Financial

DIRECTORS

62. The Society shall have a Board of Directors comprising not less than three Directors.

63. The initial Directors of the Society from registration until the first annual general meeting
shall be appointed by the Founder Members.

64. Only persons who are aged 18 years or more may serve on the Board of Directors.

Board Composition

65. The composition of the Board shall be as follows:

(a) Up to seven Directors elected by and from the Society’s Members;

(b) At its discretion, the Board may appoint up to two Directors in addition to the elected Directors. Such Directors may be recruited from a named Member (being a body corporate, Society, or other institution) where in the Board’s reasonable opinion such Member can provide significant expertise or benefit to the Society. If an organisation with the required expertise, is the Contracted Manager of the Society, and also a Member of the Society, the Contracted Manager shall have the right (the Board not having any discretion in this case) to appoint a person (if the Contracted Manager so wishes) to fill one of these two positions. The Contracted Manager may also by written notice to the Society remove any person so appointed and if it so chooses appoint someone else in his/her place. Any Director appointed under this Rule shall not be required to retire by rotation in accordance with Rule 66, but shall be considered for re-appointment or substitution every two years in consultation with the named Member.

Retirement Cycle

66. At the second annual general meeting all elected Directors shall stand down. At every subsequent annual general meeting one-third of the elected Directors, or if their number is not a multiple of three then the number nearest to one-third, shall retire from office. The Directors to retire shall be the Directors who have been longest in office since their last election. Where Directors have held office for the same amount of time the Director to retire shall be decided by lot. A retiring Director shall be eligible for re-election. This rule does not apply to additional Directors appointed under Rule 65 (b).

Co-option of Directors

67. In addition to those Directors appointed under the provisions titled ‘Board Composition’ in these Rules, the Board of Directors may co-opt up to two external independent Directors who need not be Members and are selected for their particular skills and/or experience. Such external independent Directors shall serve a fixed period determined by the Board of Directors at the time of the co-option, subject to a review at least every 12 months. External independent Directors may be removed from office at any time by a resolution of the Board of Directors.

68. The Board of Directors may at any time fill a casual vacancy on the Board by co-option. Co-opted individuals must be Members of the Society and will hold office as a Director only until the next annual general meeting.

Powers and Duties of the Board of Directors

69. The business of the Society shall be managed by the Board who may exercise all such powers of the Society as may be exercised and done by the Society and as are not by statute or by these Rules required to be exercised or done by the Society in general meeting.

70. All decisions made by a meeting of the Board of Directors or by any person acting as a Director shall remain valid even if it is later discovered that there was some defect in the Director’s appointment or that the individual had previously been disqualified from acting as a Director.

71. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts for monies paid to the Society shall be signed, drawn, accepted, endorsed, or otherwise executed in such manner as the Board shall from time to time direct.

72. Without prejudice to its general powers, the Board may exercise all the powers of the Society to borrow money and to mortgage or charge its undertaking and property or any part of it and to issue debentures and other securities whether outright or as security for any debt, liability or obligation of the Society or of any third party.

73. No Regulation made by the Society in general meeting shall invalidate any prior act of the
Board which would have been valid had that Regulation not been made.

74. Any ultra vires action by the Board may be ratified by the Society by a special resolution passed in the way required by s44 of the Act. A separate special resolution must be passed in the same way should the Society wish to relieve a Director from any liability incurred as a result of a breach of duty arising from the Society acting outside its powers.

Delegation

75. Subject to these Rules, the Directors may delegate any of the powers which are conferred on them under these Rules to any Person or committee consisting of Members of the Society, by such means, to such an extent, in relation to such matters and on such terms and conditions as they think fit.

76. The Directors may specify that any such delegation may authorise further delegation of
the powers by any Person to whom they are delegated.

77. The Directors may revoke any delegation in whole or in part or alter any terms and
conditions.

Sub-Committees

78. A sub-committee to which the Directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of these Rules which govern the taking of decisions by Directors.

79. The Directors may make Regulations for all or any sub-committees, provided that such Regulations are not inconsistent with these Rules.

80. All acts and proceedings of any sub-committee must be fully and promptly reported to the Directors.

PROCEEDINGS OF THE BOARD OF DIRECTORS

Calling a Meeting of the Board of Directors

81. Any Director may, and the Secretary on the requisition of a Director shall, call a meeting of the Board of Directors by giving reasonable notice of the meeting to all Directors. Notice of any meeting of the Board of Directors must indicate the date, time and place of the meeting and, if the Directors participating in the meeting will not be in the same place, how they will communicate with each other.

Proceedings of a Meeting of the Board of Directors

82. The Board of Directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit.

83. A Director is able to exercise the right to speak at a meeting of the Board of Directors and is deemed to be in attendance when that person is in a position to communicate to all those attending the meeting. The Directors may make whatever arrangements they consider appropriate to enable those attending a meeting of the Board of Directors to exercise their rights to speak or vote at it including by Electronic Means. In determining attendance at a meeting of the Board of Directors, it is immaterial whether any two or more Directors attending are in the same place as each other.

84. Questions arising at any meetings of the Board shall be decided by a majority of votes. In the case of an equality of votes the status quo shall be maintained and the Board of Directors may choose to refer the matter to a general meeting of the Society.

85. A written resolution, circulated to all Directors and signed by a simple majority of Directors, shall be valid and effective as if it had been passed at a Board meeting duly convened and held. A written resolution may consist of several identical Documents signed by one or more Directors.

86. The Board of Directors may, at its discretion, invite other persons to attend its meetings with or without speaking rights and without voting rights. Such attendees will not count toward the quorum.

Quorum

87. The quorum necessary for the transaction of business at a meeting of the Board of Directors shall be 50% of the Directors or 3 Directors, whichever is the greater and shall include those Directors present, but not in person.

88. If at any time the total number of Directors in office is less than the quorum required, the Directors are unable to take any decisions other than to appoint further Directors or to call a general meeting so as to enable the Members to appoint further Directors.

Chairing Board Meetings

89. The chairperson shall facilitate meetings of the Board of Directors. If s/he is absent or unwilling to act at the time any meeting proceeds to business then the Directors present shall choose one of their number to be the chairperson for that meeting.

Declaration of Interest

90. A Director shall declare an interest in any contract or matter in which s/he has a personal, material or financial interest, whether directly or indirectly, and shall not vote in respect of such contract or matter, provided that nothing shall prevent a Director voting in respect of her/his terms and conditions of employment or any associated matter.

For the purposes of this Rule:
(a) a general notice given to the Board that a Director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the Director has an interest in any such transaction of the nature and extent so specified;
(b) an interest of which a Director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of hers/his;
(c) holding an interest in any shares of the Co-operative directly or indirectly shall not be treated as an interest of a Director;
(d) a Director with an interest in a contract will not be involved in awarding the contract whether by discussion or by voting.

Expenses

91. The Society may pay any reasonable expenses which the Directors properly incur in connection with their attendance at meetings or otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the Society.

Termination of a Director’s Appointment

92. A person ceases to be a Director of the Society as soon as:

(a) That person resigns from office in Writing to the Secretary of the Society, and such
resignation has taken effect in accordance with its terms;

(b) That person is removed from office by an ordinary resolution of the Society in general meeting, the notices for which specified that the question of the Director’s removal was to be considered;

(c) That person is prohibited from being a Director by law;

Choose this option if the society is to be registered in England & Wales
(d) That person is disqualified from acting as a trustee by virtue of sections
178 and 179 of the Charities Act 2011 (or any statutory re-enactment or modification of those provisions); or

(e) A bankruptcy order is made against that person;
Choose this option if the society is to be registered in Scotland
(d) That person is disqualified from acting as a charity trustee by virtue of sections 69 and 70 of the Charities and Trustee Investment (Scotland) Act 2005 (or any statutory re-enactment or modification of those provisions);

OFFICERS

93. The Board shall elect from among their own number a chairperson and Secretary and such other Officers as they may from time to time decide. These Officers shall have such duties and rights as may be bestowed on them by the Board or by law and any Officer appointed may be removed by the Board. A serving Officer who is not re- elected to the Board at the annual general meeting shall nevertheless continue in office until the first Board meeting following the annual general meeting.

DISPUTES

94. In the event of a dispute between the Society or its Board and a Member of the Society or a former Member, such dispute shall be referred to an independent arbitrator whose appointment is acceptable to both parties to the dispute or in the
absence of agreement to be nominated by the Secretary General of Co-operatives UK (or any role or body that succeeds to its function). The decision of such an arbitrator shall be binding. In the event that a dispute cannot, for whatever reason, be concluded by reference to an arbitrator, the matter may be referred to the county court (or in Scotland, to the sheriff). Any Person bringing a dispute must, if so required, deposit with the Society a reasonable sum (not exceeding £100) to be determined by the Board. The arbitrator will decide how the costs of the arbitration will be paid and what should be done with the deposit.

REGULATIONS

95. The Society in a general meeting, or the Board of Directors, may from time to time make, adopt and amend such Regulations in the form of bye-laws, standing orders, secondary rules or otherwise as they think fit for the management, conduct and regulation of the affairs of the Society and the proceedings and powers of the Board of Directors and subcommittees. Such Regulations (if any) shall be made available to Members. No Regulation shall be made which is inconsistent with these Rules or the Act. All Members of the Society and the Board of Directors shall be bound by such Regulations whether or not they have received a copy of them.

LIABILITY OF MEMBERS

96. The liability of a Member is limited to the amount of their shareholding.

PAYMENT OF INTEREST ON SHARE CAPITAL

97. In order to meet its obligation to carry on its business for the benefit of the community, the Society may raise share capital as required to carry out its objects and may pay interest on Members’ share capital at such rate as may be determined by the Board from time to time, provided that the rate of interest paid does not exceed the minimum rate necessary in the opinion of the Board to obtain the required share capital and thereafter to retain it.

APPLICATION OF PROFITS

98. Any profits of the Society shall be applied as follows in such proportions and in such
manner as may be decided by the Society at the annual general meeting:

(a) To a general reserve for the continuation and development of the Society; or

(b) To making payment for social or community purposes within the community served
by the Society.

AMALGAMATION, TRANSFER OF ENGAGEMENTS AND CONVERSION

99. The Society may, by special resolution passed in the way required by section 111 of the Act, amalgamate with, or transfer its engagements to another registered society subject to at least the same degree of restriction on the distribution of profits and assets as imposed on this Society by virtue of these Rules. The Society may also accept a transfer of engagements and assets by a resolution of the Board or by general meeting.

100. The Society may, by a special resolution passed in a way required by section 113 of the Act, amalgamate with, or transfer its engagements to, or convert to a company, subject to at least the same degree of restriction on the distribution of profits and assets as imposed on this Society by virtue of these Rules. In relation to calling a general meeting for the purpose of such resolution, the following provisions shall apply:

The Society shall give to Members not less than two months’ notice of the meeting;

(a) Notice of the meeting shall be posted in a prominent place at the registered office
and at all trading premises of the Society to which Members have access;

(b) The notice shall be accompanied by a separate statement setting out for
Members:

(i) the reasons for the proposal;

(ii) whether the proposal has the support of the Board of the Society;
(iii) what alternative proposals have been considered, and whether they are
viable;
(iv) details of the number of shares in the Society held by Members of the
Board, and Persons connected with them;

(v) a recommendation by reputable independent financial advisors that the Members should support the proposal rather than any alternative proposal.

(c) Where the separate statement is contained in another Document, information shall be provided in the notice specifying where Members can obtain a copy of the Document.

DISSOLUTION

101. The Society may be dissolved:

(a) in accordance with section 119 of the Act by an instrument of dissolution;

(b) in accordance with section 123 of the Act in pursuance of a winding up order or by a resolution made or passed as directed in regard to companies by the insolvency Act 1986; or

(c) in accordance with section 125 of the Act, after administration and administrator issues a notice to dissolve the society without prior winding-up.

102. If on the winding up or dissolution of the Society any of its assets remain to be disposed of after its liabilities are satisfied, these assets shall not be distributed among the members, but shall be transferred instead to some other non-profit body or bodies subject to at least the same degree of restriction on the distribution of profits and assets as is imposed on this Society by virtue of these Rules, as may be decided by the members at the time of or prior to the dissolution.

ADMINISTRATIVE ARRANGEMENTS

Means of Communication

103. A Member may provide their consent to receive communications from the Society by
Electronic Means.

104. A notice sent to a Director’s Address shall be deemed to have been duly served 48 hours after its posting. A Director may agree with the Society that notices or Documents sent to her/him in a particular way are to be deemed to have been received within a specified time of their being sent, and for the specified time to be less than 48 hours.

Seal

105. If the Society has a seal, it shall only be used by the authority of the Board of Directors acting on behalf of the Society. Every instrument to which the seal shall be attached shall be signed by a Director and countersigned by a second Director or the Secretary.

Registers

106. The Board of Directors shall ensure accurate registers are maintained which shall include a register of Members, a register of Directors, register of Officers and register of nominations. Such registers may be kept in hard copy or by secure electronic storage.

Register of Members

107. The Board shall ensure that the register is maintained in accordance with the Act and
that the particulars required by the Act are available for inspection and accessible without the need to disclose other particulars contained in the register.

Register of Directors and Officers

108. The Society shall maintain a register of Directors and Officers which shall include the
following particulars:

(a) Name of the Director;
(b) Address of the Director;
(c) The date on which they assumed office;

(d) The date on which they vacated office; and

(e) The position held by a Director if s/he is also an Officer and the date on which the
Director assumed and vacated his/her Officer position.

Register of Nominations

109. The Society shall maintain a register of nominations which shall record the names of all persons entitled to a Member’s property in the event of his/her death and any revocation or variation of the nomination.

Amendments to Rules

110. Any of these Rules may be rescinded or amended or a new rule made by Extraordinary Resolution at a general meeting of which 14 Clear Days’ notice has been given, such notice to include details of the change(s) to be proposed at that meeting. No amendment of Rules is valid until registered by the Registrar. When submitting the rule amendments for registration, the Secretary may at their sole discretion accept any alterations required or suggested by the Registrar without reference back to a further general meeting of the Society.

Copies of the Society’s Rules

111. A copy of these Rules and any amendments made to them shall be given free of charge to every Member upon admission to membership and shall be provided to any other Person on demand and on payment of the statutory fee chargeable for the time being in force.

Minutes

112. The Society shall ensure that minutes are kept of all:

(a) Proceedings at general meetings of the Society; and

(b) Proceedings at meetings of the Board of Directors and its sub-committees which include names of the Directors present, decisions made and the reasons for those decisions.

Annual Return

113. Every year and within the period prescribed by the Act, the Secretary shall send the annual return in the prescribed form to the Registrar. The annual return shall be accompanied by:

A copy of the Auditor’s report on the Society’s accounts for the period covered by the annual return or a copy of such other report (if any) as is required by statute for such a period; and

A copy of each balance sheet made during that period and report of the Auditor or other appropriate person as required by statute on that balance sheet.

114. The Society shall on demand supply free of charge to any Member or any person with an interest in the funds of the Society a copy of the latest annual return together with a copy of the Auditor’s report on the accounts and balance sheet contained in the annual return and the Auditor’s Report (if any).

115. The Society shall at all times keep a copy of the latest balance sheet of the Society together with a copy of the corresponding Auditor’s report (if any) hung up in a conspicuous place at the registered office and displayed on the Society’s website (if any).

Audit

116. Unless the Society meets the criteria set out in section 83(2) of the Act or may disapply the audit requirement in accordance with section 84 of the Act, the Board shall in each financial year appoint an Auditor as required by section 83(1) of the Act, to audit the Society’s accounts and balance sheet for the year. This provision also applies if the Society is in its first financial year.

117. The following persons shall not be appointed as Auditor of the Society:

(a) An Officer or Employee of the Society;

(b) A person who is a partner or employee of, or who employs an, Officer of the Society.

118. The Board may appoint an Auditor to fill a casual vacancy occurring between general meetings.

119. An Auditor for the preceding financial year shall be re-appointed as Auditor of the Society for the current financial year unless:

(a) S/he has given notice in writing to the Secretary of her/his unwillingness to be reappointed; or

(b) S/he is ineligible for appointment as Auditor of the Society for the current financial
year; or

(c) S/he has ceased to act as Auditor of the Society by reason of incapacity; or

(d) An ordinary resolution is passed under section 93(2) of the Act; to either:
(i) appoint another person instead of the existing auditor,

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(ii) expressly provide that the existing auditor is not to be re-appointed, or

(iii) disapply section 83 (duty to appoint auditors) in relation to the current year of account.

120. Any ordinary resolution of a general meeting of the Society either to remove an Auditor from office or to appoint another person as Auditor shall not be effective unless notice of the proposed resolution has been given to the Society at least 28 days prior to the meeting at which the resolution is to be considered. At least 14 days’ notice of such resolution must then be given to Members of the Society in the manner prescribed in these Rules and in Writing to the Auditor(s).

Social Accounting and Reporting

121. In addition to any financial accounts required by the Act, the Members may resolve to undertake an account of the activities of the Society which will endeavour to measure its social and environmental performance using whatever methodology the Members deem appropriate. Following the completion of such an account the Society shall report any findings to its Members and other stakeholders.

Indemnity and Insurance

122. Subject to the following rule, any Director or former Director of the Society may be
indemnified out of the Society’s assets against:

(a) Any liability incurred by that Director in connection with any negligence, default,
breach of duty or breach of trust in relation to the Society;

(b) Any liability incurred by that Director in connection with the activities of the Society in its capacity as a trustee of an occupational pension scheme;

(c) Any other liability incurred by that Director as an Officer of the Society.

123. The above rule does not authorise any indemnity which would be prohibited or rendered void by any provision of law.

124. The Directors may decide to purchase and maintain insurance, at the expense of the Society, for the benefit of any Director or former Director of the Society in respect of any loss or liability which has been or may be incurred by such a Director in connection with their duties or powers in relation to the Society or any pension fund or employees’ share scheme of the Society.