Co-operatives Act 2009

In this section —

A distributing co‑operative may apply a part of the surplus arising in any year from the business of the co‑operative or a part of the reserves of the co‑operative by —

distribution to members as a rebate in proportion to the value of business done by each member with the co‑operative or to profits earned by the co‑operative on business done by each member with the co‑operative; or

the issue of bonus shares to members in proportion to the value of business done by each member with the co‑operative, to profits earned by the co‑operative on business done by each member with the co‑operative or to shares held by the member; or

the issue to members of a limited dividend in proportion to shares held by the member.

The amount of a rebate payable to a member under subsection (2)(a) may be applied —

in payment for the issue to the member of bonus shares, with the consent of the member; or

as a loan to the co‑operative —

with the consent of the member; or

if the rules of the co‑operative authorise the amount of a rebate payable to a member under subsection (2)(a) to be applied as a loan to the co‑operative.

The amount of a dividend payable to a member under subsection (2)(c) may be applied —

in payment for the issue to the member of bonus shares, with the consent of the member; or

as a loan to the co‑operative —

with the consent of the member; or

if the rules of the co‑operative authorise the amount of a dividend payable to a member under subsection (2)(c) to be applied as a loan to the co‑operative.

A loan to the co‑operative authorised by the rules (as referred to in subsection (3)(b)(ii) or (4)(b)(ii)) is repayable at call and must bear interest at a rate not lower than the rate prescribed by the regulations.