Registration of a Co-operative

Summary

- Standardize Saskatchewan co-operative legislation;

- Provide for specific needs of individual co-operatives;

- Give co-operatives greater flexibility;

- Set out provisions which must be included in the articles and bylaws of co-operatives; and

- Allow for additional bylaws unique to the needs and operation of individual co-operatives. These are identified in the Act by the words "subject to the bylaws" at the beginning of the subsection. The provisions of the Act will apply in cases where bylaws have not been formulated.

Incorporation

In order to incorporate a co-operative, the incorporation package (which includes the Articles of Incorporation, a Notice of Registered Office and a proposed set of bylaws) must be completed and submitted to the Department of Justice with the appropriate fees.

It is important to establish or confirm your basic purpose so that everyone shares the same understanding of the organization's goals and objectives. A formal written schedule should be developed to outline all steps and deadlines in the development process. The schedule also enables you to designate specific tasks to members, with realistic objectives and achievable assignments.

Membership Requirements

A minimum of six persons is required to apply for incorporation unless special permission has been granted by the Registrar of Co-operatives. To become a member, a person must be at least sixteen years of age (or an age specified in the bylaws), and must have purchased the required number of shares or have paid the required membership fee. The shares or fees are determined by the incorporators.

The Incorporation Package

An application must be submitted to the Registrar of Co-operatives. The applicants are required to submit the forms of the incorporation package in duplicate (Articles of Incorporation in the prescribed form, a Notice of Registered Office, and a proposed set of bylaws) and the prescribed fee. The Articles of Incorporation and bylaws represent an agreement between members concerning the co-operative's aims, objectives and rules of operation, and they provide a sound legal basis of operation. The registrar may request additional information.

Articles of Incorporation

The Co-operatives Act, 1996 requires that the Articles of Incorporation (Appendix B, Form A of the Co-operatives Regulations, 1998) establish the following criteria:

1. Name of the co-operative;

2. Details of share capital, par value of the shares and limits (if any) on the number of shares that can be issued by the co-operative;

3. If there is no share capital, the interest of each member is the same as the interest of every other member;

4. Number of directors or minimum of and maximum number of directors;

5. Full names and addresses of the directors;

6. Objective or purpose of the co-operative (it is important to set objectives for a new co-operative to ensure that all members have the same understanding of its purpose and the anticipated level of involvement of the board of directors);

7. Any restrictions on business activities;

8. Any other provisions (example: if the intention of the co-operative is to carry on business without the purpose of financial gain for its members, a statement must appear in this section); and

9. Full names and addresses, with signatures, of the incorporators.

Bylaws

Section 8 of The Co-operatives Act, 1996 requires that specific information be provided in the co-operative's bylaws. Additional information may also be included.

(1) A co-operative shall include bylaws relating to:

(a) Conditions of membership including:

(i) The rights of joint members, if any;

(ii) The qualification and withdrawal of members and the transfer of shares;

(iii) The amount of the membership fee and the annual fee, if any, to be paid by members; and

(iv) The conditions on which membership ceases or may be terminated, the disposition that may be made on cessation or termination of a member's interest, and the determination of the value of the member's interest.

(b) The election, term of office and removal of directors and members of directors' committees.

(c) The municipality in Saskatchewan where the registered office is to be situated.

(d) Where the co-operative proposes to divide the territory in which members are located into districts:

(i) The establishment of district boundaries;

(ii) The procedure for altering district boundaries; and

(iii) Where there is to be a delegate structure, the defining of the powers, duties, election, voting rights and removal proceedings of district delegates.

(e) Where the co-operative proposes to divide its members who are shareholders into classes:

(i) The qualifications of members of each class;

(ii) The conditions precedent to membership in each class;

(iii) The method, time and manner, and conditions precedent to transferring membership in one class to membership in another class;

(iv) The conditions on which membership in a class ceases;

(v) The method, time and manner of permitting members to withdraw from each class of members;

(vi) Whether the interest of a member in a class may be assigned or transferred; and

(vii) The automatic suspension of a member's rights when the member ceases to be qualified for membership in a class.

(f) The distribution of the co-operative's property on dissolution of the co-operative.

(g) Where the co-operative is to act as an agent for its members, a definition of the agency relationship between the co-operative and its members.

(h) Any matters, in addition to those described in clauses (a) to (f), that the members consider necessary or desirable.

Registration

The registrar will review the Articles of Incorporation, the Notice of Registered Office and the proposed set of bylaws for compliance with The Co-operatives Act, 1996. When all legislative requirements have been met and it is appropriate to approve the incorporation, the registrar may:

- Register the Articles of Incorporation and bylaws;

- Enter the name of the co-operative in the register;

- Issue a Certificate of Incorporation in accordance with section 271, stating that the co-operative is incorporated pursuant to this Act and showing the incorporation date; and

- Send to the co-operative at its registered office one copy of its articles and bylaws certified as registered.

The co-operative officially comes into existence on the effective incorporation date recorded on the Certificate of Incorporation. Within four months of the incorporation date, a co-operative must hold a general meeting at which all members are entitled to be present and to vote.

Annual General Meeting

The co-operative must hold an annual general meeting each year and no later than six months after the end of its fiscal year.

The board of directors should have its first meeting after the annual general meeting, and should elect a president, vice-president and a secretary-treasurer (or a secretary and a treasurer) at that time. The names of the directors and officers must be included in the annual return filed with Saskatchewan Justice.

For more information on requirements of the annual general meeting please see the document  Core Functions and Processes of Co-operative Governance .

Financial Statement

A co-operative must appoint an auditor at its first annual general meeting and each subsequent annual general meeting. A co-operative with fewer than 20 members may resolve, at each annual general meeting, not to appoint an auditor if the members present give their unanimous consent.

CHECKLIST FOR INCORPORATING A CO-OPERATIVE

1. Set Objectives

Objectives ensure that all members understand the purposes of the organization, and they give potential members essential information about the co-operative.

2. Prepare a Business Plan

The business plan is a guide for managing the organization, obtaining financing (if applicable), and measuring progress. It outlines goals and how to achieve them. Some of the purposes are:

- To clearly state goals and to ensure members' agreement;

- To determine whether the goals are reasonable and attainable, so the members are confident about committing their time and investment;

- To identify strategies necessary to achieve the goals;

- To identify facilities, equipment and resources needed to carry out the organization's objectives;

- To identify an organizational structure;

- To decide what shares/capital are required and their sources;

- To provide a guide for completing projects and achieving objectives; and

- To provide a standard for measuring the co-operative's progress.

3. Complete a Name Search

The Request for Name Search and Reservation must be submitted to the Corporations Branch, Department of Justice. This confirms the availability of the name you have chosen, and should be done before you submit your incorporation package.

4. Establish Proposed Bylaws

Bylaws ensure equitable treatment for all members, and they are the basis of members' working relationship. Members must agree to operate according to the bylaws.

Two copies of the proposed bylaws must be sent to the Registrar of Co-operatives. They are reviewed at the first general meeting, and amended if necessary before they are approved by the membership.

After this meeting, bylaws may be amended at the annual meeting or a special meeting called for that purpose. A fee is required by the Registrar of Co-operatives when bylaws are amended.

Areas not specified by bylaws are regulated by The Co-operatives Act, 1996. Bylaws cannot override the Act unless the Act stipulates the area is "subject to the bylaws".

5. Complete the Certificate to Accompany Bylaws

The bylaws must be accompanied by two copies of this form signed by the president and secretary of the co-operative.

6. Complete the Articles of Incorporation

The articles must be completed according to the instructions attached to the form. Two copies must be submitted.

7. Submit the Incorporation Fee

The incorporation fee must accompany the incorporation package.

8. Post-Incorporation Activity

When the registrar approves the incorporation, a Certificate of Incorporation is issued. This certificate and the approved copy of the Articles of Incorporation will be mailed to the co-operative. The organization is now a legal entity under its registered name.

For additional information contact Saskatchewan Regional Economic and Co-operative Development toll free at 1-800-265-2001.  We also invite you to visit or contact us through our web site on the Internet at http://www.recd.gov.sk.ca

Prepared by: Saskatchewan Regional Economic and Co-operative Development