When did the new Act come into force?
The Co-operative and Community Benefit Societies Act 2014 came into force on 1 August 2014. It affects existing societies and changes how new societies are registered.
We are an existing society registered under the Industrial and Provident Societies Act 1965. Do we need to amend our rules?
There is no requirement to amend the rules. However, you may wish to do so if the rules refer to the previous legislation. For many existing societies, the 2014 Act presents an opportunity to review current rules to check whether they are still fit for purpose and/or take advantage of some of the changes that have been implemented in 2014. Contact [email protected] for details on how Co-operatives UK can assist with updating your society’s rules. We also offer governance training and can undertake a governance review.
We want to take advantage on the new share capital limits. Do we need to amend our rules?
Before April 6 2014, an individual could subscribe up to a limit of £20,000 in withdrawable share capital. This has now been increased to £100,000. Although the legislation has changed, societies must comply with their own rules. If the rules state that ‘members can hold withdrawable shares up to a statutory limit’ then this rule is flexible enough to enable individual members to hold £100,000 in withdrawable share capital. If a specific shareholding is referenced in the rules, this limit will stand and the society will need to carry out a rule amendment to change this limit. The amount that can be invested in non-withdrawable shares is unlimited. Co-operatives UK can assist with a rules review.
We are an existing society registered under the Industrial and Provident Societies Act 1965 and want to amend our rules to operate as a co-operative or community benefit society. How do we do this?
An existing society can decide to become a bona fide co-operative or a community benefit society. This can be achieved by amending society rules in accordance with its rulebook and filing this change with the FCA. Once a society has amended its rules in this way it cannot revert back. The society still retains its registration number. However, if the existing society has the word ‘co-operative’ in its registered name and makes the decision to change to operate as a community benefit society, it is likely that the FCA will require the word ‘co-operative’ to be removed from the society name. Co-operatives UK can assist with an amendment of rules.
We are an existing society and want to be registered under the new Act as a co-operative society. Is this possible?
Yes. However, it is likely that this change cannot be achieved by a simple rule amendment and it will be necessary to (a) register a new co-operative society with the FCA under the new Act; and (b) transfer engagements from the existing society to the new co-operative society. Once the transfer is complete, the co-operative society will operate under a new registration number.
We are an existing society and promote ourselves as a co-operative. Are there any disadvantages to remaining as a ‘registered society’ rather than re-registering as a ‘co-operative society’ under the new Act?
No. The new Act applies to ‘registered societies’, ‘co-operative societies’ and ‘community benefit societies’, regardless of the type of society. If you think there is added value in marketing the society as a co-operative you may consider registering a new society as a ‘co-operative society’.
We are an existing society with the word ‘co-operative’ in our name. Do we have to change our name?
There is no requirement to amend the society’s name and it can still promote itself as a co-operative. However, you must clearly state on business stationery and anywhere it would refer to being registered under the new Act that it is a ‘registered society’ - not a ‘co-operative society.’
We are an existing society and our rules refer to our society as a cooperative. Can we still refer to our society as a co-operative?
Yes, you can continue to promote the society as a co-operative, provided that you can demonstrate, if necessary, that the society is a bona fide co-operative. However, as a registered society, any business stationery, such as letter headed paper, invoices etc should not refer to the society as a ‘co-operative society’ but as a ‘registered society’ under the Co-operative and Community Benefit Society’s Act 2014.
Do we need to tell anyone that our existing society is subject to new legislation?
The new Act is a consolidation of previous industrial and provident society law, so provided that the society refers to itself accurately under the new Act and amends any reference to the previous law on business materials (eg) letterheads, there is no legal requirement to tell anyone that the society is subject to a new Act. However, you may wish to inform the society’s advisors. For example, the society’ s accounts and auditors will need to be aware that any accounts prepared or audit carried out for the society post 1 August 2014 will be subject to the requirements under Part 7 of the new Act.
We are a co-operative, registered as a limited company. Does the Act affect our society?
No, the Act only affects existing societies registered before 1 August 2014 and new organisations that wish to register as a co-operative or a community benefit society after 1 August 2014.
Definitions used in these FAQs:
‘Existing societies’ means those societies registered prior to 1 August 2014, predominately under the Industrial & Provident Societies Act 1965.
‘New societies’ means those societies registered after 1 August 2014 under the Co-operative and Community Benefit Societies Act 2014, as either a co-operative society or a community benefit society.