Changes to Queensland co-operatives law

On 1 December the Cooperatives Act 1997 (Qld) was repealed and replaced by the Co-operatives National Law Act 2020 (Qld).

Replacing Queensland’s Cooperatives Act 1997 with the Co-operatives National Law Act will mean that Queensland co-operatives benefit from a consistent system of law for co-operatives.

Other key reforms of the Co-operatives National Law Act include:

• updating of provisions to ensure consistency of laws across all jurisdictions;
• automatic mutual recognition of co-operatives by other states and territories resulting in lower costs and paperwork for co-operatives trading interstate;
• simplification of financial reporting and auditing requirements for small co-operatives;
• updating of directors’ and officers’ duties to modern standards of corporate governance, integrated with co-operative principles;
• new fundraising provisions for co-operative capital units; and
• referencing of the Corporations Act 2001 (Cth) has been updated.

What does my co-operative need to do?

As a co-operative, you don’t need to do anything to transition to the Co-operatives National Law Act. Co-operatives registered under the Cooperatives Act had their registration transferred to the Co-operatives National Law Act automatically on 1 December 2020.

What are the law changes?

• Types of co-operatives

Trading co-operatives are now known as distributing co-operatives and non-trading co-operatives are now known as non-distributing co-operatives.

Co-operatives are categorised as either small or large.

A co-operative is a small co-operative if:

• it satisfies at least 2 of the following:
• the consolidated revenue of the co-operative and the entities it controls (if any) is less than $8 million for the financial year;
• the value of the consolidated gross assets and the entities it controls (if any) is less than $4 million at the end of the financial year;
• the co-operative and the entities it controls (if any) had fewer than 30 employees at the end of the financial year;

and none of the following apply to the co-operative:

• it issues shares to more than 20 prospective members during that year and the amount raised in that year by the issue of those shares exceeds $2 million; or
• it has securities on issue to non-members during that year, other than shares in the co-operative and securities issued in respect of the co-operative’s obligations under section 163 of the Law.

A co-operative is a large co-operative if it does not satisfy the criteria for a small co-operative.

• Co-operative rules

Your co-operative can continue to use its existing rules without the need to update them. However, if there is an inconsistency between your co-operatives rules and the Co-operatives National Law Act the rules set out in the Co-operatives National Law Act will prevail.

• Operating freely across borders

Co-operatives from different states have mutual recognition, which means they can operate freely across borders. 

• Financial reporting

Although there are no changes to reporting requirements for large co-operatives, a small co-operative only need submit a simplified annual return to the Office of Fair Trading.

A small co-operative is not required to have their financial statements audited.

• Fundraising

Co-operative can now raise funds by issuing co-operative capital units to its members or non-members. However, if the co-operative wishes to raise such funds it must update its rules (section 349 of the Co-operatives National Law Act).

• Director and officer responsibilities

The Co-operatives National Law Act has modified the duties and responsibilities of directors and officers. The corporate governance standard is now consistent with the standards under the Corporations Act 2001 (Cth).

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.