Co-operatives UK is delighted to announce that a long awaited Legislative Reform Order was formally accepted in Parliament on Tuesday 8 November – a reform that will make it easier for co-operatives to run their businesses.
The simplifications in the Legislative Reform Order (LRO), which help put co-operatives on a more equal footing with other forms of business, has been a central campaign for Co-operatives UK and the co-operative sector since 2002.
Helen Barber, Head of Legal Services at Co-operatives UK, comments: "This is a significant change for co-operative businesses, helping to ensure that co-operatives are treated equally to other models of business.
"Co-operatives UK and the wider sector has been working with its members and the Treasury to put this into effect for many years, so this Reform Order represents a significant victory."
A Legislative Reform Order (LRO) is a legal procedure that government can use to remove or reduce burdens resulting from legislation. This LRO applies specifically to Industrial and Provident Societies and credit unions, making changes in three key areas:
Age Limits. The LRO allows people 16 and under to become members of co-operatives and those 16 and over to stand for committees or boards;
Share Capital. The £20,000 limit on share capital will now apply only to withdrawable shares; there will no longer be a limit on non-withdrawable, i.e. transferable, shares;
Interim Accounts. The LRO allows societies to publish un-audited interim accounts provided they are clearly identified and published alongside the most recent audited accounts. This is a change that will save co-operative businesses thousands of pounds in expense.
Credit unions will also benefit from the LRO - they will be able to admit corporate members and attract more individual members from a wider geographical area.
Mark Lyonette, Chief Executive of the Association of British Credit Unions, said: "Credit unions in the UK are delighted that legislative reforms have been agreed by parliament, freeing the sector to compete on a more level playing field.
"Abcul has campaigned long and hard for these changes, so we’re happy that credit unions will be able to use the new powers from the new year."
The LRO is expected to come into effect on 8 January 2012.