Winding up a co-operative
If a co-operative intends to cease its activities, winding up ensures its assets are distributed lawfully. A co-operative can be wound-up in four ways:
- Winding-up on Certificate of the Registrar;
- Winding-up by the Supreme Court;
- Voluntary Winding-up by a creditor; or
- Voluntary winding-up by members.
In most instances, a co-operative will be voluntarily wound up by its members, and the process to be followed will be the same as the process applying to the winding-up of a corporation registered under the Corporations Act 2001.
A voluntary winding-up by members is initiated by a special postal ballot of members, and commences when the result of the special postal ballot is noted in the minute book by the secretary.
Notice of the special resolution for voluntary winding-up must be filed with the Registrar within seven days.
A liquidator must be appointed to wind-up the affairs of the co-operative, the liquidator can also be appointed in the same ballot that is used to approve winding-up, but appointment of the liquidator requires only a simple majority. The co-operative ceases to carry on its business (except as required to wind it up, in the opinion of its liquidator). All notices and reports of the liquidator required to be provided by the applied provisions of the Corporations Act 2001 are to be filed with the Registrar.
An alternative way to close a co-operative is to apply to the Registrar for deregistration without winding-up, under applied section 601AA of the Corporations Act 2001. A liquidator will not be required.
An application for deregistration requires the approval of all members of the co-operative, and is only a suitable option where the co-operative has no significant assets or liabilities.
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