Amalgamating your cooperative

Policy Statement 17.3

Note

You are providing information required by the Coop Act. Note that both the Coop Act and the Privacy Act allow this information to be disclosed to the public. It will be stored in personal information bank number IC/PPU-049.

This policy is intended only as a guide; it does not replace or take precedence over the Coop Act.

Table of Contents

What is an amalgamation?

Two or more cooperativesFootnote 1 incorporated under the Canada Cooperatives Act (Coop Act) can amalgamate, or join together, to form a single cooperative. The amalgamated cooperative must be operating in more than one province.

Cooperatives under the Coop Act may also amalgamate with businesses incorporated under other statutes, including provincially incorporated cooperatives, provided the amalgamated cooperative satisfies the requirements of the Act. Bodies corporate, that is, entities not under the Coop Act, however, must also continue under the Coop Act when amalgamating. When bodies corporate continue into the federal cooperative jurisdiction and amalgamate at the same time, certain requirements that normally apply on continuance do not have to be met. An amalgamation agreement must also be filed with the Director, who is appointed to administer the COOP Act, in these circumstances. Please see the policy "Continuing Your Cooperative under the Canada Cooperatives Act" for more information.

What are the different types of amalgamation?

The Act provides for three types of amalgamation:

  • a vertical short-form amalgamation, when a holding cooperative amalgamates with one or more of its wholly-owned subsidiary cooperatives;
  • a horizontal short-form amalgamation, when two or more wholly-owned subsidiary cooperatives amalgamate and continue as one cooperative; and
  • a long-form amalgamation, when members and, if any, investment shareholders of each amalgamating cooperative approve an amalgamation agreement before filing articles of amalgamation.

What documents must I submit?

An application for amalgamation must include:

  1. Form 3009 - Articles of Amalgamation
  2. Statutory Declaration (See Annex A);
  3. A NUANS Name Search Report for the proposed name that is not more than 90 days old. If you have received prior approval of the name, attach a copy of the letter from Corporations Canada approving your name along with the copy of the NUANS Name Search Report;
  4. Form 3003 - Notice of Registered Office (PDF Version, 445 KB, 2 pages);
  5. Form 3006 - Notice of Directors (PDF Version, 440 KB, 2 pages);
  6. the filing fees

Note that you do not need to use these pre-printed forms but that the documents used must conform closely to the forms.

Once approved by the Director, Corporations Canada issues a certificate of amalgamation and the information on the cooperative is entered on the corporate register.

Statutory Declaration

Your application must include a statutory declaration signed by the directors of the cooperative stating that the amalgamating cooperatives are solvent and that, after the amalgamation, the cooperative will be solvent and will be organized and operated and will carry on its business as a cooperative. The declaration must also state that the information contained in forms 3003 and 3006 filed with articles of amalgamation meet the requirements of the Act. If the cooperative is a non-profit housing or worker cooperative, the declaration must also state that the cooperative will comply with Part 20 or 21 of the Act respectively.

The statutory declaration should be dated no more than two weeks prior to the effective date of the Certificate of Amalgamation in order that the Director can be satisfied that the amalgamating cooperatives are solvent at the time of amalgamation and that no creditor will be prejudiced by the amalgamation [see subsections 299(2)(d) and (e) of the Act].

Bilingual Name

If your cooperative intends to carry on business in a region or regions where both English and French are spoken, you may wish to consider adopting a bilingual name.

The procedure is the same as for a unilingual name, except that one NUANS Name Search Report is required for each name or variation requested. For example, two NUANS Name Search Reports must be filed in order to verify that the phonetically dissimilar English and French forms of a name are both distinctive.

Name Pre-approval

Corporations Canada offers a service where you can get pre-approval of your cooperative name before filing your Articles of Amalgamation. This is recommended as it will avoid unnecessary rejection at the time you file your articles; if a name is not approved, articles will be rejected.

Ensure the Cooperatives are in Good Standing

Both amalgamating cooperatives must be in good standing before the amalgamation will be approved. If either cooperative is not in good standing, you must submit copies of its last three annual reports, along with all required fees. If the cooperative in question is a distributing cooperative, you must also submit copies of the last two financial statements filed.

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How to fill out Form 3009 - Articles of Amalgamation

Item 1 - Name of the Amalgamated Cooperative

  • The name must include one of the following words: "cooperative"; "coop"; "coopérative"; "cooperative"; "united"; "pool" or "co-op". The same word must be used in both the English and the French forms of the name.
  • If the cooperative is a non-profit housing cooperative, paragraph 353(a) of the Act stipulates that its name must include the words: "non-profit," "not-for-profit," "not for profit," "sans but lucratif" or "à but non lucratif"; and "housing cooperative," "housing cooperative," "housing co-op," "coopérative d'habitation," "coop d'habitation," "co-op d'habitation," "coopérative de logement," "coop de logement" or "co-op de logement."
  • If the cooperative is a worker cooperative, section 361 of the Act stipulates that its name must include one of the following terms: "worker cooperative," "worker cooperative," "worker co-op," "coopérative de travailleurs," "coop de travailleurs," "co-op de travailleurs," "coopérative de travail," "coop de travail" or "co-op de travail."
  • If the business of the cooperative is restricted by its articles or by a resolution of its members to a specific business purpose, the cooperative must have as part of its name one or more words that suggest the nature of the restriction.

Item 2 - Municipality and Province of the Registered Office

  • The articles should specify (i) a city or a municipality and (ii) a province within Canada. (Do not specify a street address.)
  • The information provided here must be the same as the one provided in item 3 of Form 3003 - Notice of Registered Office.

Item 3 - Number of Directors

  • The number can be fixed or a minimum and a maximum can be stated.
  • The minimum number of directors is 3. At least 25% of the directors must be resident in Canada. However, where the cooperative will only have 3 directors, at least one must be resident in Canada. [Subsection 76(1)].

Item 4 - Restrictions on the Business of the Cooperative

  • Mandatory for Housing Cooperatives: The articles state that the business of the Housing Cooperative is restricted to that of primarily providing housing to its members [Section 353(b)].
  • Other Cooperatives: Set out any restrictions on the business you want the cooperative to have. If there are no restrictions, mark "none".

Item 5 - Restrictions on the Classes of Membership

  • Mandatory for worker cooperatives: Ensure that the articles state the following:
    1. No person may be admitted to membership unless the person is an individual and an employee of the cooperative [Subsection 359 (2)(a)].
    2. The maximum membership investment payable by a person to be a member should not exceed more than fifty per cent of their expected annual salary during the first year of their membership, unless an amount in excess of that amount is also paid equally by all persons who are members [Subsection 359 (2)(b)].
  • Other cooperatives: Set out any restrictions on membership you may want the cooperative to have. If there are no restrictions, mark "none".

Item 6 - Membership Share Capital and Member Rights

A cooperative may be amalgamated with or without membership shares [Section 9].

Amalgamation without membership share capital
For cooperatives: The articles must state that:
where every member has only one vote (i.e., not federations or with members that are cooperative entities, where some members may have more than one vote) There is to be no membership share capital and the interest of each member as a member is the same as that of every other member.
that are federations where members or delegates have more than one vote, or if the cooperative was a cooperative under a previous Act and prior to its continuance permitted members or delegates to have more than one vote. There is to be no membership share capital and, subject to the voting rights set out below for members or delegates, the interest of each member is the same as that of every other member. (Set out the voting rights on the form or in an attachment.)
that would include cooperative entities as members, and such members have more than one vote There is to be no membership share capital and, subject to the voting rights of a cooperative entity, the interest of each member as a member is the same as that of every other member. (Set out the voting rights for members that are cooperative entities on the form or in an attachment.)


Amalgamation with membership share capital
  Value of shares Number of shares
Non-profit housing cooperatives The cooperative may only issue membership shares on a par value basis [paragraph 354(b)] The articles must state whether the number of membership shares to be issued is limited or unlimited. If limited, the articles must include the maximum number of membership shares to be issued.
All other cooperatives The articles must state whether the shares are set at:
  • par value (the stated value of each share) or;
  • no par value.

For cooperatives that do not use par value shares, the articles must state whether the membership shares are to be issued, purchased, redeemed or otherwise acquired at a fixed price or in accordance with a formula. The articles must describe any formulas used.

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Item 7 - Maximum Rate of Return (Optional)

The articles may state the maximum rate of return that may be paid on member loans or membership shares and may provide for the amount and payment schedule of the loans (with or without interest).

Item 8 - Distribution of Property in case of Dissolution (Optional)

Housing Cooperatives
Restriction: Housing cooperatives must distribute their assets among one or more non-profit housing cooperatives, cooperatives incorporated in a province that have similar objectives and limitations, or a specific charitable organization. [section 354(e)].
Worker Cooperatives
Note: Unless otherwise provided in the articles, at least 20% of the surplus must be distributed to another cooperative, a non-profit entity or a charitable entity after payment of its liabilities but before any distribution is made to a member or shareholder.
All Cooperatives
Subject to the above restrictions respecting non-profit housing and worker cooperatives, the articles of a cooperative may provide for distribution or disposal of a cooperative's property on dissolution of the cooperative, including distribution:
  1. among the members at the time of dissolution, in any manner, including equally among the members irrespective of the number of membership shares or amount of member loans, if any, held or made by a member;
  2. among the members at the time of dissolution on the basis of patronage returns accrued to those members during a stated period before dissolution; or
  3. to charitable organizations or cooperative entities.

The value of such property is determined after the payment of all debts and liabilities, including any declared and unpaid dividends, the amount to be paid to the holders of any investment shares and the amount to be paid on the redemption of membership shares. These distribution schemes are suggestions only; the decision rests with the cooperative. If there is no distribution scheme, mark "none." If no provisions are indicated in the articles, the remaining property of the cooperative is distributed among the members and shareholders, if any, according to their respective rights.

Item 9 - Investment Share Capital

A cooperative may be incorporated with or without the power to issue investment shares [Section 9].

Housing Cooperatives
Restriction: Housing cooperatives may not issue investment shares [Section 354(a)].
Other Cooperatives (Optional)
If the cooperative wants to have an investment share structure, the articles must state it and provide particulars:
  1. whether the investment shares may be issued to non-members;
  2. whether the number of investment shares is to be unlimited and, if not, the maximum number of investment shares that may be issued
  3. the number of classes of investment shares
  4. the preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the investment shares and, if there is to be more than one class, the designation of each class and the special preferences, rights, conditions, restrictions, limitations and prohibitions attaching to each class

The COOP Act allows investment shares to be issued to members and non-members alike at the discretion of the cooperative. Investment shareholders have no right to vote at a meeting of a cooperative unless the articles specifically give them the right to vote and only in the following limited circumstances set out in the Act [subsections 124(2) to 124(4)]: the articles can give non-member investment shareholders the right to elect up to 20 percent of board members; that when the cooperative wants to change its structure in a way that affects investment shareholders, the Act gives shareholders the right to vote on those proposed changes.

These provisions are designed to provide more flexibility in the way cooperatives may raise capital and provide safeguards for investment shareholders, while keeping the control of the cooperative in the hands of the members.

Item 10 - Restrictions on Powers of Directors to Manage (Optional)

Include any provision by which members, other than by means of a unanimous agreement, restrict the powers of directors to manage the business of the cooperative. The powers may be restricted in whole or in part. If there are no restrictions, mark "none".

Item 11 - Other Provisions (Optional)

The articles may include any other provision permitted by the Act to be set out in the by-laws which members feel is necessary to be set out in the articles rather than in the by-laws.

Items 12/13 - Statements

These statements are required by the Act and are pre-printed on the form.

Item 14 - Approval of Amalgamation

Check off the section or subsection of the Act under which the amalgamation has been approved.

  • Section 297 applies to a long-form amalgamation where the amalgamation is approved by members and, if any, shareholders.
  • Subsection 298(1) applies to a vertical short-form amalgamation where the amalgamation is approved by a resolution of the directors of each amalgamating cooperative.
  • Subsection 298(2) applies to a horizontal short-form amalgamation where the amalgamation is approved by a resolution of the directors of each amalgamating cooperative.

Item 15 - Declaration

A director or authorized officer of the amalgamating cooperatives shall sign the articles.

How to fill out Form 3003 - Notice of Registered Office

Item 4 - Indicate the full address of the registered office

The address must be within the municipality and province specified in Item 2 of Form 3009 - Articles of Amalgamation.

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How to fill out Form 3006 - Notice of Directors

Item 3 - New Directors or Change of Address

  • Membership Requirement: Not less than two thirds of the directors or any greater proportion that is provided for by the articles must be:
    1. Members of the cooperative;
    2. Representatives of members that are legal entities; or
    3. Members of cooperatives who are members [Section 77].
  • Note that up to one third of the directors may be non-members. For worker cooperatives, at least 80 percent of the directors must be members that are employees of the cooperative.
  • Directors have to be elected by the members, except where the cooperative chooses to allow directors to be elected by the investment shareholders [Subsection 78(5)]. Note that not more than 20% of the directors may be elected by investment shareholders who are non-members.
  • Residency requirement: A majority of directors must be resident in Canada [Subsection 78(4)].

Item 4 - Directors being Removed

List the names of all individuals who are no longer directors.

By-laws

The by-laws do not need to be submitted when submitting a request for amalgamation. The by-laws are nevertheless very important to the cooperative as they are the internal governance rules adopted for the cooperative.

The Act requires the by-laws to cover at least the following areas (section 15):

  • qualifications and procedures for acceptance of members;
  • rights of joint members, if any;
  • rights and obligations of members and, if any, auxiliary members;
  • transfer or assignment of members' interest;
  • selection, qualifications and term of office of directors;
  • distribution of any surplus earnings;
  • definition of any agency relationship the cooperative has with its members;
  • conditions of termination of membership; and
  • electronic voting at members' meetings, if permitted.

The by-laws may also address:

  • representation by delegates;
  • classes of membership;
  • dispute resolution process; and
  • any other matter that the members consider necessary or desirable.

In addition to the above, the by-laws of non-profit housing cooperatives and worker cooperatives must include certain provisions. Refer to section 355 of the Act for non-profit housing cooperatives and section 360 for worker cooperatives.

Related Information

How do I file my application?

What happens after I submit my application?

How to Reach Cooperatives Policy (formerly the Cooperative Secretariat)

For more information on cooperatives, you may also want to contact Cooperatives Policy at Industry Canada (formerly the Cooperative Secretariat with Agriculture and Agri-Food Canada):

Cooperatives Policy Strategic Policy Branch, Strategic Policy Sector Industry Canada 235 Queen Street Ottawa, Ontario K1A 0H5 Telephone: 613-954-5031 Toll-free: 1-800-328-6189 Fax: 613-954-2340 By Email: info@ic.gc.ca TTY (for hearing impaired): 1-866-694-8389
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Annex A

In the Matter of the Canada Cooperatives Act and In the Matter of an Application for Amalgamation Pursuant to Section 285 or 299

(Name of Applicant Cooperative)

Statutory Declaration

We, the undersigned, DO SOLEMNLY DECLARE that:

  1. We are the directors of space to insert full cooperative name, an amalgamating cooperative and we have personal knowledge of the matters herein deposed to.
  2. The information contained in forms 3003 and 3006 filed with the articles of amalgamation meets the requirements of the Act.
  3. Choose one of the following statements:
    • The amalgamated Cooperative will be organized and operated and will carry on business on a cooperative basis.
    • (For non-profit housing cooperatives)
      The amalgamated Cooperative will be organized and operated and will carry on business on a cooperative basis and the Cooperative will comply with Part 20 of the Canada Cooperatives Act.
    • (For worker cooperatives)
      The amalgamated Cooperative will be organized and operated and will carry on business on a cooperative basis and the Cooperative will comply with Part 21 of the Canada Cooperatives Act.
  4. We are satisfied that there are reasonable grounds for believing that:
    1. each amalgamating cooperative can and the amalgamated cooperative will be able to pay its liabilities as they become due;
    2. the realizable value of the amalgamated cooperative's assets will not be less than the total of its liabilities and stated capital of all classes; and
    3. Choose one of the following statements:
      • no creditor will be prejudiced by the amalgamation; or
      • adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

And we make this solemn declaration conscientiously believing it to be true, and knowing that it is of the same force and effect as if made under oath and by virtue of the Canada Evidence Act.

(This declaration must be signed by all the directors of the Cooperative.)

Declared before me at
the City of space to insert city,
in the Province of space to insert province,
this space to insert day day of space to insert month, 20space to insert year.

space to insert signature
(signature of director)

space to insert signature
A Commissioner, etc.

Declared before me at
the City of space to insert city,
in the Province of space to insert province,
this space to insert day day of space to insert month, 20space to insert year.

space to insert signature
(signature of director)

space to insert signature
A Commissioner, etc.

Declared before me at the City of space to insert city,
in the Province of space to insert province,
this space to insert day day of space to insert month, 20space to insert year.

space to insert signature
(signature of director)

space to insert signature
A Commissioner, etc.

Footnotes

Footnote 1

Note that "cooperative" may also be spelled as "cooperative". Corporations Canada has chosen this spelling for consistency with the Act.

Return to footnote 1 referrer

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