Canada Cooperatives Act (S.C. 1998, c. 1)

Marginal note:Withdrawal of membership

• 39. (1) Unless the by-laws provide otherwise, this section applies to the voluntary withdrawal of a member from membership in a cooperative.

• Marginal note:Written notice

  (2) A member may withdraw from membership in a cooperative by written notice to the cooperative. Any such withdrawal is effective on the later of the date stated in the notice and the date on which the cooperative receives the notice.

• Marginal note:Redemption of membership shares and repayment of amounts owing on withdrawal

  (3) Subject to section 149, the cooperative must, no later than one year after the effective date of a notice of withdrawal, redeem all membership shares held by the withdrawing member at the redemption price determined in accordance with section 146 and repay to the member all member loans, all other amounts held to the member’s credit and all amounts outstanding on loans made to the cooperative by the member, together with any interest accrued on those amounts up to the date of the payment.

• Marginal note:Redemption and repayment more than one year after withdrawal

  (4) Despite subsection (3), if the directors determine that the redemption of membership shares, or the repayment of membership loans, of a withdrawing member would adversely affect the financial well-being of the cooperative, the directors may direct that the redemption and repayment referred to in subsection (3) take place after the end of the one year period.

• Marginal note:Withdrawal not to have certain effects

  (5) Unless the directors determine otherwise,

  • (a) the withdrawal of a member from the cooperative does not release the member from any debt or obligation to the cooperative or contract with the cooperative; and

  • (b) the cooperative need not, despite subsection (3), repay to the member amounts outstanding on loans made to the cooperative that have a fixed maturity date until that date has arrived.

Marginal note:Termination of membership by directors

• 40. (1) This section sets out the rights and procedures that apply to termination of membership. The by-laws of a cooperative may derogate from this section, but only in respect of the manner in which the membership of members may be terminated.

• Marginal note:Special resolution of directors

  (2) The directors may by special resolution order the termination of the membership of a member but, if the cooperative is in breach of section 149 — or if making the payment referred to in subsection (7) would put the cooperative in breach of section 149 — the termination is not effective until the cooperative is no longer in breach.

• Marginal note:Written notice

  (3) Not more than ten days after the date on which a special resolution is made, the secretary of the cooperative must give written notice to the member of the termination and the reasons for it. Subject to subsections (4) and (5), the effective date of the termination is the later of the date specified in the written notice and thirty days after the member receives the notice.

• Marginal note:Appeal

  (4) A member whose membership has been terminated may appeal from the decision of the directors to the next meeting of members by giving written notice to the secretary of the member’s intention to appeal no later than thirty days after receiving notice of the special resolution.

• Marginal note:Effect of notice of appeal

  (5) If a member gives a notice of appeal, the effect of the special resolution is suspended until the vote of the members under subsection (6).

• Marginal note:Resolution of members

  (6) If a member appeals the termination of membership, a vote of members must be taken at the next meeting of members as to whether the member’s membership should be terminated as of the effective date referred to in subsection (3). The vote is by majority of the members present at the meeting, unless a greater proportion is specified in the articles, the by-laws or a unanimous agreement.

• Marginal note:Effect of termination of membership

  (7) Subject to section 149, if a member’s membership is terminated, a cooperative must, no later than one year after the date of the special resolution, redeem all membership shares held by the member at the redemption price determined in accordance with section 146, and repay to the member all member loans and all other amounts held to the member’s credit and all amounts outstanding on loans made to the cooperative by the member, together with any interest accrued on those amounts up to the date of the payment.

• Marginal note:Termination of membership not to have certain effects

  (8) Unless the directors determine otherwise, the termination of the membership of a member does not release the member from any debt or obligation to the cooperative or contract with the cooperative.

• Marginal note:If address of member unknown

  (9) If the address of a member whose membership has been terminated by the directors is unknown to the cooperative after all reasonable efforts have been made to ascertain it and two years have elapsed since the effective date referred to in subsection (3), the cooperative must transfer all amounts owing under subsection (7) to a reserve fund, but those amounts do not, despite subsection (7), include any interest that would have accrued after the end of the two years.

• Marginal note:Amounts paid to entitled persons

  (10) If any amounts are transferred to a reserve fund under subsection (9), the cooperative must pay those amounts to any person who, no later than ten years after the transfer, shows evidence of entitlement satisfactory to the cooperative. If no person appears to show that evidence within the ten years, the amounts become the property of the cooperative.