Canada Cooperatives Act

Incorporation of afederal cooperative

December 2013

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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

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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

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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

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Flexible structure involving:

– membership

– member shares:

o one class only

o can only be issued to members

– investment shares:

o one or more classes

o may be issued to non-members

o rights, conditions, etc. must be provided in articles, regardless of number of classes to be established

Canada Cooperatives Act

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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?

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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

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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

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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

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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

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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

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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

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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

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Corporations Canada has a website with various documents including– Incorporating your cooperative– How to file my application– Requests for copies of corporate documents

www.corporationscanada.ic.gc.ca

Client Services Section available to answer questions on the phone

1-866-333-5556

Canada Cooperatives Act

http://laws-lois.justice.gc.ca/eng/acts/C-1.7/index.html

Where to get information or ask questions

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