Co-op Decision Making

How do co-operatives differ from other types of corporate structures?

Co-ops are owned and controlled by their members, the people who use their services. Co-ops are based on the principle of one member one vote. Members are responsible for making decisions about how the co-op should be managed and administered.

How frequently must co-operatives hold meetings?

There must be an annual general meeting every year so members can review the current financial status and vote on essential management issues. The co-op's Rules may call for other periodic meetings.

What if all members cannot meet at once?

The co-op's Rules can allow two or more meetings on the same matter, with the vote taken by secret ballot at each meeting and counted after the final session has been held.

What if a member is unable to get to the meeting?

A co-op's Rules determine whether to allow proxy voting, where a member authorizes another member to cast a vote on their behalf at a specific meeting, and under what circumstances.

The Rules may also allow mail-in votes, and set out circumstances where members or investment shareholders may take part in a meeting by telephone or any other communications medium.

Who can request a members' meeting?

In addition to the annual general meeting, the directors of the co-op may call a special meeting when they think fit.

Directors must call a meeting if a specified number of members ask for one. The old Act required 20% of members to ask for a meeting but the new Act allows a tiered system where the required percentage is lower for co-operatives with larger memberships.

The directors can refuse to call a requisitioned meeting if the proposal:

• clearly involves a personal claim or a personal grievance against the co-op or its officers;
• primarily promotes causes that are extraneous to the purposes of the co-op;
• is substantially the same as a proposal considered and defeated within in the last three years; or
• involves business outside the power of the members.

The directors have seven days to either call the requisitioned meeting or explain their reasons for not holding the meeting.

What is the majority needed for a vote to pass?

The majority needed depends on the nature of the resolution. It also depends on the date of incorporation of the co-op, except for housing co-ops.

For co-ops incorporated after January 31, 2001, a special resolution can be passed with a two-thirds majority of the votes cast unless the co-op's Rules have increased this percentage to a maximum of three-quarters.

Co-ops incorporated before January 31, 2001, and housing co-ops regardless of their date of incorporation, require a three-quarters majority of votes cast to approve a special resolution, unless the co-op's Rules have reduced this threshold to two-thirds.

Ordinary resolutions, for all co-ops for all matters other than those for which the Act specifies special resolutions, require a simple majority of more than half of the votes cast.

How does a co-op determine when a resolution should be a special resolution?

The Act indicates when a resolution must be a special resolution, requiring a higher percentage of support to pass. For example, changes to the Rules or Memorandum require a special resolution of the members.

Who has the right to vote at a meeting?

Votes are attached to memberships, and not shares. Therefore, each member has one vote, regardless of how many shares they may own. Joint members are entitled to one vote, unless a co-op's Rules provide for each of the joint members to have one vote.

Members who are in arrears on the payment of their membership share cannot vote for directors, give a proxy to another member or vote another member's proxy.

Investment shareholders who are not members have very limited voting rights and can vote only at separate meetings of investment shareholders. They cannot attend or vote at members' meetings.

What can members and investment shareholders do to dissent to a fundamental change proposed to their co-op?

Members can give written notice of dissent if the co-op proposes fundamental changes, as set out in Section 161 of the Act, such as moving outside of British Columbia, amalgamating with another co-operative or issuing investment shares to non-members.

Members who register dissent and deliver their share certificates to the co-op are entitled to a written offer for their shares and an explanation of how this value was estimated.

What happens if a co-op's members decide to wind-up the co-op's business or service?

All co-ops should have provisions in their Rules for dissolution.

Generally, members receive only the price paid on their membership shares and the redemption value of any investment shares. The exception is new generation co-ops that have been structured to allow the value of the membership shares to reflect the value of the co-operative enterprise.

As long as there are no investment shares, a co-op has the option of providing in its Memorandum that when it winds up, any property remaining after all costs and liabilities are addressed must be transferred to co-ops with a similar purpose or charitable organizations registered under the Income Tax Act.

Certain non profit housing co-ops must provide that any property be transferred to another housing co-op or a charitable organization. See Co-ops and Investment Shares.

More information about co-operatives in British Columbia is available at the Ministry of Finance and at the Canadian Co-operative Association - BC Region. [BROKEN LINK]