Until the passing of the Co-operatives National Law, co-operatives had endured additional compliance costs to trade across state and territory borders, putting them at a competitive disadvantage to companies. Co-operatives were required to have multiple registrations to have cross-border trade, except for “foreign co-operatives” which traded in Victoria.
Australia is a national market, and there has been an enormous increase in trade being conducted over the internet. The Co-operatives National Law has given “participating co-operatives” the freedom to operate nationally, giving them greater opportunities to respond creatively and quickly to opportunities and threats, to access services, products and capital, and to provide services to their members and communities.
Participating co-operatives (PCs) are bodies that are registered and incorporated in one state or territory and carry on business, solicit for members, seek share capital, take deposits and/or offer securities such as debentures and CCUs in another state or territory.
Authorisation and restrictions
A PC is authorised by Co-operatives National Law to carry on business as a co-operative in another state or territory. The authorisation for a PC to carry on business in another state or territory is subject to the same conditions or restrictions that apply under its registration.
A PC carrying on business in another state or territory must do so under a name that is not likely to be confused with the name of a body corporate or a registered business name.
A PC must ensure its name, the jurisdiction of its registration and any other information prescribed by Chapter 5 of the Co-operatives National Regulations appear in legible characters on each seal of the co-operative, and in all notices, advertisements and other official publications of the PC and in all its business documents.
A person must not advertise or publish a statement that directly or indirectly refers to an offer or intended offer of shares in a distributing PC (if the shares are offered or the invitation made to persons who are not shareholders of the PC), or debentures or CCUs, unless a current relevant disclosure statement is lodged or registered with the Registrar for the other jurisdiction, and any other requirements prescribed in Chapter 5 of the Co-operatives National Regulations are complied with.
Authority to carry on business in another state or territory will cease if a PC is deregistered or ceases to be a co-operative under the laws of the place where it is registered, incorporated or formed; or if its authorisation to carry on business in another state is withdrawn by the Registrar because the name of the co-operative does not comply with the Act, or it has failed to comply with provisions of co-operatives law or its rules, or has failed to comply with the Registrar’s direction as to the way in which it is to exercise its functions in relation to its activities in obtaining financial accommodation in another state or territory.