Rule changes for co-operatives

You may need to change your co-operative’s rules (or ‘constitution’) for all kinds of reasons. Some common ones include:

• in practice they don’t work
• they’re out of date
• you’ve changed the nature or structure of your co-operative
• you want to outline how you will fundraise
• your members no longer agree with them.

Most rule changes don't require our prior approval. However, the prior approval of rule amendments order under section 60(2) specifies which rule amendments do require our prior approval. They are changes:

• to active membership provisions in the rules of a co-operative
• from a non-distributing co-operative to a distributing co-operative.

Check the draft rules

We must approve any draft changes to your rules before you formally vote on whether to adopt them.

Make sure you discuss any changes with your members before you send us your draft rule changes. There is no point having us approve the rules if your members won’t accept them.

Lodge the rules

Once you decide on proposed changes:

• fill out and lodge the form application for prior approval of rule amendments
• pay the required fees

You will need to attach copies of:

• the draft rule changes (especially any changes to active membership rules)
• a draft of the special resolution
• your reasons for making these changes.

Wait for our approval

You must give us at least 28 days to examine your draft rules. You mustn’t do anything to move ahead with any changes until you hear back from us. We will advise you in writing if we approve the changes. We will give reasons for any refused changes.

Pass the resolution

After we approve the rule changes, and for all other rule amendments that do not require prior approval, the next step is to formally adopt them. This is usually by special resolution.

You can pass this:

• at a general meeting
• by postal ballot or special postal ballot (depending on your rules).

You must give your members 21 days notice of the special resolution. You must advise them about:

• your intention to propose a special resolution
• the reasons for proposing the special resolution
• the effect of the special resolution
• a specific notice if you’re changing the active membership rule.

If the rule change does no more than give effect to a requirement, restriction or prohibition imposed by the Act, you can approve it at a board meeting.

Register the changes

After you pass the resolution, apply to register the change.

To do this, you must

• fill out and lodge the form application for registration of amendment of rules/special resolution
• pay the required fees

You must also include:

• a copy of your rules, including the amendments (1 copy)
• the resolution as passed
• the full text of the rule in its new form.

Enact the changed rules

Once we process the registration of amendment of rules/special resolution form we will send you a copy of the registered amendment of the new rules.

If you made the rule change as a board resolution, you must tell your members about the change:

• in writing
• as soon as possible after it takes effect
• no later than the date that you give notice of an upcoming AGM.