A cooperative relies heavily on the contribution and support of its members to be successful. For this reason, cooperatives set out guidelines on the minimum amount of member activity needed for members to keep their voting rights and membership.
These guidelines are called ´active membership provisions´, and they form part of the cooperative´s rules.
Statement of primary activity
Before deciding what it will require of members, a cooperative must first figure out what its main purpose or activity will be.
This is the statement of primary activity, and it forms part of the rules of the cooperative. All cooperatives must have at least one primary activity that contributes significantly to the business of the cooperative.
For example, the statement of primary activity for a trading dairy cooperative could read: ´To sell the milk produce of members´.
The primary activity of a cooperative should account for at least 10 per cent of at least one of these:
- business of the organisation.
Active membership provisions
If members don´t support the cooperative, it will fail. Members need to support the primary activity or activities of the cooperative according to the active membership provisions.
For example, the active membership provisions of a non-trading cooperative may require members to pay a regular subscription fee.
Active membership provisions for a trading cooperative may require a member to purchase or supply goods or services to a certain value within a financial year.
Last reviewed 09/12/2011