Rules of United Diversity Co-operative Limited

A Somerset Rules 2012 Multistakeholder Co-operative

Registered under the Co-operative and Community Benefit Societies Act 2010

1. Open and voluntary membership of the co-operative

1.1. The name of the co-operative is United iversit! Co-operative "imited. 1.2. The re#istered office of the co-operative is at 1$% &d'ard Road( "ondon &1) *+A. 1.,. The o-.ects of the co-operative are to carr! on an! industr!( -usiness or trade in accordance 'ith co-operative principles in order to achieve this mission/ to create and share tools for selfor#anisation to empo'er people( -uild communit! and develop co-operatives0 1n addition to the #eneral co-operative aims descri-ed in 1.$( 2.1( ,.1( $.1( %.1( *.1 and ).1 -elo'. 1.$. The co-operative has the aim of -uildin# mem-ership 'ithin its stakeholder #roups( and ensurin# that its mem-ership full! reflects the diversit! of those #roups and of the 'ider communit!. 1.5. Classes of membership a2 The mem-ership of the co-operative 'ill -e made up of persons dra'n from one or more cate#ories of stakeholder( correspondin# to the different t!pe of involvement those stakeholders have 'ith the co-operative. -2 User mem-ers( 'ho are the main -eneficiaries of the co-operative3s services( pla! the principal role in the direction of the co-operative. 4on-user mem-ers do not have such relevant transactions 'ith the co-operative( thou#h the! ma! -e investors( supporters( or other'ise interested parties. The! are su-.ect to limits on their po'ers( as specified in 2.)( 2.5( $.2 and $.% -elo'. c2 &ach class of share 'ill -e availa-le to particular stakeholders and ma! have distinct ri#hts and po'ers. d2 A person or or#anisation that has mem-ership under more than one class 'ill -e re6uested to 'ithdra'( cancel or transfer shares such that the! have mem-ership in one class onl!. 1f after three months this has not -een done( the secretar! ma! cancel the minimum num-er of shares necessar! in order to ensure compliance. e2 &ach class has a uni6ue num-er( and 'here a person 'ould -e eli#i-le to .oin in more than one class( mem-ership 'ill -e allocated to the lo'est num-ered class that the! are eli#i-le for( unless the -oard of directors rules other'ise. f2 The user mem-ership classes are as follo's/ Class num-er/ 7orkers 1 Suppliers 2 Customers , #2 The non-user mem-ership classes are as follo's/ 1nvestors $ 1.6. pplications for membership a2 The co-operative is open to applications for mem-ership in the appropriate class 'ithout discrimination( su-.ect to a mem-ership polic! a#reed -! the -oard. This polic! 'ill -e made availa-le to current and prospective mem-ers( and 'ill specif!/ i. the responsi-ilities of mem-ership that mem-ers are e8pected to compl! 'ith( ii. the application procedure( 'hich ma! include a reasona-le pro-ationar! period iii. the minimum shareholdin# for mem-ership in each class( 'hich for user mem-ers must -e set at -et'een 1 and %0 shares 9the application procedure ma! allo' deferred or sta#ed purchase of the minimum shareholdin#( provided at least one share is full! paid up2. iv. the transactions 'ith the co-operative that 6ualif! an applicant for mem-ership in each class. -2 All user mem-ers must -e a#ed si8teen or over. The -oard has the ri#ht to refuse mem-ership 'here it -elieves there is #ood reason to do so. 1.!. "hares held by members a2 The ma8imum shareholdin# for an! mem-er that is not an 1ndustrial and +rovident Societ! is :20(0000 if the la' permits a hi#her ma8imum( it ma! -e applied instead of this limit su-.ect to a resolution to that effect -ein# passed at a #eneral meetin#. Transfera-le shares ma! not -e issued -! the -oard unless in accordance 'ith a resolution passed at a #eneral meetin#.

-2 7ithin an! class( shares can -e issued for a special purpose and treated as separate from the main funds of the co-operative. The! ma! have different conditions( and ma! attract a different rate of interest( to other shares in that class. Mem-ers ma! hold -oth special purpose and ordinar! shares( 'ith no distinction -ein# made for the purposes of 6ualification( votin# and limits on total shareholdin#. c2 Shares 9other than those specified in 1.;2 are par shares priced at :1( 'ith no possi-ilit! of e8ceedin# that value. Their value can -e reduced -! the -oard in the event that independent accountants certif! that the co-operative<s lia-ilities( plus issued 'ithdra'a-le share capital( have -ecome more than the value of its assets0 other'ise( shares 'ill -e purchased for their nominal value. 7here shares have -een issued for a special purpose( the lia-ilities and assets 'ill -e calculated for that purpose onl!. d2 Shares ma! -e converted -et'een classes on re6uest at the discretion of the -oard( provided that i. the holder of shares has completed an! process specified in the mem-ership polic! 9referred to in 1.* a2 for the class to 'hich the! are transferrin#( and ii. there is no resultin# increase in the value of the shareholdin#( and iii. the conditions of an! special purpose shares permit it. e2 All issues and transfers of shares are su-.ect to the limits and re#ulations imposed -! la'0 the -oard 'ill o-tain appropriate advice -efore issuin# shares in order to raise capital. f2 1n the event that an! mem-er has a de-t o'in# to the co-operative( the co-operative ma! set off an! sum standin# to the mem-er<s credit includin# an! loan mone!( interest( dividends. 1t ma! also retain shares( preventin# 'ithdra'al or transfer( until the de-t has -een settled. 1.#. $ithdra%al of shares a2 Shares carr! no a-solute ri#hts of 'ithdra'al. The -oard ma! at its sole discretion/ i. repa! a fi8ed proportion 9less than 100=( unless mem-erships are cancelled in accordance 'ith 1.10 -elo'2 of all shares in a class0 ii. allo' the 'ithdra'al of shares in one or more classes on re6uest( su-.ect to 'hatever limits or period of notice the -oard ma! think prudent0 iii. permit no 'ithdra'als 9other than small sums on cancellation( as descri-ed in 1.10 c2 for a fi8ed period of time or disallo' 'ithdra'als indefinitel!. 1f a mem-er 'ishes to 'ithdra' their share capital( the! should notif! the co-operative in 'ritin# that the! 'ould like it to purchase its shares from them( enclosin# the appropriate share certificates. -2 7here 'ithdra'als are permitted( the! must take place in the order that the re6uests 'ere received 9allo'in# for an! period of notice2 and all mem-ers must -e treated impartiall!. c2 Shares ma! -e issued 'ith conditions that further restrict 'ithdra'al( -ut ma! not offer terms that are not permitted under these rules. 1.&. Cancellation of membership a2 Mem-ership of the co-operative 'ill -e cancelled under the follo'in# circumstances/ i. at the discretion of the -oard( if the mem-er is una-le to provide evidence that the! conduct 9or intend to conduct 'ithin a reasona-le timeframe2 the transactions 'ith the co-operative 9referred to in rule 1.* a a-ove2 that ori#inall! 6ualified them for mem-ership0 ii. on receipt of a 'ritten re6uest -! a mem-er 'ith %0 or fe'er shares for the cancellation of their o'n mem-ership0 iii. if( over a period of t'o !ears( reasona-le attempts to communicate 'ith the mem-er 9includin# a 'ritten 'arnin# that mem-ership ma! -e cancelled if no response is received2 elicit no response0 iv. if the mem-er is a corporate -od!( and has -een 'ound up( has #one into li6uidation or has other'ise ceased to function accordin# to its o'n rules0 or v. if the mem-er is e8pelled. The mem-er in 6uestion must -e #iven 'ritten 'arnin#( and sufficient time to prepare an appeal to a #eneral meetin#. An e8pulsion re6uires a )%= vote at a #eneral meetin#( in 'hich neither the mem-er in 6uestion nor an! mem-er of their famil! ma! vote. >ollo'in# such a vote( the e8pelled mem-er ma! not -e readmitted to an! class of mem-ership 'ithout a further resolution at a #eneral meetin#. vi. if the mem-er dies. -2 7hen a person<s mem-ership is cancelled( 'ithdra'a-le share capital 'ith a total value of :%0 or less 'ill -e immediatel! repaid. 1f the sum is lar#er and 'ithdra'al accordin# to 1.5 a-ove is not possi-le( the -oard ma! transfer the shares to another class provided that

the mem-ership polic! 9referred to in 1.* a2 and cancellation polic! 91.10 a2 'ould allo' that person to -ecome a mem-er in that class0 and ii. there 'ill -e no resultin# increase in the value of the shareholdin#0 and iii. the conditions of an! special purpose shares permit it. ?ther'ise( or if the -oard so chooses( the! 'ill convert the shares into loan stock 'ith a closin# date no more than t'o !ears from the date of cancellation e6uivalent in value to the value of the shares at the date of the cancellation of mem-ership. c2 Mem-ers ma! in accordance 'ith the la' nominate an individual or individuals to 'hom the full value of their propert! in the co-operative should -e transferred in the event of the co-operative receivin# proof of the mem-er<s death. 1f there is no nominee( then all propert! held -! a deceased mem-er shall -e transferred to their personal representative upon re6uest. The cooperative 'ill also transfer propert! in the co-operative held -! a -ankrupt mem-er to their trustee in -ankruptc! upon receipt of a valid claim. 1.1'. Re(ister of members A re#ister of mem-ers is kept at the re#istered office( and 'ill include/ a2 the name and address of ever! mem-er0 -2 the num-er and class of shares held -! each mem-er0 c2 an! loans or other propert! held -! mem-ers0 d2 the date on 'hich the mem-er<s name 'as entered on the re#ister( and the date on 'hich the! ceased to -e mem-ers0 e2 the names and addresses of directors and officers of the co-operative( the positions held -! them( and the dates on 'hich those appointments -e#an and ended. 7hile a mem-er shall -e allo'ed at all reasona-le hours to inspect their o'n account( information in 9-2 and 9c2 a-ove 'ill -e kept confidential other than for administrative necessit!.

i.

). Democracy
2.1. The co-operative has a #eneral aim of consultin# 'ith( empo'erin# and servin# its mem-ership. 2.2. The soverei#n -od! of the co-operative is the #eneral meetin#( 'hich 'ill appoint a -oard of directors to mana#e the co-operative( and ma! convene a Common'ealth Council to provide oversi#ht in accordance 'ith rule *.). 2.,. The -usiness of the #eneral meetin# and -oard is #overned -! such standin# orders as ma! -e adopted -! a #eneral meetin#0 these 'ill remain in force until the! are amended or repealed -! a #eneral meetin#. Such standin# orders ma! not contradict these rules -ut ma! allo' for the takin# of a vote 9other than a vote on procedure2 to -e deferred to allo' for the development of consensus. 2.$. 7here shares are held -! an or#anisation 9incorporated or unincorporated2( its ri#hts 'ill -e e8ercised -! a person 'ho is nominated -! that or#anisation in accordance 'ith their rules. That person 'ill cease to do so if for an! reason that nomination is no lon#er sustained -! the mem-er or#anisation. 2.%. The co-operative 'ill have a secretar! and a treasurer. The! ma! -e appointed or replaced -! a #eneral meetin#. 1f a #eneral meetin# does not appoint them( the -oard of directors 'ill do so. ).6. *eneral meetin(s a2 7ithin each class of mem-ership( votin# at #eneral meetin#s is on the -asis of one mem-er( one vote. -2 @eneral meetin#s 'ill -e convened -! the -oard of directors as follo's/ i. Annual @eneral Meetin#s( held 'ithin si8 months of the close of the co-operative<s financial !ear0 ii. at the re6uest of the Common'ealth Council0 iii. at the re6uest in 'ritin# of % or more mem-ers( provided that the! amount to at least 1%= of the mem-ership 9rounded up2( or ,0= of the mem-ership in an! one class 9rounded up20 iv. in the event of the num-er of elected directors fallin# -elo' three( or in the event that more than 2%= of the directors are not user mem-ers0 v. in the event that the -oard fails to secure the appointment of a secretar! and a treasurer0 vi. at an! other time deemed appropriate -! the -oard. c2 All mem-ers( and an! auditor or accountants appointed -! the co-operative( 'ill -e notified of the time and place of the #eneral meetin# in 'ritin# to their re#istered address or 9'here the mem-er has supplied suita-le contact details2 -! electronic communication( no less than fourteen da!s -efore the date of the meetin#. The notice must inform mem-ers/ i. ho' to propose resolutions and stand for election to the -oard0 ii. 'hat resolutions have -een received -! the secretar!. ).!. Resolutions at (eneral meetin(s a2 All mem-ers have the ri#ht to propose resolutions. 1f a resolution is proposed that includes an! of the actions listed in 2.) c and d -elo'( its content must -e provided to the secretar! in time for inclusion in the notice of the #eneral meetin#. ?ther'ise resolutions ma! -e proposed in the course of the meetin#( in accordance 'ith an! standin# orders that are in force. -2 Aotes 'ill -e conducted on a sho' of hands0 at an! point durin# the #eneral meetin#( an! mem-er ma! re6uest that the result of an! vote -e verified 'ith a count. c2 Resolutions re6uire a clear ma.orit! of the vote at the #eneral meetin# to -e in favour to pass( e8cept the follo'in# resolutions re6uire more than )%= support/ i. resolutions to chan#e the conditions attached to shares0 ii. amendments to these rules0 iii. empo'erin# the -oard to allot transfera-le shares 9such resolutions must specif! a period of time after 'hich the! 'ill lapse( and limits to the num-er of shares that ma! -e allotted20 iv. resolutions to 'ind up or dissolve the societ! 9on 'hich onl! user mem-ers ma! vote20 v. e8pulsion of a mem-er in accordance 'ith 1.10 9a2 v. a-ove0 vi. dissolution of the Common'ealth Council. d2 The follo'in# proposals are special resolutions that must -e passed and confirmed in accordance 'ith the la'( and on 'hich onl! user mem-ers ma! vote/ i. amal#amation 'ith( or transfer of en#a#ements to( another societ! re6uires t'o thirds support0 ii. conversion to a compan! re6uires )%= support( 'ith at least %0= of mem-ers castin# votes.

e2 Certain proposals ma!( even if the! fail to achieve a ma.orit!( nonetheless constitute a petition that the co-operative must compl! 'ith if the! achieve the support of one third of the votin# stren#th in a #eneral meetin#. The! are/ i. the -oard to pu-lish its policies re#ardin# social investment of li6uid assets( e6ual opportunities( health and safet! andBor corporate social responsi-ilit!0 ii. the -oard to -e#in the process of convenin# a common'ealth council( in accordance 'ith rule *.). ).#. +otin( by classes a2 1f an! mem-er re6uests that a vote -e counted rather than taken on a sho' of hands( the votes cast -! each class 'ill -e 'ei#hted 9that is( treated as -ein# a #reater or lesser amount2 to ensure that the final proportions of votes cast -! each class of mem-ership are fi8ed as follo's/ Class num-er = share of votin# stren#th 9totalin# 100=2 1 2%= 2 2%= , 2%= $ 2%= Aotes for each class shall -e counted separatel!. Cefore com-inin# them( the votes cast for or a#ainst 9and a-stentions2 shall -e esta-lished as proportions of the availa-le votes in that class. Then the percenta#e share of votin# stren#th allotted to that class( as indicated a-ove( shall -e applied to each. The votes for and a#ainst( alon# 'ith a-stentions( shall -e esta-lished -! a##re#atin# the fi#ures for each in each class. The follo'in# 6ualifications appl! to this rule/ i. if the effect of this rule 'ould -e to #ive a person more than 2%= of the total votin# stren#th in a meetin# attended -! four or more user mem-ers( then for the duration of that meetin# onl! the votin# share for the class to 'hich the! -elon# 'ill -e reduced( and the votin# share of other user mem-er classes increased pro rata. ii. 1f a class has no mem-ers in attendance( the shares of the votin# stren#th for other classes are unaffected. iii. a motion to suspend 'ei#hted votin# ma! -e passed provided it has unanimous support. >ollo'in# such a motion( votes 'ill -e on a simple one mem-er( one vote -asis( su-.ect to the votes of non user mem-ers -ein# capped at no more than 2%= of the overall vote 9appl!in#( if necessar!( the method descri-ed a-ove to achieve this2. iv. An! #eneral meetin# ma! adopt standin# orders specif!in# -lock votin# to -e emplo!ed at that and all future #eneral meetin#s in place of 'ei#hted votin#. This re6uires classes to meet separatel! to decide ho' to cast their -lock vote on each resolution. The siDe of the -lock vote for each class 'ould -e as specified in 2.5 9a2. v. Special resolutions listed in 2.) d should -e voted on 'ithout an! 'ei#htin# of votes( and 'ithout an! participation -! non-user mem-ers. -2 4o amendment ma! -e made to these rules that 'ould allo' non-user mem-ers to have more than 2%= of total votin# stren#th at an! #eneral meetin#( or 'ould cause an! class of user mem-ers to have less than 2%= of the total votin# stren#th. ).&. ,oard of directors a2 The ma8imum num-er of -oard mem-ers is t'elve( and the minimum num-er is three. Casual vacancies ma! -e filled -! co-option. An! directors that have -een co-opted to the -oard 'ill resi#n or stand for election at the ne8t availa-le #eneral meetin#. -2 At all times the -oard must remain independent of outside interests in accordance 'ith rule $.% -elo'. c2 >or so lon# as the num-er of user mem-ers is less than ten( unless a #eneral meetin# resolves to hold elections all user mem-ers 'ill -e automaticall! appointed to the -oard 9thou#h the! ma! decline to accept the appointment2 and 2.; 9d2 'ill not appl!. d2 The first annual #eneral meetin# shall determine 'hether at that and all su-se6uent annual #eneral meetin#s i. all directors 'ill resi#n so that those 'ishin# to continue must seek re-election( or ii. half of the -oard( -ein# those 'ho have served lon#est( 'ill resi#n( or iii. a third of the -oard( -ein# those 'ho have served lon#est( 'ill resi#n. This decision ma! -e altered -! resolution at an! #eneral meetin#.

Resolutions to elect each candidate 'ill -e voted on in turn until there are no vacancies remainin#. The order in 'hich candidates are voted on ma! -e determined -! standin# orders0 if not( candidates that have served lon#est on the -oard 'ill -e first. 1f some candidates have served for an e6ual len#th of time( those that have -een mem-ers lon#est 'ill -e first. e2 All mem-ers have the ri#ht to stand as candidates( su-.ect to an! reasona-le nomination procedure specified in standin# orders. 4o one can serve on the -oard if the!/ i. have resi#ned in 'ritin# to the secretar!0 ii. are not a mem-er( or the nominated representative of a mem-er or#anisation0 iii. are removed from office -! a resolution passed -! a #eneral meetin#0 iv. fail to attend three consecutive meetin#s 'ithout ade6uate e8planation0 v. commit fraud( or an! act of financial impropriet!( or failed to disclose 'hen standin# for election an! previous offence of this t!pe( or contravene rule $.%0 vi. are an undischar#ed -ankrupt or other'ise prohi-ited -! la' from actin# as a director of a compan! or societ!. f2 The -oard ma! also appoint other officers in addition to the Secretar! and Treasurer( and form su-committees( as it sees fit( and in accordance 'ith an! standin# orders. ?fficers shall have the po'ers and duties specified -! la' and -! the -oard( and ma! -e removed -! the -oard. The -oard ma! also convene consultative committees composed of mem-ers of the co-operative( 'hich ma! -e elected or unelected( for an! purpose. #2 irectors and officers ma! -e reim-ursed for an! e8penses incurred in the course of carr!in# out their duties. irectors ma! receive an attendance allo'ance and ma! -e paid 'a#es( -ut onl! for services actuall! performed for the co-operative( and in accordance 'ith a pa! polic! su-mitted to the ne8t availa-le #eneral meetin# for approval. ).1'. -uorum a2 4o -usiness 'ill -e transacted at an! #eneral meetin# unless a 6uorum is present. A 6uorum is present if/ i. there are three or more user mem-ers present0 and ii. there are t'o mem-ers present from an! class in 'hich there are more than ten mem-ers0 and iii. there are five mem-ers present from an! class in 'hich there are more than fift! mem-ers. -2 A 6uorum is present at a -oard meetin# if three directors are present. c2 1f standin# orders permit( a mem-er ma! -e considered present if the! are participatin# throu#h a live electronic link.

..

pplication of /rofits

,.1. The co-operative has the #eneral aims of creatin# common 'ealth( -uildin# an indivisi-le reserve and providin# a return on investment no more than is necessar! to attract and retain the capital it re6uires. ,.2. The co-operative ma! -orro' up to a ma8imum of :10(000(000 and ma! issue de-t securities provided that this does not amount to receivin# mone! on deposit. An! interest paid on share capital held -! user mem-ers( or on funds -orro'ed from user mem-ers 'ill not e8ceed the hi#hest rate for fi8ed term -usiness lendin# pu-lished -! the Co-operative Cank. 1n keepin# 'ith co-operative accountin# practice( interest on share capital is considered a -usiness e8pense and is not included in profits. ,.,. The co-operative 'ill not normall! transfer assets for less than full consideration( e8cept for the purposes specified in ,.$ -elo'. This rule does not prevent the -oard a2 settin# varia-le rates of interest pa!a-le on user and and non-user share capital accordin# to the tradin# performance of the co-operative( provided that this is consistent 'ith ,.1 and ,.2 a-ove0 -2 pa!in# -onuses( incentives and other re'ards to mem-ers and emplo!ees( provided that this is in pursuit of the co-operative<s mission in para#raph 1.,. Some interest and dividend pa!ments 'ill -e <ke! decisions< re6uirin# the process specified in rule $.). ..0. pplication of annual profits +rofits of the co-operative 'ill -e applied at the discretion of the committee( su-.ect to the rules for ke! decisions in para#raph $.) and the follo'in# process/ a2 co-operative dividend pa!ments that are specified in contracts of emplo!ment 'ill -e paid to emplo!ees in proportion to 'orkin# hours0 -2 at least 20= of remainin# profits 'ill -e transferred to a #eneral reserve for the continuation and development of the co-operative( or used to support the 'ork of secondar! co-operatives or federal -odies of 'hich the co-operative is a mem-er( or used to make pa!ments for social or charita-le purposes consistent 'ith the mission in para#raph 1., of these rules0 c2 the remainder 'ill -e used to pa! co-operative dividends to user mem-ers( on the -asis of an e6uita-le polic! that reco#nises each mem-er3s contri-ution to the co-operative3s -usiness durin# the period in 'hich the profit 'as #enerated and 'hich ma! make allo'ance for such relevant factors as len#th of mem-ership0 or to make pa!ments for social or charita-le purposes consistent 'ith the mission in para#raph 1., of these rules. ..5. Division on dissolution 1n the event of the 'indin# up or dissolution of the co-operative the assets of the co-operative 'ill first( accordin# to la'( -e used to satisf! its de-ts and lia-ilities 9includin# the pa!ment of interest on share capital2. 1n the event that an! assets remain to -e disposed of after its lia-ilities are satisfied( holders of 'ithdra'a-le and transfera-le shares 'ill receive the par value of the shares if sufficient funds are availa-le( and in proportion to their holdin# if not. The remainin# assets 'ill -e transferred to a common o'nership enterprise9s2( or to an asset locked or#anisation9s2 supportin# common o'nership enterprises or other o-.ects of the co-operative( as ma! -e nominated -! the mem-ers at the time of or prior to the dissolution. 1f no such or#anisation is nominated( the assets 'ill -e transferred to Co-operatives UE "td 9re#istered num-er 2)5,R2. 1n the event that for 'hatever reason an! residual assets cannot -e transferred as descri-ed a-ove( the! 'ill -e #iven for charita-le purposes. 4o amendment to these rules 'ill -e made that could reduce the amount of assets transferred( or allo' for their transfer to an or#anisation 'ith no asset lock.

0.

utonomy and independence

$.1. The co-operative has the #eneral aims of maintainin# its autonom! and independence and empo'erin# mem-ers and other stakeholders at the most local level possi-le. $.2. 4on-user mem-ers ma! not vote on an! proposal to convert the co-operative to a compan!. $.,. 7ithdra'a-le shares or de-t securities 'ill not -e issued( or loans received( if it 'ould result in one natural person holdin# more than a 6uarter of all 'ithdra'a-le share capital( or of all de-ts0 or if it 'ould e8ceed the limits specified in 1.) 9a2. $.$. +ro8! votin# at #eneral meetin#s 'ill -e permitted on special resolutions and on other resolutions that have -een #iven in full 'ith the notice for the #eneral meetin#( provided that it is in accordance 'ith standin# orders for #eneral meetin#s. 0.5. Outside interests on the board of directors a2 1f( follo'in# a #eneral meetin#( the num-er of directors is less than the ma8imum( other mem-ers ma! -e co-opted -! the -oard to fill vacancies. 4o one ma! -e elected or co-opted to the -oard if doin# so 'ould result in user mem-ers formin# less than )%= of the -oard. -2 All directors 'ill( on takin# office( indicate in a re#ister of interests an! material interests the! have( or positions that the! hold in other or#anisations( that mi#ht cause conflict 'ith the o-.ects of the co-operative. All directors 'ill declare an! such conflict of interest that the! have in respect of an! -usiness -efore the -oard and 'ill 'ithdra' from votes in respect of that matter unless i. so man! directors are conflicted on an issue that the -oard 'ould not -e 6uorate( or ii. the Common'ealth Council determines that the interest 'ill not lead to si#nificant conflict. $.*. The -oard of directors 'ill re#ularl! revie' all contracts and undertakin#s to ensure that the cooperative continues to -e controlled -! its mem-ership. 0.!. 1ey decisions a2 The -oard of directors( on -ehalf of the co-operative( ma! make an! contract( and carr! on an! activit!( that is 'ithin the la' and in the opinion of the -oard( ma! -enefit the co-operative<s o-.ects( includin# the contractin# of loans and de-t securities and the investment of funds. Fo'ever( the follo'in# issues are desi#nated <ke! decisions</ i. the sale( transfer or disposal of assets 'orth in e8cess of :100(000 to the same -u!er0 ii. a mort#a#e or char#e on its propert! 'ith a value in e8cess of :100(0000 or -orro'in# that 'ould have the effect of increasin# the de-tBe6uit! ratio of the co-operative -! more than %0=. iii. issuin# loanstock( de-entures or other securities 'ith a value of more than :%0(0000 iv. settin# up or investin# in corporate -odies in 'hich the co-operative 'ill have more than %0= of the value or votin# stren#th of the share capital0 v. remuneration of emplo!ees( 'here the pa! differential 'ithin the co-operative e8ceeds ,/10 vi. an! pa!ment of co-operative dividend to user mem-ers other than one made to emplo!ees in accordance 'ith their contract of emplo!ment0 vii. compulsor! redundancies0 viii. an! pa!ment of interest on share capital that is more than ,= a-ove or -elo' inflation. Such pa!ments are also su-.ect to the limit specified in rule ,.2. -2 An! ke! decision that is authorised -! a resolution at a #eneral meetin# ma! -e implemented immediatel! 'ithout further consultation. 1f no such resolution is passed( then i. 1f a Common'ealth Council 9see *.) -elo'2 has -een convened( ke! decisions must -e -rou#ht to its attention no less than t'o 'eeks -efore the! come into effect0 and if a ma.orit! of the Common'ealth Council re6uest further consultation( the proposal ma! not -e enacted until the -oard and the Common'ealth Council -oth have a ma.orit! in favour. ii. 1f a Common'ealth Council has not -een convened( or at its re6uest( notice of the ke! decision 'ill -e -rou#ht to the attention of the mem-ership -! means of a pu-lic notice( electronic communication or other communication likel! to -e received -! most mem-ers in sufficient time for a #eneral meetin# to -e called -! the mem-ers 9in accordance 'ith 2.* -2 -efore the decision comes into effect.

0.#. pproved nominees a2 The -oard can desi#nate an individual or incorporated or#anisation as an <Approved 4ominee< 'ho can appl! for mem-ership on -ehalf of others as 'ell as on their o'n -ehalf. 7hen appl!in# on -ehalf of others( the approved nominee must full! identif! those persons and the value of the shares that the! are appl!in# for. 2Rules 0.# b 3 f do not have effect unless an approved nominee is appointed in accordance %ith 0.# a4 b) The board i!! consider a!! app!ications made through an approved nominee in the same ay as specified in 1"# above$ and i!! not unreasonab!y refuse to accept them" c) The board can at any time ithdra the status of approved nominee if it is satisfied that the nominee is not behaving in an honest$ transparent and responsib!e manner to ards either the members they nominate or the co-operative" The nominee must inform prospective members that they intend to represent of any circumstances under hich they might not act on the members% instructions& and ho $ if at a!!$ they can end representation by the approved nominee" d) The register of members i!! record the name of the approved nominee a!ongside the detai!s of any member they represent$ and in genera! a!! communication$ inc!uding communications re'uired by these ru!es$ i!! be conducted through the nominee" e) The first time that the board appoints an approved nominee$ they must adopt standing orders for pro(y votes at genera! meetings that a!!o the approved nominee to vote on beha!f of the members they represent by defau!t" )o ever$ members represented by an approved nominee can participate in person instead if they so choose" *o approved nominee can contro! more than +, of user member voting strength in a genera! meeting$ nor can a!! approved nominees together contro! more than 2+, of user member voting strength" f2 Any payments that are due from the co-operative re!ating to shares associated ith an approved nominee i!! be made to the approved nominee" Any communication from an approved nominee i!! be treated as if it ere made by the ho!der of the shares to hich it re!ates" 0.&. Limitation on po%ers >or the avoidance of dou-t the societ! shall not en#a#e in an! activit! -! virtue of an! of these rules that 'ould re6uire a permission from the >inancial Services Authorit! 9or an! -od! that succeeds its function2 to carr! on that activit! 'ithout first havin# applied for and o-tained such permission.

5. 5ducation and information

%.1. The co-operative has a #eneral aim of educatin# its mem-ers and emplo!ees 9particularl! in principles of co-operation( mana#in# the co-op and fulfillin# their role in the co-op2 and of supportin# education in the 'ider communit! 9particularl! in the principles of co-operation2. 5.). /ublic identity a2 1f the tradin# name does not include the 'ord <co-operative< then the co-operative 'ill clearl! identif! itself as either a co-operative( democratic social enterprise( or communit! enterprise in all its official pu-lications. -2 At least once a !ear( the co-operative 'ill provide at least one communication to its mem-ers that either lists the co-operative principles( profiles other co-operative -odies( or advises mem-ers ho' the! can -ecome more involved in one or more other co-operatives. 5... /rovision of information a2 A cop! of these rules( and an! amendments made to them( 'ill -e #iven free of char#e to ever! mem-er on admission or on re6uest. The -oard 'ill accommodate an! reasona-le re6uest to e8plain or clarif! the meanin# of the rules( and .ustif! its interpretation of them. -2 The follo'in# information 'ill -e recorded( retained and made availa-le at no char#e to mem-ers i. a#endas and minutes0 ii. 6uarterl! mana#ement accounts 9unless the annual turnover of the co-operative is -elo' :10(00020 iii. annual returns and an! other documents su-mitted to the >inancial Services Authorit! 9or an! -od! that succeeds its function20 iv. .o- descriptions and contracts of emplo!ment of staff emplo!ed0 v. documents relatin# to the mem-er makin# the re6uest. c2 4o information 'ill -e provided to a mem-er or an! other person( or made availa-le for #eneral vie'in#( that 'ould disclose details of the financial transactions of another mem-er 'ith the cooperative( other than 'ith their permission. 1f the -oard refuses a re6uest for information( it must e8plain 'hat reason it has for 'ithholdin# the information. 5.0. /resentation of accounts a2 urin# each financial !ear( the co-operative 'ill appoint a person 6ualified to the standard re6uired -! la' 'ho is neither a mem-er nor an emplo!ee of the co-operative to audit the Cooperative<s accounts and -alance sheet for the !ear. -2 The -oard 'ill appoint such a person 'henever a vacanc! arises( and the appointment 'ill -e confirmed at the ne8t availa-le #eneral meetin#( and at ever! annual #eneral meetin#. c2 1f the la' permits the co-operative to -e e8empted from the o-li#ation to appoint a 6ualified auditor( the #eneral meetin# 'ill consider a resolution to appl! the e8emption each !ear. Such a resolution 'ill -e passed onl! if 50= of votes are in favour( and less than 10= a#ainst. d2 1f the accounts( an! social accounts as specified in ).2( and an! accompan!in# report from the auditor or social reportin# panel are not availa-le at an annual #eneral meetin#( or the! are not accepted -! a #eneral meetin#( another #eneral meetin# 'ill -e called 'ithin t'o months to consider them. 5.5. nnual Return &ver! !ear( and in accordance 'ith the re6uirements of the la'( the Secretar! 'ill send the annual return relatin# to the societ!<s affairs for the re6uired period to the >inancial Services Authorit! 9or an! -od! that succeeds its function2( to#ether 'ith i. a cop! of an! auditor<s report for that period that ma! -e re6uired -! la'0 ii. a cop! of each -alance sheet made durin# that period.

6. 6he %ider co-operative movement

*.1. The co-operative has the #eneral aim of supportin# the development and #ro'th of the cooperative movement. *.2. 1n preparin# contracts for the purchase of #oods and services lar#er than :1(000( the -oard of directors should ensure that other co-operative enterprises are #iven a reasona-le opportunit! to -id alon#side other potential suppliers. *.,. 1f the li6uid assets and investments of the co-operative e8ceed :10(000( the -oard of directors 'ill prepare a polic! on social investment( 'hich includes a process for identif!in# and considerin# investment in other co-operatives( and ethical criteria for all investments relevant to the o-.ects of the co-operative. *.$. The -oard of directors has the po'er to make an! investments it considers prudent( su-.ect to an! polic! on investments that ma! -e in force. *.%. A desi#nated person should have overall responsi-ilit! for relations 'ith the 'ider co-operative movement( and should maintain contacts 'ith national and re#ional co-operative or#anisations. *.*. 4o a#reement 'ill -e entered into 'ith an! enterprise( co-operative or other'ise( that 'ould have the effect of e8ploitin# a monopol! or other dominant market position to the detriment of mem-ers( customers or suppliers. 6.!. 6he Common%ealth Council a2 The Common'ealth Council is an oversi#ht -od! that does not operate immediatel! follo'in# incorporation( -ut 'hich can -e activated at a later date( for e8ample if the co-operative has -ecome lar#er and more comple80 pla!s an important role in the co-operative sector locall!0 is facin# divisive or controversial decisions0 or 'ishes to offer an additional voice to minorit! #roups or classes 'ithin the mem-ership. The Common'ealth Council ma! -e convened -! the -oard of directors at an! time( or -! a resolution of the mem-ers at a #eneral meetin#( or follo'in# a petition of the mem-ers in accordance 'ith clause 2.) 9e2 ii. 2Rules 6.! b 3 f do not apply unless enabled in accordance %ith 6.! a4 b) The Common ea!th counci! i!! be free to consider any matter affecting the co-operative$ may pub!ish its vie s on any matter$ and may summon any emp!oyee or officer of the co-operative to attend their meetings and ans er 'uestions re!ating to the business of the co-operative" -t can be disso!ved on!y by a reso!ution at a .enera! /eeting carried ith more than 0+, of votes" c) The si1e and procedures of the Common ea!th Counci! i!! be determined by its standing orders$ hich i!! be prepared by the board of directors" -t must have no fe er than four members" d) -nvitations to app!y for membership i!! norma!!y be pub!icised among the fo!!o ing sta2eho!ders$ un!ess they are specifica!!y e(c!uded by the board of directors3 i" Those e!igib!e for membership under 1"+ 4f) and 1"+ 4g)& ii" 5mp!oyees$ vo!unteers$ service users$ !oca! residents$ significant supp!iers and customers$ and investors$ that ou!d not norma!!y be e!igib!e for membership& iii" Anyone ho as previous!y a member of the co-operative ithin the !ast five years& and iv" Any co-operative that may be considered re!evant due to geography$ simi!arity$ common membership or trading re!ationship& e) -f at any time fo!!o ing such invitations fe er than eight peop!e e(press i!!ingness to serve on the Common ea!th Counci!$ or if a!! but three candidates come from a sing!e one of the categories !isted in #"0 4d)$ the board may suspend it unti! the ne(t .enera! /eeting due to !ac2 of interest" App!ications for membership i!! be considered according to the standing orders in force$ sub6ect to the re'uirements that i" the process of se!ection for membership of the Common ea!th Counci! shou!d be impartia!$ fair$ transparent$ and non-discriminatory& and ii" members of any one of the four categories !isted in #"0 4d) shou!d not have a ma6ority of votes on the Counci!$ and no more than one person may sit on both Counci! and Board" f) /embers of the co-operative engaged in a dispute re!ating to the co-operative may re'uest the Common ea!th Counci! to mediate bet een them and sha!! do so before e!evating any such dispute to the board or to the membership as a ho!e"

!. "ustainable development
).1. The co-operative has the #eneral aim of evaluatin# its impact on the communit! and the environment in 'hich it operates( and developin# policies that reduce harmful impacts and increase positive impacts. !.). "ocial accounts a2 The -oard of directors is responsi-le for preparin# annual social accounts. These 'ill consist of 6uantitative and 6ualitative data relatin# to the a#reed indicators of achievement. The! should cover( and clearl! distin#uish -et'een( outputs 9'hat the co-operative has done2( outcomes 9'hat the direct effects of this have -een2 and impacts 9'hat indirect chan#es can -e reasona-l! attri-uted to the co-operative<s activities in this and previous !ears2. -2 The indicators used should clearl! correspond to the aims and o-.ects in these rules( and should allo' 'here possi-le for comparison 'ith other accountin# periods. !... "ocial accountin( panel a2 At least one month -efore -ein# presented to the annual #eneral meetin#( the social accounts 'ill -e verified -! a social accountin# panel 'hich 'ill consider i. to 'hat e8tent the accounts are comprehensive0 ii. 'hether the information #athered is relia-le and reasona-l! interpreted0 iii. 'hether the indicators used should -e chan#ed in order to -etter correspond to the aims and o-.ects of the co-operative0 iv. 'hether the aims and o-.ects of the co-operative remain relevant or re6uire modification. -2 The panel should -e chaired -! an independent( 6ualified social auditor( unless a #eneral meetin# allo's for the current or follo'in# !ear<s social audit panel to -e i. chaired -! a la! social auditor( or ii. chaired -! a mem-er of the co-operative( in 'hich case the chair of the panel ma! not -e a -oard mem-er( unless more than half the mem-ers of the co-operative are directors. c2 The panel 'ill -e made up of mem-ers of the co-operative approved -! the -oard and common'ealth council 9if it is active2. 1f the mem-ership of the co-operative is more than 20( there 'ill -e at least three mem-ers of the panel in addition to the chair.

Si#natures of founder mem-ers/

>ull names in -lock capitals/

Secretar!/

Accepted as a model -! the >inancial Services Authorit! 2012

Somerset Co-operative Services C1C

This document is licensed under the Attri-ution-ShareAlike 2.0 UE/ &n#land G 7ales license( availa-le at http/BBcreativecommons.or#BlicensesB-!-saB2.0BukB