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What can a co-operative do

Co-operatives can be involved in a variety of social and commercial activities. A Co-operative may carry out any activity defined within its rules. Co-operatives generally fall into four categories:

  • consumer - buying and then selling goods to members at a competitive rate
  • marketing - branding, marketing and distributing members' products and services
  • service - providing services to members, such as health, electricity or housing
  • community - resource, information and skill sharing encouraging ownership and participation.

Distributing and Non-distributing Co-operatives

Co-operatives can be a distributing or non-distributing organisation.  You need to specify the type of Co-operative you wish to establish.

A distributing Co-operative:

  • may distribute any surplus funds to its members
  • must have share capital and at least five active members. If there are less than five active members, the Registrar must give permission to form
  • can distribute part of its surplus to members by way of bonus shares, dividends or rebates. Each member must buy the minimum number of shares stated in the Co-operative's rules. Members receive a return on the capital they invest if the Co-operative is wound-up.

A non-distributing Co-operative:

  • will use surplus funds to support its activities, rather than distribute to members.  It is likely to be more appropriate for a community organisation
  • must also have at least five active members, but cannot distribute surpluses to members.  If the co-operative is wound-up, the most members can get back is the original value of their shares.

Where to next?

Updated: 01 Jun 2020

This page has been produced and published by the Consumer Building and Occupational Services Division of the Department of Justice. Although every care has been taken in production, no responsibility is accepted for the accuracy, completeness, or relevance to the user's purpose of the information. Those using it for whatever purpose are advised to verify it with the relevant government department, local government body or other source and to obtain any appropriate professional advice. The Crown, its officers, employees and agents do not accept liability however arising, including liability for negligence, for any loss resulting from the use of or reliance upon the information and/or reliance on its availability at any time.