Co-operatives Act 2009

The rules of a co‑operative may authorise the co‑operative to —

purchase any share of a member in the co‑operative at the request of the member; and

repay to a member, with the member’s consent, all or any part of the amount paid up to the stated nominal value on any share held by the member when the amount repaid is not required for the activities of the co‑operative.

The amount paid by a co‑operative under this section in purchasing shares or repaying an amount paid up to the stated nominal value on shares, or both, in any financial year of the co‑operative must not be more than the total of —

5% of the nominal value of the issued share capital of the co‑operative immediately before the start of that financial year; and

the amount of any additional share capital of the co‑operative subscribed for during that year.

The members of a co‑operative may by special resolution exempt a co‑operative from the operation of subsection (2) in relation to a particular financial year, either unconditionally or on conditions.

The amount paid for a share when it is repurchased may be an amount decided by the board that is less than the nominal value of the share but only —

if the books of the co‑operative disclose that the amount paid is the net shareholder’s equity per share in the undertaking of the co‑operative; or

in accordance with the rules of the co‑operative.

A co‑operative must not purchase shares or repay amounts paid up on shares if —

the co‑operative is likely to become insolvent because of the repurchase of the shares or because of the repayment of amounts paid up on the shares; or

the co‑operative is insolvent.

This section does not apply if the member has resigned or has been expelled from the co‑operative or the member’s membership has been otherwise cancelled.