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About Coops In General

A co-operative (coop) is a democratic member owned organisation that is owned and controlled by its members for a common benefit. Coops are traditionally based on the values of self-help, self-responsibility, equality and solidarity.

Even though coops are companies limited by guarantee, they are different from public companies because voting rights are based on membership (ie. one member, one vote) rather than shareholding. 

While other types of corporations are owned by shareholders or stockholders, coops are owned by its members or the people who use the services of the cooperative. 

What can a coop do?

Coops can be involved in a variety of social and commercial activities such as owning and operating 4WD parks, motorcycle parks, caravan parks, residential parks, campgrounds, etc. A co-operative may carry out any activity defined within its rules, which must be approved by the relevant Australian state/ territory government agency.

Who regulates coops?

All registered Coops except those in QLD, are governed by the Co-operatives National Law (CNL) and are regulated by the relevant state/ territory agencies, eg. NSW Office of Fair Trading.

Documents such as disclosure statements, rules, etc relating to a coop, must be approved by the relevant Australian state/ territory government agency.

What is coop membership?

Coops must have at least five active members at all times. There is no limit on the maximum number of members a coop may have.

Coops are controlled by their members, who each have one vote, no matter how many shares they hold.

Only members who actively utilise or support the coops primary activities as required by the coops rules (ie. active members) are able to vote and are able to retain their membership. 

All coop members subscribe to the seven international coop principles.

What are the international coop principals?

The seven co-operative principles ensure all stakeholders in the economy – customers, workers, suppliers – can have a say in business decisions. These are:

  1. Voluntary and open membership
  2. Democratic member control
  3. Member economic participation
  4. Autonomy and independence
  5. Education, training, and information
  6. Co-operation among co-operatives
  7. Concern for Community

What are the different types of coops? 

Co-operatives can be either distributing or non-distributing. Distributing co-operatives must have share capital and members must hold at least the minimum shareholding specified in the rules.

A distributing co-operative may distribute to members a part of the surplus generated in a year by way of:

  • a rebate, or
  • the issue of bonus shares to members, or
  • the issue of a limited dividend.

Non-distributing co-operatives are not required to have share capital.

A non-distributing co-operative must not distribute surplus funds to members. If the co-operative is wound up members can only get back the nominal value of any shares they hold in the co-operative. The surplus must be distributed as provided for in the co-operative’s rules. A non-distributing co-operative structure is more likely to be suitable for community organisations.

What is a coop's liability

Coops are incorporated bodies, so members are not liable for the coops debts. A coop is a limited liability entity. A coop is a separate legal identity, so it can buy, own or sell property itself.

Where do I find more info about coops?

The Business Council of Cooperatives and Mutuals has plenty of information on offer, plus they have a video which simply describes What is a Coop.

About AMA Coops

To learn about AMA Coops, please refer the About AMA Coops page.