In Australia a cooperative is an incorporated body registered under state or territory cooperatives law.

Cooperatives are democratic organisations formed by people with mutual needs and aspirations which can be fulfilled by pooling resources and working together. 

The most important aspect of cooperatives is people. Cooperatives belong to, are operated by, and benefit the people who become members of cooperatives. They also enhance the communities they operate in.

Members are the heart and soul of a cooperative. The main purpose of a cooperative is for all members to join with a group of like minded people to share in the benefits of cooperation, which are designed to meet the social, economic and cultural needs of its members.

Cooperatives are people centred and are owned, used and invested in by their members, who have a responsibility to support their cooperative by being an active member. In return, the cooperative must ethically service the needs of its members.

Seven internationally recognised cooperative principles act as guidelines by which cooperatives put these values into practice, and form the basis of cooperatives legislation in Australia and other countries.

Australian cooperatives law allows the formation of two types of cooperatives; a trading cooperative and a non trading co-operative, in recognition that co-operatives can provide both economic and social benefits to people.

Non trading cooperatives are 'not-for-profit' organisations that can conduct commercial activities, but it is prohibited under law to distribute surplus funds to members from profits or upon winding up. Members of a non trading cooperative receive no pecuniary benefit from their ownership of the co-operative.

A non trading cooperative has the following characteristics -

  • A member must maintain a relationship with the cooperative associated with its primary activity, e.g. a parent must have a child enrolled in a child care cooperative to be an 'active' member. Payment of a regular subscription by a member is also sufficient to establish 'active' membership of a non trading cooperative.
  • No disclosure statement required for formation (except NSW) or issuing shares.
  • Shares cannot be issued at a premium.
  • Bonus shares cannot be issued either from asset revaluation or sale, or from profits.
  • Members cannot be compelled to acquire more shares or lend money to the cooperative.
  • Profits made from trading are reinvested in the cooperative and/or distributed to a charitable organisation.
  • Surplus funds from winding up are distributed to another similar 'not-for-profit' organisation approved by members of the cooperative.

Exhaustive information about cooperatives is available in the Coop Manual. This manual is designed to assist anyone who wants to start or join a cooperative, and also increase the understanding of members already involved in cooperatives across Australia.


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