NOT A LEVEL PLAYING FIELD: Co-operatives and company laws Kingfisher Law

Not a level playing field… Co-operatives law vs company law Issues from Senate Inquiry Strengths and weaknesses - conclusions

Not a level playing field… Co-operatives law vs company law:  A uniform law? Companies – Corporations Act 2001 (Cth)  Co-operatives – State based  Co-operatives National Law (CNL) Agreed principles  Different approaches  ‘Hold-out’ States

Not a level playing field… Formation: Co-operatives vs companies  Complexity of process  Speed  Cost  Registration  Rules/Constitution (Model / Replaceable Rules vs Bespoke; Disclosure Statement/Prospectus; Shareholder Agreements)

Not a level playing field… Operation: Co-operatives vs companies  Governance  Membership – gaining, maintaining, transferring  Voting  Shares – acquisition and disposal

Not a level playing field… Asset management: Co-operatives vs companies  Companies’ asset opportunity and risk profile  Co-operatives’ asset opportunity and risk profile

Not a level playing field… Capitalisation: Co-operatives vs companies  Company capitalisation  Co-operatives capitalisation  Finance – equity and debt

Not a level playing field… Taxation: Co-operatives vs companies  Company taxation  Co-operatives taxation  Tax in a business project  Tax in asset management - mutuals

Not a level playing field… Winding up: Co-operatives vs companies  Winding up a company  Winding up a co-operative  Distributing vs non-distributing

Not a level playing field… Issues from the Senate Inquiry  Background  International Year of Co-operatives  Business Council of Co-operatives and Mutuals  Senate Inquiry  Terms of Reference  Progress  Website tives tives

Not a level playing field… Issues from the Senate Inquiry…  Formation  Costs  CNL vs company law  Capitalisation  Co-operatives expertise

Not a level playing field… SWOT and Conclusions  Formation Upside: tailor to objectives and supply chain  Downside: registry “policy”  Costs Upside: no more expensive than a real company  Downside: scarce expertise, competition from inappropriately-advised company models  CNL vs company law Upside: uniformity/standardization is increasing  Downside: not uniform yet, still State-based regulation  Co-operatives expertise

Not a level playing field… SWOT and Conclusions…  Capitalisation Upside: Some flexibility and asset protection  Downside: Arbitrary rule AASB 132 financial reporting of equity  Co-operatives expertise deficit o Upside: no upside  Downside: inappropriate advice, incompetent models and structures, lost opportunities, high costs

Kingfisher Law