A co-operative may be wound up voluntarily by members on the passing of a special resolution by a special postal ballot in favour of voluntarily winding up. The ballot may also appoint one or more liquidators to wind up the co-operative’s affairs and distribute its assets, and set the remuneration to be paid to the liquidator. The Registrar may exempt a co-operative from compliance. A members’ voluntary winding up starts when the result of the special postal ballot is noted in the minutes by the secretary of the co-operative. A co-operative may also be wound up by a creditors’ voluntary winding up.
The members of the co-operative have limited liability. A member of a co-operative may be liable for any charges payable to the co-operative in accordance with its rules; a member of a co-operative with share capital is also liable to the co-operative for the amount remaining unpaid on the shares held. There are special rules for the liability of members who have cancelled shares, or where the co-operative has purchased the share or repaid some or all of its value to the member within two years of the winding up.
The rules of a non-distributing co-operative provide for the ways in which surplus property is to be distributed when the co-operative is wound up. Members only receive the nominal value of shares (if any) at winding up.
Under Co-operatives National Law, the Registrar may wind up a co-operative if:
there are not enough members (unless the Registrar approves fewer members)
the co-operative has not started business within a year of registration
the co-operative suspends business for more than six months
the registration was obtained by mistake or fraud
the co-operative exists for an illegal purpose
the co-operative has wilfully violated the Act or its rules
the Registrar has sent notice that the rules do not contain active membership provisions and the board has not since complied
there are, and have been for one month, insufficient directors to form a quorum
an inquiry has found it to be in the interests of members or creditors or the public to wind it up
the co-operative was formed for a fixed time or event and the Registrar certifies the fixed duration has ended or the event has occurred.
A winding up on a certificate of the Registrar begins when the certificate is given. The Registrar may appoint a liquidator of the co-operative. When the winding up process is complete, the Registrar de-registers the co-operative.
A co-operative may also be deregistered by the Supreme Court in the same way, and for the same reasons, as a company under the Corporations Act.