A ‘legal form’ is the type of entity that an organisation is considered to be in the eyes of the law, for example, a company limited by guarantee or a society. It is really important to make sure that you choose the most suitable legal form for your co-operative as it can have an impact on the sustainability and future direction of your organisation.
In the UK there is no 'Co-operatives' Act' and any organisation wanting to register as a co-operative will need to choose a separate legal form to underpin the governance of the co-operative. Depending on the legal form chosen, it may be necessary to incorporate. The governing document of the chosen legal form is what makes an organisation a co-operative as it will include reference to the ICA Co-operative Values & Principles.
Legal form should not be confused with 'organisational type'. An organisational type defines what type of business or activity an organisation undertakes (such as a community shop) or the sector it operates in (such as a co-operative) but it would be recognised as such in the eyes of the law.
For more information on the legal forms available for co-operatives, see our Simply Legal guide.