Online learning

This module explores co-operatives, their legal structure and how this structure supports people or businesses to work together within a co-operative. The types of co-operative business models are outlined with current Australian case study examples showcasing their effectiveness.

This module covers the following topics

• The key differences between being a member and shareholder of a co-operative and a company shareholder.
• The value of being a member of a co-operative and how this is the key focus of a co-op compared with the focus of a company.
• The tried and tested seven global principles that help to keep co-ops in Australia focused on serving members and their communities.

Learning outcomes

Upon watching this video, you will understand and be able to identify:

• The difference between a co-operative and a company and how that difference provides value to the agricultural sector.
• Co-operative business models and how they help smaller businesses work together for a common benefit.
• How co-operatives are democratically owned by their members.
• The seven global principles underpinning co-operatives and the value they provide.
• The meaning of a ‘transactional’ relationship.

Resources

In this video, the Business Council of Co-operatives and Mutuals (BCCM) explains what is a co-operative and its benefits.

The About Co-operatives page on the BCCM website explains the difference between distributing and non-distributing co-ops and types of members and provides specific information on:

• Customer owned co-operatives
• Worker owned co-operatives
• Producer owned co-operatives
• Multi-stakeholder co-operatives

The International Cooperative Alliance unites, represents and serves co-operatives worldwide and is the guardian of the Statement on the Cooperative Identity, which includes a definition, ten values and the seven Cooperative Principles.

Case studies

• Geraldton Fishermen’s Co-operative
• Northern Co-operative Meat Company
• Yolla Producers
• CBH Group
• Mountain Milk Co-operative

This module explains the key features of being a member of a co-operative including the ownership and power of each member, and the value and resilience co-op membership provides. The impact co-operatives have on the communities they work within is also outlined with case study examples provided.

This module covers the following topics

• The details of how being a member of a co-operative gives you ownership over its business and the control mechanisms that are in place to support this.
• The impact of members joining and leaving a co-op.
• The importance of being an active co-op member.

Learning outcomes

Upon watching this video, you will understand:

• Why people join co-ops.
• What co-op members can do.
• Why the mutual relationship between members and their co-operative is important.
• What an active membership requirement is.
• What a primary activity rule is.
• How co-ops build resilience.

Resources

The BCCM’s Co-operative Constitution Library contains examples of the primary activity and active membership rules for different co-operatives registered in Australia.

There are also examples from the following producer types: grain, fishing, ethical meat supply and timber.

Case studies

• Geraldton Fishermen’s Co-operative
• CBH Group
• Oz Group
• Sweeter Banana Co-operative

This module walks you through testing the feasibility of your ideas for helping individual agricultural businesses to get better returns by working together. It then provides a business planning framework to support putting these ideas into action.

This module covers the following topics

• Testing your idea by exploring the areas of:
  • vision and purpose
  • primary activities
  • member value proposition
  • resources
  • members
  • financial viability
  • community benefit
  • governance and
  • risk.
• Understanding what needs to be put in place to turn an idea into a successful co-op that is prepared and ready to open for business.

Learning outcomes

Upon watching this video, you will understand:

• How to test ideas for a co-op business.
• The importance of choosing the right business model.
• What you need to plan and prepare for when starting a co-op.

Resources

The Co-operative Farming website provides resources to support you to develop and refine your idea through five steps.

Under each step are links to additional resources, including a summary table that outlines the differences between business models.

Co-operatives UK provides information on testing your business idea.

Business Queensland provides planning tools and resources including a business plan template with sections to support both feasibility testing and business planning.

The Business Model Canvas is a well-recognised format used to develop a business idea by considering nine key areas. This video provides an overview.

The BCCM’s business planning for co-operatives takes you through a range of questions to consider as part of your business plan.

Risk

Business Queensland provides a guide that outlines the steps involved in preparing a risk management plan and a business impact analysis for your business.

Section 3.8 Risk management strategy on page nine of Business planning for co-operatives provides an overview of risk and what to consider.

Examples for creating forecast financial statements (a profit and loss and a cash flow statement) can be found in Section Four of Business planning for co-operatives.

Co-operatives UK also provides financial projections templates.

The Co-op Builder is a free step-by-step tool to help groups prepare and understand the legal documents required to form a co-operative in Australia.

Case studies

• Sweeter Banana Co-operative
• Limestone Coast Fishermen’s Co-operative
• Geraldton Fishermen’s Co-operative

This module explains how a co-operative is effectively governed by its members, with all members having an equal vote and sharing in key decision-making. It outlines how this is achieved, focusing on the role and importance of co-operative rules, the board of directors, and member meetings.

This module covers the following topics

• The rules that govern co-operatives.
• The role of a co-op board of directors.
• Co-op member meetings.
• Co-op office bearers.

Learning outcomes

Upon watching this video, you will understand:

• The role of the Co-operatives National Law.
• Understanding the three elements of a co-op’s governance framework
  • Rules
  • The board
  • Member meetings.
• How members can use their vote.
• Why training and succession planning for a board of directors is important.
• Office bearers and their role.

Resources

The following resources provide support in setting up your co-op and developing its rules.

The Co-op Builder is a free step-by-step tool to help groups prepare and understand the legal documents required to form a co-operative in Australia.

The Co-operative Farming website provides resources for when you are ready to register your co-op. There are three steps involved:

• Step 1: Seek approval from your local State or Territory Registrar for your proposed co-operative’s name, draft rules and disclosure statement (if you need to have one)
• Step 2: Hold a formation meeting
• Step 3: Apply to register the co-operative

Under each step are links to additional resources including:

A list of co-operative registries and contact information.

Where to search for information on registered business names and the registering a business name.

Holding a formation meeting – a template for the agenda.

Governance

As outlined in Module 4, governance is the means by which an organisation’s purpose is translated into action.

The Co-operative Farming website has a section on governance that covering structures, good governance and governance principles.

These governance principles provide guidance for directors who are charged with making decisions for member-based enterprises, namely co-operatives and mutual enterprises or CMEs.

Case studies

• CBH Group
• Geraldton Fishermen’s Co-operative
• Mountain Milk Co-operative
• Northern Co-operative Meat Company

This module explains the key areas of financial management in a co-op, what is required to meet compliance standards, and the importance of having access to reliable and accurate statements about a co-operative’s overall performance.

This module covers the following topics

• What reports are created and when.
• The external compliance requirements that need to be met.
• What is value measuring and reporting and how often should it be done.
• The role of disclosure statements.
• The importance of planning.
• How a financial surplus is managed in a co-op.

Learning outcomes

Upon watching this video, you will understand:

• Financial reporting obligations for co-ops.
• The role of Australian Accounting Standards in co-ops.
• Reporting on member value – what this looks like.

Resources

As we learnt in Module 5, financial reporting obligations for co-operatives are dictated by the Co-operatives National Law and tax laws.

The measuring and reporting section of the Co-operative Farming website provides detailed information on financial reporting, financial performance measures and non-financial indicators.

In this section, there are links to additional resources including:

• The full definition of a small and a large co-operative in the National Regulations.
• Australian accounting standards frequently asked questions regarding co-operatives and mutual enterprises.
• Five common financial performance measures or indicators useful for co-operatives to be able to assess performance at different stages of development are outlined in this document.
• Mutual Value Measurement (MVM) uses six dimensions to cover the unique areas of value that CMEs generate.
• The key performance indicator (KPI) framework is designed to help co-operatives select the indicators most appropriate to them: Key Performance Indicators (KPI) – A framework for guidance for co‑operatives.
• A narrative reporting framework to help co-operatives report to their members based around three pillars – member value, member voice and co-operative values.

Compliance

All businesses are required under Australian law to obtain an Australian Business Number (ABN) and a Tax File Number (TFN).

An Australian Business Number is a unique 11 digit number that identifies your business or organisation to the government and community.

Companies, trusts, partnerships and many other organisations can apply for a tax file number (TFN) using an online application.

If the co-operative is not-for-profit and designed to carry out a charitable purpose, it must also register as a charity with the Australian Charities and Not for profits Commission (ACNC).

The Co-operatives National Law requires a co-operative to set up registers, such as registers of members and of directors. Download and save the Start-Up Resources folder from the Co-op Builder, which contains useful guides and templates to help you prepare the documents and registers for compliance under Co-operatives National Law.

Information about what registers are required and other useful information on running a co-operative is on the NSW Governments Fair Trading website.

The Australian Business Licence and Information Service provides information about licences you may need for your co-operative.

Co-operatives can apply to get a ‘.coop’ domain for their website.

The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. Their website clearly outlines their role as an independent Australian Government body.

A list of co-operative registries and contact information.

The Australian Taxation Office (ATO) is the principal revenue collection agency of the Australian Government.

Safe Work Australia is an Australian government statutory body established in 2008 to develop national policy relating to WHS and workers’ compensation.

The Commonwealth, states and territories regulate and enforce work health and safety laws.

Fairwork Australia helps employers and employees understand and follow Australian workplace laws.

Case studies

• CBH Group
• Geraldton Fishermen’s Co-operative
• Oz Group

This module provides information on the options for co-operatives to raise money and what is involved with each one, starting with determining how much capital is required, then working through to understanding the options. Capital and fundraising by co-operatives are complex topics, but understanding the potential for their unique nature can open doors to growth and increased member value.

This module covers the following topics

• What is co-operative capital.
• Shares and share capital including the differences between shares in a company and a company; rights and benefits attached to member shares and different classes of shares.
• Debt Securities and borrowing money.
• Co-operative Capital Units or CCUs – what they are, how they work, regulatory framework and approvals.

Learning outcomes

Upon watching this video, you will understand:

• The unique nature of capital within a co-operative
• The features and differences between shares and share capital
• That share capital in a co-operative has fixed value.
• How the net asset value in excess of share capital is the co-op’s common property.
• The nature of debt securities and CCUs.
• The purpose of the regulatory framework for offering debt securities or CCUs.

Resources

The BCCM has developed the Capital Builder, an exciting free resource for co-operatives considering raising new funds.

Attracting funding for a new idea requires planning from the start. There are two phases requiring finance in the development of all new co-operatives:

• Before registration – the period when you are developing or testing the idea and forming the co-operative; and
• After registration – the period when you start to trade or provide services

The Co-operative Farming website provides resources and links relevant to both these phases.

Parts 3 and 4 of Community investment for Australia co-operatives – A handbook covers co-operative securities and offering securities.

Crowdfunding for co-operative securities produced by BCCM provides information on the regulatory requirements and matters for security offers.

Generate your debenture offer documents with disclosure and terms of issue and your CCU offer documents including disclosure including terms of issue and the approved Statement with the Capital Builder.

Government Co-operative Loan Schemes in Australia

Co-operative and mutual organisations have longstanding recognition as distinct types of organisations in Australia’s taxation system. Australian taxation legislation provides that certain “cooperative companies”, as defined for taxation purposes, can obtain government loans for purchasing assets (e.g. new plant) and deduct repayments from assessable income. Some States provide specialised loan schemes for co-operatives, designed to fall within this legislation. This document outlines what is on offer from each state and territory in Australia.

Case studies

• CBH Group
• Geraldton Fishermen’s Co-operative
• Mountain Milk Co-operative
• Sweeter Banana Co-operative

If you have questions or would like more information or support to plan, start or run a co-op, please get in touch with the BCCM team.

• Co-operative Conversations Livestream Series archive
• Farming Together’s webinar series archive
• Farming Together’s online training videos