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COOPERATIVES REGULATIONS 2003 (NO 22 OF 2003)
2003
LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL
TERRITORY
COOPERATIVE REGULATIONS 2003
SUBORDINATE LAW
SL2003-22
EXPLANATORY STATEMENT
Circulated by authority of the
Attorney General
Mr Jon
Stanhope MLA
2.
COOPERATIVES REGULATIONS
2003
SUBORDINATE LAW 2003 NO 22
The Cooperatives Act 2003 (the Act) is intended to:
(a) enable the formation, registration and operation of cooperatives; and
(b) promote cooperative philosophy, principles, practices and objectives; and
(c) protect the interests of cooperatives, their members and the public in the operations and activities of cooperatives; and
(d) ensure that the directors of cooperatives are accountable for their actions and decisions to the members of cooperatives; and
(e) encourage and facilitate self-management by cooperatives at all levels; and
(f) encourage the development, integration and strengthening of cooperatives at local regional, national and international levels by supporting and fostering Territory, State and national peak organisations and cooperative instrumentalities.
Cooperatives are member based organisations operated for the benefit of their members. The factors which distinguish cooperatives from other forms of organisations are their mutuality, their democratic structure and character (each member is entitled to one vote only, regardless of the size of their shareholding), and the fact that capital in a cooperative services the activity rather than providing individual benefit.
The Cooperatives Regulations 2003 (the Regulations) give effect to the
substantive legislation. They are designed to allow it operate as effectively
and efficiently as possible. The regulations supplement the new legislation to
provide a clear and coherent framework for the formation, registration and
management of cooperatives. They are also designed to enable flexibility in the
operation and development of cooperatives.
The regulations have been
prepared to ensure consistency with the Nationally Consistent Cooperative
Legislation process and as such are aligned (to as much extent as is practical)
with the Co-operatives Regulations that are currently in force in Queensland.
The adoption of a uniform national approach to legislation and
regulations dealing with cooperative societies overcomes the lack of consistency
between the legislation and regulations of the States and Territories,
particularly in respect of cooperatives that wish to carry on business outside
the jurisdiction in which they are initially registered.
3.
Regulation 1 – Name of regulations – provides that the
regulations are the Cooperatives Regulations
2003.
Regulation 2 – Commencement – provides that
the regulations commence on the day after they are notified on the Legislation
Register.
Regulation 3 – Dictionary – provides that
the dictionary is part of the regulations.
Regulation 4 – Notes
– provides that the notes included in the regulations are explanatory
and do not form part of the regulations.
Regulation 5 –
Offences against Regulations – application of Criminal Code etc –
provides that other legislation applies in regard to the offences against
this Regulation. For example chapter 2 of the Criminal Code applies to offences
in this Act. This clause increases awareness of the Criminal Code and alerts
the reader to the fact that chapter 2 of the Criminal Code, setting out the
general principles of criminal responsibility, applies to these Regulations.
Regulation 6 – Content of rules – Act, s102 –
provides that the rules of a cooperative that has share capital must state
the minimum number of shares to which a member of the cooperative must
subscribe.
Regulation 7 – Maximum fine cooperative may impose
on member – Act, s103(6) - provides that for the purposes of section
103 of the Act, the maximum fine that a cooperative may impose on a member
is:
• 10 penalty units for a trading cooperative; and
• 1
penalty unit for a non-trading cooperative.
A penalty unit is defined in
the Legislation Act 2001 as $100.
Regulation 8 ––
Deciding primary activities – Act, s119(2)(c) – provides that
for the purposes of section 119 of the Act, the following factors are relevant
in determining the primary activities of a cooperative:
• if the cooperative actually carries on its primary activities;
and
• whether the cooperative carries on the provision of a taxi radio
network.
• if it contribution 10% to the cooperatives turnover, income, expenses
or surplus; or
• if the registrar believes that the business of the
cooperative would reduce by over 10% if the activity was not conducted.
4.
Regulation 10 – How to notify member whose whereabouts unknown
of memberships cancellation – Act, s 131 (1) – provides that the
board of a cooperative may given notice of its intention to cancel the
membership of a member whose whereabouts are unknown by publishing a notice in a
newspaper circulating in the ACT.
Regulation 11 – Particulars to
include in register of cancelled memberships – Act, s136(2) –
provides that the items specified in Schedule 1, clause 5 are prescribed.
Clause 5 of Schedule 1 provides the detail of what must be included in a
register of cancelled memberships.
Regulation 12– Person who may
make a valuation for bonus share issue – Act, s155(c) – provides
that a person who has been valuing assets of the kind concerned for at least
five years can make a valuation for a bonus share issue.
Regulation
13– Postal ballots – Act, s199(1) – provides that it is an
offence for a person to conduct a postal ballot other then in accordance with
schedule 2. The maximum penalty for this offence is 10 penalty units.
This is a strict liability offence. Section 23 of the Criminal Code
provides that if a law that creates an offence provides that the offence is one
of strict liability, there are no fault elements for any of the physical
elements of the offence. Essentially this means that conduct alone is
sufficient to make the defendant culpable.
However, under the Criminal
Code, all strict liability offences will have a specific defence of mistake of
fact. Clause 23(3) of the Criminal Code makes it clear that other defences may
still be available for use in strict liability offences.
Regulation
14– Certification of date of release from prison – Act, s214(5)
– provides that in a proceeding under section 214 a certificate from a
prescribed entity can provide a certificate stating that a person was released
from prison on a stated date, which is, in the absence of evidence to the
contrary, proof that the person was released from prison on that date. The
prescribed entities include the Director of Corrective Services Tasmania and the
Corrective Services Commission of NSW.
Regulation 15–
Registers to be kept by cooperatives - Act, s245 – provides that a
cooperative must keep a register of fixed assets, subordinated debt and a
register of people who have provided financial accommodation that is a
subordinated debt.
A subordinated debt is a debt incurred under
an agreement under which, in the event of the winding-up of the cooperative, any
claim of the creditor against the cooperative in relation to the debt is to rank
in priority after creditors but before the claims of members to repayment of any
share capital in the cooperative.
The registers must contain the
particulars prescribed in schedule 1.
5.
Regulation 18– Documents to be available for inspection –
Act, s247 (7) – prescribes the documents that a cooperative must have
available for inspection.
Regulation 19– Particulars
of appointment etc to be included in notice – Act, s249 (2) (b) –
prescribes the content of notices that must be given when a person is
appointed or ceases to hold an office of the cooperative.
Regulation
20 - Particulars to be included in annual report – Act, s 250 (1) (e) -
prescribes what must be included in a cooperative’s annual
report.
Regulation 21 – Advertising change of name – Act
256 (2) – provides that a cooperative must advertise any change of
name within a newspaper circulating in the ACT.
Regulation 22
– Restriction on obtaining financial accommodation – Act, s 259
– prescribes that it is an offence for a deposit-taking cooperative to
obtain financial accommodation from anyone but its’ members and
employees.
Regulation 23 – Maximum term of compulsory loan by
member – Act s 268 (2) – provides the maximum term of a
compulsory loan by a member.
Regulation 24 – Maximum amount of
limited dividend – Act, s274 (3) – prescribes the maximum
amount of limited dividend that a cooperative may pay.
Regulation 25
– Requirements for notices under Act, div 11.1 – Act s 279 -
provides what must be included in notices given in respect of acquisition of
interests in trading cooperatives.
Regulation 26 – Maximum fee
for inspection of register – Act, s 285 (4) – provides the fee
to be charged for inspection of the register of notifiable
interests
Regulation 27 – Information to be included in draft
explanatory statement – Act, s 341 (2) (b) (i) – provides what
must be included in a draft explanatory statement provided by a cooperative in
respect of a compromise or arrangement.
Regulation 28 –
Information to be included in explanatory statement – Act, s 341 (2) (b)
(i) –
provides what must be included in an explanatory statement
provided by a cooperative in respect of a compromise or arrangement is
prescribed in Schedule 3 of the regulations.
Regulation 29 –
Particulars to be included in notice to remaining shareholders – Act, s
357 (1) (a) – prescribes the particulars that must be included in a
notice to remaining shareholders following a compromise or arrangement being
entered into.
Regulation 30 – Corresponding laws – Act, s
362 (2) – provides a list of laws of other jurisdictions that
correspond to section 340 of the Cooperatives Act 2002.
Regulation 32 – Documents to accompany application – Act,
s 369 (2) (e) – prescribes the documents and information that must
accompany and application for registration by a foreign participating
cooperative.
6.
Regulation 34 – Documents etc to accompany application for
registration – Act, s 370 (2) (c) – prescribes the documents and
information that must accompany and application for registration by a foreign
non-participating cooperative.
Regulation 35 – Application of
Act to foreign cooperatives – Act 374 – provides that certain
provisions of the Act apply to participating cooperatives and that other
particular provisions apply to non-participating cooperatives.
Regulation 37 – Provision of Act to be complied with –
Act, s 378 (1) – provides the provisions of the Act that a foreign
cooperative proposing to register must comply with.
Regulation 38
– Documents to be given to cooperative – Act, s 378 (3) –
prescribes the documents that must be given to a cooperative proposing to
register as a foreign cooperative.
Regulation 39 – Allowances
etc payable to involved person attending for examination – Act,
s 406 (5) – provides the allowances and expenses that are
payable to a person attending an examination.
Regulation 40 –
Prescribed documents – Act, s 435 (1) (b) – prescribes the
documents kept by the registrar of cooperatives that may not be inspected.
Regulation 41 – Application of Act, s 407 and s 408 –
prescribes that the sections of the Act dealing with examination of involved
persons and client legal privilege of involved persons who are also lawyers
apply to regulation 39 (with certain modifications).
Regulation 42
– Extension of time by the registrar – provides that the
registrar may extend the time for something that is to be done under the
Act and Regulations (or notices under the Act and
Regulations).
Regulation 43 – Exclusions – holders of
prescribed offices – Act, sch 1, cl 19 – provides that the
offices detailed in schedule 5 of the regulations are excluded from the being
allowed a vote or a proxy, where they have that vote or proxy by virtue of the
office they hold.
Regulation 44 – Laws for registration of
securities – Act, sch 3, cl 8 – provides the laws that are
applicable to a reference in the Act to a lien or charge on a
crop, a lien or charge on wool or a stock
mortgage includes a reference to a security (however described) that is
registrable under a law of a State or Territory.
7.
Regulation 47 – Interpretation of applied Corporations Act
provisions – provides definitions of ‘court’ and
‘prescribed form’ in the context of the provisions of the
Corporations Act that are applied by the Cooperatives Act 2002 or these
regulations.
Schedule 1 – Particulars to be included in
registers – provides for particulars to be included in the various
registers prescribed by the Act.
Schedule 2 – Postal
Ballots – provides for details of the procedures to be followed in
conducting postal ballots.
Schedule 3 – Information for draft
explanatory statements and explanatory statements – provides details
of the information which must be included in draft explanatory statements and
explanatory statements with regard to compromise or arrangements entered into by
a cooperative.
Schedule 5 – Holders of prescribed offices – lists the
offices that are excluded from the being allowed a vote or a proxy, where they
have that vote or proxy by virtue of the office they hold.