Does Not Include Amendments By

Co-operatives Act 1992

Does not include amendments by:

Co-operatives Amendment Act 1997 No 39, Sch 1 [212] and [218] (not commenced)

Law Enforcement (Powers and Responsibilities) Act 2002 No 103 (not commenced -- to commence on 1.12.2005)

Reprint history:

Reprint No 1

1 August 1996

Reprint No 2

27 October 1998

Reprint No 3

25 September 2001

Reprint No 4

11 May 2004

Long Title

An Act to provide for the establishment of co-operatives and the regulation of their operations; and for related purposes.

Part 1 – Preliminary

Division 1 – Introduction

1 Name of Act

This Act may be cited as the Co-operatives Act 1992.

2 Commencement

This Act commences on a day or days to be appointed by proclamation.

3 Objects of this Act

(cf Vic Act s 3)

The objects of this Act 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 that the 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 and National peak organisations and co-operative instrumentalities.

3A Application to co-operative housing societies and other bodies

Except where expressly provided by this Act and except as provided by the regulations, this Act does not apply to or in respect of:

(a) a co-operative housing body under the Co-operative Housing and Starr-Bowkett Societies Act 1998, or

(b) a body that is of the same nature as such a co-operative housing body but that is not registered under that Act.

Division 2 – Interpretation

4 Division of functions under this Act

(1) The Minister has the function of determining policies for the administration of this Act.

(2) The Registrar is to exercise the functions of Registrar in accordance with the policies determined by the Minister for the administration of this Act.

(3) The Council is, in the exercise of its functions, to have regard to the policies determined by the Minister for the administration of this Act and is to exercise its functions in a manner that is consistent with those policies.

5 Definitions

(cf Vic Act s 4)

(1) In this Act:"agreement" means an agreement, arrangement or understanding:

(a) whether formal or informal or partly formal and partly informal,

(b) whether written or oral or partly written and partly oral, and

"alter", in relation to the rules of a co-operative, includes add to, substitute and rescind."associate" has the meaning given by Schedule 2."association" means an association registered under this Act."board" means the board of directors of a co-operative and includes a committee of management of a co-operative."CCU" means a co-operative capital unit, as provided for by Division 2 of Part 10."component co-operative" means a member of an association."co-operative" means a body registered under this Act as a co-operative and includes an association or federation."Corporations Act" means the Corporations Act 2001 of the Commonwealth."Council" means the Co-operatives Council constituted under this Act."Court" means the Supreme Court."debenture" means a document issued by a co-operative that evidences or acknowledges indebtedness of the co-operative in respect of money that is or may be deposited with or lent to the co-operative, whether constituting a charge on property of the co-operative or not, other than:

(a) a cheque, order for the payment of money or bill of exchange, or

(b) a promissory note having a face value of not less than $50,000, or

and includes a unit of a debenture."deed of arrangement" means a deed of arrangement executed under Part 5.3A of the Corporations Act as applying under this Act or such a deed as varied and in force from time to time."deposit taking co-operative" means a co-operative which is permitted to under section 263A accept money on deposit."director", in relation to a co-operative, includes:

(a) a person who occupies or acts in the position of a director or member of the board of the co-operative, whether or not the person is called a director and whether or not the person is validly appointed or duly authorised to act in the position, and

(b) a person in accordance with whose directions or instructions the directors or members of the board of the co-operative are accustomed to act.

"federation" means a federation registered under this Act."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

(i) the methods by which financial statements are made up, and

(ii) adjustments to be made in preparing financial statements.

"financial statements" means:

(a) a profit and loss statement, and

(b) a balance sheet, and

(d) if required by the accounting standards under the Corporations Act applying under this Act--a consolidated profit and loss statement, balance sheet and statement of cash flows.

"foreign co-operative" means a body corporate that is registered, incorporated or formed under, or subject to, a law in force outside New South Wales (including outside Australia), that regulates co-operatives or organisations having attributes the same as or similar to co-operatives but does not include:

(a) a body incorporated under the Corporations Act, or

(b) a financial institution or foreign society registered under financial institutions legislation within the meaning of the Financial Institutions (NSW) Code.

"holding co-operative", in relation to a subsidiary, means the co-operative of which the subsidiary is a subsidiary."inspector" means a person appointed as an inspector under section 372."model rules" means the model rules approved by the Registrar under Part 5."mortgage" includes lien, charge or other security over property."non-trading co-operative" means a non-trading co-operative that complies with section 15."officer", in relation to a co-operative, means:

(a) a director, secretary or employee of the co-operative, or

(b) a person who is concerned, or takes part, in the management of the co-operative, whether or not as a director, or

(d) an administrator of a deed of arrangement executed by the co-operative, or

(e) a liquidator or provisional liquidator appointed in a voluntary winding up of the co-operative, or

(f) an administrator of the co-operative appointed under Part 5.3A of the Corporations Act as applying under this Act or under Division 6 of Part 12 of this Act, or

(g) a trustee or other person administering a compromise or arrangement made between the co-operative and another person or other persons.

"primary activity" is defined by section 115."principal executive officer", in relation to a co-operative or to a subsidiary of a co-operative, means the principal executive officer of the co-operative or subsidiary for the time being, by whatever name called, and whether or not that officer is a director or the secretary."records" includes books, financial records, financial statements, minutes, registers, deeds, writings, documents and other sources of information compiled, recorded or stored in written form or on microfilm, or by electronic process, or in any other manner or by any other means."Register" means the Register of Co-operatives established under Part 15."Registrar" --see section 5B."related" (in the context of related bodies corporate) has the meaning given by Schedule 2."relevant interest" has the meaning given by Schedule 2."rule" means registered rule of a co-operative for the time being in force."seal", in relation to a co-operative, means common seal or official seal."share" means share in the share capital of a co-operative."subordinated debt" has the meaning given by section 265."subsidiary" has the same meaning as in the Corporations Act."surplus", in relation to a co-operative, means the excess of income over expenditure after making proper allowance for taxation expense, depreciation in value of the property of the co-operative and for future contingencies."trading co-operative" means a trading co-operative that complies with section 14.

(2) Words and expressions that have a defined meaning in the Corporations Act have, when used in this Act in relation to a body corporate that is not a co-operative, the same meaning as in the Corporations Act.

(3) In this Act:

(a) a reference to a function includes a reference to a power, authority and duty, and

(b) a reference to the exercise of a function includes, in relation to a duty, a reference to the performance of the duty.

(4) Notes included in this Act do not form part of this Act.

(5) A reference in this Act to a provision of the Corporations Act that is applied by or under this Act (or a part of this Act) is a reference to that provision to the extent that it is declared to apply to a matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 as a law of this State.

5A Qualified privilege

(cf Vic Act s 5)

(1) If this Act provides that a person has qualified privilege in respect of an act, matter or thing, the person, in respect of that act, matter or thing:

(a) has qualified privilege in proceedings for defamation, or

(b) is not, in the absence of malice on the person's part, liable to an action for defamation at the suit of a person.

(2) In subsection (1):"malice" includes ill-will to the person concerned or any other improper motive.

(3) Neither this section nor a provision of this Act that provides as mentioned in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.

5B Exercise of Registrar's functions

(1) The functions expressed to be conferred or imposed on the "Registrar" by or under this Act are to be exercised by the Director-General of the Department of Fair Trading.

(2) For that purpose, a reference in this Act to the Registrar is to be read as a reference to the Director-General of the Department of Fair Trading.

Division 3 – The co-operative principles

6 Co-operative principles

(cf Vic Act s 6)

In this Act, a reference to "co-operative principles" is a reference to the principles adopted by the International Co-operative Alliance, being the following principles:

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.

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 (one member, one vote) and co-operatives at other levels are organised in a democratic manner.

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that 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: developing the co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

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.

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.

Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

While focusing on member needs, co-operatives work for the sustainable development of their communities through policies accepted by their members.

7 Interpretation to promote co-operative principles

(cf Vic Act s 7)

(1) In the interpretation of a provision of this Act or the regulations, a construction that would promote co-operative principles is to be preferred to a construction that would not promote co-operative principles.

Division 4 – Application of Corporations Act to co-operatives

8 Definitions

(cf Vic Act s 8)

In this Division:

"excluded Corporations legislation provision" means any provision of the Corporations legislation that does not apply to co-operatives as a law of the Commonwealth.

9 Excluded matter

(cf Vic Act s 9)

(1) A co-operative is 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.

(2) Subsection (1) does not exclude the application of the following provisions of the Corporations legislation to co-operatives to the extent that those provisions would otherwise be applicable to them:

(a) provisions that relate to any matter that the regulations provide is not to be excluded from the operation of the Corporations Act,

(b) provisions that relate to the role of a co-operative in the formation of a company,

(d) provisions that confer or impose functions on a co-operative as a member, or former member, of a corporation,

(e) provisions that relate to dealings by a co-operative in securities of a body corporate, other than securities of the co-operative itself,

(f) provisions that confer or impose functions on a co-operative in its dealings with a corporation, not being dealings in securities of the co-operative,

(g) provisions that relate to securities of a co-operative, other than shares in, CCUs issued by, debentures of or deposits with a co-operative,

(h) provisions relating to derivatives,

(i) provisions relating to:

(i) financial services licensees (as defined in section 761A of the Corporations Act) whose licence covers dealing in, or providing advice about, securities, or

(ii) regulated principals (as defined in section 1430 of the Corporations Act) when dealing in, or providing advice about, securities as authorised by Subdivision D of Division 1 of Part 10.2 of that Act,

(j) provisions relating to the carrying on of a financial services business (as defined in section 761A of the Corporations Act) relating to securities,

(k) provisions relating to financial statements, and audits of financial statements, of:

(i) financial services licensees (as defined in section 761A of the Corporations Act) whose licence covers dealing in, or providing advice about, securities, or

(l) provisions relating to money and scrip of clients of:

(i) financial services licensees (as defined in section 761A of the Corporations Act) whose licence covers dealing in, or providing advice about, securities, or

(m) provisions relating to registers of interests in securities,

(n) provisions relating to powers of a Court to cure procedural irregularities and to make other orders.

(3) It is declared that subsection (1) does not operate 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:

(a) Part 1.2A (Disclosing entities),

(b) Chapter 2L (Debentures),

(d) Part 7.10 (Market misconduct and other prohibited conduct relating to financial products and financial services).

(4) Subsection (1) does not apply if the co-operative is directed by an order of the Court under section 98 (j) to become registered as a company under the Corporations Act to the extent necessary for a co-operative to be registered as a company under Chapter 5B of that Act.

10 Applying the Corporations legislation to co-operatives

(cf Vic Act s 10)

(1) The regulations may declare any matter relating to co-operatives to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 in relation to any excluded Corporations legislation provision or provisions (with such modifications as may be specified in the declaration).

(2) Without limiting subsection (1), any such regulations may:

(a) specify modifications to the definitions and other interpretative provisions of the Corporations legislation relevant to any excluded Corporations legislation provision that is the subject of the declaration, and

(b) provide for ASIC to exercise a function under any excluded Corporations legislation provision that is the subject of the declaration, but only if:

(i) ASIC is to exercise that function pursuant to an agreement of the kind referred to in section 11 (8) or (9A) (b) of the Australian Securities and Investments Commission Act 2001 of the Commonwealth, and

(ii) ASIC is authorised to exercise that function under section 11 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth, and

(c) specify that a reference to ASIC in any excluded Corporations legislation provision that is the subject of the declaration is to be read as a reference to another person, and

(d) identify any excluded Corporations legislation provision to which the declaration relates by reference to that provision as in force at a particular time, and

(e) specify a court of this State (other than the Supreme Court) to exercise any function conferred on a court or the Court by any excluded Corporations legislation provision to which the declaration relates.

(3) Words and expressions used in this section and also in Part 3 of the Corporations (Ancillary Provisions) Act 2001 have the same meanings as they have in that Part.

11 Modifications to applied provisions

(cf Vic Act s 11)

(1) If a provision of this Act declares a matter to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 (the "declaratory provision") in relation to any provisions of the Corporations legislation (the "applied provisions"), the declaratory provision is taken to specify the following modifications:

(a) a reference in the applied provisions to the constitution of a company is to be read as a reference to rules,

(b) 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 Act,

(d) any of the applied provisions that are not relevant to co-operatives or which are incapable of application to co-operatives are to be ignored,