Cooperatives Law

What is a Cooperative?

Una cooperative refers to an autonomous association constituted by a group of people united voluntarily with the purpose of forming an organization with variable capital, democratic structure and management, where the people who make it up have common interests or socio-economic needs and who also carry out business activities at the service of the community, generating economic results for the partners, once the respective community funds have been taken care of.

In a cooperative, all members have the same rights, as well as the same responsibilities in the future of society. For this reason, the property is shared between all the partners, but it is not inheritable or transferable, unless one partner decides to withdraw and instead between another. Each member has the freedom to make decisions individually within the cooperative, however, the responsibility is taken collectively, although limited, this means that it should not affect the personal assets of each member in the event of a bankruptcy process.

Each cooperative establishes the statutes to follow and the minimum capital that each member must contribute. As it is a democratic management, all partners have the same weight regardless of their contributions. In addition, a cooperative is a society that has social, tax, labor and accounting obligations, just like any company seeks to obtain benefits and whose difference lies in the organization.

How is a Cooperative Society organized?

In principle, cooperatives are societies that are formed by groups of people who decide of their own free will and free membership in the terms described above, integration or society is based on sharing the same objectives to carry out activities for economic and social purposes .

Within its denomination the words must always be included "Cooperative Society or S. Coop", which emphasizes your business name. For it to be legally constituted, it must be done by means of a public deed and once registered in the Cooperatives Registry it acquires legal personality. This registry is dependent on the Ministry of Labor, Migration and Social Security. It should be noted that once the registration has been made in the Registry, there is a maximum period of one (1) year from the date of registration to begin its economic activity in accordance with its own established statutes.

It is important to note that no cooperative society may acquire a name identical to that of another already existing one. The fact of inclusion in the denomination of reference to the class of cooperatives is not a sufficient reason to determine that there is no identity in the denomination. Neither may cooperative societies adopt misleading or misleading names in relation to their scope, corporate purpose or class thereof, or with other types of entities.

Nor, other private entities, society, association or individual entrepreneur may make use of the term cooperative, or in abbreviation Coop., Or any other similar term that lends itself to confusion, unless a favorable report from the Higher Council of Cooperativism.

What are the bodies that make up a Cooperative Society?

A cooperative society is made up of the following bodies:

* The general assembly: Its main objective is to make the main decisions and it is carried out through a meeting with all those who make up the cooperative, whose votes are individual with respect to the decisions submitted to a vote.

* The Governing Council: He is in charge of the management and representation of the cooperative, it is like the board of directors that is part of a public limited company. General guidelines are established through the governing council.

* Intervention: It is made up of the auditors who are the supervisors of the work carried out by the Governing Council, their main function is to monitor and review the accounts of the cooperative.

What are the existing Cooperative Classes?

Cooperative societies are classified into two, those that can be of the first degree and those of the second degree.

1) Cooperative Societies of the First degree: They are cooperatives that must be formed with at least three partners, natural or legal persons. According to the Cooperatives Law of 1999, they are classified according to the main types indicated below:

  • Cooperative of consumers and users, responsible for defending rights and having access to quality products.
  • Housing cooperative, its main function is the access of the members to the self-promotion of housing to obtain prices that are affordable.
  • Agri-food cooperatives, are dedicated to the commercialization of products related to agricultural and livestock activity.
  • Cooperatives of community exploitation of the land are also in charge of the primary sector, where productive resources are a common aspect.
  • Service cooperatives are those formed to provide services to members in all kinds of aspects.
  • Cooperatives of the sea, are those dedicated to fishing activities that are associated for the production or sale of their products.
  • Transport Cooperatives, are those dedicated to the road transport sector to group different companies, natural or legal persons, in order to seek more benefits and better services in their activity.
  • Cooperativa de Seguros, its function is to provide an insurance service to members.
  • Health cooperatives are those that carry out their activity in the health sector.
  • Teaching cooperatives are those that are formed to develop teaching activities.
  • Credit unions are those formed to meet the needs of members and third parties in financing matters.
  • Associated Work Cooperatives.

2) Second degree Cooperative Societies: They are known as "Cooperatives of Cooperatives", they must be formed with at least two partners who must belong to first degree cooperatives.

What laws regulate the formation of a Cooperative?

Currently, cooperatives are regulated by different autonomous cooperative laws. In Spain, the law that regulates the formation and function of a cooperative society is State Law 27/1999, of July 16, on Cooperatives, which establishes that cooperative societies that carry out their cooperative activity in the territory of several Communities Autonomous or that carry out their cooperative activity mainly in the cities of Ceuta and Melilla.

What should be the domicile of a cooperative society?

Cooperative societies must have their registered office within the territory of the Spanish State and within the scope of the company, preferably in the place where they carry out activities with the partners that make it up or centralize their administrative management and business management.