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Annex B — Co-operative Structure Sources

Legal Handoff Package — Bottom Pub Co-op

Prepared: 18 May 2026 | Internal use only — not for public release Purpose: Supporting annex for internal/lawyer_brief_draft.md. Compile of statutory provisions, industry guidance, and open questions on co-operative legal structure for the lawyer’s use.

How to read this annex

Labels used throughout: FACT (verified from source) | ASSUMPTION (plausible, unconfirmed) | UNKNOWN (could not be verified) | TODO (requires lawyer’s input)

Part 1 — The Governing Statutory Framework

B1. Tasmania’s Co-operatives National Law — the adopting mechanism

Source: Co-operatives National Law (Tasmania) Act 2015. Canonical URL: https://www.legislation.tas.gov.au/view/whole/html/inforce/current/act-2015-006. Verified 2026-05-09 — s.4(1) confirmed.

What it says (FACT): Section 4(1) applies “the Co-operatives National Law … set out in the Appendix to the Co-operatives (Adoption of National Law) Act 2012 of New South Wales … as a law of this jurisdiction.” Tasmania does not re-print the CNL text — it incorporates the NSW host Act’s Appendix by reference.

Practical consequence: All CNL section references in the brief and these annexes are references to the Appendix of the NSW host Act, applied as Tasmanian law by s.4(1) of the 2015 Tas Act. The lawyer should confirm which version of the NSW Appendix is current.

What it leaves open:

• TODO: Has the CNL been amended since the 2015 Tasmanian adoption? If so, do the amending provisions apply to Tasmania automatically, or require a further Tasmanian instrument? UNKNOWN — this is a formal legal question, not an internet-research question.

B2. CNL — s.18: Distributing co-operative

Source: Co-operatives (Adoption of National Law) Act 2012 (NSW) Appendix, s.18. Applied in Tasmania via [B1]. Canonical URL: https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-2012-029. Note: WebFetch returned 403 (user-agent block) but text cross-confirmed via the Tasmanian briefings and CBOS sources.

What it says (FACT — verified by cross-confirmation):

“A distributing co-operative is a co-operative that is not prohibited from giving returns or distributions on surplus or share capital.”

Operative consequences of this choice (FACT from CNL + CBOS Tas fact sheet + NFP Law 2025 guide):

1. The co-op may pay returns to members on shares or surplus, subject to the 20% maximum-shareholding cap (no member may hold more than 20% of shares).
2. It must prepare a Disclosure Statement approved by the Registrar before any offer of shares is made — the Disclosure Statement is a mandatory pre-condition, not an optional disclosure.
3. The Disclosure Statement must contain: capital requirements, active membership provisions, projected income and expenditure for Year 1, and rights and liabilities of members.
4. Advertising shares to non-members without a current approved Disclosure Statement is an offence under the CNL.
5. A distributing co-op is treated as a commercial entity — generally ineligible for grants requiring NFP status.
6. On wind-up, assets may be distributed to members (up to par value) and then per rules — no mandatory asset lock.

What it answers: Basis of brief questions A1, A2, A3, C7, C8, D10.

What it leaves open:

• TODO: The 28-day minimum Registrar approval period before a Disclosure Statement can be circulated — is this still current under the CNL as applied in Tasmania? Confirm with CBOS. ASSUMPTION: Yes, based on CBOS fact sheet and Co-op Federation drafting guide.
• TODO: What are the Registrar’s current requirements for the Disclosure Statement content in Tasmania? Are there template forms? UNKNOWN — not located in research.

B3. CNL — s.19: Non-distributing co-operative

Source: Same as B2 (CNL Appendix s.19, applied via Tas 2015 Act s.4(1)).

What it says (FACT — verified by cross-confirmation):

“A non-distributing co-operative is a co-operative that is prohibited from giving returns or distributions on surplus or share capital to members …”

Operative consequences (FACT from CNL + CBOS Tas + NFP Law 2025):

1. The co-op cannot pay any returns to members on shares or surplus — this prohibition is absolute under s.19, not merely a default rule.
2. Surplus is locked in the enterprise and must be reinvested into the co-op’s purposes.
3. On wind-up, surplus passes to a body with similar objects whose constitution also prohibits member distribution (the “asset lock” — see CNL Schedule 1 model rules).
4. Generally does not require a Disclosure Statement before offering member shares, unless the Registrar specifically requires one.
5. Non-distributing structure is a positive signal for grant eligibility and philanthropic capital.

What it answers: Basis of brief questions A1, A2, A3, C7, C8, D10.

What it leaves open:

• TODO: Can a non-distributing co-op pay interest on a debt instrument (debenture or loan note) to a non-member lender, without triggering the s.19 prohibition on distributions to members? This is the core question at A2 in the brief. ASSUMPTION in the research: probably yes (interest is consideration for debt, not a surplus distribution to a member) — but this requires legal confirmation and analysis of the interaction with the Corporations Act.
• TODO: Does the Registrar in Tasmania have discretion to require a Disclosure Statement for a non-distributing co-op, and under what circumstances has this discretion been exercised in practice? (Brief question D10.) UNKNOWN — no Tasmanian precedents were identified in the research.
• TODO: Exactly what does the asset-lock provision require from the wind-up clause in the rules — what is an acceptable “similar objects” institution in the Tasmanian context? ASSUMPTION: Another registered co-op, an incorporated association with compatible objects, or a community foundation — but the specific drafting requires Registrar guidance or legal opinion.

B4. CNL — s.156: Active membership obligation

Source: CNL Appendix s.156, applied via Tas 2015 Act. Cross-referenced in CBOS Tas fact sheet and BCCM drafting guide [12].

What it says (FACT): Every co-operative must have an active-membership rule in its rules (constitution). A member who fails to satisfy the active-membership rule for the default period (three years) must have their membership cancelled. The rule must be SMART — Simple, Measurable, Actionable, Reasonable, and Timely — so that a member’s active status can be objectively verified.

Operative consequences:

• For a distributing co-op: active membership is typically defined by use of the co-op’s services (e.g., minimum annual spend at the pub).
• For a non-distributing co-op: active membership can be satisfied by payment of an annual subscription fee — use of services is not required by the CNL.

What it answers: Brief question C7 (what active-membership rule would the Registrar accept).

What it leaves open:

• TODO: Are there precedents from other registered Tasmanian co-operatives for an active-membership rule suitable for a community pub in a town of ~1,200 people? UNKNOWN — no Tasmania-specific precedents were identified. The BCCM guide provides general guidance but no Tasmanian register data.
• TODO: What specific threshold (dollar spend, volunteer hours, or subscription amount) would the CBOS Registrar accept as SMART-compliant for this type of venue? This requires either direct CBOS guidance or a legal opinion informed by Registrar practice. CHOICE for steering committee.
• TODO: Does the active-membership rule interact with Australian Consumer Law in a way that creates compulsory-dealing exposure? ASSUMPTION: Low risk if the threshold is modest and voluntary — but requires legal review.

B5. CNL — Schedule 1: Mandatory rule content

Source: CNL Appendix Schedule 1. Referenced in CBOS Tas page on co-operative rules ([6] in citations): https://www.cbos.tas.gov.au/topics/licensing-and-registration/co-operatives/before-you-register-a-co-operative/rules (CBOS URL; WebFetch 403 but content cross-confirmed).

What it says (FACT): A co-op’s rules must include all matters required by Schedule 1 and must be approved by the Registrar before registration. The rules operate as a statutory contract between the co-op, its members, officers, directors, and secretary.

What it answers: Why rules drafting requires a solicitor, not just a template — the Registrar must approve the final instrument.

What it leaves open:

• TODO: Does the CBOS Registrar provide a model set of rules for a non-distributing co-op, and how extensively can a new co-op deviate from the model? ASSUMPTION: Model rules are available; deviation is permitted but requires Registrar approval of the specific variation.
• TODO: What is the current CBOS registration timeline and fee? ASSUMPTION (from research): 3–6 months; fee schedule updated 1 July 2025 — confirm directly with CBOS before budgeting. (Brief question D9.)

Part 2 — The CNL Compliance Issue in the Prior Draft

This section documents why the earlier Bottom Pub operating model is not CNL-compliant, for the lawyer’s context.

FACT [sourced from internal workplans and legal_licensing_brief.md; described in brief pp.3–4]: The earlier operating-model document proposed:

• 5% annual dividends to investors (distributing feature — requires distributing co-op registration)
• Capital return in Year 15 (distributing feature — requires distributing co-op)
• An asset lock (non-distributing feature — requires non-distributing co-op)
• Surplus funnelled into community grants and reinvestment (non-distributing feature)

FACT [CNL s.18 and s.19]: The CNL draws a hard binary. A non-distributing co-op cannot pay returns at all (s.19). A distributing co-op can pay returns but cannot also lock assets in the way s.19 and Schedule 1 provide. There is no hybrid type recognised by the CNL. The Registrar will not approve rules that attempt to sit on both sides.

What the brief asks the lawyer to confirm (brief question A3): Which specific CNL provision prohibits the straddle, and whether any rule drafting could approximate both features within a single structure (e.g., through debentures for the return-seeking element in a non-distributing co-op, or through a tightly-restricted surplus-retention clause in a distributing co-op).

What remains open:

• TODO (A2 and A3): Whether a non-distributing co-op could issue community debentures (debt instruments paying interest to non-member lenders) to satisfy the return-seeking community members, while keeping the co-op itself non-distributing — and without triggering the Corporations Act’s prospectus regime. ASSUMPTION: This is a recognised structure in the BCCM Community Investment Handbook, but the specific CNL-compliance and Corporations Act analysis requires legal opinion.

Part 3 — ASIC and Corporations Act Interaction

B6. When the Corporations Act applies on top of the CNL

Source: BCCM Community Investment for Australian Co-operatives Handbook (2021) [11]; ASIC RG 87 [9]; ASIC RG 129 [10]; Corporations Act 2001 (Cth) ss.706–739, Chapter 6D. Citations verified or cross-confirmed as noted in docs/research/citations.md.

What the research shows (FACT where sourced; ASSUMPTION where inferred):

1. FACT [BCCM Handbook; NFP Law 2025]: Since harmonisation of the CNL, standard co-operative share/CCU capital raising is regulated by the state Registrar, not ASIC. A co-op does not need an ASIC-approved prospectus to offer shares or Co-operative Capital Units (CCUs) to the public — the CNL’s Disclosure Statement regime substitutes for the Corporations Act prospectus regime for this purpose.

2. ASSUMPTION (but strongly supported by BCCM Handbook and ASIC RG 87): If the co-op issues a debt instrument (debenture, loan note, community bond) to non-members — rather than shares — the Corporations Act’s debenture and fundraising provisions in Chapter 6D may apply, because the CNL’s carve-out is specific to co-operative share/CCU raising, not to debt instruments. This is the central uncertainty at brief question A2.

3. FACT [Corporations Act 2001 (Cth) s.708; Allied Legal summary [14]]: The “20/12 rule” safe harbour exempts raises under $2 million from fewer than 20 investors in a 12-month period from the full prospectus regime. Whether this exemption is available to a co-op issuing a debenture, and whether it stacks on the CNL regime, requires legal analysis.

4. ASSUMPTION: If any capital-raising instrument is structured as a managed investment scheme (e.g., pooled funds managed by the co-op on members’ behalf), ASIC registration as a registered managed investment scheme may be required. This is unlikely for a straightforward community pub model but requires confirmation if any pooled-investment mechanism is proposed.

What it answers: Background for brief question A2 (debentures in a non-distributing co-op) and brief question C8 (accounting treatment for membership fees/shares).

What it leaves open:

• TODO (A2 — highest priority after the distributing/non-distributing choice): Precise boundary between CNL-regulated capital raising and Corporations Act-regulated debt raising when a co-op issues interest-bearing debt instruments to non-members. UNKNOWN — the research identifies the question but cannot answer it.
• TODO: If community debentures are issued, does the co-op need an Australian Financial Services Licence (AFSL) to offer them? UNKNOWN.
• TODO: Does the “charitable investment fundraising” ASIC relief apply to a non-distributing co-op? ASSUMPTION: Only if the co-op is also a registered charity, which requires separate ACNC registration and a charitable purpose — a community pub may not satisfy the charitable purpose test. Requires confirmation.

Part 4 — Interim Entity: Incorporated Association

B7. Associations Incorporation Act 1964 (Tas) — interim vehicle capacity

Source: Associations Incorporation Act 1964 (Tas), specifically s.6. Canonical URL: https://www.legislation.tas.gov.au/view/whole/html/inforce/current/act-1964-064. Cross-confirmed via Hobart Community Legal Service guidance and ABLIS.

What it says (FACT): Once incorporated, a Tasmanian incorporated association is a legal person capable of owning property, entering contracts, suing and being sued, opening a bank account, and receiving and holding data.

Relevant practical facts (FACT from Hobart CLS and ABLIS):

• Minimum 5 members; model constitution available from CBOS.
• Application fee ~$187 (as at late 2024; current fee updated 1 July 2025 — confirm at CBOS fee schedule).
• Processing time: typically 2–4 weeks from lodgement of a complete application (ASSUMPTION — practitioner-reported; CBOS does not publish a statutory determination period).
• Pre-incorporation acts can be ratified after incorporation (s.6 of the Act).

What it answers: Brief question E11 — whether an incorporated association can act as the interim vehicle for correspondence, EOI data, NDA with the appointed receivers, and a non-binding letter of interest.

What it leaves open:

• TODO (E11(d)): Privacy Act 1988 (Cth) obligations arising from holding community members’ EOI contact details. The research identifies this as requiring specific legal advice — it is not resolved by the association’s incorporation alone. Specifically: does the association need a privacy policy, consents from EOI participants, and a data-transfer protocol to the future co-op?
• TODO: Should the interim association’s objects be drafted specifically to cover the anticipated activities (exploring co-operative purchase, receiving EOIs, engaging with receivers), and if so, what precise objects language is safe and sufficient? ASSUMPTION: Specific drafting is advisable — overly broad or narrow objects could create capacity or liability issues.

Part 5 — What the Research Has Answered vs What It Has Not

This table summarises the research position for each brief question topic, to help the lawyer allocate time.

This annex is internal research, not legal advice. All UNKNOWN and TODO items require the lawyer’s confirmation. The most critical unresolved issue for this annex is Question A2 — whether community debentures can be issued by a non-distributing co-op without triggering the CNL surplus-distribution prohibition or the Corporations Act fundraising regime.