Governance and legal updates for co-ops

Key governance and legal issues that have changed for societies over the past year

Attendees at last month’s Co-operatives UK Practitioners Forum heard from Anthony Collins Solicitors’s David Alcock for an update on the key governance and legal issues that have changed over the past year. 

Changes co-ops need to be aware of include the requirements of the Financial Conduct Authority (FCA) for co-ops and Community Benefit Societies (CBSs), which were updated on 10t November, taking into account the circumstances of the pandemic.

Late submission of annual returns and accounts
In April this year, the FCA said that for annual returns and accounts that were due by 31 October, no action would be taken on accounts filed less than three months late. This remains the case, meaning that co-ops and CBSs experiencing delays in filing their returns on time this year will have until January to submit if needed. 

Statutory declarations
The FCA’s requirement for statutory declarations, usually provided by a solicitor to accompany certain paperwork such as applications and rule amendments, was suspended last year due to the pandemic. The FCA will be requiring statutory declarations again from 13 December this year, but highlighted that electronic submissions, including electronic signatures, are allowed and encouraged.

Virtual meetings
Last year, the FCA allowed societies to meet virtually without their rules being changed to allow for this, due to the lockdowns requiring groups to meet online at short notice. These permissions ended on 30 March this year. The FCA’s position on this is now that “societies are expected to comply with any legal requirement or requirements under your own rules for holding meetings,” meaning that co-ops and CBSs whose rules don’t allow for virtual meetings, will now need to address this in their rules in order to continue holding meetings online. Mr Alcock also made the point that societies’ rules which do not address the question of virtual versus in-person meetings at all would be likely to be interpreted as meetings needing to be in-person as default, so an explicit reference to virtual meetings is advised for groups wanting to continue meeting online. 

A poll was held in the online session to find out how attendees expected their members’ meeting to be run in future, with 63% of participants saying they plan to use a hybrid approach of both online and offline meetings in future, and 22% saying they expect to hold most of their meetings online.

Mr Alcock said that this response accords with what his clients have been telling him, and said this is “a massive change for all of us in terms of the practice of meetings and making decisions”.

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