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Guide to Writing Articles of Incorporation

To incorporate a co-op, you will need to submit documents called “Articles of Incorporation” to the government. If you are incorporating a co-op that will operate only in your province you will submit these to the provincial government; you also have the option of incorporating a co-op with the federal government, meaning it will be able to operate in different provinces. Most likely, your co-op will be provincial.

Filing your Articles of Incorporation is what makes your co-op a “legal entity”. You will submit them to your government’s corporate registry. Here are the corporate registries for the four western Canadian provinces – we’ll link you straight to the page with the forms you need:

Your Articles set out the basic operating principles for your co-op. They don’t contain a lot of information: later, when you write your co-op’s bylaws, you’ll more provide a lot more information about your co-op’s operating procedures, policy, and responsibilities.

Here is a list and brief explanation of the kind of information you’ll need to include in your Articles:

Name of your Co-operative: What you can name your co-op will depend on your province’s legislation. The name of your co-operative business may have to include the words ‘co-op,’ ‘co-operative,’ ‘credit union,’ ‘pool,’ or ‘association.’

Location: This is the full address of the co-operative’s registered office. This must include a physical location, and not just a post office box number.

Shares: The type and number of shares issued by your co-operative need to be specified with their assigned par (or “face”) value. In most cases, there will be two options: membership share (sometimes called “common shares”) and investment shares (sometimes called “preferred shares”). Investment shares are issued to raise the capital needed to finance the business; these shares offer returns at a fixed rate, and do not give investors the right to vote. To gain voting rights, people also need to purchase a membership share.

The co-op will have to decide how much each type of share will cost and determine how many will be issued; in larger co-operatives, there is no limit on the number of membership shares issued. Shares may be sold back to the co-operative once it has sufficient financial means.

Shareholders: The incorporators must acknowledge that each member has the same rights and interest in the co-op as every other member. This is one of the defining features of the co-operative business model, which makes it different from a corporation.

First Directors: Provide the names and addresses for each of the first directors. These directors must also complete the ‘consent to act as a first director’ form and submit it with their application. The number of required directors depends on your province and type of co-operative you’re creating. For example, all co-ops incorporated in Saskatchewan must have 5 directors, while in Alberta you only need 3. If it’s not possible to have the required number of directors, you can include a written explanation with your application to incorporate. It will be up to the corporate registry whether they’ll allow you to incorporate with fewer directors.

The Purpose of the Co-operative: Briefly state your primary purpose for incorporating a co-operative. If, for example, you are creating a solar co-op, your primary purpose could be “to provide members of your community an opportunity to invest in clean energy production”.

Restrictions on Business: Here you need state any restrictions that should be placed on the business of the co-operative. There may not be any! If restrictions are placed upon the business of the co-operative, they typically reflect broader governing bodies or principles to observe (e.g. the College of Physicians and Surgeons).

Other Provisions: State any other provisions that are permitted by governing legislation that will be included in the co-op’s bylaws. Some examples may include characteristics of membership, requirements to serve as a director (e.g. must be over a certain age, not holding the status of bankrupt, etc.), or restrictions on staff serving on the board of the co-operative.

Incorporators: This is a complete list of the incorporators (founding members) and their addresses and signatures. The number of people required to incorporate a co-operative varies; Saskatchewan requires 6 while British Columbia, Manitoba, and Alberta only require 3.

 

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