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Create the rules

The rules (sometimes known as the cooperative´s constitution) form a binding contract between the cooperative and its members, and list everyone´s obligations.

All cooperative members and office holders must agree to follow the rules. We recommend that an agreement to follow the rules form part of the membership application form.

Proposed members should discuss and agree on the rules before the formation meeting, and before submitting them to us for approval, because once we approve the rules, they must be accepted by a two-third majority vote of members in the formation meeting.

You should not change the rules at the formation meeting because if the vote does not pass them, you must redraft and resubmit them to us for approval.

When the members accept the rules at the formation meeting, you should sign and submit them to us for registration. While you can make changes to the registered rules later, getting them right first time will save you money, time and trouble.

The rules document describes how the cooperative will operate. It includes information such as:

primary activity or activities
active membership requirements
qualifications for members and directors
procedure to admit new members
how shares and fundraising will be handled
fines for breaking the rules
meeting procedures
treatment of surplus funds
accounts and audit requirements.

Using the standard rules

The Regulation includes model rules, which were intended to help cooperatives draft their rules to comply with the legislation.

We have updated the model rules to match changes to the legislation, which are called the standard rules. (You don´t have to use the standard rules. However, writing a set of rules from scratch can be consuming and complicated, as they must comply with the legislation.)

A set of standard rules exist for each of the three different types of cooperatives:

The rules must cover all aspects of Schedule 1 of the Act, and not contradict the Act in any way.

To ensure you complete the rules correctly, use the Guide to completing the standard rules (PDF, 22 KB).

Submitting the rules

We need to approve cooperatives´ rules to make sure they comply with the Act. Submit the proposed rules to us at least 28 days before you plan to hold the formation meeting.

When submitting the draft rules, complete Cooperatives Form 2 - Application for approval of proposed rules for a cooperative (PDF, 422 KB).

We can:

approve the rules as submitted
approve different rules to those submitted
refuse to approve the rules altogether.

We notify the person who submitted the proposed rules of our decision. If we do not approve the rules, we give the reasons.

When we first approve the rules, they become known as the approved rules. After the members´ vote passes the rules at the formation meeting and we officially accept them, they become known as the registered rules.

Last reviewed 06/12/2011