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This Law may be cited as the Co-operatives National Law (NSW).
This Law commences in a jurisdiction as provided by the Co-operatives National Law Act of that jurisdiction.
The objects of this Law are—
to enable the formation, registration and operation of co-operatives; and
to promote co-operative philosophy, principles, practices and objectives; and
to protect the interests of co-operatives, their members and the public in the operations and activities of co-operatives; and
to ensure directors of co-operatives are accountable for their actions and decisions to the members of co-operatives; and
to encourage and facilitate self-management by co-operatives at all levels; and
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.
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—
whether formal or informal or partly formal and partly informal; or
whether written or oral or partly written and partly oral; or
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—
is admitted to the legal profession under the law of a jurisdiction; and
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 register; and
minutes; and
any other record of information; and
financial reports or financial records, however compiled, recorded or stored; and
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 company; and
any body corporate (whether incorporated in this jurisdiction or elsewhere); and
an unincorporated body that, under the law of its place of origin, may—
sue or be sued; or
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—
an exempt public authority (within the meaning of the Corporations Act); or
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—
for a State—Part 3 of the Corporations (Ancillary Provisions) Act 2001 of that State; or
for the Northern Territory—Part 4 of the Corporations Reform (Northern Territory) Act of that Territory; or
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—
an undertaking to repay money deposited with or lent to the co-operative by a person if—
the person deposits or lends the money in the ordinary course of a business carried on by the person; and
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
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
an undertaking to pay money under—
a cheque; or
an order for the payment of money; or
a bill of exchange; or
an undertaking by a co-operative to pay money to a related corporation; or
an undertaking to repay money that is prescribed by the regulations under the Corporations Act; or
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—
of the kind; and
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—
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 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
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—
invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
documents of prime entry; and
working papers and other documents needed to explain—
the methods by which financial statements are made up; and
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 director or secretary of the co-operative; or
a person—
who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the co-operative; or
who has the capacity to affect significantly the co-operative’s financial standing; or
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
a receiver, or receiver and manager, of property of the co-operative; or
an administrator of the co-operative; or
an administrator of a deed of arrangement executed by the co-operative; or
a liquidator of the co-operative; or
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.
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—
section 8 (Interests to which this Act does not apply);
section 12 (Meaning of security interest);
Chapter 9 (Transitional provisions).
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 PPSA security interest; or
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—
the Minister administering the Co-operatives National Law Act of this jurisdiction; or
if different Ministers are administering that Act in different respects—the Minister administering the Act in the relevant respect; or
if different Ministers are administering different portions of that Act—the Minister administering the relevant portion of the Act; or
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.
Schedule 4 contains miscellaneous provisions relating to the interpretation of this Law.
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.
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.
This section determines what (if any) law of another jurisdiction is a corresponding co-operatives law for the purposes of this Law.
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.
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.
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 person or body to be a designated authority; or
an instrument or document to be a designated instrument; or
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.
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.
A person is involved in a contravention if, and only if, the person—
has aided, abetted, counselled or procured the contravention; or
has induced, whether by threats or promises or otherwise, the contravention; or
has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or
has conspired with others to effect the contravention.
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—
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;
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.
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.
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.
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—
provisions relating to a matter that the National Regulations provide is not to be excluded from the operation of the Corporations legislation;
provisions relating to the role of a co-operative or participating co-operative in the formation of a company;
provisions relating to the registration of a co-operative as a company under Chapter 5B of the Corporations Act;
provisions relating to substantial shareholdings, by or involving a co-operative or participating co-operative, in a company;
provisions conferring or imposing functions on a co-operative or participating co-operative as a member, or former member, of a corporation;
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;
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;
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;
provisions relating to financial markets and participants in financial markets;
provisions relating to financial services licensees whose licence covers dealing in, or providing advice about, financial products;
provisions relating to carrying on a financial services business;
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;
provisions relating to clients of financial services licensees whose licence covers dealing in, or providing advice about, financial products;
provisions relating to registers of interests in financial products;
provisions relating to powers of a court to cure procedural irregularities and to make other orders.
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—
Part 1.2A;
Chapter 2L;
Chapter 6CA;
Chapter 6D;
Part 7.10.