Co-operatives and community benefit societies
The Law Commission has been asked to review the law governing co-operative and community benefit societies. This is ensure that it fits the nature and needs of these societies as well as ensuring that regulation is proportionate and effective. The consultation period for this project has now ended.
Background (Back to top)
Co-operatives and community benefit societies are business associations. They are alternatives, for example, to companies and partnerships.
Co-operatives are associations of consumers, producers, or workers. Part of their purpose is to harness economies of scale. For example, when producers or workers combine as members of a co-operative, the co-operative might command better prices in the market for the produce or labour. When consumers combine as members of a co-operative, the co-operative might access cheaper prices for goods or services. The co-operative can then pass on those better prices when selling to its consumers, buying from its producers, or paying its workers.
There are more than 7000 co-operatives in the UK, with around 14 million members, contributing about £40 billion to the economy. A visible example on the high street is the Co-op chain of supermarkets.
A community benefit society carries on business for the benefit of the community. They can engage in a range of activities, from owning a local pub, through publishing a newspaper or developing a local renewable energy network, to providing social housing.
Project (Back to top)
Co-operatives and community benefit societies are governed by the Co-operative and Community Benefit Societies Act 2014. We have been asked to review the Act, to ensure that it fits the nature and needs of co-operatives and community benefit societies, and to ensure that regulation is proportionate and effective.
We have now published our consultation paper, and a summary, both available below. The consultation paper discusses the current law and makes provisional proposals for reform. We ask stakeholders for their views on our proposals.
Principal proposals for reform include:
- new statutory definitions for co-operatives and for community benefit societies, and the regulation of charitable community benefit societies
- an overhaul of the law relating to society shares, with definitions of withdrawable and transferable shares, prescribed conditions for withdrawal and transfer, protections for class rights and when writing down shares, limits to interest payable on shares, as well as confirmation that shares can be issued with varying rights and to non-user investors
- society officers to be listed on the Mutuals Public Register, with statute to prescribe duties owed by officers.
The consultation paper discusses a long list of further reforms. The length of the list reflects the fact that parts of society law have not been systematically reviewed for over a century.
Next steps
We are now evaluating the responses to the consultation that has now ended. We will use them to develop our final recommendations for reform. We expect the final report will be published in 2025.
Documents (Back to top)
Consultation papers and related documents
Consultation paper and summary
Adolygiad o Ddeddf Cymdeithasau Cydweithredol a Chymdeithasau Budd Cymunedol 2014
Updates (Back to top)
Consultation opens: 17 September 2024
Consultation ends: 10 December 2024
Contact us (Back to top)
Contact us for more information or to be added to our email list.
Email: coops@lawcommission.gov.uk
Related projects (Back to top)
Read our review of the law relating to friendly societies.