Acts and Regulations

82-58 - Co-operative Associations

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Revoked on 1 January 2020
NEW BRUNSWICK
REGULATION 82-58
under the
Co-operative Associations Act
(O.C. 82-289)
Filed April 1, 1982
Under section 62 of the Co-operative Associations Act the Lieutenant-Governor in Council makes the following Regulation:
Repealed: 2019, c.24, s.198
1This Regulation may be cited as the Co-operative Associations Regulation - Co-operative Associations Act.
2In this Regulation
“Act” means the Co-operative Associations Act;(loi)
“loan capital” means the retained patronage rebates due a member that are loaned to the association under such terms and conditions as are determined by the board of directors or the by-laws of the association or both;(capital de prêt)
“patronage rebates” means the money allocated or paid to shareholders pursuant to subsection 24(1).(ristournes)
3(1)An application for incorporation of an association limited by shares shall be in Form 1.
3(2)An application for incorporation of an association limited by membership shall be in Form 2.
3(3)An association shall have a corporate seal, the design of which shall be approved by the board of directors of the association and the Inspector.
3(4)The seal shall be affixed by the president, secretary, secretary-treasurer or such other person as the board of directors may appoint for the purpose but shall not be affixed to any instrument except by authority of a resolution of the board of directors.
3(5)An instrument to which the seal is affixed shall be signed by any two of the persons referred to in subsection (2).
4Any person may apply to the board of directors for membership in an association but no person under the age of sixteen years shall hold office in an association or vote at any meeting.
5(1)When the board of directors approves an application for membership, the applicant,
(a) in the case of an association limited by shares, shall subscribe for one or more shares of the association and make an initial payment on such subscriptions as prescribed by the by-laws; and
(b) in the case of an association limited by membership, shall agree to pay the annual or other periodic membership fee on such terms and conditions as are prescribed by the by-laws.
5(2)An applicant becomes a full member with voting privileges only after an instalment has been paid on the shares subscribed for or on the membership fee, as the case may be.
6A member who fails to make the agreed payments for shares subscribed for or for membership fee, may, at the discretion of the board of directors, be expelled from membership and when money has already been paid for shares subscribed for, the amount shall, subject to paragraph 27(1)(c) of the Act, be returned to that person.
7For the purposes of the transfer of shares, the registered holder of a share is the absolute holder thereof and, except as ordered by a court of competent jurisdiction or as may be required by or under any Act, the Association is not bound to recognize any equitable or other claim to or interest in, such share by any other person.
8The instrument of transfer of a share shall be in writing, and the transferor is deemed to remain the holder of a share until the name of the transferee is entered in the share register.
9Only one of the joint holders of a share or membership may vote at any meeting and the joint holders shall decide who exercises that vote, but if one of the joint holders is elected a director then that person shall exercise the vote.
10An association is not required to issue a share or membership certificate nor to issue a statement to each member at the end of the fiscal year of the association showing the member’s equity in the association.
11(1)Legal heirs of deceased members who have inherited shares in the association may apply for membership in the same manner as any other applicant.
11(2)If the application for membership of an heir referred to in subsection (1) is not approved, the association shall, subject to paragraph 27(1)(c) of the Act, repurchase the shares of the heir.
12(1)A copy of the by-laws of an association shall be given to a member on demand.
12(2)A copy of the Act and this Regulation shall be kept at the registered office of the association and shall be available for inspection by a member on demand.
13At all meetings of an association a majority vote of the members present, unless otherwise provided for in the Act or in this Regulation, shall decide all questions.
14(1)At any meeting of an association a resolution put to the vote of the meeting shall be decided by a show of hands unless a poll is demanded by at least three members.
14(2)If a poll is demanded it shall be taken by ballot in such manner as the chairman directs.
15(1)The capital of an association limited by shares is composed of
(a) share capital,
(b) retained earnings including that segregated in reserves,
(c) loan capital, and
(d) contributed surplus.
15(2)The capital of an association limited by membership shall be the same as that for an association limited by shares, except that it has no share capital.
16The par value of shares in an association limited by shares shall be as stated in the articles of incorporation but the number of shares that may be issued is unlimited.
17The maximum amount of shares that an individual member may hold in an association shall be set out in the by-laws of the association.
18(1)Subject to subsection (2), the holder of share capital may receive interest thereon up to the maximum rate specified in the by-laws.
18(2)No interest shall be computed on shares until the full amount of the share has been paid.
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19(1)Subject to section 26 of the Act, shareholders desiring to dispose of their shares shall first offer them to the association through the board of directors.
19(2)The board of directors are authorized to redeem the shares offered at a price not exceeding par value or book value, whichever is less.
20When the share capital of an association is, in the judgment of the board of directors, in excess of current requirements, the board of directors, subject to the approval of the Inspector, may repurchase from shareholders who have shares in excess of the minimum requirement of one share as many shares as it considers necessary to the best interests of the association.
21The board of directors has the authority, subject to subsection 27(2) of the Act, to cancel the membership of any member who has died, who has ceased to patronize the business of the association, who has failed to meet instalments within the time specified or for any other reason has been judged unfit for membership, and, subject to paragraph 27(1)(c) of the Act, to repurchase the shares.
22Unless otherwise provided for in the by-laws of the association, shares to be repurchased for the purpose of reducing share capital shall be purchased from amongst the members in the ratio that the shares held by each member bears to the total amount of shares held by all the members.
23(1)The directors shall set aside annually or semi-annually in a reserve account not less than five per cent of the annual or semi-annual savings arising from the business of the association as determined in accordance with generally accepted accounting principles and practice, until such fund is equal to thirty per cent of paid-up share capital.
23(2)The reserve fund shall be used to off-set extraordinary losses or expenditures and to provide protection for share capital.
23(3)Extraordinary losses or expenditures shall be included on the statement of earnings and a corresponding transfer shall be made from the reserve fund to retained earnings to show that part or all of the reserve fund has been used for its designated purpose but such transfers are subject to the approval of the Inspector.
24(1)At the end of each fiscal year, after paying the interest on shares and after providing for a reserve fund, the balance of the surplus may be apportioned among the members who are fully paid-up shareholders and those members who are not in arrears in their payments for shares or membership fees, in proportion to the amount of their patronage.
24(2)Allocations under subsection (1) allotted to members who have not paid in full for their shares must be applied as payment towards the shares.
24(3)Patronage rebates shall be applied in accordance with the by-laws of the association.
25(1)Subject to subsection (2), if within fifteen minutes from the time appointed for any meeting of an association a quorum is not present,
(a) the meeting shall stand adjourned to not less than seven days thereafter,
(b) all members shall be notified of the time and place of the said adjourned meeting at least five days before the date thereof, and
(c) the decisions of the adjourned meeting are binding if there are at least three members present.
25(2)If a meeting is convened on the request of members and a quorum is not present within fifteen minutes from the time appointed for the meeting, the meeting shall be dissolved.
26(1)Annual meetings of the association shall be held at a time and place determined by the board of directors and set forth in the call to the meetings.
26(2)Unless otherwise provided by the by-laws, notice of meeting shall be
(a) posted prominently in the association’s place of business, and
(b) sent, at least ten calendar days prior to the meeting, to every member at the address as registered on the books of the association.
27The order of business for annual meetings of the association shall be as follows:
(a) the call to order by the chairman;
(b) the appointment of the credentials committee;
(c) the report of the credentials committee;
(d) the reading and disposition of the minutes of the preceding meeting;
(e) business arising out of the minutes;
(f) the reports of standing committees appointed at previous meetings;
(g) the reports of special committees appointed at previous meetings;
(h) the reports of officers;
(i) the reports of auditors;
(j) consideration of financial statements;
(k) financial considerations, including reserve funds, interest on share capital and patronage rebates;
(l) unfinished business;
(m) the nomination and election of directors;
(n) the election of auditors;
(o) new business.
28(1)Special meetings of the association may be called at any time by the board of directors and the directors shall call a special meeting whenever a petition therefor is signed by at least fifty members or ten per cent of the members of the association, whichever is the lesser, and presented to the board of directors.
28(2)Notice of special meetings shall be given in the same manner as set forth for annual meetings under section 26 and shall state the time, place and purpose of such meetings and the business to come before it, and no business other than that specified in the notice shall be transacted.
29The members of an association shall have the right and the responsibility
(a) to elect directors and members of committees and to remove them from office for cause;
(b) to hear and pass upon the reports of the officers, the general manager and any committees of the association;
(c) to determine the method of distributing the net earnings;
(d) to make the final decision regarding any major changes in the financial policy, including the purchase or sale of real estate;
(e) to act as final arbiters in any dispute or disagreements that may arise between the board of directors and any committees or individual members;
(f) to determine what amendments shall be made in the by-laws; and
(g) to exercise its final authority in all other matters vitally affecting the association as a co-operative body and as a business organization.
30(1)The board of directors of an association shall be elected at the annual meeting.
30(2)The number of directors shall be set forth in the by-laws of the association.
30(3)At the first general meeting of the association, for the purposes of the first board, one-third of the board of directors shall be elected to hold office until the first annual meeting, one-third shall be elected to hold office until the second annual meeting and the remaining third shall be elected to hold office until the third annual meeting.
30(4)At each annual meeting directors shall be elected to replace those retiring and directors so elected at any annual meeting shall hold office for three years.
30(5)Where an association has fifteen or more members, directors of the association may be re-elected but shall not serve more than three or, if the by-laws of an association specify, two consecutive three-year terms without a lapse of at least one year.
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31(1)The board of directors shall meet immediately following the first general meeting of the association, and immediately following each annual meeting, and the first order of business shall be the election from among themselves of a president and vice-president for the coming year.
31(2)A secretary or secretary-treasurer shall be appointed by the board of directors and may or may not be a director.
31(3)The by-laws may provide the time at which the incoming executive officially takes office.
32No director shall engage in business that competes with the business of the association.
33The board of directors shall manage the affairs of the association and implement policies as directed at meetings of the members and in accordance with the Act, this Regulation and the by-laws of the association.
34(1)The minimum number of meetings of the board of directors shall be set forth in the by-laws.
34(2)A majority of the directors constitutes a quorum.
35The directors may arrange themselves into sub-committees to supervise one or more of the different activities carried on by the association, and each chairman thereof shall make a detailed statement of the work done in that sub-committee at the directors’ meeting.
36The board of directors shall convene the meetings of the association.
37The president or any two directors may call a special directors’ meeting by giving two days’ notice in writing to the secretary specifying the object thereof.
38The directors shall act for the association and shall be responsible for the performance of the following duties:
(a) to hire a manager, define his responsibilities and provide him with overall direction;
(b) to acquire the facilities necessary to carry on the association’s business;
(c) to ensure that the business is conducted in accordance with co-operative principles and the law;
(d) to control all investments whether in shares or loans in other associations, or in land, property and fixtures;
(e) to ensure economical working of the association’s business;
(f) to take all reasonable steps necessary to ensure a system of control over the assets of the association;
(g) to provide the best possible conditions of labour in the association’s service;
(h) to suggest policy for control of the sources of supply of the association’s goods and to maintain a direct and vital connection with other co-operative organizations; and
(i) to ensure that the association complies with the provisions of the Act and this regulation and its own by-laws.
39(1)The president shall act as chairman at all meetings of the association and of the board of directors, and in his absence the vice-president shall act as chairman.
39(2)If both the president and the vice-president are absent, the officers and directors present shall elect from among themselves a person to act as chairman for that meeting.
40(1)The secretary shall, on all occasions, in the execution of his duties, act under the supervision, control and direction of the board of directors.
40(2)The secretary or secretary-treasurer shall attend all meetings of the association and of the board of directors and shall record the names of all the directors present and the minutes of the proceedings.
41(1)The manager may be required to attend meetings of the association and of the board of directors.
41(2)The manager shall conduct the business of the association on a day-to-day basis and account for all transactions that take place ensuring that proper records are kept.
42The members may elect committees at the annual meeting, including an educational committee, a membership committee for the purpose of securing new members and increasing the interest of the members through recreational and social activities and other committees that may be needed from time to time for any special need.
43The treasurer, manager or other officers or employees having the custody of the funds or goods shall be bonded by the association with corporate security against possible loss.
44Each association shall adopt by-laws that shall include at least the following:
(a) the name of the association and the address of its registered office;
(b) the date of its fiscal year end;
(c) the par value of its shares or the annual or other periodic membership fees;
(d) the maximum interest rate to be paid on share capital;
(e) the number of members or percentage of total membership required to form a quorum at annual or special membership meetings;
(f) the minimum notice required for annual or special membership meetings if such notice is different from the minimum requirements specified in this Regulation;
(g) the terms of payment for shares or the terms of payment of membership fees;
(h) the procedure required for the calling of annual and special meetings;
(i) the qualifications of directors;
(j) any specific duties and responsibilities of directors and officers not set out in this Regulation;
(k) the minimum number of meetings of the board of directors;
(l) the method of filling any vacancy on the board of directors;
(m) the conditions for the borrowing of money and the giving of security therefor;
(n) the conditions under which the association may borrow money from its members, the terms and the specific rates of interest, if any, to be paid on the capital;
(o) the percentage of surplus to be set aside annually into the reserve fund;
(p) the credit policy of the association; and
(q) the manner in which members may withdraw from the association.
45(1)An association may make, repeal or amend the by-laws at a special or annual meeting if
(a) notice of the proposed action is given in writing to the members at least ten calendar days before the meeting; and
(b) the notice contains the exact wording of the by-law to be repealed, or amended together with the exact wording of the by-law incorporating the proposed amendments.
45(2)Motions to adopt by-laws, repeal by-laws or amend by-laws must be passed by a majority of not less than two-thirds of the votes cast by the members of the association entitled to vote and present at a special or annual meeting.
45(3)By-laws and amendments thereto are subject to the approval of the Inspector.
46(1)The financial statements laid before the members of an association at any special meeting or at an annual meeting shall consist of at least the following:
(a) a balance sheet;
(b) a statement of earnings;
(c) a statement of source and application of funds; and
(d) a statement of changes in financial position.
46(2)The financial statements shall be prepared in accordance with generally accepted accounting principles.
46(3)The statement of earnings shall include all losses and expenses incurred throughout the fiscal period and, without limiting the generality of the above, shall contain:
(a) a provision for depreciation on all fixed assets in every fiscal period at appropriate rates that amortize the cost of the assets over their useful lives; and
(b) adequate provision for doubtful accounts receivable for the fiscal period.
47When an association is wound up, the amount remaining after all creditors’ and members’ claims have been satisfied shall be distributed in proportion to the shares held by members at the time of dissolution unless a special agreement has been made by the membership or provisions are made in the articles of association that specifically state conditions under which such amounts shall be distributed.
48Regulation 79-44 under the Co-operative Associations Act is repealed.
N.B. This Regulation is consolidated to January 1, 2020.