A co-operative is owned by an association of persons seeking to satisfy common needs (access to products or services, sale of their products or services, employment, etc.).
This association includes one or more kinds of users or stakeholders in the enterprise, such as:
Co-operatives operate democratically (one person, one vote) through two bodies: general meetings of the members or delegates, and the board of directors, at least two-thirds of whom are members elected at a general meeting. The delegate structure may reflect the size of the organization or the distance covered by the co-operative and include more than one delegate for each organization or territory represented.
The co-operative's start-up capital usually comes from co-operative shares purchased by members. Federal co-operatives, however, can raise capital by issuing investment shares to members or non-members.
Each member's liability is limited to the amount of his or her share in the capital. Each member has only one vote regardless of his or her capital contribution.
The purpose of a co-operative is both economic and social. It may include, for example, social development or local economic development through job creation or the provision of goods and services that would be otherwise unavailable.
All co-operatives are guided by the same general principles as stated by the International Co-operative Alliance. These principles are:
For regulatory or legal questions, it may be useful to contact a lawyer that deals with business regulations through the Law Society of Upper Canada's Lawyer Referral Service.
For further information:
call 1-800-268-8326
Law Society of Upper Canada's Lawyer Referral Service
Step 1: Assemble a group of interested people
Step 2: Conduct a feasibility study
Step 3: Hold an organizing meeting
Step 4: Conduct a viability study
Step 5: Organize the association
Step 6: Organize the enterprise
Step 7: Hold the initial general meeting
A business plan is a document providing a complete description of the co-operative enterprise you wish to form. It describes in detail the products or services that will be produced or sold, the organization of work and the management approach, the results of the market study and the marketing plan, the characteristics of the paid and unpaid human capital (the members), equipment and material needed, financing requirements and the financing plan.
For further information:
visit the website: Developing the Business Plan of a New Co-operative
A co-operative may be formed in accordance with:
All co-operatives in Canada are incorporated under federal or provincial co-operative legislation. The degree of supervision and guidance offered to co-operatives varies from province to province. The federal statute and some provincial statutes recognize two kinds of co-operatives:
The Co-operative Corporations Act (CCA) is administrated by the Financial Services Commission of Ontario and governs the incorporation of Ontario co-operatives. If your business is only operating in Ontario then you must register your organization provincially. In Ontario, all co-operatives must file for incorporation with the Financial Services Commission of Ontario, Licensing and Enforcement Division of the Ministry of Revenue. Provincial incorporation will not protect your corporation's name or trademark outside of the province. If you are planning to conduct business outside of Ontario you will be required to apply for Federal incorporation.
The process of business incorporation has three major elements.
Step 1: The first element is the name search; a professional search house must perform the name search. The name search report or NUANS (Newly Automated Name Search) report confirms that the name chosen for the co-operative does not already exist, and that no one else has a business or registered trademark with a name the same as, or similar to, the one you have chosen. You can find listings of these firms in your local phone book under the heading Searchers of Records.
Step 2: Articles of Incorporation are then completed and filed with the Financial Services Commission of Ontario, Licensing and Enforcement Division of the Ministry of Revenue. These are official documents required for incorporation that state the co-operative's name, purpose, share structure, directors and incorporators, and must be approved by the government before you can do business under that name.
Step 3: The final element is the fee to file your application for incorporation that can vary based on your organizations structure. Please contact the Financial Services Commission of Ontario for specific information regarding fee structures.
For further information:
please call 1-800-668-0128 (FSOC)
visit these websites:
Co-operatives Secretariat
Financial Services Commission of Ontario - Co-operative Corporations
Filing Requirement and Record-Keeping outlines the routine information that co-ops send to FSCO, such as annual financial statements. This guide also describes the records that the Co-operative Corporations act requires co-ops to keep.
For further information:
visit the website: Filing Requirement and Record-Keeping (PDF)
The Canada Cooperatives Act governs the incorporation of federal cooperatives. Cooperatives are business organizations owned by the members who use their services. They are a separate legal entity which may enter into contracts in their corporate name. Generally, each member of a cooperative is entitled to one vote. Surpluses are shared by members in proportion to the degree they use the services. The members elect the board of directors and decide what should be done with any profit that is generated in the coop.
To apply for incorporation, at least three persons, or one or more federation, must send the Director, appointed under the Canada Cooperatives Act, the following:
For further information:
visit the website: Canada Cooperatives Act
You can also complete and file documents online (via Internet) and pay electronically in a secure environment through the Online Filing Centre.
For further information:
visit the website: Corporations Canada Online Filing Centre
Online filing offers many benefits:
You can pay using your Visa®, Mastercard® or American Express® credit card. All transactions are secure.
Online filing is optional. It provides you, as well as the Director, with more options for sending or issuing documents under the CBCA.
For further information:
please call 1-866-333-5556
visit the website: Create / Maintain a Cooperative
All businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply. For information specific to your organization you should consult an accountant or financial professional.
For further information:
See the Taxation Guide
Other Resources:
Ontario Ministry of Revenue: 1-866-668-8297
Small Business Tax Help (MOR)
Canada Revenue Agency: 1-800-959-5525
Canada Revenue Agency (CRA)
Co-operatives in general will be subject to the same taxes as other business types and potentially fall into one of these categories: Producer, Consumer, or Worker with a Corporation Return form filed within 6 months after the end of each fiscal year. Incorporated organizations are required under the Income Tax Act to file a T2 or T2 Short return, and all corporations doing business in Ontario are required to file a separate tax return with the Ministry of Revenue. Information provided here is simply a general guide and you should consult with an accountant or financial professional for more specific information regarding the tax requirements for your organization.
For further information
visit these websites:
CanadaRevenue Agency (CRA) - Corporations
Ministry of Revenue of Ontario - Corporations Tax
The T2 return is the form which all corporations have to file every tax year even if there is no tax payable.
TheT2 Corporation Income Tax Return is an eight-page return that serves as a federal corporation income tax return.
The T2 Short is a two-page return designed for small, non-taxable corporations with a gross annual income of $500 000 or less. The T2 Short return is a simpler version of the T2 Corporation Income Tax Return.
The Co-operative Development Initiative (CDI) is a program designed to enhance the quality of life in Canada through supporting the development of co-operatives in areas of federal priority.
The Price Pooling Program provides a price guarantee that protects marketing agencies and producers against unanticipated declines in the market price of their products.
The Co-operatives Secretariat is an agency established in 1987 to help the federal government respond more effectively to the concerns and needs of co-operatives.
For further information:
please call 613-759-7194
visit the website: Co-operatives Secretariat
Click: Canada Business
Call: The Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888
Visit: Find a Community Partner Location near you
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.
Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.