The Co-operatives National Law Act 2020 (the Act) which passed the Queensland Parliament in June 2020 has officially been given a commencement date of 1 December 2020.
With the commencement of the Act in Queensland, all states and territories in Australia will now have adopted the Co-operatives National Law (CNL) providing uniform laws for the establishment, registration and administration of co-operatives. These changes will significantly reduce the red tape and inter-jurisdictional issues which co-operatives have faced when operating across state borders.
The Act will replace the Cooperatives Act 1997 (Qld) and provide significant benefits to the sector, most notably through:
- bolstering the competitiveness of Queensland co-operatives by allowing them to trade easily in other jurisdictions;
- levelling the playing field for all Australian co-operatives against other business structures which have long enjoyed uniform national laws;
- consistency of laws across all States and Territories;
- automatic mutual recognition of co-operatives by other states and territories resulting in lower costs and paperwork for co-operatives trading interstate;
- simplification of financial reporting and auditing requirements for small co-operatives, with small co-operatives (under $8 million in consolidated revenue or $4 million in gross assets) no longer subject to mandatory audit requirements;
- updating of directors' and officers' duties to modern standards of corporate governance, integrated with co-operative principles; and
- new fundraising provisions for co-operative capital units.
Co-operatives have long played an important role, particularly in the agricultural sector, providing farmers and producers with the ability to achieve scale and competitiveness together, while ensuring the value created goes directly to their members, communities, or back into the business.
It is hoped that with the commencement of the CNL in Queensland (and the recent development of programs such as Farming Together), the attractiveness of co-operatives as a viable business structure will increase for Queensland entrepreneurs and producers.
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