Winding up is the process of dissolving a co-operative and ensuring its assets are distributed lawfully. During this process, the co-operative ceases to carry on its business (except as required to wind it up, in the opinion of its liquidator).
A co-operative can be voluntarily wound up:
On a certificate of the Registrar
A co-operative's process to wind up begins when a certificate of the Registrar is given to the co-operative.
The Registrar may then appoint a person to be the liquidator of the co-operative. The Registrar can also set the security to be given by a liquidator and the fees payable to a liquidator.
Voluntary winding up
A co-operative may be wound up voluntarily:
- by a creditor's voluntary winding up, or
- if a special resolution (at least 75 per cent) is achieved by a special postal ballot. In this case, by simple majority (at least 50 per cent), the members may then:
- appoint one or more liquidators to wind up the affairs and distribute the assets of the co-operative
- set the remuneration to be paid to the liquidator.
Disclosure statement
You must provide the draft disclosure statement to our Registrar of Co-operatives at least 28 days before you intend to give the notice to members. Download an Example disclosure statement for voluntary wind-up of co-operative (Word, 40 KB).
Alternatively, you may wish to seek legal advice on drafting your own disclosure statement.
The disclosure statement must contain information about:
- the financial position of the co-operative
- the interests of the directors of the co-operative in the winding up, including any interests of the directors in another organisation concerned in the winding up proposal
- any compensation or consideration to be paid to officers or members of the co-operative in connection with the winding up.
Notice of a special postal ballot
After the Registrar of Co-operatives approves the disclosure statement, you may give notice to each member by a special postal ballot.
The notice must:
- include a copy of the approved disclosure statement. See Disclosure statement section above for information on what to include
- include information about how members can submit their vote
- be sent to the members at least 28 days before the ballot closes.
The special postal ballot can also include (if applicable) details about the:
- appointment of one or more liquidators
- remuneration to be paid to the liquidator(s).
The Registrar can decide to exempt a co-operative or class of co-operatives from holding a special postal ballot, if holding a special postal ballot would be difficult or impractical. These exemptions are made by way of a notice in writing to a specific co-operative, or publication in the Government Gazette for a class of co-operatives.
To apply for exemption, email your reasons to: cav.registration.enquiries@justice.vic.gov.au.
Holding the special postal ballot
A meeting is not required, and not all members have to vote.
The special postal ballot must be held in accordance with:
- the co-operative's rules
- Regulation 3.9 of the Co-operatives National Regulations.
Each member of the co-operative can vote by either:
- posting a ballot paper to the co-operative
- using a similar electronic procedure, such as an electronic voting form or email.
The secretary of the co-operative must update its records to show the number of:
- formal votes in favour of the winding up
- formal votes against the winding up
- informal votes.
If a special resolution is achieved (75 per cent of the votes received are in favour), the voluntary wind-up of the co-operative is then deemed to have begun.
Appointment of a liquidator
If the special postal ballot was successful, you must appoint a liquidator to help with the distribution of the co-operative's assets. The liquidator's appointment and activities are governed by the Corporations Act 2001.
A liquidator will ensure that the assets of the co-operative are:
- used to meet its liabilities equally
- distributed among the members (unless it is a non-distributing co-operative) according to their rights and interests in the co-operative. For more information on non-distributing co-operatives, view our What is a co-operative? page.
A simple majority vote in the ballot is required to appoint a liquidator.
Application to the Registrar
Complete and lodge our Application to wind up a co-operative (Word, 78 KB) within 28 days of the special postal resolution being passed.
Unless you were exempt from holding a special postal ballot, you must also lodge:
- two copies of the full set of minutes detailing the special resolution, signed by:
- a director
- the secretary of the co-operative, or
- another authorised representative.
- details of the co-operative's final accounts.
Summary of the process
If you wish to voluntarily wind up a co-operative, you must:
- give our Registrar a completed disclosure statement
- gain approval of the disclosure statement, then notify members of a special postal ballot. If we exempt you from holding a ballot, go to step 4
- hold the special postal ballot to pass a special resolution in favour of voluntary winding up
- appoint a liquidator (if the ballot is successful)
- lodge an application to the Registrar to wind up the co-operative.
By the Supreme Court
A co-operative may be wound up by the Supreme Court in accordance with the Corporations Act 2001. Seek legal advice for information and advice on this process.
Deregistration
An alternative way to wind up a co-operative with less than $1,000 in assets is to apply to the Registrar for deregistration under section 601AA of the Corporations Act 2001. A liquidator is not required.
Follow the same process for deregistering a company, as set out on the Voluntarily deregistering a company page of the Australian Securities and Investments Commission website. Replace the word 'company' with 'co-operative', and email the application to cav.registration.enquiries@justice.vic.gov.au.