Co-op FAQs

Do you have questions about co-ops?

Whether you’re just starting out or already running a co-operative, we’ve pulled together some common questions to help you understand and explain what makes co-ops different, how they operate, and what you need to know to stay on track! We’ve kept it plain and practical. If you’re still unsure, please don’t hesitate to get in touch. We’re here to help.

Co-op Basics

At its most basic level, a co-operative is a legal structure option you can choose when setting up a new organisation.

You might choose to register as a:

  • Company
  • Sole Trader
  • Partnership
  • Incorporated Association
  • Trust, or….
  • Co-operative ✅

A co-operative is a structure with heart. It’s values-based, member-owned, and democratically governed. Rather than profits flowing to off distant shareholders, benefits flow directly back to the members who contribute to the co-op.

Every co-op has a Board of Directors, who are elected by an annual vote of the co-op members.

Co-ops can be:

  • Distributing (for-profit)
  • Non-distributing (not-for-profit)

Fairness is built in. Co-ops commit to the seven co-operative principles, including democratic control (one member, one vote), education, concern for community, and cooperation among co-operatives just to name a few.

We believe business works better when people work collaboratively.

No. Co-ops can be distributing (for-profit) or non-distributing (not-for-profit). Both types are built on co-operative values and seven global principles, which guide the way co-ops do business. It’s like we have the sustainable development goals baked into the DNA of our organisations.

No. Co-operatives are registered in their state/territory (see below for more info).

Running a Co-op

Unlike companies, which report to ASIC, co-ops report to a Registrar in their state or territory. Each state has slightly different processes and a small fee.

Reporting To Members

The Board must present annual financial statements to members at the AGM (held within 5 months of the co-op’s financial year-end).

Reporting Externally 

Each year, co-ops must report to their state or territory’s Co-operatives Registrar. The minimum required of a small co-op* is:

  • Lodge an Annual Return to your State/Territory Co-op Registrar (see below for more details)
  • Report any changes to the Board of Directors or co-op registered address.

Extra Reporting

  • Large Co-ops Must be financially audited and may have extra record-keeping requirements if they distribute or have rebates or shares.
  • ACNC – If Co-op is a registered NFP or charity

*To clarify if your co-op is a ‘small co-op’, get in touch for more info.

Every co-op must have a document called Co-operative Rules. These are like a constitution and set out how your co-op operates, who can be a member, how decisions are made, and what happens if there is conflict.

What other documents are co-ops required to keep, what roles are required, how long records should be kept etc. consider enrolling in an upcoming co-operative governance course!

Co-ops must follow the Co-operatives National Law (CNL), which governs things like board roles, reporting, and rules.

You also need to follow all relevant Australian laws depending on what your co-op does. This could include:

  • Workplace Health and Safety (WHS) laws
  • Employment law and award conditions
  • Anti-discrimination and bullying laws
  • Consumer law (especially if you are selling goods or services)
  • Privacy law
  • Food safety regulations (for food co-ops)
  • Aged care or disability service standards (for care-based co-ops)

If you are not sure what applies to your co-op, we are happy to talk it through.

The Board is ultimately responsible. Members have limited liability, but directors are ultimately responsible for making sure the co-op is run legally and responsibly.

Good communication between the Board, members, and any staff is essential. We recommend regular governance training to support sound decision-making and a healthy co-op.

Yes. All co-ops must hold an Annual General Meeting every year. Members must be given a chance to ask the Board questions and see the finances of the co-op. The AGM must happen within five months of the end of your financial year.

Contact us if you need help preparing or reporting after your AGM.

Under Co-operative National Law (CNL), co-op boards are required to meet at a minimum once every three months.

No. Co-operative National Law states that to legally use the word “co-operative” in your organisation’s name, you must be a registered Co-operative.

Forming a Co-op

  • Documents – prepare your rules and approve formation paperwork
  • Formation meeting – gather your founding members and pass the necessary resolutions
  • Lodgement – submit your application to the Registrar

We can guide you through this or do it for you. Contact us for a quote or a chat.

You need at least five founding members. A co-op is a group-owned, group-led enterprise.

At least three. Larger co-ops may want more, but it depends on your group’s size and needs.

Yes. Co-op rules can be changed, but the members must agree.

Changing your active membership rule is the only one that needs Registrar pre-approval.

We can help update and streamline your rules. Just get in touch.

Absolutely!

We’re happy to chat and point you in the right direction for free, usually in one or two meetings, to help you get started.

If you’d like hands‑on support all the way through, we can provide an affordable paid service where we guide you step‑by‑step, create best‑practice rules, and deliver an approved co‑op ready to go.

The Co‑op Federation is a not‑for‑profit, member‑powered co‑operative (we don’t receive government funding), so we aim to support new co‑ops in the way that works best for your situation.