Canada Cooperatives Act Incorporation of a federal cooperative December 2013

1 Canada Cooperatives Act Who can incorporate? Application Form 3001: Articles of Incorporation Forms 3003 and 3006 Statutory Declaration Common Mistakes Where to get information or ask questions? Table of Contents

2 Harmonized with CBCA and federal NFP Act with changes to reflect special nature of cooperatives Special features of the Coop Act –must operate and have fixed place of business in at least 2 provinces or territories –one vote per member –no proxy voting Canada Cooperatives Act

3 Articles must include statements about being organized and operating on a cooperative basis In the Act, “cooperative basis” includes: –membership that is open and non-discriminatory –one member one vote with no proxy vote –maximum interest on member loans and dividends on membership shares is fixed in the articles –constraints on use of surplus funds –members are source of capital to the extent feasible –education of members and public on cooperative principles Canada Cooperatives Act

4 Flexible structure involving: –membership –member shares: oone class only ocan only be issued to members –investment shares: oone or more classes omay be issued to non-members orights, conditions, etc. must be provided in articles, regardless of number of classes to be established Canada Cooperatives Act

5 Minimum of 3 individual incorporators who are: –at least eighteen years of age –of sound mind and –not bankrupt Minimum of 1 cooperative entity, including federation of cooperatives All must intend to become members Who can incorporate?

6 An incorporation application under the Coop Act includes: –Form 3001: Articles of Incorporation –Form 3003: Notice of Registered Office –Form 3006: Notice of Directors –Statutory declaration –NUANS Name Search Report –Filing fee of $250 Application

7 Fillable PDF forms available on Corporations Canada website –fill the form, print and have signed –send the complete application to Corporations Canada By-laws are not part of the incorporation application Application

8 Articles are the core document and require: –name of the cooperative –municipality and province of the registered office –number of directors –restrictions, if any, on the business of the cooperative –restrictions, if any, on the class of membership –membership share capital and member rights –maximum rate of return, if any –provisions, if any, on distribution of property on dissolution –investment share capital, if any –restrictions, if any, on powers of directors to manage –other provisions, if any –mandatory statements Form 3001: Articles of Incorporation

9 Form 3003: Notice of Registered Office –address of the registered office –cannot be a PO Box –any additional mailing address (optional) Form 3006: Notice of Directors –list all directors –residential address or other address for service –indicate whether a resident Canadian and/or a coop member Will use same forms to update information during life of cooperative Forms 3003 and 3006

10 Must be signed by all the incorporators Must state: –the cooperative will be organized and operated and will carry on business as a cooperative –the information contained in Forms 3003 and 3006 meet the requirements of the Coop Act –if non-profit housing cooperative, the cooperative will comply with Part 20 of the Coop Act –if worker cooperative, the cooperative will comply with Part 21 of the Act Must be sworn before a commissioner of oaths or a notary public Statutory Declaration

11 Proposed cooperative name is not acceptable Not all incorporators sign Form 3001 Membership share and investment share information is mixed together in Form 3001 Membership shares given preferences, rights, etc. not set out in the Act Form 3003 and/or 3006 not signed by an incorporator Form 3006: Notice of Directors –lists less than the minimum 3 directors –not all directors are individuals –less than 25% of directors are resident Canadians –less than 2/3 of directors are members of the cooperative Common mistakes

12 Statutory declaration is missing, not signed by all incorporators and/or not sworn before a commissioner or notary Cooperative Name –must be distinctive, not just descriptive –assigned numbered names not permitted –must include words “co-operative”, “united”, “pool” or similar –must be approved by Corporations Canada –if a housing cooperative, must include words “non-profit” or similar and “housing co-operative” or similar –if a worker cooperative, must include words “worker co- operative” or similar Common mistakes

13 Corporations Canada has a website with various documents including –Incorporating your cooperative –How to file my application –Requests for copies of corporate documents Client Services Section available to answer questions on the phone Canada Cooperatives Act Where to get information or ask questions

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