The Federation is the peak representative body for co-operatives in New South Wales.
A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise.
Federation personnel are usually available to meet with management and/or Directors to discuss co-operative issues such as updating rules, managing records under the Co-operative legislation, assisting in setting up networking amongst other co-operatives, liaising with the regulator, finding other organisations with whom to share training costs, etc. They also often act as a facilitator, to assist in resolving issues within the co-operative, between organisations, etc.
Ask us and we'll see what we can do to assist. Contact Helen McCall by telephone on 02 4938 5308. Click here to send an email.
The Federation also provides services to foreign co-operatives wishing to operate in NSW.
The International Co-operative Principles
At a glance - what is different about a co-operative - traditional trading (distributing) co-operative:
co-operatives are uniquely member-owned, member-controlled entities which exist to provide benefits to members. The challenge for the board of a co-operative is to work out how to achieve this benefit, which may not be related to profit for the co-operative. Co-operatives use profits to achieve activities; investor-owned entities use activities to achieve profits. There is a fundamental difference - the co-operative advantage.
Element |
Co-operative |
Investor-owned entity |
Membership |
Membership is open to all applicants who will be users - suppliers, customers, workers (depending on the type of co-operative) |
Membership is acquired by investment and may not be open but restricted to invitees only |
Ownership |
Members (users) |
Investors (generally not users of the business) |
Investment |
In Australia shares retain their nominal value and are issued by the co-operative, not bought from other members |
Shares usually change hands at current market rates, between shareholders |
Voting |
One member one vote - control relates to membership, not how many shares are held |
One share one vote - control relates to the number of shares held by each shareholder |
Benefits |
Members receive patronage benefits (rebates) in proportion to the use they make of the co-operative. Return on invested capital is not normally significant |
Investors receive a share of the profits of the entity as dividends, based on the number of shares owned |
Taxation |
Patronage benefits (rebates) can be treated as tax deductions by the co-operative or can be franked. Their treatment in the hands of members depends on the member's use of the co-operative - ie whether membership is for business or domestic reasons |
Dividends are franked and taxable in shareholders' hands |
Reason for membership |
Membership is usually to gain an economy of scale advantage for the member's own business activities, eg sector-wide marketing, bulk purchasing. The business advantage is often not received by the co-operative but directly in members' hands |
Investment is for return on capital ie dividends |
Terms of trade |
Purchases from members usually are priced at a compromise between lowest possible cost and best possible return for suppliers; sales to members are usually a compromise between highest possible price and lowest possible cost for customers. The key factor is the economic viability of the businesses of the members, achieved by the long term success of the co-operative |
The lowest possible purchase price is usually sought and the highest possible sales price is usually levied, with maximisation of profits for the investor-owned business always the key factor |
Click icon |
Description |
 |
How to Form a Co-operative |
|
Guide to Duties and Responsibilities of Directors |
|
Visit the Registry site for a downloadable version of the model rules and step-by-step help in getting your new co-operative started |
|
A suggested FREE on-line journal to which every board member can subscribe |
|
Board Job Description and Self-assessment |
Click icon |
Description |
|
Five Good Reasons for Co-operatives |
|
The Different Types of Co-operatives |
If you can't open pdf files, download the Adobe Acrobat Reader to view and print pdf documents is available,
free of charge, on the Adobe Web site.
