Queensland: Co-operatives National Law (Queensland) (Qld)

Co-operatives National Law (Queensland) Editor's note— The Co-operatives National Law is applied (with modifications) as a law of Queensland by the Co-operatives National Law Act 2020. This version is the law as it applies in Queensland—see the Co-operatives National Law Act 2020, section 4. It is intended a new reprint of the National Law will be prepared by the Office of the Queensland Parliamentary Counsel when any change in the National Law takes effect. Chapter 1 Preliminary Part 1.1 Introductory 1 Citation This Law may be cited as the Co-operatives National Law (Queensland). 2 Commencement This Law commences in a jurisdiction as provided by the Co-operatives National Law Act of that jurisdiction. 3 Objects The objects of this Law are— (a) to enable the formation, registration and operation of co-operatives; and (b) to promote co-operative philosophy, principles, practices and objectives; and (c) to protect the interests of co-operatives, their members and the public in the operations and activities of co-operatives; and (d) to ensure directors of co-operatives are accountable for their actions and decisions to the members of co-operatives; and (e) to encourage and facilitate self-management by co-operatives at all levels; and (f) to encourage the development, integration and strengthening of co-operatives at local, regional, national and international levels by supporting and fostering State, Territory and national peak organisations and co-operative instrumentalities. Part 1.2 Interpretation 4 Definitions In this Law— active member—see section 145. active membership provisions—see section 146 (1). active membership resolution—see section 146 (2). agreement means an agreement, arrangement or understanding— (a) whether formal or informal or partly formal and partly informal; or (b) whether written or oral or partly written and partly oral; or (c) whether or not having legal or equitable force and whether or not based on legal or equitable rights. another jurisdiction means a State or Territory other than this jurisdiction. approved form means a form approved under section 622. ASIC means the Australian Securities and Investments Commission. ASIC Act means the Australian Securities and Investments Commission Act 2001 of the Commonwealth. Australian legal practitioner means a person who— (a) is admitted to the legal profession under the law of a jurisdiction; and (b) holds a current practising certificate under a law of a jurisdiction authorising the person to engage in legal practice. authorised deposit-taking institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth. board means the board of directors of a co-operative, and includes a person or committee exercising a power of the board delegated to the person or committee under the rules of the co-operative. books includes— (a) a register; and (b) minutes; and (c) any other record of information; and (d) financial reports or financial records, however compiled, recorded or stored; and (e) a document. carry on business has the same meaning in relation to a co-operative or participating co-operative as it has under the Corporations Act in relation to a company. Note. Division 3 of Part 1.2 of the Corporations Act contains provisions relating to carrying on business. CCU means a co-operative capital unit, as provided for by Division 2 of Part 3.4 (see section 345). chief executive officer of a co-operative or a subsidiary of a co-operative means the chief executive officer of the co-operative or subsidiary for the time being (by whatever name called), and whether or not the officer is a director or the secretary. civil penalty provision—see section 553. compensation order—see section 553. constituent documents of a corporation means the constitution of the corporation or any rules or other document constituting the corporation or governing its activities, and includes a memorandum or articles of association and replaceable rules or other rules. co-operative means a body registered under this Law as applying under the Co-operatives National Law Act of this jurisdiction as a co-operative (including a co-operative group). co-operative group means a co-operative that has a membership as described in section 111. co-operative principles—see section 10. Co-operatives National Law Act of a jurisdiction means the Act of that jurisdiction that applies this Law (whether with or without modification) as a law of that jurisdiction. corporation includes— (a) a company; and (b) any body corporate (whether incorporated in this jurisdiction or elsewhere); and (c) an unincorporated body that, under the law of its place of origin, may— (i) sue or be sued; or (ii) hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose; but does not include— (d) an exempt public authority (within the meaning of the Corporations Act); or (e) a corporation sole. Note. A co-operative is a corporation within this definition. Corporations Act means the Corporations Act 2001 of the Commonwealth or, where appropriate, that Act as applying under this Law as a law of this jurisdiction. Corporations application legislation means— (a) for a State—Part 3 of the Corporations (Ancillary Provisions) Act 2001 of that State; or (b) for the Northern Territory—Part 4 of the Corporations Reform (Northern Territory) Act of that Territory; or (c) for the Australian Capital Territory—the provisions of a law of that Territory that are declared by the Co-operatives National Law Act of that Territory to be the Corporations application legislation of that Territory; unless a law of the State or Territory concerned provides otherwise. Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act applies. corresponding co-operatives law of another jurisdiction—see section 7. de facto partner has the meaning given by the Acts Interpretation Act 1901 of the Commonwealth in relation to an Act of the Commonwealth. debenture of a co-operative means a chose in action that includes an undertaking by the co-operative to repay as a debt money deposited with or lent to the co-operative. The chose in action may (but need not) include a security interest in property of the co-operative to secure repayment of the money. However, a debenture does not include— (a) an undertaking to repay money deposited with or lent to the co-operative by a person if— (i) the person deposits or lends the money in the ordinary course of a business carried on by the person; and (ii) the co-operative receives the money in the ordinary course of carrying on a business that neither comprises nor forms part of a business of borrowing money and providing finance; or (b) an undertaking by an Australian authorised deposit-taking institution to repay money deposited with it, or lent to it, in the ordinary course of its banking business; or (c) an undertaking to pay money under— (i) a cheque; or (ii) an order for the payment of money; or (iii) a bill of exchange; or (d) an undertaking by a co-operative to pay money to a related corporation; or (e) an undertaking to repay money that is prescribed by the regulations under the Corporations Act; or (f) another document of a class prescribed by the National Regulations as exempt from this definition. For the purposes of this definition, if a chose in action that includes an undertaking by a co-operative to pay money as a debt is offered as consideration for the acquisition of securities under an off-market takeover bid, or is issued under a compromise or arrangement under Part 4.4, the undertaking is taken to be an undertaking to repay as a debt money deposited with or lent to the co-operative. deed of arrangement means a deed of arrangement executed by a co-operative under Part 5.3A of the Corporations Act as applying under this Law (see section 382 of this Law) or a deed of that type as varied and in force from time to time. deposit-taking co-operative means a co-operative permitted under section 333 to accept money on deposit. designated authority means (except in section 612) the person or body specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used. designated instrument means an instrument or document— (a) of the kind; and (b) made, served or published in the manner (if any); specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used. Note. Examples are an order in writing served on a person and a notice published in the Gazette. designated tribunal means the court or tribunal specified or described in the Co-operatives National Law Act of this jurisdiction for the purposes of the provision in which the term is used. director of a co-operative includes— (a) a person who occupies or acts in the position of a director or member of the board of a co-operative, whether or not the person is called a director and whether or not the person is validly appointed or properly authorised to act in the position; and (b) a person under whose directions or instructions the directors or members of the board of directors of the co-operative are accustomed to act. distributing co-operative—see section 18. entity includes a person and an unincorporated body. evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist. file includes lodge. financial records includes— (a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and (b) documents of prime entry; and (c) working papers and other documents needed to explain— (i) the methods by which financial statements are made up; and (ii) adjustments to be made in preparing financial statements. half-year—see section 296. inactive member of a co-operative is a member of the co-operative who is not an active member of the co-operative. inspector means a person appointed as an inspector under Part 6.4. investigator means a person appointed under section 520 to hold an inquiry into the affairs of a co-operative. involved in a contravention—see section 9. jurisdiction means a State or Territory. large co-operative means a co-operative that is not a small co-operative. local Registrar means the Registrar for this jurisdiction. local regulations means regulations made under the Co-operatives National Law Act of this jurisdiction, but does not include the National Regulations. Ministerial Council means the MCCA as defined in the Australian Uniform Co-operative Laws Agreement, the parties to which are the States and Territories, and which came into force on 21 January 2012 (being the date when it has been executed by all the parties). Note. The Agreement includes the following definition— "MCCA" means the Ministerial Council on Consumer Affairs which for the purposes of this Agreement comprises the members in accordance with Part VIII of this Agreement or such body as succeeds it or for the time being performs the functions carried out by the Ministerial Council on Consumer Affairs as set out in this Agreement. model rules means model rules under Division 2 of Part 2.3. modification, in relation to an applied Corporations legislation matter, means a modification or change (as the case may be) within the meaning of the Corporations application legislation of this jurisdiction. mortgage includes a lien, charge or other security over property. National Regulations means the Co-operatives National Regulations made under this Law, as referred to in section 612. Note. Jurisdictional legislation may provide for the application of the National Regulations in individual jurisdictions. Section 6 of this Law deals with the case where the National Regulations are not applied in a jurisdiction in that manner but are separately made for that jurisdiction. non-distributing co-operative—see section 19. NSW legislation website means the website with the URL of www.legislation.nsw.gov.au, or any other website, used by the Parliamentary Counsel of New South Wales to provide public access to the legislation of New South Wales. officer of a co-operative or participating co-operative means— (a) a director or secretary of the co-operative; or (b) a person— (i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the co-operative; or (ii) who has the capacity to affect significantly the co-operative's financial standing; or (iii) in accordance with whose instructions or wishes the directors of the co-operative are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the co-operative); or (c) a receiver, or receiver and manager, of property of the co-operative; or (d) an administrator of the co-operative; or (e) an administrator of a deed of arrangement executed by the co-operative; or (f) a liquidator of the co-operative; or (g) a trustee or other person administering a compromise or arrangement made between the co-operative and someone else. ordinary resolution—see section 238. participating co-operative means a body that is registered and incorporated under, and is subject to, a corresponding co-operatives law of another jurisdiction. participating jurisdiction means a jurisdiction in which a corresponding co-operatives law is in force. participating Registrar means a person exercising the functions of a Registrar under a corresponding co-operatives law of another jurisdiction. pecuniary penalty order—see section 553. PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 of the Commonwealth and to which that Act applies, other than a transitional security interest within the meaning of that Act. Note 1. The Personal Property Securities Act 2009 of the Commonwealth applies to certain security interests in personal property. See the following provisions of that Act— (a) section 8 (Interests to which this Act does not apply); (b) section 12 (Meaning of security interest); (c) Chapter 9 (Transitional provisions). Note 2. For the meaning of transitional security interest, see section 308 of the Personal Property Securities Act 2009 of the Commonwealth. primary activity—see section 144. prison includes a correctional centre or correctional complex. public sector official has the meaning given by the Co-operatives National Law Act of this jurisdiction. quoted security means a security that is quoted on a prescribed financial market (within the meaning of the Corporations Act). receiver includes a receiver and manager. Registrar for this jurisdiction has the meaning given by the Co-operatives National Law Act of this jurisdiction. related (in the context of related corporations)—see Part 3 of Schedule 2. relevant interest—see Part 1 of Schedule 2. rules of a co-operative (otherwise than in the context of proposed rules or model rules) means the registered rules of the co-operative in force for the time being. secretary of a co-operative means the person appointed under section 190 to be, or to act as, the secretary of the co-operative. security interest means— (a) a PPSA security interest; or (b) a charge, lien or pledge. serve includes give, send and similar terms. small co-operative means a co-operative of a class or description prescribed by the National Regulations. special postal ballot—see section 248. special resolution—see section 239. strict liability—see section 550. subsidiary has the same meaning as it has in the Corporations Act. Supreme Court means the Supreme Court of this jurisdiction. surplus, in relation to a co-operative, means the excess of income over expenditure after making adequate allowance for taxation expense, for depreciation in value of the property of the co-operative and for future contingencies. the Minister means— (a) the Minister administering the Co-operatives National Law Act of this jurisdiction; or (b) if different Ministers are administering that Act in different respects—the Minister administering the Act in the relevant respect; or (c) if different Ministers are administering different portions of that Act—the Minister administering the relevant portion of the Act; or (d) if paragraphs (b) and (c) do not apply and 2 or more Ministers are administering that Act or a portion of that Act—any one of the Ministers administering the Act or portion of the Act. this jurisdiction—see the definition of that term in the Co-operatives National Law Act of each jurisdiction that adopts this Law. 5 Miscellaneous provisions relating to the interpretation of this Law ( Schedule 4 ) Schedule 4 contains miscellaneous provisions relating to the interpretation of this Law. 6 References to regulations where National Regulations are not applied (1) This section applies where the Co-operatives National Law Act of a jurisdiction does not provide that the National Regulations apply as regulations for the purposes of this Law as applying in that jurisdiction. (2) A reference in this Law as applying in that jurisdiction to National Regulations is taken to be a reference to regulations made under that Act that are the same or substantially the same as the National Regulations. 7 Corresponding co-operatives law (1) This section determines what (if any) law of another jurisdiction is a corresponding co-operatives law for the purposes of this Law. (2) If this Law applies as a law of the other jurisdiction (whether with or without modification), this Law as so applying is a corresponding co-operatives law for the purposes of this Law. (3) If this Law does not apply as a law of the other jurisdiction, a law of the other jurisdiction is a corresponding co-operatives law for the purposes of this Law if the National Regulations declare that the law substantially corresponds to the provisions of this Law. 8 Co-operatives National Law Act of this jurisdiction (1) It is intended that this Law will or may be supplemented by provisions of the Co-operatives National Law Act of this jurisdiction where an intention of supplementation (however expressed) is indicated in this Law, including provisions designating— (a) a person or body to be a designated authority; or (b) an instrument or document to be a designated instrument; or (c) a court or tribunal to be a designated tribunal; for the purposes of particular provisions of this Law. Note. Other provisions of this Law express the intention that the Co-operatives National Law Act of this jurisdiction will or may provide for particular matters. (2) It is also intended that the National Regulations will or may be supplemented by provisions of the local regulations where an intention of supplementation is indicated in the National Regulations. 9 Involvement in contraventions (cf Corporations Act s 79) A person is involved in a contravention if, and only if, the person— (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. Part 1.3 The co-operative principles 10 Co-operative principles The co-operative principles are the following principles— 1 Voluntary and open membership Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. 2 Democratic member control Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (1 member, 1 vote) and co-operatives at other levels are organised in a democratic way. 3 Member economic participation Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of the capital is usually the common property of the co-operative. They usually receive limited compensation (if any) on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes— (a) developing the co-operative, possibly by setting up reserves, part of which at least would be indivisible; (b) benefiting members in proportion to their transactions with the co-operative; (c) supporting other activities approved by the membership. 4 Autonomy and independence Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy. 5 Education, training and information Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their co-operatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of co-operation. 6 Co-operation among co-operatives Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures. 7 Concern for the community While focusing on member needs, co-operatives work for the sustainable development of their communities through policies accepted by their members. Note. The co-operative principles are those adopted by the International Co-operative Alliance. 11 Interpretation to promote co-operative principles In the interpretation of a provision of this Law, a construction that would promote the co-operative principles is to be preferred to a construction that would not promote the co-operative principles. Part 1.4 The Corporations legislation Division 1 Exclusion of matters from the Corporations legislation 12 Excluded matter—co-operatives and participating co-operatives (1) A co-operative and a participating co-operative are each declared to be an excluded matter for the purposes of section 5F of the Corporations Act in relation to the whole of the Corporations legislation other than to the extent specified in this section. Note. This section ensures that neither the Corporations Act nor Part 3 of the ASIC Act will apply in relation to a co-operative or participating co-operative, other than to the extent specified in this section. Section 5F of the Corporations Act provides that if a State or Territory law declares a matter to be an excluded matter in relation to the whole of the Corporations legislation other than to a specified extent, then that legislation will not apply, except to the specified extent, in relation to that matter in the State or Territory concerned. However, other provisions of this Part provide for the application of provisions of the Corporations legislation to co-operatives or participating co-operatives as laws of this jurisdiction. (2) Subsection (1) does not exclude the application of the following provisions of the Corporations legislation to co-operatives or participating co-operatives to the extent that the provisions would otherwise be applicable to them— (a) provisions relating to a matter that the National Regulations provide is not to be excluded from the operation of the Corporations legislation; (b) provisions relating to the role of a co-operative or participating co-operative in the formation of a company; (c) provisions relating to the registration of a co-operative as a company under Chapter 5B of the Corporations Act; (d) provisions relating to substantial shareholdings, by or involving a co-operative or participating co-operative, in a company; (e) provisions conferring or imposing functions on a co-operative or participating co-operative as a member, or former member, of a corporation; (f) provisions relating to dealings by a co-operative or participating co-operative in financial products of a corporation, other than financial products of the co-operative or participating co-operative itself; (g) provisions conferring or imposing functions on a co-operative or participating co-operative in its dealings with a corporation, not being dealings in financial products of the co-operative or participating co-operative; (h) provisions relating to financial products of a co-operative, other than shares in, CCUs of, debentures of, or deposits with, a co-operative or participating co-operative; (i) provisions relating to financial markets and participants in financial markets; (j) provisions relating to financial services licensees whose licence covers dealing in, or providing advice about, financial products; (k) provisions relating to carrying on a financial services business; (l) provisions relating to financial statements, and audits of financial statements, of financial services licensees whose licence covers dealing in, or providing advice about, financial products; (m) provisions relating to clients of financial services licensees whose licence covers dealing in, or providing advice about, financial products; (n) provisions relating to registers of interests in financial products; (o) provisions relating to powers of a court to cure procedural irregularities and to make other orders. (3) To avoid doubt, it is declared that subsection (1) does not operate so as to exclude the operation of the following provisions of the Corporations Act, except in relation to shares in, CCUs issued by, debentures of, or deposits with, a co-operative or participating co-operative— (a) Part 1.2A; (b) Chapter 2L; (c) Chapter 6CA; (d) Chapter 6D; (e) Part 7.10. Division 2 Applied matters (applied Corporations legislation matters) 13 Applied Corporations legislation matters under this Law (1) Other provisions of this Law declare matters to be applied Corporations legislation matters for the purposes of the Corporations application legislation of this jurisdiction in relation to provisions of the Corporations Act specified in those provisions. (2) A declaration is made subject to any modifications specified in or in connection with the provision in which the declaration is made. (3) Additionally, a declaration is also made subject to— (a) any modifications applying under section 15; and (b) any modifications prescribed by the National Regulations; and (c) any necessary modifications. Note 1. The Corporations application legislation of this jurisdiction provides for the application of provisions of the Corporations Act and Part 3 of the ASIC Act as laws of this jurisdiction in respect of any matter declared by a law of this jurisdiction (whether with or without modification) to be an applied Corporations legislation matter for the purposes of the Corporations application legislation in relation to those Commonwealth provisions. The Corporations application legislation ensures that a declaration made for the purposes of that legislation only operates so as to apply a provision of the Corporations legislation to a matter as a law of this jurisdiction if that provision does not already apply to the matter as a law of the Commonwealth. If a provision referred to in a declaration already applies as a law of the Commonwealth, nothing in the declaration will affect its continued operation as a law of the Commonwealth. Note 2. The following Table indicates the location and subject matter of declarations made under other provisions of this Law. Table Applied provisions of Corporations Act Location of applied provisions in Corporations Act Matter to which applied provision applies Provision of this Law that makes the declaration Sections 111AA–111AX Part 1.2A (Disclosing entities) Debentures (and CCUs) of a co-operative Section 337 Sections 283AA–283HB Chapter 2L (Debentures) Debentures (and CCUs) of a co-operative Section 337 Section 295A Part 2M.3, Division 1 (Annual financial reports and directors' reports) A co-operative with quoted securities Section 277 Sections 299A–300A Part 2M.3, Division 1 (Annual financial reports and directors' reports) A co-operative with quoted securities Section 281 Sections 302–306 Part 2M.3, Division 2 (Half-year financial report and directors' report) A co-operative that is a disclosing entity Section 282 Sections 307–313 Part 2M.3, Division 3 (Audit and auditor's report) A co-operative Section 283 Section 315 (1) Part 2M.3, Division 4 (Annual financial reporting to members) A co-operative that is a disclosing entity Section 285 Section 318 Part 2M.3, Division 4 (Annual financial reporting to members) A co-operative Section 288 Sections 323–323C Part 2M.3, Division 6 (Special provisions about consolidated financial statements) A co-operative Section 294 Sections 324AA–324DD (except section 324BD) Part 2M.4 (Appointment and removal of auditors), Divisions 1–5 A co-operative Section 297 Sections 416–434G Part 5.2 (Receivers, and other controllers, of property of corporations) A co-operative Section 393 Sections 435A–451D (except section 446B) Part 5.3A (Administration of a company's affairs with a view to executing a deed of company arrangement) A co-operative Section 382 Sections 459A–581 Part 5.4 (Winding up in insolvency) The winding up of a co-operative Section 444 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 465–489E Part 5.4B (Winding up in insolvency or by the court) The winding up or deregistration of participating co-operatives Section 472 Sections 513–581 Part 5.6 (Winding up generally) The winding up or deregistration of participating co-operatives Section 472 Section 536 Part 5.6, Division 3 (Liquidators) A person appointed to administer a compromise or arrangement Section 420 Section 563AAA Part 5.6, Division 6 (Proof and ranking of claims) Debentures (and CCUs) issued by a co-operative to any of its members or employees Section 342 Sections 588C–588Z Part 5.7B (Recovering property or compensation for the benefit of creditors of insolvent company) A co-operative Section 451 Sections 589–596 Part 5.8 (Offences) A co-operative Section 201 Sections 596AA–596AI Part 5.8A (Employee entitlements) A co-operative Section 202 Sections 596A–597B Part 5.9, Division 1 (Examining a person about a corporation) A co-operative Section 489 Sections 600A–600H Part 5.9, Division 3 (Provisions applying to various kinds of external administration) A co-operative Section 382 Sections 601AA–601AH Part 5A.1 (Deregistration) The deregistration of a co-operative and a deregistered co-operative Section 453 Sections 674–678 Chapter 6CA (Continuous disclosure) Debentures (and CCUs) of a co-operative Section 337 Sections 700–742 Chapter 6D (Fundraising) Debentures (and CCUs) of a co-operative Section 337 Sections 1040A–1045A Part 7.10 (Market misconduct and other prohibited conduct relating to financial products and financial services) Debentures (and CCUs) of a co-operative Section 337 Sections 1339–1343A Part 9.7 (Unclaimed property) Anything paid or transferred to the Registrar under section 436 (2) Section 436 (3) 14 Applied Corporations legislation matters under the National Regulations (1) The National Regulations may declare any matter relating to co-operatives or participating co-operatives to be an applied Corporations legislation matter for the purposes of the Corporations application legislation of this jurisdiction in relation to any provision of the Corporations legislation that does not apply of its own force to co-operatives or participating co-operatives (as the case may be). (2) The declaration is made subject to any modifications specified in the provision in which the declaration is made. (3) Additionally, the declaration is also made subject to— (a) any modifications applying under section 15; and (b) any modifications prescribed by the National Regulations; and (c) any necessary modifications. (4) The National Regulations may also provide that a specified provision of the Corporations legislation (with any applicable modifications) that is the subject of the declaration— (a) operates to the exclusion of a specified provision of this Law; or (b) prevails over a specified provision of this Law to the extent of any inconsistency. 15 Modifications to applied provisions (1) This section applies in relation to any provisions of the Corporations legislation (the applied provisions) that are the subject of— (a) a declaration under this Law, as referred to in section 13; or (b) a declaration under the National Regulations, as referred to in section 14. (2) For the purposes of sections 13 and 14, the following modifications apply— (a) a reference in the applied provisions to a corporation, company or public company is to be read as a reference to a co-operative; (b) a reference in the applied provisions to ASIC is to be read as a reference to the Registrar; (c) a reference in the applied provisions to the court is to be read as a reference to the Supreme Court; (d) a reference in the applied provisions to the Commonwealth is to be read as a reference to this jurisdiction; (e) a reference in the applied provisions to articles or memorandum of association or constitution or replaceable rules is to be read as a reference to rules; (f) a reference in the applied provisions to the Gazette is to be read as a reference to the Government Gazette of this jurisdiction; (g) a reference in the applied provisions to "prescribed" is to be read as a reference to "approved by the designated authority", and (without limitation) a reference to a prescribed form is to be read as a reference to an approved form within the meaning of this Law; (h) a reference in the applied provisions to a special resolution is to be read as a reference to a special resolution referred to in section 239 of this Law; (i) a cross-reference in the applied provisions to another provision of the Corporations Act is, if that cross-reference is not appropriate (because, for example, the provision cross-referred to is not among the applied provisions), to be read as a cross-reference to the equivalent provision of this Law; (j) a reference in the applied provisions (including section 311 of the Corporations Act) to a "contravention of this Act" is to be read as including a reference to a contravention of this Law; (k) a reference in the applied provisions to the regulations is to be read as a reference to the National Regulations or local regulations, as the case requires; (l) all notes in the applied provisions are to be ignored; (m) any of the applied provisions that are not relevant to co-operatives or that are incapable of application to co-operatives or participating co-operatives are to be ignored. (3) Subsection (2) does not apply to the extent to which this Law or the National Regulations provide otherwise, whether expressly or by implication. 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 (1) The National Regulations may make provision, in relation to co-operatives, participating co-operatives or associated matters, for or with respect to any matter for which a provision of the Corporations legislation has effect in relation to companies or associated matters. (2) A National Regulation made under subsection (1) may deal with a matter in a similar way as, or in a different way from, that in which the provision of the Corporations legislation has effect. (3) Subsection (1) does not apply in relation to a provision of the Corporations legislation that applies of its own force or by operation of other provisions of this Law. (4) Without limiting subsection (1) or (2), the National Regulations may confer jurisdiction on a court or tribunal to exercise any function conferred by the National Regulations made under subsection (1). Note. This section authorises the National Regulations to deal with a matter dealt with by Corporations legislation (with certain limitations) in a manner that does not involve the declaration of the matter to be an applied Corporations legislation matter. This procedure is contemplated by the Corporations application legislation of the various jurisdictions. Chapter 2 Formation, powers and constitution of co-operatives Part 2.1 Formation Division 1 Types of co-operatives 17 Types of co-operatives (1) A body may be registered under this Law as a co-operative. (2) A co-operative may be either— (a) a distributing co-operative; or (b) a non-distributing co-operative. 18 Distributing co-operatives (1) A distributing co-operative is a co-operative that is not prohibited from giving returns or distributions on surplus or share capital. (2) A distributing co-operative must have share capital. (3) A distributing co-operative must have a membership of— (a) in the case of a co-operative group—2 or more co-operatives; or (b) in the case of any other distributing co-operative— (i) if a lesser number than 5 is approved by the Registrar—at least that number of active members; or (ii) otherwise—5 or more active members. (4) An approval under subsection (3) may be given in relation to a particular co-operative or class of co-operatives. 19 Non-distributing co-operatives (1) A non-distributing co-operative is a co-operative that is prohibited from giving returns or distributions on surplus or share capital to members, other than the nominal value of shares (if any) at winding up. (2) A non-distributing co-operative may or may not have share capital. (3) A non-distributing co-operative must have a membership of— (a) in the case of a co-operative group—2 or more co-operatives; or (b) in the case of any other non-distributing co-operative— (i) if a lesser number than 5 is approved by the Registrar—at least that number of active members; or (ii) otherwise—5 or more active members. (4) An approval under subsection (3) may be given in relation to a particular co-operative or class of co-operatives. 20 Provisions regarding Registrar's approvals about numbers (1) The Registrar may give one composite approval that operates as more than one of the following— (a) an approval concerning the number of active members of a co-operative required under section 18 (3) or 19 (3); (b) an approval concerning the number of persons required to hold the formation meeting of a co-operative under section 22 (2); (c) an approval concerning the number of members required to sign the application for registration of a proposed co-operative under section 26 (1); (d) an approval concerning the minimum number of members for a co-operative to continue to carry on business under section 119. (2) A composite approval may be given in relation to— (a) a particular co-operative or proposed co-operative; or (b) a particular class of co-operatives or proposed co-operatives; or (c) all co-operatives or proposed co-operatives. (3) This section does not limit the power of the Registrar to give separate approvals under any of the relevant sections. Division 2 Formation meeting 21 Formation meeting (1) Before a proposed co-operative (other than an existing corporation) can be registered, a formation meeting must be held under this Division. (2) Before a formation meeting can be held for a proposed co-operative, a draft of the proposed rules and a draft of the proposed formation disclosure statement must be approved by the Registrar in accordance with Division 3. 22 Requirements regarding formation meeting (1) At the formation meeting for a proposed co-operative— (a) the proposed rules of the co-operative approved under section 24 for the proposed co-operative, including active membership provisions, must be passed by two-thirds of the proposed members of the proposed co-operative attending the meeting; and (b) in the case of— (i) a proposed distributing co-operative; or (ii) a proposed non-distributing co-operative that is the subject of a direction under section 23 (2) (a); a formation disclosure statement approved under section 25 must be presented to the meeting; and (c) the proposed members of the proposed co-operative must sign the application for membership; and (d) the proposed members must elect the first directors of the proposed co-operative under the proposed rules; and (e) the proposed members must authorise a person— (i) to apply to the Registrar for registration of the proposed co-operative; and (ii) to do anything necessary to have the proposed co-operative registered. (2) The formation meeting must be held by— (a) in the case of a co-operative group—not less than 2 co-operatives suitably qualified to be members of the proposed co-operative group; or (b) in the case of any other co-operative—not less than 5 persons, or if a lesser number than 5 is approved by the Registrar not less than the approved number of persons, suitably qualified to be members of the proposed co-operative. (3) For the purposes of subsection (2), a person (including a co-operative) is suitably qualified to be a member if— (a) there are reasonable grounds to believe the person will be an active member of the proposed co-operative; and (b) in the case of an individual—the person is an adult; and (c) the person satisfies any other requirements for membership in the proposed rules. (4) Each co-operative forming a proposed co-operative group may be represented at the formation meeting by one person. (5) An approval under subsection (2) may be given in relation to a particular co-operative or class of co-operatives or to all co-operatives. Division 3 Initial approval of rules and formation disclosure statement 23 Submission of draft rules and draft formation disclosure statement (1) The following documents must be submitted to the Registrar before the formation meeting— (a) a draft of the rules proposed for the co-operative (including active membership provisions); (b) in the case of— (i) a distributing co-operative—a draft formation disclosure statement for the co-operative; or (ii) a non-distributing co-operative—a draft formation disclosure statement for the co-operative if the Registrar so directs under subsection (2) (a); (c) a written notice of intention to apply for registration as a co-operative. (2) The Registrar may by written notice direct that— (a) a draft formation disclosure statement for a proposed non-distributing co-operative must be submitted to the Registrar; and (b) a formation disclosure statement approved under section 25 must be presented to the formation meeting for the co-operative. (3) The notice under subsection (2) is to be given to the person who submitted notice of intention to apply for registration as a co-operative and must specify the time by which the draft formation disclosure statement must be submitted to the Registrar. 24 Provisions relating to and approval of rules (1) This section applies to draft rules for a co-operative required to be submitted to the Registrar under section 23. (2) The rules must— (a) be in accordance with section 56; and (b) be in a form that may reasonably be approved. (3) If the rules do not make provision for any matter required by Schedule 1, the Registrar may approve the relevant provisions of the model rules as rules of the co-operative. (4) The Registrar may— (a) approve the rules as submitted; or (b) approve different rules to those submitted; or (c) refuse to approve the rules; or (d) require the person submitting the draft rules to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b) or (c). (5) Subject to subsection (6), the Registrar approves of the rules by giving written notice of the approval of the rules to the person who submitted the draft rules to the Registrar. (6) The Registrar is taken to have approved the proposed rules (as submitted to the Registrar) at the end of the period of 28 days after they were submitted, unless before the end of that period the Registrar gives written notice to the person who submitted them that the Registrar— (a) has approved different rules to those submitted; or (b) is still considering the matter; or (c) refuses to approve the proposed rules. (7) The Registrar must give the person who submitted the proposed rules to the Registrar written notice of the reasons for acting under subsection (6) (a) or (c). 25 Provisions relating to and approval of formation disclosure statement (1) This section applies to a draft formation disclosure statement for a co-operative required to be submitted to the Registrar under section 23. (2) The draft formation disclosure statement for a distributing co-operative must contain the information necessary to ensure prospective members are adequately informed of the nature and extent of a person's financial involvement or liability as a member of the co-operative including so far as applicable— (a) the estimated costs of formation; and (b) the active membership provisions of the proposed co-operative; and (c) the rights and liabilities attaching to shares in the proposed co-operative; and (d) the capital required for the co-operative at the time of formation; and (e) the projected income and expenditure of the co-operative for its first year of operation; and (f) information about any contracts required to be entered into by the co-operative; and (g) any other information that the Registrar directs to be included. (3) The draft formation disclosure statement for a non-distributing co-operative must contain the information that the Registrar directs to be included. (4) The Registrar may— (a) approve the draft statement as submitted; or (b) amend the draft, or require a specified amendment of the draft, and then approve the amended statement; or (c) approve a different statement to that submitted; or (d) refuse to approve the draft statement; or (e) require the person submitting the draft statement to give the Registrar any additional information the Registrar reasonably requires, and then act under paragraph (a), (b), (c) or (d). (5) Approval may be given at any time before the formation meeting is held. (6) Approval may be given with or without conditions. (7) Subject to subsection (8), the Registrar approves of a formation disclosure statement by giving written notice of the approval of the statement to the person who submitted the draft statement to the Registrar. (8) The Registrar is taken to have approved the formation disclosure statement (as submitted to the Registrar) at the end of the period of 28 days after the day it was submitted to the Registrar, unless before the end of that period the Registrar gives written notice to the person who submitted the draft statement that the Registrar— (a) has approved a different formation disclosure statement to that submitted; or (b) is still considering the matter; or (c) refuses to approve the formation disclosure statement. (9) The Registrar must give the person who submitted the draft statement to the Registrar written notice of the reasons for acting under subsection (8) (a) or (c). Note. Section 69 contains restrictions on advertising or publishing statements about an offer, or intended offer, of shares in a distributing co-operative unless a current formation disclosure statement relating to the shares is registered with or approved by the Registrar. Division 4 Registration of proposed co-operative 26 Application for registration of proposed co-operative (1) An application for registration of a proposed co-operative (other than an existing corporation) must— (a) be made in the approved form; and (b) be accompanied by the fee— (i) prescribed by the National Regulations, unless subparagraph (ii) applies; or (ii) prescribed by the local regulations; and (c) be signed by— (i) in the case of a co-operative group—at least 2 directors; and (ii) in the case of any other proposed co-operative—at least 5, or if a lesser number than 5 is approved by the Registrar at least the approved number of, suitably qualified members, including 2 directors elected at the formation meeting; and (d) be accompanied by— (i) 2 copies of the proposed rules signed and certified by the persons who acted as chairperson and secretary at the formation meeting; and (ii) in the case of— (A) a proposed distributing co-operative; or (B) a proposed non-distributing co-operative that is subject to a direction under section 23 (2); a copy of the formation disclosure statement presented to the formation meeting signed and certified by the persons who acted as chairperson and secretary at the formation meeting; and (iii) a statement listing the name, address, occupation and place and date of birth of each director; and (iv) a statement of the address (located in this jurisdiction) of the co-operative's registered office or proposed registered office; and (v) any other particulars the Registrar may require in a particular case. (2) The application must be filed with the Registrar within 2 months after closure of the formation meeting for the proposed co-operative or within the extended period that the Registrar may allow. 27 Registration of proposed co-operative (1) If an application is made under this Division for registration of a proposed co-operative, the Registrar must register the co-operative and its rules if the Registrar is satisfied that the requirements for registration of the co-operative have been met. (2) The requirements for registration of a co-operative under this Division are as follows— (a) the proposed rules of the proposed co-operative must be the rules approved by the Registrar under section 24; (b) the requirements of this Law must have been complied with in relation to the proposed co-operative; (c) the proposed co-operative must be designed to function under the co-operative principles or, if it is not designed to function entirely under the co-operative principles, the Registrar must be satisfied there are special reasons why the co-operative should be registered under this Law; (d) there must be no reasonable cause for refusing registration of the proposed co-operative. (3) If the Registrar is not satisfied that the requirements for registration of the co-operative have been met, the Registrar may refuse to register the co-operative and its rules. (4) The Registrar must give to the applicant written notice of the refusal and the reasons for the refusal. 28 Incorporation and certificate of registration (1) A co-operative becomes a corporation on being registered. (2) On the registration of the co-operative, the Registrar must issue a certificate of registration. Division 5 Registration of existing corporation 29 Existing corporation can be registered A corporation (other than a co-operative taken to be registered under this Law) may apply to the Registrar to be registered as a co-operative under this Law. 30 Formation meeting (existing corporation) (1) Before applying for registration as a co-operative, the corporation must, at the formation meeting, by a resolution approve of— (a) the proposed registration; and (b) any amendment of its existing constituent documents necessary to enable the corporation to comply with this Law; and (c) the proposed rules of the proposed co-operative approved under section 24, including active membership provisions. (2) The formation disclosure statement approved under section 25 must be presented to the formation meeting, in the case of— (a) a proposed distributing co-operative; or (b) a proposed non-distributing co-operative that is the subject of a direction under section 23 (2). (3) A resolution under this section must have been passed by a two-thirds majority of eligible members present at the formation meeting. Note. Section 32 (5) provides that, despite anything to the contrary in this Division, the registration of a corporation as a co-operative does not take effect until the corporation ceases to be registered under the law under which it was previously registered. 31 Application for registration of existing corporation An application for the registration of an existing corporation must— (a) be in the approved form; and (b) be accompanied by the fee— (i) prescribed by the National Regulations, unless subparagraph (ii) applies; or (ii) prescribed by the local regulations; and (c) be accompanied by— (i) a written declaration, signed no more than 28 days before the application for registration by the directors or committee of management of the corporation, stating that at a meeting of the directors or committee they formed the opinion that the corporation will be able to pay its debts as they fall due; and (ii) a report in the approved form as to the affairs of the corporation and showing its assets and liabilities, made up to the latest practicable date before the application; and (iii) a copy of the constituent documents of the corporation in force at the date of the application; and (iv) 2 copies of the proposed rules of the co-operative, as provided for by the special resolution; and (v) in the case of a proposed distributing co-operative or in the case of a proposed non-distributing co-operative that is subject to a direction under section 23 (2)—a copy of the formation disclosure statement presented to the meeting held under section 30, certified by the directors or committee of management of the corporation; and (vi) a list containing the name, address, occupation and place and date of birth of each director; and (vii) evidence to the satisfaction of the Registrar of the incorporation of the corporation; and (viii) a statement setting out the connection that the proposed co-operative would have to this jurisdiction; and (ix) a statement of the address (located in this jurisdiction) of the co-operative's registered office or proposed registered office; and (x) any other particulars the Registrar may require in a particular case. 32 Requirements for registration (1) When an application is made for the registration of a corporation as a co-operative under this Division, the Registrar must register the corporation as a co-operative under this Law and register its rules under this Law if the Registrar is satisfied the requirements for the registration of the corporation as a co-operative have been met. (2) The requirements for the registration of a corporation as a co-operative under this Division are as follows— (a) the proposed rules of the proposed co-operative must be the rules approved by the Registrar under section 24; (b) the requirements of this Law must have been complied with in relation to the proposed co-operative; (c) there must be no reasonable cause for refusing registration of the proposed co-operative; (d) the proposed co-operative must have a sufficient connection with this jurisdiction. (3) If the Registrar is not satisfied t