Bylaws & Policies



Here are some of the structures and regulations that will help us maximise value for
our customers and sustainable results for our farmers and other southern partners.

ETHICAL COFFEE CHAIN TRADE CO-OPERATIVE INC. BY-LAWS

1)     Preliminary and Definitions

 

a)     In these By-Laws:

i)      The singular includes the plural, and vice versa,

ii)     Persons include corporations, incorporated societies, Co-operatives, and other incorporated bodies.

iii)   "call", "director", "special resolution", "memorandum", "officer", and "By-Laws" have the meanings assigned to them by the Act.

iv)    "Act" means the Co-operative Corporation Act

v)     "Co-operative" means Ethical Coffee Chain Trade Co-operative Inc.

vi)    "the directors:" means the board of directors of the Co-operative

vii)  "dividend" means the allocation or payment of  surplus to members in proportion to their paid-up shares in the Co-operative.

viii) "patronage return means the allocation or payment of a surplus to members in proportion to the amount spent by them in purchasing goods or services from the Co-operative.

ix)    "special resolution" means a resolution that is passed by a 75 percent majority of the total votes cast on the resolution by members eligible to vote.

x)      "creditors" means Preference Shareholders, as well as any other investor or lender to the Co-operative.

xi)    "Farmers" means the farmers that ECC engages in business or direct trade with.

xii)   "ECC" means "Ethical Coffee Chain"

b)     The By-Laws are subject to the Act, and the Act contains provisions not repeated in the Rules.

c)     The By-Laws may be changed only by special resolution.

 

2)     Membership

 

a)     To become a member, a person must:

i)      In the case of an individual, be at least 16 years of age, and

ii)     Subscribe for and own at least one membership share.

iii)   The directors may approve or refuse an application for membership.

iv)    Membership is open in a non-discriminatory manner to individuals and corporations that can use the services of the Co-operative and are willing and able to accept the responsibilities of membership.

b)     Basic Rights of Members:

i)      A member in good standing is entitled to all the rights, benefits and privileges of membership and to stand for any elected office in the Co-operative.  To remain in good standing, a member is expected to:

(1)   abide by these By-Laws and any other policies the Co-operative may establish from time to time pursuant to these By-Laws

ii)      Members have the following rights:

(1)   To elect and remove directors;

(2)   To make motions;

(3)   To present and vote on resolutions;

(4)   To hear reports on the Co-operative's operations an financial status;

(5)   To discuss any issue they have asked the directors to put on the agenda

c)      Limited Liability of Members:

i)      Members are generally not responsible for the Co-operative's debts and liabilities.

ii)     Members  may be liable to the Co-operative's creditors if:

(1)   Members have been paid by the Co-operative as a result of an amendment to the articles reducing its issued loan or share capital. These members may be liable to the Co-operative's creditors for the amount they were paid.

(2)   Members have received any of the Co-operative's property before the Co-operative's creditors have been repaid on dissolution. Members may be liable to credits for the amount received.

d)     Leaving the Co-operative:

i)      A member may choose to leave the Co-operative at any time by giving the Secretary six months notice.

ii)     Within six months of leaving the Co-operative, ECC must:

(1)   redeem or buy back the member's membership shares at their par value plus a premium, or if the member agrees, ECC may redeem shares at less than par value.

(2)   Pay the member all dividends that have been declared but not paid on their shares. 

iii)   If the Co-operative agrees, members planning to leave may maintain some or all of their preference shares, and at any time ask the Co-operative to redeem their preference shares by giving six months notice.

iv)    The directors of ECC may delay repaying a withdrawing member's investment if they believe that doing so all at once would not be in the Co-operative's best interests. This delay may not be longer than five years and at least 20% of the member's investment must be repaid each year.

e)     Terminating Membership:

i)      The Co-operative may terminate the membership of those who have not used its services for two years or more.

ii)     The Co-operative may terminate a corporate membership if the member is about to be dissolved.

iii)   Upon terminating membership, the Co-operative will buy back the member's shares.

iv)    When redeeming shares for reasons of termination, ECC will pay the member the book value or the par value of the shares, plus any premiums and unpaid dividends, whichever is lower.

v)     ECC will not terminate an individual or corporate membership if the Co-operative is insolvent or if the board of directors believes that buying back members' shares would be harmful to the Co-operative's stability.

f)      Expelling a Member:

i)      If a member has broken an important by-law, ECC may expel the member by having a majority of the board of directors pass a resolution in accordance with Sections sixty-six and sixty-seven of the Act.

g)     Appealing an Expulsion:

i)      A member who has been expelled has the right to appeal his or her expulsion at the next annual general meeting in which a majority of the members may confirm or overrule the board's decision.

(1)   A member must notify the board of his or her appeal within twenty-one days of receiving his or her expulsion notice.

(2)   ECC must distribute the member's written statement to the Co-operative's membership at least seven days before the notice of the member meeting is mailed.

 

3)     Members' Meetings

 

a)     Annual General Meetings:

i)      A general meeting shall be held at least once in every year within four (4) months of the end of the financial year. Other general meetings may be held as the Directors or members decide.

ii)     The Co-operative may hold two or more members' meetings at different locations and different times instead of a single general meeting, as permitted by the Act.

iii)   Every member present at a general meeting who became a member ninety (90) days or more before that meeting is eligible to vote and has one vote on each matter voted upon in the meeting.

iv)    Three(3) directors and at least 5 of the members must be present at all General Meetings in order for business to be carried out.

v)     The Directors may call a special general meeting whenever they think fit.  In addition, they must call a special general meeting upon receipt of a written requisition signed by no less than five percent of the members in good standing.  A requisition shall set forth the object of the meeting. If the directors do not call the meeting within seven days after the deposit of the requisition, the requisitionists may themselves convene a meeting.

vi)    Every member shall be given at least ten(10) days notice of every general meeting specifying the place, the day and the hour of the meeting, and, in the case of special business, the general nature of that business.

vii)  All ECC Meetings may be held in person or in electronic form.

viii) The directors shall provide one of their number to serve as a chair at the general meetings.

ix)    The chair shall run the meetings in order to further the best interests of the Co-operative and its members, and to facilitate the participation of all members present in the discussions.  The agenda shall be approved at the beginning of each meeting.

x)      The only persons entitled to be present at a general meeting are members of the Co-operative, the auditor, and others who are entitled or are required under any provision of the Act  or By-Laws.

xi)    A person who is not entitled to be present at a general meeting under Sec. 3, a, Viii may be admitted to a meeting only on the invitation of the chair or with the consent of a majority of the members at the meeting.

xii)   A member which is a corporation may appoint an individual to represent it and vote on its behalf at a general meeting, but the appointment must

(1)   Be in writing

(2)   Identify the appointing member, and the individual appointed,

(3)   Identify the meeting in respect of which the representative is appointed,

xiii) A representative appointed under 3,a,x is entitled to exercise at that meeting the same rights on behalf of the member as the member could exercise if it were an individual member present, and must be counted for the purpose of determining quorum.

xiv)  A non-member director may not be counted for the purpose of determining quorum.

 

b)     Voting

i)      All meetings of the Co-operative shall attempt to reach decisions by consensus, but in default, they shall be decided by a simple majority of votes, except where the Act or these By-Laws require a greater number.

ii)     Proxy voting is not permitted.

iii)   In Person and Electronic Voting is permitted at all meetings of the Co-operative.

iv)    The chair shall, in the case of tied vote, have a casting or second vote at any general meeting.

 

4)     Members' Requisitions

 

a)     As per Sections 70, 71, and 79  members' requisition is a petition asking the directors to:

i)      Call a Member's Meeting.

ii)     Circulate Members' Resolutions

iii)   Call a Directors' Meeting to Pass a By-Law or Resolution.

 

5)     Resolutions:

 

a)     Any member wishing to move an ordinary resolution at a general meeting must deliver notice of the resolution to the Co-operative no less than 45 days before the date of the general meeting.

b)     Emergency resolutions may be permitted at the discretion of the board of directors, in the interest of ECC.

c)     An ordinary resolution of a member will be binding on the Co-operative accepted by a majority of the members at the general meeting will be binding,

d)     The directors will not accept or allow an ordinary resolution if at least 75 percent of all the directors determine, by board resolution, that accepting the ordinary resolution is not in the best interest of the Co-operative. The directors will provide reasons for rejecting any resolution.

 

6)     Special Resolutions:

 

a)     The Co-operative must give notice of the intention to propose a special resolution of the resolution is:

i)      Being submitted by the directors, or

ii)     Submitted, together with a request by at least five members that notice be given, before the close of nominations.

b)     The Co-operative must give notice of the intention to propose a special resolution by posting the notice and the text of the special resolution on the Co-operative's Internet website, concurrently with the election information.

c)     If at least 2/3 of the directors resolve that a special resolution is frivolous, vexatious, or an abuse of process, or that the resolution, if passed, would harm the Co-operative, the Co-operative may refuse to give notice of the resolution. The members requesting notice of the resolution must be notified immediately by the directors of their decision and the reasons for it

d)     The Co-operative must, along with notice of an election, notify each member of the deadline for submitting a proposed special resolution.

e)     The Co-operative must indicated whether a special resolution is being proposed by the directors, or by members, or by both.

f)      The Co-operative must not dispense of the whole or substantially the whole of its undertaking unless:

i)      The disposition is authorized by a special resolution, and

ii)     All members have the opportunity to vote on the special resolution by mail or electronic ballot.

g)     All members who joined 12 weeks or more before the next AGM are eligible to vote on special resolutions. Members eligible to vote may vote on special resolutions by mail or electronic ballot.

h)     The election auditor must announce the result of the voting on each special resolution, including the number of votes in favour and the number of votes opposed, at the Annual General Meeting.

 

7)     Minutes

 

a)     ECC must keep minutes of all meetings of members, directors, and any executive committees.

b)     Minutes should indicate the date, time, place, and agenda of the meeting, text of resolutions, results of votes, records of carried and failed motions, and the names of movers, seconders, chairpersons, recorders of minutes, and any other participants.

c)     Minutes of members' meetings are available for inspection by all members; minutes of directors' meetings and executive committee meetings are not.

 

8)     Directors

a)     The exact number of directors shall be determined by a special resolution or, if authorized by a special resolution, by a resolution of the directors.

b)     Directors must be at least 18 years of age.

c)     Not all directors must be members of the co-op

d)     The number of directors appointed or elected who are non-members or who are not directors, officers, shareholders or members of a corporate member, must not exceed the total number of directors who are members of the co-operative.

e)     Directors who are non-members or who are not directors, officers, shareholders, or members of a corporate member, are not to be counted for the purpose of constituting quorum.

f)      The first directors shall be the persons so named in the Articles of Incorporation, and shall hold office until the first general meeting.

g)     Directors' terms shall be two (2) years.

h)     If the number of candidates for election as directors of the Co-operative at a general meeting is the same or fewer than the number to be elected at that meeting, the chair may declare the candidates to have been elected by acclamation.

i)      Where a vacancy occurs in the board of directors the remaining directors may appoint a member to fill the vacancy, but any member who is so appointed shall only hold office to the close of the next annual general meeting.

j)      The office of director shall be vacated if the director:

i)      ceases to be a member in good standing, unless the director is a non-member to begin with;

ii)     is concerned or participates in the profits of a contract with the Co-operative without prior declaration to the Board of their interest in that contract;

iii)   is absent from three (3) consecutive regular meetings of the directors without the consent of the directors.

k)              No director shall vacate the office by reason of being a member of a company which has entered into contracts with or done any work for this Co-operative.  In such a case the director shall disclose the fact of membership to the other directors and shall not vote in respect of that contract or work, and if she does vote her vote shall not be counted.

l)               Directors, in exercising their power and performing their functions, shall act honestly and in good faith and in the best interest of the Co-operative, and shall exercise the care, diligence and skill of reasonably prudent persons.

m)            The business of the Co-operative shall be managed by the directors, who may pay from its funds the expenses of the corporation and may exercise all its powers, subject to the Act and these By-Laws.

n)             The directors shall elect a President, Secretary, and Treasurer from their number, and may employ staff and may prescribe their duties and fix their remuneration and dismiss them.  The Secretary shall exercise the powers of the chair if the chair is absent.

o)             The directors may delegate any of their powers to committees consisting of members of the Co-operative as they see fit; any committee shall, in the exercise of the powers delegated, conform to any regulations that may be imposed on them by the directors.

p)             The directors shall cause minutes to be made in books provided for the purpose:

i)      of all appointments of officers made by them;

ii)     of the names of the directors present at each meeting of directors or committee;

iii)    of all resolutions and proceedings at all meetings of the Co-operative, the directors, or any committee.

q)    The directors shall cause proper registers of the members and directors to be kept at the registered office, and shall in all other respects comply with the Act.

r)      The Co-operative in general meeting shall determine the remuneration, if any, of the directors and the amount, if any, allowed to them for expenses.

s)     All meetings of the directors shall be held in person or via phone or Internet, and the quorum necessary for the transaction of business may be fixed by the directors, and unless so fixed shall be 2/3 of the Board.

t)      The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit.  Questions arising at any meeting shall be decided by a majority of votes.  In case of an equality of votes the chair shall have a second or casting vote.  A director may, and the secretary, on requisition of a director, shall, at any time summon a meeting of the directors.

u)     A resolution signed by all directors shall have the same force and effect as if passed at a duly constituted meeting of the directors.

v)     The Co-operative may indemnify directors or former directors, their heirs and personal representatives against all costs, charges and expenses, including any amount paid to settle an action or satisfy a judgement incurred by them, and to which they were made party by reason of being or having been directors.

w)    The Co-operative must indemnify the directors and officers to the maximum extent permitted by the Act.

x)      The directors may cause the Co-operative to purchase and maintain insurance for the benefit of any person who is serving or has served as a director, officer, employee or agent of the Co-operative and the person's heirs or personal representatives, against any liability incurred by the person as such director, officer, employee or agent.

 

9)     Board of Advisors

a)     At the discretion of the Directors, ECC may appoint any number of advisors to the Board of Advisors.

b)     Advisors may be any individuals, members or non-members, that may provide advice or guidance on any matter related to the operation and management of the Co-operative.

c)     Directors and Officers should make an effort to seek and appoint advisors on matters or areas they lack knowledge or experience in.

 

10)  Officers

a)     Officers may be elected or appointed by the directors.

b)     Officers are required to act honestly, in the co-op's best interest, and to take responsibility.

c)     Officers are responsible to a co-op and its creditors for any losses that result from approving a type of financial assistance to directors, members, or employees that is not normally available to all members

d)     ECC must elect or appoint a President, Secretary and Treasurer. Other officers may be elected or appointed as needed.

 

11)  Records

 

a)     The Co-operative is required to keep the following records:

i)      Copies of the articles of incorporation, by-laws, resolutions, and special resolutions;

ii)     An alphabetical register of members and security holders over the last ten years, including addresses;

iii)   A register of all transfers of shares.

iv)    A register of past and present directors, including terms served and addresses;

v)     Accounting records of financial and other transactions.

vi)    Minutes of meetings of all members, directors, and any executive committee.

 

12)  Shares

 

a)     Unless otherwise specified in an offering statement issued by ECC one of the following limitations on investment must be abided by:

i)      Members may purchase a maximum of ten (10), One Hundred Dollar ($100) Preference Shares per year.  Members may not invest more than Ten Thousand Dollars $10,000 in the Co-operative in their lifetime; OR

ii)     ECC may not sell Preference Shares to more than 35 non-members. OR

iii)   ECC may not sell more than Two Hundred Thousand Dollars ($200,000) in shares per year.

b)     Government grants and investments from accredited investors are excluded from the limitations in 11(a).

c)     The authorized capital is limited to the sum of Twenty Million Dollars ($20,000,000.00), divided into:

i)      Two Hundred and Fifty Thousand (250,000) Membership Shares with a par value of Two Dollars ($2.00) each; and,

ii)     One Hundred and Ninety-Five Thousand (195,000) Preference Shares with a par value of One Hundred Dollars ($100.00) each.

d)     The minimum number of Membership Shares per Member is One (1) Membership Share.

e)     The holders of Preference Share are entitled to:

i)      A variable Cumulative Dividend, paid in priority to any dividend being paid on other classes of shares; and

ii)     When the Co-operative dissolves, first priority for repayment of the amount paid for the shares, together with all unpaid dividends, but they have no other right to receive remaining property.

f)      The Variable Cumulative Dividend is payable yearly when declared by the board of directors. The dividend rate, is the Prime Rate (As announced by the Central 1 Credit Union at the Co-operative's year-end) plus 2%. This rate applies to the amount paid for the shares.

g)     The holders of Membership Shares are entitled to:

i)      Vote at the annual and special meetings of members;

ii)     A dividend no greater than the amount permitted by the Act and calculated based on patronage as determined by the Directors.

iii)   When the Co-operative dissolves, to repayment of the par value of the Membership Share, but no further right to receive remaining property of the Co-operative.

 

13)  Redemption of Shares

 

a)     Shares are to be redeemed as specified in the Articles of Incorporation.

14)  Distribution of Surplus

a)     ECC may set aside part or all of their surplus to create reserve funds, pay dividends on shares, or invest in community development projects in Farmers' communities.

b)     How the Co-operative should distribute its surplus shall be decided at the annual general meeting and must be accepted by 2/3 of the Membership voting, as well as 2/3 of the Board of Directors.

c)     At the discretion of the Directors, and in the best interest of the financial well-being of the Co-operative, members may be required to reinvest part or all of their patronage returns  in the Co-operative. Members cannot be required to reinvest patronage returns if the co-op is insolvent.

 

15)  Financial

 

a)     The directors may, without the authority of a special resolution, cause the Co-operative to borrow money, and to secure the repayment of money borrowed by means of a charge on all or part of its assets and undertaking.

b)     An auditor must be appointed by ordinary resolution at every annual general meeting, but the directors may appoint an auditor to fill a vacancy arising between meetings. The remuneration of the auditor must be set by the directors.

c)     At every annual general meeting, the directors must present the financial statements required by the Act.

d)     The Co-operative must, on request by a member, but no more than once a year, provide a copy of the Co-operative's latest financial statements and the auditor's report on them to the member.

e)     The directors may invest all of part of the funds and assets of the Co-operative in such manner and on such terms as they deep in the best interests of the Co-operative.

f)       

16)  Dispute Resolution

 

a)     This section applies to a dispute arising out of the affairs of the Co-operative which involves a member, a candidate, a director, the Co-operative, or any combination of them including a dispute under the Rules. It does not apply to a dispute between the Co-operative and an employee, supplier, or contractor.

b)     A person claiming that a dispute has arisen must, not more than one year after the person became aware, or ought to have become aware, of the circumstances which the persn alleges gave rise to the dispute:

i)      Give notice of the dispute to the Co-operative, and

ii)     Provide the Co-operative with a written summary of the dispute and the remedy sought.

c)     The parties to a dispute may agree to resolve it through informal dispute resolution, mediation, a sole arbitrator, or other appropriate process. If the parties do not agree to a method dispute resolution, the provisions set out below must be followed.

d)     The parties must establish an arbitration committee of three volunteers.

e)     Each party must choose one appointee to the arbitration committee within 60 days of notice being received by the Co-operative.

f)      The two initial appointees must choose the third person, who must chair the committee, within thirty (30) days after their appointment.

g)     The arbitration committee must not include any person who is, or is claimed to be, a party to the dispute.

h)     The chair of the arbitration committee must declare all personal, employment, or business relationships with any party before being chosen.

i)      The Co-operative must provide a written summary of its position on the dispute to the other party within 60 days of receiving notice, and to the arbitration committee as soon as it is convened.

j)      Each party may make oral submissions to the arbitration committee, personally or through a representative.

k)     If the parties do not otherwise agree, the arbitration committee will sit at the Co-operative's place of business closest to the residence of the person claiming the dispute.

l)      The arbitration committee may:

i)      Determine its own procedure, and

ii)     Reach decisions by majority vote.

m)   The arbitration committee must:

i)      Hear the dispute within 60 days after the chair is chosen,

ii)     Come to a decision as soon as reasonably possible, and

iii)   Immediately inform the parties of the decision.

n)     The decision of the arbitration committee is final.

o)     Unless the arbitration committee decides otherwise, the parties must bear their own costs.

p)     If a party fails to comply with the provisions of this section, that party must ace[t as the final decision the position submitted by other party under 15(b)(ii) or 15(i).

 

17)  Notice

 

a)     A notice under the Act or these By-Laws, shall be in writing, and may be given by the Co-operative to any member either personally or by sending it by sending it by registered post to her registered address, or by personally acknowledged electronic mail.

b)     Where a notice is sent by post, service of the notice shall be effected by properly addressing, prepaying, and posting a letter containing the notice, and unless the contrary is proved, it will be assumed to have been effected at the time at which the letter would be delivered in the ordinary course of the post

 

18)  Seal

 

a)     The directors must provide for the safe custody of the seal.

b)     The seal must not be impressed on any instrument unless that impression is attested by the signature or signatures of

i)      Any two directors,

ii)     An officer and a director, or

iii)   One or more directors, offers or other persons as determined by resolution of the directors

c)     If the directors have not adopted a seal for the Co-operative, instruments may be executed on behalf of the Co-operative by the persons specified in 17(b)

 

19)  Dissolution

 

a)     Voluntary dissolution requires 2/3 of the members and 2/3 of the directors to approve a resolution to dissolve at a members' meeting and subsequent directors' meeting.

b)     If the Co-operative is dissolved, or upon its conversion to another business for, its property will be distributed as follows:

i)      First, the Co-operative will make payment of all debts and liabilities and all dividends declared and not paid, payable and the purchase for cancellation or redemption of all outstanding shares.

ii)     The remaining property of the Co-operative will be distributed to another Co-operative selected by the directors at the time of dissolution.