Glossary of Terms

Articles lay out the general framework of the cooperative. Articles include the cooperative's name, share structure, directors and incorporators. Amendments to the articles require a special resolution of the members and, if investment shares are issued, a separate special resolution of shareholders. A special resolution is one requiring no less than two-thirds of the votes cast. Any amendments must be sent to the Director (see also by-laws).

Bankruptcy is the formal condition of an insolvent person being declared bankrupt under law. The legal effect is to divert most of the debtor's assets and debts to the administration of a third person, sometimes called a "trustee in bankruptcy," from which outstanding debts are paid proportionate to a certain rate. Bankruptcy forces the debtor into a statutory period during which his or her commercial and financial affairs are administered under the strict supervision of the trustee.

A body corporateincludes a cooperative, a cooperative entity or any other body corporate wherever or however incorporated.

By-laws are internal to a cooperative. They generally pertain to the rules of operation. Cooperatives can make any by-law they wish, so long as they conform to the Canada Cooperatives Act. If members consider it necessary, they can decide to put in the articles anything that the act allows in the by-laws (see also articles).

A cooperative is a body corporate that is incorporated under the Act and not discontinued under this Act.

A cooperative entity is a body corporate that by the law under which it is organized and operated, must be organized and operated on — and is organized and operating on — cooperative principles

The Director is the person appointed by the Minister of Industry, under the Canada Cooperatives Act, to administer the act.

An entity is a body corporate, a trust, a partnership, a fund or an unincorporated organization.

A non-profit housing cooperative is formed when people join with each other on a democratic basis to own or control the buildings in which they live. Under the Canada Cooperatives Act, there are certain restrictions pertaining to these cooperatives such as: they may not issue investment shares; they may only issue membership shares on a par value basis; and the property, on dissolution, is to be distributed to other non-profit housing cooperatives.

A NUANS® Name Search System report must be submitted as part of your application to use your cooperative name. A NUANS® report compares your proposed name with a federal database of names that include trade-marks, provincial and federal corporate names, and most provincially registered business names (except those in Quebec). This report will ensure that your cooperative name does not conflict with another name already in use. There are several types of NUANS® reports and the one you need for federal incorporation is a Canada-biased report. A Canada-biased report means that the proposed name was searched against all the names found in the database, not just names registered in a particular province.

Par value shares are shares that have a stated face value expressed as a dollar amount per share. Shares that are without par value or "no par value shares" are shares with no stated face value. Member shares can be either par or no par value. If they are no par value, the articles of the cooperative must either state the fixed price or set out the formula to determine the price at which they can be sold or acquired. Under the Canada Cooperatives Act, investment shares must be no par value.

A unanimous agreement is a written agreement among all members and, if investment shares are issued, among all shareholders, that contains a provision restricting the discretion or powers of the directors to manage the affairs of the cooperative or vests the discretion or powers in the members. Members who are vested discretion or powers taken from the directors have all the duties and liabilities, along with the rights and privileges, of the directors.

A worker cooperative is a cooperative whose prime objectives are to provide employment to its members and to operate an enterprise in which control rests with the members. Under the Canada Cooperatives Act, members must be individuals and employees of the cooperative. However, the cooperative can provide employment to non-members as long as at least 75 percent of its permanent employees are members.

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