, debentures
- Corporate eg – mergers, transfers
- Administration eg – postal ballots, resolutions, membership
The information included in a disclosure statement will depend on the topic. Check the relevant section of Co-operatives National Law (South Australia) Act 2013 for what you need to include and use the examples below to help you draft your statement. Drafts need to be submitted to CBS for approval at least 28 days before you give it to members.