Ireland’s government has agreed to start work on the drafting of a new Co-operative Societies Bill, which would aid investment in the sector and enforce the co-op ethos.
Announcing the bill, the government said its general scheme provides for a specific legislative framework for co-operative societies for the first time, with societies registering under the legislation being required to adhere to the co-operative ethos.
Ministers also hope to consolidate and modernise existing provisions and introduce modern corporate governance, financial reporting and compliance requirements, thereby making co-operatives more attractive to investors.
The general scheme also includes provisions to:
- make it easier to set-up and operate a co-op – for example, by reducing the minimum number of founding members (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
- empower co-ops by providing them with the flexibility to reflect in their rules what best suits their own particular circumstances
Leo Varadkar, tánaiste and minister for enterprise, trade and employment, said: “Many successful co-operatives have operated in Ireland down the years including agricultural co-ops and mutual building societies. 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. However, the law governing co-operatives has not kept up with the times. This new law changes all that, responds to the needs of the co-operative movement and opens a path for a new wave of co-operative societies. This is a very substantial legislative initiative and I am committed to bringing this new law into operation at the earliest date, thereby fulfilling another major commitment of this government.”
Dara Calleary, minister for trade promotion, digital and company regulation, said: “I am conscious of the proud history of the co-operative sector since the 1880s and the invaluable role it has played in this country. I want to build on this important legacy and provide a modern legal framework to help the sector grow.
“I am particularly mindful of the diverse nature of the co-operative sector, ranging from the sophisticated and very large to the very small and localised; from those with a successful commercial focus to others with a focus on community, culture and social enterprise; those comprised of producer, consumer, retail or worker members and those who provide services to members in areas such as advice, education, housing, water supply. As a result, I am committed to ensuring that the proposed legislation will provide as much flexibility as possible, thereby empowering individual co-operative societies to reflect in their rules what best suits their own particular circumstances.”
He added: “The legislation will introduce a modern legal framework which will place the co-operative model on a more favourable and clear legal basis. It will create a level playing field with the situation applying to companies and encourage the consideration of the co-operative model as an attractive formation option for entrepreneurs and also for social and community activities.”