Co-operation (Amendment) Act 1988 (NSW)
CO-OPERATION (AMENDMENT) ACT 1988 No. 107
NEW SOUTH WALES
TABLE OF PROVISIONS
1. Short title
2. Commencement
3. Amendment of Co-operation Act 1923 (1924 No. 1)
SCHEDULE 1—AMENDMENTS
CO-OPERATION (AMENDMENT) ACT 1988 No. 107
NEW SOUTH WALES
| An Act to amend the Co-operation Act 1923 to make further provision with | Act No. 107, 1988 |
respect to the acquisition of shares in co-operative societies and the entitlements of inactive members of those societies and for other purposes. [Assented to 21 December 1988]
Co-operation (Amendment) 1988
The Legislature of New South Wales enacts:
Short title
1. This Act may be cited as the Co-operation (Amendment) Act 1988.
Commencement
2. This Act commences on a day or days to be appointed by
proclamation.
Amendment of Co-operation Act 1923 (1924 No. 1)
3. The Co-operation Act 1923 is amended as set out in Schedule 1.
SCHEDULE 1—AMENDMENTS
(Sec. 3)
(1) Section 2 (Division into Parts)—
Omit the section.
(2) Sections 4 7 B B - 4 7 B D — After section 47BA, insert:
Restrictions on significant share offers47BB. (1) This section applies to an offer to purchase shares in a society (other than a co-operative housing society, a non- terminating building society or a society mentioned in the Second Schedule) if—
(a) the offer is made as part of a proposal for, or is conditional on, the sale of the undertaking or any part of the undertaking, as a going concern, of the society; or (b) the offer is made as part of a proposal for, or is conditional
on, the registration of the society as a company under the Companies (New South Wales) Code; or
(c) the offer is made as part of a proposal for, or is conditional on, the winding-up of the society; or (d) a contravention of section 47 (10) (maximum shareholding) would result were the offeror to be registered (immediately after the offer is made) as the holder of the shares that are the subject of the offer. (2) A person shall not make an offer to which this section applies if—
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SCHEDULE 1— AMENDMENTS—continued
(b) the offer is made without the appropriate approvals.
(3) An offer shall be regarded as having been made with the
appropriate approvals only if—
(a) at a postal ballot of the members of the society held in the prescribed manner and in accordance with section 79A, at least three-quarters of the formal votes cast are in favour of the offer being made; and (b) the Minister, after consideration of the matter by the Advisory Council under section 79B, approves of the offer being made; and (c) the offer is made in accordance with the conditions of the Minister's approval.
(4) The Minister may direct that one or more of the requirements of this section do not apply (either generally or in a particular case) to a specified society or to a society that is a member of a specified class of societies, and such a direction has effect accordingly.
Certain discriminatory share offers prohibited
47BC. (1) A person shall not make an offer to purchase shares in a society if—
(a) the offeror would become a substantial shareholder in the society (within the meaning of section 47BA) were the offeror to be registered (immediately after the offer is made) as the holder of the shares that are the subject of the offer; and (b) the offer operates or would operate to discriminate between members who are active members and members
who are not active members.
(2) The Minister may direct that this section does not apply (either generally or in a particular case) to a specified society or to a society that is a member of a specified class of societies, and such a direction has effect accordingly.
Consequences of prohibited offer
47BD. (1) If a person makes an offer to purchase shares in a society in contravention of section 47BB or 47BC—
(a)
the person is not entitled to be registered as the holder of the shares concerned; and
Co-operation (Amendment) 1988
SCHEDULE 1— AMENDMENTS—continued (2) Any vote cast by or on behalf of a member when the member is not entitled to vote because of the operation of this section shall be disregarded.
(3) Section 79A (Special postal ballots)—
(a) Section 79A (1)—
Omit "section 64", insert instead "section 47BB, 64".(b) Section 79A (1A)—
After section 79 (1), insert:(1A) The only persons eligible to vote in the postal ballot are those members of the society who are entitled to vote at meetings of the society and who under this Act are not otherwise prevented from voting.
(c) Section 79A (2)— vote".
(4) Section 79B (Approval of the Minister etc.—ss. 47BB, 64, 70, 92)—
(a) Section 79B (1)—
Omit "by a society".(b) Section 79B (1)—
Omit "section 64", insert instead "section 47BB, 64".(c) Section 79B (3) (a)—
Omit "transaction", insert instead "action".(d) Section 79B (8)—
After section 79B (7), insert:(8) In the case of a proposed offer to which section 47BB
applies, the Minister's approval under this section may be given subject to such conditions as the Minister thinks appropriate.
(5) Section 80FA—
After section 80F, insert:
Failure to alter rules—active membership provisions
80FA. (1) If the rules of a society do not contain active membership provisions as required by section 80F, the Advisory Council may by resolution alter the rules of the society so that the rules contain active membership provisions.
(2) The active membership provisions shall be provisions that in the opinion of the Advisory Council are appropriate to the society concerned, having regard to—
(a) the objects and rules of the society; and
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(b) the membership structure of the society; and
(c) such other matters as the Advisory Council thinks are relevant.
(3) Before taking action under this section, the Advisory Council shall—
(a) give notice in writing to the society concerned that it proposes to take the action; and (b) take into account any representations made by the society concerning the matter within the time allowed by the notice for the making of representations.
(4) A resolution of the Advisory Council under this section operates to alter the rules of the society accordingly, but section 83 (4) applies to any such alteration (so as to require registration and certification by the registrar before the alteration takes effect).
(5) The fact that active membership provisions in the rules of a society resulted from the operation of this section does not prevent the alteration of those provisions in accordance with this Act.
(6) Section 80z (Eligibility to vote—active membership)—
Section 80z (1)— of the society (whether or not a postal ballot),".
(7) Part 3A, Division 5—
After Division 4, insert:
Division 5—Entitlements of ex-shareholders
Ex-shareholders to be regarded as shareholders for certain purposes
80AC. (1) Even though a person's shares in a society have been forfeited under Division 4, the person shall be regarded as being the holder of shares in the society (the same in all respects as those that were forfeited) for the following purposes:
(a)
the entitlements of a shareholder in respect of the purchase of shares in the society pursuant to an offer described in section 47BB (1) (a), (b) or (c), or the purchase of all the shares in the society, if the offer or purchase occurs within 5 years after the person's shares were forfeited;
(b) the entitlement of a shareholder when the society becomes
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SCHEDULE 1—AMENDMENTS—continued
(c)
the entitlement of a shareholder to a distribution of surplus in a winding-up of the society that commences within 5 years after the person's shares were forfeited.
(2) Subsection (1) (a) does not apply in respect of—
(a) an offer described in section 47BB (1) (a) or (c) that is made by another society; or (b) the purchase of all the shares in the society by another society. (3) Subsection (1) (c) does not apply if the winding-up is for the purposes of an amalgamation under section 43.
(4) To remove any doubt, it is declared that the entitlement
under subsection (1) (a) of a person whose shares have been
forfeited does not include an entitlement to vote on any matter.
(5) This section does not apply to a forfeited shareholding in a
society if section 80AD operates to require that forfeitedshareholding to be regarded as a forfeited shareholding in another
society.
Entitlements of ex-shareholders on mergers etc.80AD. (1) If within 5 years after a person's shares in a society ("the original society") are forfeited under Division 4—
(a)
the original society becomes a subsidiary of another society ("the new society"); or
(b)
another society ("the new society") is created as a result of an amalgamation under section 43 involving the original society; or
(c)
the engagements of the original society are transferred to another society ("the new society") under section 69,
(and the further operation of this section) be regarded as being the person shall, for the purposes of the operation of section 80AC the holder of shares in the new society (being the shareholding determined in accordance with subsection (2)) that were forfeited under Division 4 when the person's shares in the original society were forfeited.
(2) The forfeited shareholding in the new society is the shareholding determined in accordance with the following:
(a)
if the entitlement of active members of the original society in the circumstances concerned is solely an entitlement to be allotted shares in the new society, the forfeited shareholding in the new society is the shareholding to
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SCHEDULE 1— AMENDMENTS—continued (b) in any other case, the forfeited shareholding in the new society is the shareholding that is the same in all respects as the forfeited shareholding in the original society.
(3) The determination under subsection (2) (a) of the person's shareholding in the new society shall be made—
(a)
solely on the basis of the person's shareholding in the original society when the shares were forfeited or (in a further operation of this section in respect of the person) when the person was first to be regarded as having a forfeited shareholding in the original society; and
(b)
without regard to any additional shareholding in the original society to which the person would have become entitled had the shares not been forfeited, whether as a result of any bonus share issue or otherwise.
Set-off of amounts repaid etc. on forfeited shares
80AE. (1) If a person has an entitlement because of the
operation of section 80AC, the entitlement operates to extinguish
any liability of the society—
(a)
to repay to the person under section 80x any amount in respect of the forfeited shares concerned; or
(b)
in respect of a deposit held by the society, or debentures allotted to the person, under section 80x in respect of the forfeited shares concerned (except a liability to pay interest that is due but unpaid).
(2) If an amount has been repaid to a person under section 80x
or 80Y, the amount repaid shall be set-off against any entitlementof the person under section 80AC in respect of the forfeited shares
concerned. (3) If the amount repaid cannot be set-off against the entitlement because the entitlement is not, or is only partly, an entitlement to money, the entitlement is lost unless the person pays to the society the amount repaid to the person and does so within the period required under subsection (4).
(4) If the circumstances specified in subsection (3) arise, the society concerned shall—
(a)
give notice in writing of the matter by post to the person concerned at the person's address last known to the
Co-operation (Amendment) 1988
SCHEDULE 1— AMENDMENTS—continued (b)
publish a general notice to that effect in a newspaper circulating in the district in which the registered office of the society is situated.
Minister may exempt societies from provisions
80AF. (1) The Minister may, after consultation with the Advisory Council, by order in writing direct that all or specified provisions of this Division do not apply (either generally or in a particular case) to or in respect of a specified society or a society that is a member of a specified class of societies.
(2) Such a direction has effect accordingly.
(8) Fifth Schedule (Savings and transitional provisions)—
At the end of the Schedule, insert:
Co-operation (Amendment) Act 1988
Prohibition on certain offers
9. Sections 47BB—47BD apply to and in respect of an offer to purchase shares made before those sections commenced unless the offer was accepted and the transfer of the shares concerned registered before that commencement.
[Minister's second reading speech made in—
Legislative Assembly on 17 November 1988 Legislative Council on 14 December 1988]
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