A new corporate reality, the European Cooperative Society

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22.06.2013

A new corporate reality, the European Cooperative Society

On 8 March the new Act governing European Cooperative Societies with their registered offices in Spain was published in the Official State Gazette. This Act will help intensify the international operations of cooperative societies, and encourage the creation of European Cooperatives based in Spain.

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These cooperatives will be governed by the European Regulation on the European Cooperative Society, and in all particulars not covered by this, the rules applicable in Spain to cooperatives, whether national or regional.

The legislation serves within the context of company law to improve the economic and social position across the European Union as a whole, removing obstacles from the internal market and encouraging development across regions and Member States using the cooperative system, without the need to set up different corporate operations in order to engage in cross-border activities.

The main aim of the European Cooperative Society is to satisfy the needs of members and to develop economic or social activities in accordance with the cooperative principles of democratic participation and equitable distribution of net profits, with no obstacles placed on membership. The recently approved Act will undoubtedly help contribute to the extended application of the European Cooperative Society Statute on behalf of respect for equality of terms in competition and economic development as pursued by the European Union, thereby providing cooperatives, organisations which are commonly recognised in all Member States, with appropriate legal instruments facilitating the pursuit of their cross-border operations.

The passing of the Act clarifies certain aspects regarding the legal framework, standardisation, registration and publication of documents, transfers to other Member States and corresponding objections, specific aspects regarding mergers and transformations and options within the management system. It thus resolves the difficulties involved in the regular references in the European regulation to the cooperative legislation of the Member States.

One of the most important impacts which this new legal text will undoubtedly have is the recognition of this corporate structure in Spain and all that entails. A European Cooperative Society based in Spain becomes a new regulatory instrument for cooperative collaboration and integration, as well as a new instrument at the service of the cross-border ties between cooperative societies, but also a cooperative formula for economic collaboration among different European economic operators.

In short, a new tool with which to overcome the obstacles imposed by borders and facilitate development across regions and states which will now be able to overcome the shortcomings which other corporate structures have in international operations thanks to the cooperative approach.

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