Co-operatives National Law (NSW)

The board of a distributing co-operative may require a member to take up or subscribe for additional shares under a proposal approved by a special resolution of the co-operative passed by a special postal ballot.

The board of a distributing co-operative may deduct amounts in payment for additional shares from money payable to members for dealings with the co-operative, under a proposal approved by a special resolution of the co-operative passed by a special postal ballot.

A proposal to require a member to take up or subscribe for additional shares must—

be accompanied by a disclosure statement, registered by the Registrar, that explains the purpose for which the funds raised by the issue of the additional shares are to be used; and

clearly show the total number of additional shares to be issued and the basis on which the shares are to be apportioned among members; and

be accompanied by a statement informing the member that the member may inform the board by notice on or before the date stated in the statement (being a date before the passing of the special resolution) that the member resigns on the passing of the special resolution.

A proposal to deduct amounts in payment for additional shares from amounts payable to members for their dealings with the distributing co-operative must clearly show—

the basis on which the deductions are to be made; and

the time and way of making those deductions.

A proposal approved under this section is binding on—

all members of the distributing co-operative at the date of the passing of the special resolution, other than a member who has given a notice of resignation under subsection (3) (c); and

all persons who become members of the distributing co-operative after that date and before the total number of shares to be issued under the proposal has been issued.

The requirements in respect of a proposal to take up additional shares under subsection (3) do not apply to the issue of bonus shares under section 80 (4) (a), 83 or 357.