The sale of shares and other securities (like debentures) is dictated by the Co-operative Corporations Act. Co-operatives raise capital for their development and operations by offering to sell securities to members and non-members. Securities include both shares issued by the co-operative and loans made to the co-operative as well as other instruments like bonds or debentures.

Where an exemption from offering statements requirements is available, a co-operative can raise funds from the sale of securities free of regulation (i.e. no submission to the Financial Services Commission of Ontario (FSCO) is required, though proper documentation must still be provided to investors to provide necessary information and reduce future liability to the co-operative). Exemptions do exist.

If a co-operative wishes to raise money through the issuance of securities, and does not meet the very specific exemptions contained in the Act, it must issue an “Offering Statement” which is similar to a prospectus offered by a business corporation that is offering shares. An offering statement must be prepared and delivered to each prospective purchaser before they purchase securities. It must be submitted to FSCO prior to being given to any prospective investor. If FSCO approves the document, it will then issue a receipt for it, and that receipt is required before the co-operative may begin selling securities.

Learn more about Using Offering Statements to Raise Capital, or refer to the Guide to the Act section on Offering Statements.