The provision in the current Act which stipulates that a federally incorporated cooperative must operate in more than one province is maintained in the bill. The bill replaces these with a simplified structure, consisting of articles of incorporation and by-laws similar to those available to business corporations. Membership is open to individuals, other cooperatives, business corporations and other entities, if the members so wish. New financing provisions are uniquely enabling, opening the door to new financing options, though cooperatives may decide to continue with traditional retention of patronage returns, issuing preferred shares and debt financing. The new provisions afford greater flexibility, meeting the financing needs of a wide variety of cooperatives.
Cooperatives have the option of issuing investment shares for transfer to members and non-members.
But, there are safeguards to protect the cooperative structure and its members. For example, members must expressly authorize the issue of investment shares, and issuing conditions must be set forth in the cooperative's articles of incorporation. Moreover, the proposed provisions guarantee that members maintain control of the cooperative, while authorizing investors to bring in capital. No par value membership shares will increase or decrease in value according to the cooperative's financial condition. New solvency rules and other capital-related requirements protect members and investors against improper redemption in a cooperative structured with membership shares with or without par value, or investment shares, as applicable.