An active member is a person who maintains a relationship with a
co-operative, either by purchasing or supplying goods
or services, paying
an annual subscription
or having another form
of relationship such as having a child enrolled at a child care co-operative or
being a tenant of a housing co-operative. Once a member ceases
to be active in accordance with the co-operative's rules, their
membership is cancelled.
Board of Directors
a co-operative is governed by a Board of Directors which is responsible for
managing the business of a co-operative for the benefit
Also see Directors.
Cardinal stakeholder group
Is the stakeholder group that a business or an
organisation is established to serve. In a
for-profit company, the cardinal stakeholder group is its
investor shareholders. In contrast, the cardinal stakeholder of a
are the members who
use of its services, whether they be consumers, parents, farmers, businesses
Also see Stakeholders.
A community buyout occurs when members of the public purchase an existing
that is threatened with closure. In Australia, community buyouts usually occur
in small rural communities where a business provides
an essential service such as a general store, post office, petrol station or
community buyout usually results in the formation of a community enterprise
incorporated as a co-operative.
A community enterprise is a business that is owned, controlled
and used by the people who live in a particular geographic area. Membership of a
community enterprise is voluntary and open to the general public.
It is a sustainable business that does not rely on
charitable donations or subsidies for its continued
existence. Most community enterprises in Australia are incorporated as
A consumer co-operative Is an enterprise that aggregates the purchasing
power of individuals and families to provide cheaper prices for goods and
services and/or to obtain goods and services that would otherwise be
Consumer co-operatives can either operate as a community enterprise or a buying
group among individuals with a common need.
A co-operative can be described as an organisation which is owned and
controlled by the persons
who use its services. In Australia, it is an
registered under state or territory co-operatives
A co-operative is a unique form of
which is based on the values of self-help,
self-responsibility, democracy, equality, equity and solidarity. Self help,
expressed through mutual action as a group, provides the motivation
for self reliance and assuming responsibility for taking control of one's own
Democracy and equity sustain the solidarity of the group by ensuring
that no individual member can secure power or gain advantage to the detriment
of other members.
Seven internationally recognised
act as guidelines by which co-operatives put these values into practice, and
basis of co-operatives legislation in Australia and other countries.
is a taxation term which describes a company or a
co-operative that is eligible to receive taxation benefits under Division 9 of
the Commonwealth Income Tax Assessment Act. The term also refers to a small
Australian state of Victoria that are incorporated as companies because they
formed before Victoria's first co-operatives legislation in 1953.
is the legislation that regulates non
financial co-operatives in Australia.
for links to the various state and territory
Democratic control means the final authority to control the affairs of a
co-operative rests with the members who use its services. Members elect
directors and vote on major decisions such as
appointing the auditor, amending the co-operative's rules, approving the sale
of its main assets and winding up
the co-operative. Democratic control is exercised by members at general
meetings or by postal ballot. Every member has
vote only, irrespective of the amount of capital contributed by them or their
use of the
is often used in Australia to describe a
change in corporate form; from a co-operative or building society to a
company limited by shares (usually a public company).
Directors are those persons with legal responsibility for providing direction
supervision of a co-operative. In some small co-operatives, directors may be
referred to as "committee members". Directors are elected by members and a
majority of directors must be
Co-operative directors have similar duties to those of
They can only act at a properly
convened board meeting except where they are delegated to perform a function
authorised by the
Board of Directors.
Also known as a
a distributing co-operative can
return surplus funds to
members, and members can share in the assets of the co-operative upon winding
co-operatives must have share capital. This type of co-operative is used for
commercial activities such business services, buying groups, and
agricultural, fish marketing and forestry services.
Is a legal person that has an existence separate from the
who are its members. An incorporated body has the legal capacity of a natural
human being), and has the power to hold property, enter into contracts, and sue
be sued in its corporate name. It has perpetual succession and continues to
exist until action is taken to dissolve it.
An incorporated body is also
described as a
corporate body, a
body corporate or legal entity. Companies, co-operatives,
incorporated associations and aboriginal corporations are all incorporated
Like other incorporated bodies, a co-operative has limited liability. This
means that the
co-operative is responsible for its debts, not the members who own the
Members are, however,
liable for the amount, if any, unpaid on their shares, any charges
payable by them in
accordance with the co-operative's rules and any debts they owe to the
In certain circumstances such as insolvent trading,
held personally liable for the debts of the co-operative if they are found to
duties under law.
A member Is a term used to describe a legal owner of a co-operative. In a
with shares, a member
referred to as a shareholder.
A mutual is an organisation where there is a complete identity between the
in the enterprise and its members; where the funding for and income of the
derived soley from its members. Mutuals can exist as incorporated associations,
co-operatives or companies. Not all co-operatives are mutuals.
The mutuality principle is a taxation term that applies to an entity where
persons contribute to a fund created
and controlled for a common purpose and for
the mutual benefit of its members.
surplus arising from the use of that fund for the
common purpose is not assessable as income, even if
distributed to the contributors.
The principle is that taxable income must be
derived by outside parties (a person cannot make a profit out of himself or
herself). Typically, the principle has
relevance with the activities between the entity
and its members (mutual activities), but not to
activities with non members for payment
Also known as a
non trading co-operative,
a non-distributing co-operative
is a 'not-for-profit' organisation which can be formed with or
without shares. While a
co-operative can conduct commercial activities, it is prohibited under
co-operatives law from
distributing surplus funds to
members from profits, asset revaluation or upon winding up. This type of
commonly used to provide social, cultural and recreation services to its
Is an activity that is related to the main purpose
of a co-operative and is used as the basis for determining whether or not a
member is an
All co-operatives must have at least one primary
A private enterprise is a business or an organisation whose membership records
open to the public. Private enterprises include
proprietary companies, co-operatives and incorporated associations.
Public service mutual
Also known as a public sector mutual, a public service mutual is a government owned company which is contracted to
deliver government services to the public.
Registrar of Co-operatives
Is a statutory officer created under Australian
co-operatives legislation who
is charged with the
responsiblily for the administration of the legislation. The
Registrar is usually is a senior state/territory government official.
The rules are the constitution of a co-operative and are a collection of
clauses that describe the internal structure of a
co-operative. In Australia, the rules include active membership provisions,
qualification for members and directors, conducting board and general meetings,
and how surplus funds will be distributed. In a formal sense, the rules
constitute a contract between members, officers,
directors and the
co-operative, all of whom are all required to
observe the rules.
A social business is a cause-driven corporation with social
objectives. People and institutions invest in a
for social purposes, not personal profit. Investors/owners can gradually
recoup the money they invest in the enterprise, but cannot
take any profits beyond that point.
Social enterprises are not-for-profit organisations that aim to
social well being of individuals and families. While there is no universally
accepted definition of a social enterprise, its key distinguishing feature is
its social purpose combined with the entrepreneurial spirit of private
In Australia, social enterprises
can either be member benefit organisations, such as
co-operative social enterprises,
or organisations that
social services to stakeholders who are not the owners of the enterprise.
Stakeholders are those who have a stake in the achievements of an organisation
three broad stakeholder groups. The prime
cardinal stakeholder group
are its legal owners (in a co-operative, its members).
The second are those who have a business relationship with the
organisation/business, such as bankers, suppliers, agents, staff, contractors
government. The third group is the community and includes
volunteers, customers, clients and the general public.