Create the rules for your cooperative

Your cooperative must have a written set of rules (or ‘constitution’) to govern how it runs. The rules form a contract between the cooperative and its members. They must outline everybody’s rights and responsibilities.

Drafting the rules

You should think carefully about your rules right from the drafting stage. If you need to make any changes, you will have to start over again from the drafting stage. It’s best to get it right from the start. Talk to your members and get their input before you put it to them at the formation meeting.

The rules should include:

  • what primary activity or activities the cooperative is for
  • how to admit new members
  • whether you charge fines for breaking the rules
  • what a person needs to do to keep active membership
  • how to qualify to become a director
  • what procedures you use to run a meeting
  • how to handle your accounts, shares and fundraising
  • what happens with any surplus funds
  • when and how to do an audit.

All members and office holders must agree to follow the rules. You can make them agree to the rules as part of agreeing to become a member. You’ll need to put a statement of agreement on the membership form, which they will need to sign.

Standard rules

Your rules must comply with the law. This means that writing your rules from scratch can be time-consuming and complicated. To help, we have written a standard set of rules that your cooperative can choose to adopt. Make sure to read through the standard rules before deciding whether to use them.

The standard rules might be a convenient tool for your cooperative. These rules:

  • are appropriate to the needs of most cooperatives
  • will help you to comply with all the current regulations.

If you use the standard rules, you may adopt them entirely. You will need to complete a few sections about the individual details of your cooperative. We have a how-to guide for how to fill in these sections.

Submitting the rules

You must submit the rules to us before you formally adopt them. We will need to approve your draft rules as early as possible to make sure they comply with the law. Submit them at least 28 days before you plan to hold the formation meeting.

You will need to fill out an approval form and send it with your draft rules and the fee.

Download the approval form (PDF, 257KB)

We can:

  • approve the rules as submitted
  • approve different rules to those submitted
  • refuse to approve the rules altogether.

We will notify you of our decision. If we don’t approve your draft rules, we give the reasons. You can make any necessary changes and resubmit the rules. When we first approve the rules, they become the approved rules.

Agreeing on the rules

Once we approve your rules, you must next hold your formation meeting. At this meeting, the members must vote on whether to adopt the approved rules. You need a two-thirds majority to agree to these rules in order to adopt them.

If your members reject the approved rules, you will need to start the whole process again. This is why you should get your members’ input at the beginning of the drafting process. You shouldn’t even edit the rules at the formation meeting. If you do, you must redraft and resubmit them to us for approval.

When the members accept the approved rules at the formation meeting, you should:

  • sign the rules
  • submit them to us for registration.

These will become your registered rules. You can make changes to the registered rules later. However, getting them right first time will save you money, time and trouble.

Download the standard rules