Can an Ontario co-operative raise capital by issuing investment shares to non-members?

Ontario's co-operative structure generally allows a co-operative to issue investment shares as a way to raise capital, separate from membership shares, and depending on the co-operative's bylaws this can extend to investors who aren't otherwise members using the co-op's services. Investment shares typically carry an economic return, such as a fixed or variable dividend, but generally don't carry the same one-member-one-vote governance rights that membership itself provides, since control of the co-operative is meant to stay with its actual members.

This distinction between membership shares (tied to using and controlling the co-op) and investment shares (a capital investment with limited or no voting rights) is one of the more flexible tools co-operatives have for raising money without diluting member control the way issuing more voting shares would in a regular corporation. Whether and how a specific co-operative can issue investment shares to non-members, and what securities or disclosure rules might apply to that offering, depends on the co-operative's bylaws and the applicable regulatory requirements for the specific offering. Get legal advice before structuring an investment-share offering to make sure it's done correctly.