How to Register a Co-operative

Co-operatives are member-owned corporations incorporated under Co-operative Corporations Act ("the
CC Act"), and are member owned and controlled businesses which operate on co-operative democratic
and financial principles:

 One member, one vote, regardless of the amount invested;

 Distribution of surplus to members, based on their use of the co-op;
 Limited appreciation of capital. (That is, interest on loan capital and dividends on share capital
are limited to a percentage fixed by this Act or the articles of incorporation of the Co-op)
There are 10 basic types of co-operatives, regulated under the CC Act:

 service co-ops;
 consumers co-ops;
 supply co-ops;
 worker co-ops;
 marketing co-ops;
 child care co-ops;
 housing
 housing development co-ops;
 farming and supply; and
 milk transport.
Other than a statutory requirement that the majority of their business must be conducted with their
members, the CC Act does not regulate the day to day business of a co-operative or the member
established by-laws under which it operates.

There are a number of associations who will assist co-ops and their members with day to day operating
or corporate governance issues and in some cases with dispute resolution. Member complaints received
by FSCO are directed to these associations. As with other types of business corporations, the final
avenue of dispute resolute is through the legal system.

Some co-operatives issue securities to their members, and to restricted categories of non-members. Co-
ops can be incorporated with share capital, without share capital, as a worker co-op (with or without
share capital) or as a non profit (must be without share capital).

There is no market for these securities. People who invest in co-op securities usually do so for the value
the co-operative will provide them as members in making available goods, services, facilities or jobs
rather than seeking income or appreciation in the value of their investment.

Where co-operatives are incorporated with share capital, no offering statement is required for the basic
membership share. For other classes of securities (subject to certain minimum statutory exemptions),
before the security may be sold each prospective investor must be provided with an offering statement
describing the security and containing disclosures required by the CC Act.
FSCO reviews these documents for compliance in form with the requirements of the CC Act before
issuing the statutory receipt to permit the security to be sold. The board of directors of the co-operative
are responsible for verification of the accuracy and adequacy of the information contained in the
offering statement, and the purchaser is responsible for assessing the risk and benefits of the investment
for their purposes.

Process for Incorporating a New Co-operative

The process for incorporation of a new Ontario Co-operative is contained in sections 4 through 6 of the
Co-operative Corporations Act.

The procedural steps for application may be summarized as follows:

A. (1) Five or more persons, being

corporations or natural persons who are of
the age of eighteen years or more, and who
intend to be members of the co-operative,
may incorporate a co-operative with or
without share capital by signing and
delivering to the Minister of Finance in
duplicate articles of incorporation and such
other information as may be prescribed.

B. (1) Articles for worker co-operatives

(1.1) Three or more natural persons who are of the age of eighteen years or more and who intend to be
members of a worker co-operative may incorporate such a co-operative with or without share capital by
signing and delivering articles of incorporation to the Minister in duplicate. 1992, c. 19, s. 2 (1).

C. The submitted articles shall set out the particulars described in subsection 5 (2) of the CC Act.

D. If the articles conform to law, the approvals to incorporate that are required by statute have been
given, all prescribed information has been delivered to FSCO and all fees established have been paid,
the Superintendent of Financial Services or her delegate shall, issue to the incorporators or their agent a
certificate of incorporation.

The following documents will help you to register and organize your co-operative:

 Guide to Setting up a Co-operative - Basic steps to start a co-operative.

 Filing Requirements and Record-Keeping - Outlines the routine information that co-ops should
send to FSCO, such as annual financial statements. This guide also describes the records that
the Co-operative Corporations Act requires co-ops to keep.
 Legal Requirements - Describes compliance with the Co-operative Corporations Act, how to
pass by-laws, and directors' legal responsibilities.
 Incorporating a Co-operative without Share Capital - Step-by-step instructions on how to
 incorporate a co-operative, including forms.
 Incorporating a Co-operative with Share Capital - Step-by-step instructions on how to
incorporate a co-operative, including forms.