Co-op Board Disputes

Cooperatives are incorporated entities owned by an association of individuals with common needs such as access to products or services. You can find a co-op in these 4 categories:

  • Consumer co-op—housing, retail, childcare, finance, or health services
  • Producer co-op—markets goods or services by members or provides them with equipment or products to allow them to engage in their own professional activities
  • Worker co-op—provides jobs to members who own the cooperative
  • Multi-stakeholder co-op—homecare, health, and social enterprises serving the needs of different stakeholders in these industries

Co-ops must have at least 3 directors or any greater minimum amount as set forth in its articles. Shares are issued but each member only has one vote, regardless of the number of shares owned. Proxies are not allowed. Interest on share capital may or may not be distributed. Dividends are distributed on the basis of the maximum percentage fixed within the articles.

In Ontario, your co-op is organized by the province’s legislation as well as by the human rights code and municipal by-laws and regulations. The co-op decides on matters either by the majority vote of the board or that of the members, depending on the issue. If you have an issue, your first step is to place it on the agenda with the board at its next meeting. The board is expected to make its decisions in accordance with the by-laws or other rules and policies, and to act in the best interests of the co-op.

If you are seeking a change in the co-op rules or feel that the co-op has not followed the applicable rules, then you can request a members’ meeting. All rules governing such meetings must be followed, such as a requirement for a resolution to be drafted as part of the requisition process.

You should consult with a Toronto business lawyer from Affinity Law if you have a material dispute with your co-op board regarding an interpretation an/or application of the Co-Operative’s Corporation Act or the co-op’s by-laws. If you have the support of other members, you could pass a resolution, ask for an investigation into the co-op’s management and affairs, or have the court appoint an inspector.

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