Canada Cooperatives Act (S.C. 1998, c. 1)

Marginal note:Control

• 4 (1) For the purposes of this Act,

  • (a) a person controls a body corporate if securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; and

  • (b) a person controls a cooperative entity if the person has the right to exercise more than fifty per cent of the votes that may be cast at an annual meeting or to appoint or elect a majority of the directors.

• Marginal note:Holding body corporate

  (2) A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

• Marginal note:Subsidiary

  (3) A body corporate is a subsidiary of another body corporate if

  • (a) it is controlled by

    • (i) that other body corporate,

    • (ii) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or

    • (iii) two or more bodies corporate each of which is controlled by that other body corporate; or

  • (b) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate.

• Marginal note:Exemptions — on application by cooperative

  (4) On the application of a cooperative, the Director may determine that the cooperative is not or was not a distributing cooperative if the Director is satisfied that the determination would not be prejudicial to the public interest.

• Marginal note:Exemptions — classes of cooperatives

  (5) The Director may determine that a class of cooperatives are not or were not distributing cooperatives if the Director is satisfied that the determination would not be prejudicial to the public interest.

• (6) [Repealed, 2001, c. 14, s. 138]

Share Ownership

Marginal note:Membership share ownership

5 A member is a holder of a membership share of a cooperative when, according to the members’ register of the cooperative, the member is the owner of the membership share or is entitled to be entered in the members’ register or like record of the cooperative as the owner of the membership share.

Marginal note:Investment share ownership

6 A person is a shareholder of a cooperative when, according to the securities register of the cooperative, the person is the owner of an investment share or is entitled to be entered in the securities register or like record of the cooperative as the owner of the investment share.

Cooperative Basis

Marginal note:Cooperative basis

• 7 (1) For the purposes of this Act, a cooperative is organized and operated, and carries on business, on a cooperative basis if

  • (a) membership in the cooperative is open, in a non-discriminatory manner, to persons who can use the services of the cooperative and who are willing and able to accept the responsibilities of membership;

  • (b) each member or delegate has only one vote;

  • (c) no member or delegate may vote by proxy;

  • (d) interest on any member loan is limited to a maximum percentage fixed in the articles;

  • (e) dividends on any membership share are limited to the maximum percentage fixed in the articles;

  • (f) to the extent feasible, members provide the capital required by the cooperative, with the return paid on member capital not to exceed the maximum percentage specified in the articles;

  • (g) surplus funds arising from the cooperative’s operations are used

    • (i) to develop its business,

    • (ii) to provide or improve common services to members,

    • (iii) to provide for reserves or the payment of interest on member loans or dividends on membership shares and investment shares,

    • (iv) for community welfare or the propagation of cooperative enterprises, or

    • (v) as a distribution among its members as a patronage return; and

  • (h) it educates its members, officers, employees and the public on the principles and techniques of cooperative enterprise.

• Marginal note:Restrictions

  (2) Paragraph (1)(a) is subject to any restrictions on the classes of persons to which membership may be available that may reasonably relate to any business restriction set out in the articles of the cooperative and to the reasonable commercial ability of the cooperative to provide services to prospective members, as long as the restrictions are consistent with applicable laws with respect to human rights.

• Marginal note:Exception

  (3) Despite paragraph (1)(b),

  • (a) the articles of a federation may provide that the members or delegates of the federation have more than one vote;

  • (b) if, before the coming into force of this subsection, the articles of association or charter by-laws of a former Act cooperative provide that a member or delegate of the former Act cooperative has more than one vote, the articles filed under subsection 379(2) may contain the same provisions with respect to voting rights of members or delegates;

  • (c) any provision referred to in paragraph (b) is deemed to be contained in the articles of the cooperative until it complies with subsection 379(2); and

  • (d) the articles of a cooperative may provide that subject to the conditions stated in the articles, a cooperative entity may have more than one vote in a cooperative.

PART 2Incorporation, Structure and Organization

Incorporators

Marginal note:Incorporators

• 8 (1) An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more cooperative entities, who intend to be members of the cooperative.

• Marginal note:Persons not to be incorporators

  (2) An application under subsection (1) is not to be made by

  • (a) an individual who is less than eighteen years of age;

  • (b) an individual who is incapable; or

  • (c) an individual or body corporate that has the status of bankrupt.

Capital Structure

Marginal note:Capital structure

9 A cooperative may be incorporated with or without membership shares and with or without the power to issue investment shares.

Application for Incorporation

Marginal note:Application

10 An application for incorporation is made by sending the following to the Director:

• (a) articles of incorporation;

• (b) a notice of registered office in accordance with section 30;

• (c) a notice of directors in accordance with section 81; and

• (d) and (e) [Repealed, 2018, c. 8, s. 49]

• (f) any other information that the Director may require to make a decision under section 12.

Articles of Incorporation

Marginal note:Articles

• 11 (1) Articles of incorporation must be in the form fixed by the Director and contain the following particulars:

  • (a) the name of the cooperative;

  • (b) the place in Canada where its proposed registered office will be located;

  • (c) [Repealed, 2018, c. 8, s. 50]

  • (d) the number of directors or the minimum and maximum number of directors;

  • (e) any restriction on the businesses that the cooperative may carry on;

  • (f) any restriction on the class of membership in the cooperative;

  • (g) a statement that the cooperative will be organized and operated and will carry on business on a cooperative basis;

  • (h) a statement that the cooperative will carry on its undertaking in two or more provinces and will have a fixed place of business in more than one province;

  • (i) whether the cooperative is to be incorporated with or without membership share capital, and, if there is to be no membership share capital, a statement that the interest or right of each member as member is, subject to subsection 7(3), the same as that of every other member;

  • (j) if there is to be membership share capital, whether the number of membership shares to be issued is unlimited or limited, and if limited, the maximum number of membership shares that may be issued, and, if the membership shares are to have a par value, their par value and, if they are not to have par value, whether the membership shares are to be issued, purchased, redeemed or otherwise acquired at a fixed price or at a price determined in accordance with a formula, and if so, the particulars of the formula;

  • (k) any provision for a maximum rate of return that may be paid on member loans or membership shares;

  • (l) whether there is to be investment share capital and, if so, the particulars of it;

  • (m) any provisions for the distribution of the property of the cooperative on its dissolution and, in the case of a cooperative to which Part 20 or 21 applies, the provisions for that distribution of property in accordance with the applicable Part; and

  • (n) any provision by which the members, other than by means of a unanimous agreement, restrict, in whole or in part, the powers of the directors to manage the business of the cooperative.

• Marginal note:Additional provisions

  (2) The articles may set out any provisions that could be set out in the by-laws of the cooperative and if they do, any reference in this Act to the by-laws of the cooperative is also a reference to those provisions of the articles.

• Marginal note:Special majorities

  (3) Subject to subsection (4), the articles or a unanimous agreement may require a greater number of votes of directors, members or shareholders than is required by this Act to effect an action.

• Marginal note:Voting number

  (4) Neither the articles nor a unanimous agreement may require, in order to remove a director or delegate, that more than a majority of the votes cast by or on behalf of the persons who are entitled to vote be so cast.

• (5) [Repealed, 2018, c. 8, s. 50]

Incorporation

Marginal note:Issuance of certificate of incorporation

• 12 (1) The Director must issue a certificate of incorporation for a cooperative if the Director is satisfied that

  • (a) the articles are in accordance with section 11 and, if applicable, section 353 and subsection 359(2);

  • (b) the cooperative will be organized and operated and will carry on business on a cooperative basis;

  • (c) the cooperative will comply with Part 20 or 21, if applicable; and

  • (d) a notice that is required to be given under subsection 30(2) or 81(1) indicates that the cooperative, if it came into existence, would be in compliance with the Act.

• Marginal note:Reliance on articles

  (2) For the purposes of paragraphs (1)(b) and (c), the Director may rely on the articles required by section 10.

Marginal note:Date of existence and effect

13 On the day set out in its certificate of incorporation, a cooperative comes into existence and the incorporators become members of the cooperative.

By-laws

Marginal note:Adoption of by-laws

14 Without delay after the issuance of the certificate of incorporation, a meeting of the members must be held to make by-laws for the cooperative.

Marginal note:By-laws — mandatory provisions

• 15 (1) The by-laws of a cooperative must provide for

  • (a) the qualifications of members and the procedures for acceptance of members;

  • (b) the rights of joint members, if any;

  • (c) the membership obligations of members, including any obligation to use the services of the cooperative and any fees to be paid by members;

  • (d) if the cooperative has auxiliary members, the rights and obligations of auxiliary members and the conditions for their acceptance by the cooperative as auxiliary members, including

    • (i) the relationship an individual must have with the cooperative in order to be an auxiliary member, and

    • (ii) the services of the cooperative that may be available to auxiliary members;

  • (e) whether the interest or right of a member in the cooperative may, subject to section 46, be transferred or assigned, and any conditions or restrictions that apply to such a transfer or assignment;

  • (f) the selection, qualifications, term of office and removal of directors and members of committees of directors;

  • (g) the distribution of any surplus earnings arising from the operations of the cooperative;

  • (h) if the cooperative is to act as an agent or mandatary for its members, a definition of that relationship;

  • (i) subject to sections 39 and 40 and Parts 20 and 21, the conditions on which membership is terminated, whether by withdrawal or by involuntary termination, if it may be terminated otherwise than as provided for in this Act, and the determination of the value and disposition of the member’s interest or right in the cooperative on termination; and

  • (j) if the cooperative wishes to permit members or shareholders to attend a meeting of the cooperative by means of a communication facility referred to in subsection 48(3), the ways in which votes must be held.

• Marginal note:By-laws — other provisions

  (2) The by-laws of a cooperative may provide for

  • (a) the representation of members by delegates and, if so,

    • (i) the designation of the classes or regional groups of members, if any, who may be represented by delegates,

    • (ii) the procedure for altering classes or regional groups of members, if applicable, and

    • (iii) the powers, duties, selection, voting rights and procedures for the removal of delegates;

  • (b) the division of members into classes or regional groups and, if so,

    • (i) the qualifications for membership in each class or regional group,

    • (ii) the conditions precedent to membership in each class or regional group,

    • (iii) the method, time and manner of withdrawing from a class or regional group or transferring membership from one class or regional group to another and any applicable conditions on a transfer, and

    • (iv) the conditions on which membership in a class or regional group ends;

  • (c) the referral of disputes between a member and the cooperative to a process of dispute resolution; and

  • (d) any other matter that the members consider necessary or desirable.