Registration of a Cooperative

Last Verified: 2005-10-06

Summary

Preparation

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.

Application for incorporation

To incorporate a cooperative, the application (which generally includes articles, memorandum or application for letters of incorporation, a notice of registered office, a proposed set of by-laws and a name search) must be submitted to the appropriate government office with the required fees. In some cases, additional information may be required by authorities.

The application provides basic information about a cooperative:

• the legal name of the cooperative;
• details of its financing by the members, be it shares, or fees, and in some cases, member loans;
• name and address of its first directors;
• purpose of the cooperative;
• any restriction on business activities;
• if the intention of the cooperative is to carry on business without the purpose of financial gain for its members, a statement may be included to that effect.

By-laws are rules set by the cooperative. They usually deal with such things as membership, directors, meetings and other matters considered necessary or desirable. The governing statute may require that specific information be provided in a cooperative's by-laws.

The name search report or NUANS (Newly Automated Name Search) report confirms the availability of the name chosen for the cooperative. A name search must be done by a professional search house. You can find a list of these firms in the business pages of your telephone book under the heading Searchers of Records.

Membership Requirements

The cooperative statute will determine a minimum number of persons for incorporation as a cooperative and the minimum age requirement of an incorporator. The incorporators and such others who subsequently become members have to purchase one or more shares, as required. If a cooperative is without share capital, members have to pay the required membership fee, or member loan in some cases.

Directors

The directors named in the application will serve as directors until the cooperative's first general meeting, when directors will be elected for a stated term of office. In general, a director must be a member of the cooperative.

The directors are responsible for:

• the management of the cooperative;
• the exercise of the cooperative's powers (directly or indirectly) through the employees and agents of the cooperative;
• the appointment of committees as required;
• the compliance with the by-laws and the cooperative statute; and
• the policies of the cooperative.

Incorporation

Upon receipt, approval or registration of the incorporation documents, a certificate or letters of incorporation are issued. The cooperative officially comes into existence on the effective incorporation date stated on the certificate or letters of incorporation. Within a period specified in the cooperative statute, a cooperative must hold a first general meeting at which all members are entitled to attend and vote.

Annual General Meeting

The cooperative must hold an annual general meeting each year after its fiscal year end within the period specified in the cooperative statute. The board of directors meets shortly after the annual general meeting and elects a president, vice-president and a secretary-treasurer (or a secretary and a treasurer). The names of the directors and/or officers must be included in the annual return filed with the proper government authority.

Financial Statements

A cooperative must appoint an auditor at its first annual general meeting and at each subsequent annual general meeting. Subject to the Act, a cooperative may be exempted from appointing an auditor.

CHECKLIST FOR INCORPORATING A COOPERATIVE

Set Objectives

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

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 cooperative's progress.

Complete a Name Search

This confirms the availability of the name you have chosen for your cooperative, and should be done before you submit your incorporation package.

Complete Incorporation Documents

The application must be completed and submitted. By-laws and notice of registered office must also be submitted, as required by the Act.

Submit the Incorporation Fee

The incorporation fee must accompany the incorporation package.

Prepared by: Saskatchewan Regional Economic and Co-operative Development