Writing a disclosure statement for a distributing co-operative

This information only applies if you’re forming a distributing co-operative (previously known as a trading cooperative).

Any potential members must be able to make a fully informed decision about joining. This is why you need to write a disclosure statement. You must give it to any potential members before they sign up.

Non-distributing co-operatives do not need to provide a disclosure statement unless directed by the Registrar of the Office of Fair Trading.

Drafting the statement

You must be clear and truthful in your disclosure statement. You can choose to work from our template or write your own, however, we recommend using our template so that you include all the important details.

Download the disclosure statement for formation template (DOC).

The statement will include information about:

• the members' rights and responsibilities
• the co-operative’s
  • details
  • directors or office holders.

The members

Your disclosure statement should set out:

• how they will need to be financially involved
• what liabilities they have as a member
• what benefits they can reasonably expect
• what they’ll need to do to keep their membership active (as a minimum standard)
• what rights and liabilities are attached to their shares
• what contracts they need to sign.

The co-operative

Your disclosure statement also needs to set out:

• why you see a need for the cooperative
• how much it’s likely to cost to form the co-operative
• what your budget is for the next 12 months (at least), showing capital and revenue items separately
• what resources are available
• who your potential members are (but only if you have 5 potential members so far)
• the risks.

The directors

The statement should set out details of your officers and directors. If you haven’t appointed them yet, set out the details of anyone standing for election.

The details should include:

• who they are
• what their experience is
• what qualifications they have.

Documents to attach

If you have either of these documents, you must attach them to your disclosure statement.

Statement of your resources

You should attach copies of any offer to sell, give or let you use:

• real estate
• loans, grants or subsidies
• donations
• any other specific resources that you’ll need to run the co-operative.

Submitting the statement

You must submit the statement to us before you start to use it. We need to approve it to make sure it complies with the law. Submit your statement—with supporting documents and the fee, 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 disclosure statement.

Download the Application for approval of a draft formation disclosure statement for a proposed co-operative form.