The Government has approved the drafting of a bill aimed at modernising the rules governing co-operative societies (co-ops), and making them more attractive to investors.
Co-ops are set up to serve the interests of their members, and are organised on the basis of principles, such as “democratic member control” (one member, one vote).
The Co-operative Societies Bill would require registered societies to adhere to the co-operative ethos, and would also make it easier to set up a co-op. It would be the first piece of legislation to deals specifically with co-ops.
According to the Department of Enterprise, Trade and Employment, the bill “consolidates and modernises” existing provisions, and introduces modern corporate governance, financial reporting, and compliance requirements.
The general scheme of the bill includes proposals to:
- Reduce the minimum number of founding members of a co-op from seven to three,
- Expand the categories of founding members to include bodies corporate,
- Provide for audit exemptions for smaller co-ops,
- Provide for virtual and hybrid participation at general meetings,
- Providing co-ops with the flexibility to reflect in their rules what best suits their own particular circumstances.
“Co-operatives differ from companies in that they serve the interest of their members – who are often their suppliers, staff or customers – rather than shareholders. It’s a model that can work particularly well for social enterprises,” said Leo Varadkar (Tánaiste and Minister for Enterprise, Trade and Employment).
He added, however, that the law governing co-ops had not kept up with the times.
Dara Calleary (Minister of State for Trade Promotion, Digital and Company Regulation) said that he was conscious of the diverse nature of the sector, and was committed to ensuring that the proposed legislation would provide as much flexibility as possible.
At the moment, entities who wish to follow the co-operative model often register as ‘industrial’, and reflect their co-op ethos in their rules. Others register as companies, operating