The Co-operative Associations Act

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1 CO-OPERATIVE ASSOCIATIONS c The Co-operative Associations Act being Chapter 143 of The Revised Statutes of Saskatchewan, 1930 (effective February 1, 1931). NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation.

2 2 c. 143 CO-OPERATIVE ASSOCIATIONS Table of Contents SHORT TITLE 1 Short title INTERPRETATION 2 Interpretation REGISTRAR 3 Appointment INCORPORATION 4 Procedure POWERS OF ASSOCIATION 5 Acquisition and disposal of real property 6 Investment in funds of other companies 7 Purchases for cash 8 Sales for cash 9 Power to pledge credit 10 Every association a company BYLAWS 11 Bylaws 12 Nonapplication of sections 7, 8 and 9 CAPITAL AND SHARES 13 Capitalisation 14 Shares, how purchased 15 Interest 16 Transfer of shares 17 Liability of shareholder 18 Lien on shares 19 Voting 20 Security Frauds Prevention Act not to apply ANNUAL RETURN 21 Annual return 22 Form of return RECORD BOOKS 23 Register APPORTIONMENT OF SURPLUS 24 Apportionment of surplus 25 Power to cease paying interest OBLIGATIONS OF OFFICERS AND SHAREHOLDERS 26 Security 27 Bylaws binding 28 Debt of shareholder OFFENCES AND PENALTIES 29 Offences 30 Liability of officers and directors 31 Use of word co-operative restricted 32 Penalty DISSOLUTION 33 By consent of shareholders 34 By registrar 35 Settlements in event of dissolution 36 Return GENERAL 37 Fees payable to registrar 38 Disposal of fees 39 Registrar supplies bylaws upon request SCHEDULE Form A Form of Memorandum of Association

3 CO-OPERATIVE ASSOCIATIONS c CHAPTER 143 An Act respecting Co-operative Associations SHORT TITLE Short title 1 This Act may be cited as The Co-operative Associations Act. 1928, c.54, s.1; R.S.S. 1930, c.143, s.1. INTERPRETATION Interpretation 2 In this Act, unless the context otherwise requires, the expression: Association 1. Association means an association incorporated under this Act or under any former Act respecting agricultural co-operative associations; Patron 2. Patron means a person who purchases over $50 worth of merchandise from an association in any one year; Registrar 3. Registrar means the Registrar of Co-operative Associations for Saskatchewan. REGISTRAR 1928, c.54, s.2; R.S.S. 1930, c.143, s.2. Appointment 3 The Public Service Commission may appoint a registrar of co-operative associations and may fix his remuneration. 1928, c.54, s.3; R.S.S. 1930, c.143, s.3. INCORPORATION Procedure 4(1) Any five or more persons who desire to associate themselves together as an incorporated association for the purpose of producing, purchasing or selling live stock or farm products on the co-operative plan, or for establishing and operating on such plan any business for procuring and selling supplies or rendering services of pecuniary value to consumers, or purchasing or otherwise acquiring on the same plan real property to be used as a club room or rest room or for entertainments and gatherings of a public nature, may in the presence of a witness sign in duplicate and cause to be filed in the office of the registrar a memorandum of association in writing (form A) to which shall be attached an affidavit verifying the signatures.

4 4 c. 143 CO-OPERATIVE ASSOCIATIONS (2) No association shall be registered under a name identical with that by which any other existing association has been registered, or so nearly resembling the same as to be likely to deceive, and the words Co-operative Association, Limited, shall be the last three words in the name of any association registered under this Act. (3) The registrar shall indorse upon each duplicate memorandum of association a certificate of the original having been filed with him with the date of filing (form B) and every such indorsement shall be prima facie evidence of the facts stated therein and of the incorporation of the association. (4) The registrar shall cause a notice of such incorporation to be published for one month, at the expense of the association, in The Saskatchewan Gazette, and shall at the time of filing receive the charges provided for such publication in form C. (5) The subscribers and such other persons as may thereafter become shareholders in the association shall thereupon become and be a body corporate and politic under its registered name. 1928, c.54, s.4; R.S.S. 1930, c.143, s.4. POWERS OF ASSOCIATION Acquisition and disposal of real property 5 The association shall have power to carry on the said business and to do anything incidental to the attainment of its objects, and to acquire and hold real property in Saskatchewan required for the purposes of the association, and to sell, mortgage, lease or otherwise dispose of such property. 1928, c.54, s.5; R.S.S. 1930, c.143, s.5. Investment in funds of other companies 6 The association may contribute to the funds or capital of any company, association or society incorporated by or under the provisions of any Act of the Legislature of Saskatchewan, having objects wholly or in part similar to those of co-operative associations and may subscribe for, purchase, hold, acquire or dispose of bonds, debentures or securities thereof. 1928, c.54, s.6; R.S.S. 1930, c.143, s.6. Purchases for cash 7(1) The association shall, except as hereinafter provided, pay for all goods purchased upon delivery: Provided that any association may purchase upon credit from any other co-operative association or any company, association or society incorporated by any special Act of the Legislature of Saskatchewan having objects wholly or in part similar to those of co-operative associations. (2) The purchase of goods otherwise than in conformity with this section shall he illegal. 1928, c.54, s.7; R.S.S. 1930, c.143, s.7.

5 CO-OPERATIVE ASSOCIATIONS c Sales for cash 8 No association shall sell its goods, wares or merchandise to its shareholders, patrons or customers except for cash. No credit shall be given. 1928, c.54, s.8; R.S.S. 1930, c.143, s.8. Power to pledge credit 9 The directors shall not pledge the credit of the association except as aforesaid or for the purchase price or rental of business premises, insurance, salaries and incidental expenses, or for moneys borrowed to pay for goods purchased or expenses incurred in connection therewith or the shipment thereof. 1928, c.54, s.9; R.S.S. 1930, c.143, s.9. Every association a company 10 Every association shall be deemed to be a company within the meaning of section 161 of The Companies Act to the extent that the provisions of the said Act are not inconsistent with the terms of this Act. BYLAWS 1928, c.54, s.10; R.S.S. 1930, c.143, s.10. Bylaws 11(1) It shall be the duty of the registrar to prepare and submit for approval by the Lieutenant Governor in Council standard bylaws not inconsistent with this Act which shall apply to every association incorporated hereunder. (2) Each association may pass such supplemental bylaws not inconsistent with the provisions of the standard bylaws as may be deemed advisable by the association. (3) No supplemental bylaws shall become operative until approved by the registrar. 1928, c.54, s.11; R.S.S. 1930, c.143, s.11. Nonapplication of sections 7, 8 and 9 12(1) Any association which conducts a retail business and has a paid up capital of at least five thousand dollars may by supplementary bylaw provide that sections 7, 8 and 9, or any of them, shall not apply to the association. Such bylaw shall be signed by not less than three-fourths of the shareholders resident within thirty-five miles of the association s registered head office. (2) Upon receipt of such a bylaw and of a Certificate signed by the president and secretary treasurer, that the amount of the paid up capital of the association is not less than five thousand dollars, the registrar shall, after he approves of such bylaw, forthwith furnish the association with a certificate to the effect that the provisions of sections 7, 8 and 9, or such of them as are mentioned in the bylaw, shall not apply to the association, and thereafter the sections specified in the certificate shall not apply to the association.

6 6 c. 143 CO-OPERATIVE ASSOCIATIONS (3) The registrar shall on payment of twenty-five cents furnish a certified copy of the certificate to any person who applies therefor. (4) The annual return made by an association to the registrar shall be prima facie evidence as to the amount of the then paid up capital of the association. 1928, c.54, s.12; R.S.S. 1930, c.143, s.12. CAPITAL AND SHARES Capitalisation 13(1) The capital of every association shall be such an amount and divided into shares of such denominations as may be set forth in the memorandum of association. (2) The capital may be increased from time to time by bylaw of the association by the issue of new shares. (3) The capital may be reduced from time to time.by bylaw of the association upon an order of the Court of King s Bench confirming such reduction being obtained in the manner set forth in The Companies Act. 1928, c.54, s.13; R.S.S. 1930, c.143, s.13. Shares, how purchased 14 The shares may be payable by instalments at such times and in such manner as may be determined by bylaw. 1928, c.54, s.14; R.S.S. 1930, c.143, s.14. Interest 15 No shareholder shall receive interest on any but the paid up portion of his shares. 1928, c.54, s.15; R.S.S. 1930, c.143, s.15. Transfer of shares 16 Shares may be assigned or transferred or may be repurchased by the association: Provided that no assignment, transfer or repurchase shall be valid unless and until approved and authorised by the directors; Provided further, that no assignment, transfer or repurchase shall be approved or authorised by the directors if it would reduce the total number of shareholders below five. 1928, c.54, s.16; R.S.S. 1930, c.143, s.16.

7 CO-OPERATIVE ASSOCIATIONS c Liability of shareholder 17 Every shareholder shall be individually liable to the creditors of the association for debts and liabilities of the association to an amount equal to the amount unpaid on the shares held by him and until the whole amount of his shares has been paid up, but no shareholder shall be liable to an action in respect of such unpaid balance until an execution at the suit of the creditors against the association has been returned unsatisfied in whole or part. 1928, c.54, s.17; R.S.S. 1930, c.143, s.17. Lien on shares 18 Every association shall have a lien on the shares of the individual shareholders for debts due from them to it, and may apply any sum credited to a shareholder in or toward payment of such a debt. 1928, c.54, s.18; R.S.S. 1930, c.143, s.18. Voting 19 At association meetings a shareholder shall have one vote only, regardless of the number of shares held by him, and no shareholder may vote by proxy. 1928, c.54, s.19; R.S.S. 1930, c.143, s.19. Security Frauds Prevention Act not to apply 20 The Security Frauds Prevention Act shall not apply to shares of an association incorporated under this Act. ANNUAL RETURN 1928, c.54, s.20; R.S.S. 1930, c.143, s.20. Annual return 21 Every association shall: (a) before the end of February in every year send to the registrar a general statement to be called the annual return, of the receipts and expenditures, assets and liabilities of the association, audited, which shall show separately the expenditure in respect to the several objects of the association for the previous year tip to and inclusive of the thirty-first day of December; (b) supply gratuitously to every shareholder or person directly interested in the funds of the association, on his application, a copy of the last annual return. 1928, c.54, s.21; R.S.S. 1930, c.143, s.21. Form of return 22 Every return and other document required for the purposes of this Act shall be made in such form and shall contain such particulars as the registrar prescribes. 1928, c.54, s.22; R.S.S. 1930, c.143, s.22.

8 8 c. 143 CO-OPERATIVE ASSOCIATIONS RECORD BOOKS Register 23 A register, or list of shareholders, shall be kept by every association, and such register shall show and shall be prima facie evidence of: (a) the names, addresses and occupations of the shareholders, the number of shares held by them respectively, the numbers of such shares and the amount paid or considered as paid thereon; (b) the date on which each shareholder was registered; (c) the date at which any shareholder ceased to be such. 1928, c.54, s.23; R.S.S. 1930, c.143, s.23. APPORTIONMENT OF SURPLUS Apportionment of surplus 24(1) The directors shall apportion the surplus arising from the business of the association as follows: (a) by setting aside not less than ten per cent of the net surplus for a reserve fund until an amount has accumulated in such fund equal to at least thirty per cent of the paid up capital stock; (b) by paying interest on the paid up capital stock at the rate of six per cent per annum. (2) The remainder of the surplus shall be divided among the patrons in proportion to the volume of business which they have done with the association. (3) An association may, by supplemental bylaw adopted at a general meeting and approved by the registrar, provide that dividends due to a non-shareholder patron or shareholder shall be placed to his credit either on loan capital account, or on share capital account for the payment of any balance outstanding on shares alloted or for the purchase of shares or additional shares, as the case may be. Such loan capital account may, on such dates as may be mentioned in the bylaw, be credited with interest at a rate not exceeding six per cent per annum, on the amounts from time to time contained therein. (4) If a shareholder so desires he may have his loan capital, or any portion thereof, placed to his credit to be used by him for the purchase of the commodities from the association. (5) A shareholder may, after giving ninety days notice in writing to the secretary of the association, withdraw any sum at the credit of his loan capital account, or any portion thereof. (6) When all shares allotted to a shareholder are fully paid, or when a stock certificate has been issued under subsection (7), and an additional amount equal to the par value of one share has accumulated in such share capital account, a stock certificate for such share shall be issued to the shareholder, and so on uiitil he holds such number of shares as may be prescribed in the bylaw mentioned in subsection (3). (7) When dividends due to a non-shareholder patron have accumulated to an amount equal to the par value of one share, a stock certificate for one share shall be issued to him. 1928, c.54, s.24; , c.48, s.2; R.S.S. 1930, c.143, s.24.

9 CO-OPERATIVE ASSOCIATIONS c Power to cease paying interest 25(1) An association may, by supplemental bylaw, provide that no interest, or no further interest, shall be paid on the capital stock. (2) Upon such bylaw being approved by the registrar. the directors shall, upon demand of any shareholder holding more than one share, repurchase for cash all his shares but one or such less number as the shareholder may specify. 1928, c.54, s.25; R.S.S. 1930, c.143, s.25. OBLIGATIONS OF OFFICERS AND SHAREHOLDERS Security 26 Every person appointed to an office touching the receipt management or expenditure of money or the receipt of goods, wares or merchandise for the purposes of an association under this Act, shall, before entering upon the duties of his office, give such security as is deemed sufficient by the directors which security may be varied in amount or renewed from time to time. 1928, c.54, s.26; R.S.S. 1930, c.143, s.26. Bylaws binding 27 The bylaws of every association shall bind the association and the shareholders thereof to the same extent as if each shareholder had subscribed his name and affixed his seal thereto and there were in such bylaws a covenant on the part of himself, his heirs, executors and administrators to conform to such bylaws subject to the provisions of this Act. 1928, c.54, s.27; R.S.S. 1930, c.143, s.27. Debt of shareholder 28 All moneys payable by a shareholder to an association under this Act shall be a debt due from such shareholder to the association and shall be recoverable as such in any court of competent jurisdiction. 1928, c.54, s.28; R.S.S. 1930, c.143, s.28. OFFENCES AND PENALTIES Offences 29 It shall be an offence against this Act if any association: (a) fails to give any notice, send any return or document, or do or allow to be done any act or thing which the association is by this Act required to give, send, do or allow to be done; (b) wilfully neglects or refuses to do any act or to furnish any information required for the purposes of this Act by the registrar or any other official or person whose duties require him to obtain the information, or does any act or thing forbidden by this Act; (c) makes a return or wilfully furnishes information in any respect false or insufficient. 1928, c.54, s.29; R.S.S. 1930, c.143, s.29.

10 10 c. 143 CO-OPERATIVE ASSOCIATIONS Liability of officers and directors 30 Every offence by an association shall be deemed to have been also committed by every officer of the same bound by the rules thereof to fulfil the duties whereof such an offence is a breach or if there is no such officer then by each of the directors, unless such officer or director is proved to have been ignorant of or to have attempted to prevent the commission of such offence. 1928, c.54, s.30; R.S.S. 1930, c.143, s.30. Use of word co-operative restricted 31(1) No person firm, or association doing business in this province shall use the word co-operative as part of its corporate or business name unless incorporated by or under the authority of an Act of the Parliament of Canada or an Act of this Legislature. (2) Any person, firm, corporation or association contravening the provisions of this section shall be guilty of an offence against this Act. 1928, c.54, s.31(1) and (3); , c.48, s.3; R.S.S. 1930, c.143, s.31. Penalty 32 Every person, firm, corporation or association guilty of an offence under this Act, shall on the complaint of any association or any shareholder thereof or of the registrar be liable on summary conviction to a penalty not exceeding $100. DISSOLUTION 1928, c.54, s.32; R.S.S. 1930, c.143, s.32. By consent of shareholders 33(1) An association may be dissolved by consent of three-fourths of the shareholders, resident within thirty-five miles of the association s registered head office, shown by their signatures to an instrument of dissolution. (2) The instrument of dissolution shall set forth in detail the liabilities and assets of the association, the number of shareholders and the nature of their respective interests in the association, the claims of creditors (if any) and the provision to be made for their payment, and the intended appropriation or division of the funds or property of the association unless the same is stated in the instrument of dissolution to be left to the award of the registrar. (3) A statutory declaration shall be made by the president and secretary of the board of directors that the provisions of this Act have been complied with, and shall be sent to the registrar with the instrument of dissolution. (4) The registrar shall cause a notice of the dissolution to be advertised, at the expense of the association, in The Saskatchewan Gazette and in some newspaper circulating in the district in which the head office of the association is situated. 1928, c.54, s.33; R.S.S. 1930, c.143, s.33.

11 CO-OPERATIVE ASSOCIATIONS c By registrar 34(1) When the registrar has reasonable cause to believe that an association is not carrying on business or is not in operation, he shall send to the secretary of the association, by post, a letter inquiring whether the association is carrying on business or is in operation. (2) If the registrar does not within one month of sending the letter receive an answer thereto, he shall within fourteen days after the expiration of the month send to the secretary of the association, by post, a registered letter, referring to the first letter and stating that no answer thereto has been received by him and that if an answer is not received to the second letter within one month from the date thereof a notice will be published in The Saskatchewan Gazette with a view to striking the name of the association off the register. (3) If the registrar receives an answer from the association to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive an answer thereto, the registrar may publish in the said Gazette and send to the association a notice that at the expiration of one month from the date of that notice the name of the association mentioned therein will, unless cause is shown to the contrary, be struck off the register and the association dissolved. (4) At the expiration of the time mentioned in the notice the registrar may, unless cause to the contrary is previously shown by such association, strike the name of such association off the register, and in such case he shall publish notice thereof in The Saskatchewan Gazette, whereupon the association shall be dissolved. 1928, c.54, s.34; R.S.S. 1930, c.143, s.34. Settlements in event of dissolution 35 In case of a dissolution of an association under this Act the associaton shall nevertheless be considered as subsisting and be in all respects subject to the provisions of this Act, so long and so far as any matter relating to the same remains unsettled, to the intent that the association may do all things necessary to the winding up of the concerns thereof and may sue and be sued under the provisions of this Act in respect to all such unsettled matters. 1928, c.54, s.35; R.S.S. 1930, c.143, s.35. Return 36(1) In the event of an association being wound up under The Companies Winding Up Act, the liquidators shall, when the affairs of the company have been fully wound up and a general meeting has been called for the purpose of having the liquidators accounts laid before it, forward to the Registrar of Co-operative Associations a duplicate of the return required to be made to the Registrar of Joint Stock Companies, and the registrar shall file such return in his office. (2) In case the liquidators make default in transmitting the return mentioned in the preceding subsection, they shall be severally liable to a penalty of $20 for every day during which the default continues. 1928, c.54, s.36; R.S.S. 1930, c.143, s.36.

12 12 c. 143 CO-OPERATIVE ASSOCIATIONS GENERAL Fees payable to registrar 37 The fees payable to the registrar for services under this Act shall be those set forth in form C in the schedule hereto. 1928, c.54, s.37; R.S.S. 1930, c.143, s.37. Disposal of fees 38 All fees received by the registrar under or by virtue of this Act shall be paid by him into and form part of the consolidated fund. 1928, c.54, s.38; R.S.S. 1930, c.143, s.38. Registrar supplies bylaws upon request 39 The registrar shall upon written request supply a copy of the standard bylaws and prepare such supplemental bylaws as may be required for the regulation, government and management of any proposed association, provided the request is accompanied by an outline of the object and business of the proposed association. 1928, c.54, s.39; R.S.S. 1930, c.143, s.39.

13 CO-OPERATIVE ASSOCIATIONS c SCHEDULE FORM A [Section 4(1)] FORM OF MEMORANDUM OF ASSOCIATION We (insert the name, occupation and address of each subscriber) desire to form an association under the provisions of The Co-operative Associations Act. The corporate name of the association is to be (insert name of association) Co-operative Association, Limited, and the objects for which the association is to be formed are (insert objects for which the association is to be formed) upon the co-operative plan. The capital stock of the association is to consist of (insert number) shares of (insert par value of shares) each. The names of the directors who shall manage the affairs of the association, until their successors are appointed under the bylaws of the association to be formed, are (insert names) and the head office of the association is to be situated in (insert name of place), in the Province of Saskatchewan. Dated at in the Province of Saskatchewan this dayof, 19. Witness: Signatures. FORM B (Section 4(3) ) ACKNOWLEDGMENT OF REGISTRY The Co-operative Association, Limited, having filed a duly executed Memorandum of Association, is registered under The Co-operative Associations Act, this day of, 19. (Registrar of Co-operative Association for Saskatchewan.)

14 14 c. 143 CO-OPERATIVE ASSOCIATIONS FORM C (Section 4(4) and 37 ) TABLE OF FEES TO BE PAID TO THE REGISTRAR UNDER THIS ACT Filing application for registration... $1.00 Filing supplemental bylaws at time of corporation Filing supplemental bylaws after incorporation, for each bylaw Filing amendments to supplemental bylaws, for each amendment Advertising notice of incorporation in The Saskatchewan gazette for one month Search of records Advertising dissolution in The Saskatchewan Gazette (includes set of blank forms for dissolution proceedings) REGINA, SASKATCHEWAN Printed by the authority of THE QUEEN S PRINTER

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