Before starting your co-operative, you may want to consult with professional advisors in accounting, business, finance, legal, and other fields. You can also contact the Canada Business Network’s New Brunswick Service Centre which is a joint initiative of the federal and provincial governments. The Centre is a valuable resource for information on registration and other requirements of various federal and provincial departments and agencies. Contact them at: 1 888 576-4444 or http://www.canadabusiness.ca
How does a co-operative know if it has tax-exempt status for non-profit organizations?
The Canada Revenue Agency
can advise you of your organization’s tax status by determining whether your organization is organized and operated solely for social welfare, civic improvement, pleasure, recreation, or for any other purpose except profit. No part of the income of the organization, whether current or accumulated, can be payable to, or made available for the personal benefit of any of its members.
How would a not-for-profit group know what course of action is best for it?
You should make yourself aware of the benefits, obligations, and rights that arise from incorporation in the context of your co-operative. Find out what is required by the Canada Revenue Agency. Incorporation under the Co-operative Associations Act may not ensure, for example, that your co-operative’s objectives fall within the Canada Revenue Agency’s guidelines for non-profit co-operatives. Look into any requirements for tax purposes before you incorporate. A list of New Brunswick Tax Service Offices can be found online.
Is a quorum necessary for meetings of the membership?
If there is no quorum at the beginning of the meeting, no business can be considered transacted. The meeting is adjourned and is binding if three members are present at the adjourned meeting. (s. 25 of the Regulation under the Co-operative Associations Act.)
What is a waiver of notice?
A waiver of notice of a membership meeting is a document signed by all members of the co-operative, which makes the meeting valid though proper notice was not provided. The current Act does not provide for such waiver unless by-laws provide for it. If the by-laws are silent, then notice has to be given: posted in the co-operative and mailed (section 26 of the regulation to the Act). Ten days would be minimum for proper notice.
Does our co-operative have to have an auditor each year?
The Act requires that each co-operative have an auditor, but there are exceptions (section 38 of the Act). The decision not to appoint an auditor is usually made at a membership meeting by a resolution passed by a majority of ¾ of the votes cast. The resolution would read as follows:
The membership decided not to appoint an auditor for the fiscal year ending in 20__.
The resolution is forwarded to the Inspector of Co-operative Associations for approval.
Can the co-operative refuse to refund my shares?
Yes, if the refund would create financial difficulty to the co-operative, the Board is well within its powers to refuse the refund (paragraph 27(1)c) of the Act).
Note: The information presented should not be considered as a legal opinion.