28th January 2022
Minister for Trade Promotion, Digital and Company Regulation, Robert Troy TD, today announced the launch of a public consultation to seek the views of interested parties on certain aspects being considered for inclusion in the forthcoming Co-operative Societies legislation.
The proposed legislation will provide a modern and effective legislative framework suitable for the diverse range of organisations using the co-operative model in Ireland.
Announcing the public consultation, Minister Troy said:
“As we look to a post-COVID recovery, we have an opportunity to reform the way we do business for the better. Part of that is diversifying the options available to corporate bodies on how to structure, operate and invest. I am now pleased to open to public consultation proposals to reform and modernise legislation regarding Co-operative Societies. This is the culmination of a number of years of work by my Department and is the most far-reaching reform of the legislation in almost 130 years. The proposals will consolidate, modernise and strengthen the legislative basis for the sector and enshrine the co-operative model in legislation for the first time.”
He continued:
“The legislation will introduce modern corporate governance, financial reporting, compliance, and reporting standards and will also address a range of other issues including the functions and powers of the Registrar and matters relating to registration, amalgamation, strike-off and restoration; shares and share capital. This will allow co-operatives to operate under a modern, fit for purpose legislative framework, and provide an attractive alternative to the company law model, for those entities who subscribe to the co-operative ethos.
“I am seeking the views from all interested stakeholders on a number of specific issues. My Department will consider carefully all views submitted in response to the consultation prior to finalising legislative proposals for consideration by Government.”
The consultation is seeking views on a number of specific issues and also provides an opportunity to provide additional comments to inform the completion of the proposed legislation.
The Department is taking the opportunity to give stakeholders a general overview of the proposed legislation. The deadline for submissions is 5pm on Friday, 25 February 2022.
NOTES TO EDITOR
Currently, the Industrial and Provident Societies (IPS) Acts 1893-2021 provide the statutory basis for the formation and general operation of industrial and provident societies and is the primary legislation within which co-operatives operate. It has long been acknowledged that the IPS legislation is no longer fit for purpose in a number of areas.
The Department of Enterprise, Trade and Employment has completed a comprehensive review of the existing statutory code including consultations in 2009 and 2016 and the responses received have informed the work undertaken on the development of new law in this area. In the context of finalising proposals, the Department wishes to provide stakeholders with a further opportunity to provide views on a number of specific issues.
The proposed legislation will consolidate and modernise the existing provisions and introduce modern corporate governance, accounting, compliance, and reporting requirements. For consistency and ease of understanding, these provisions are generally similar in approach to the provisions of the Companies Act 2014 but amended as appropriate recognising the distinctive characteristics of co-operatives. Having provisions for modern corporate governance, accounting, compliance, and reporting requirements not only protects stakeholders but also increases the attractiveness of co-operatives for investment.
Main elements of the proposed legislation
- Providing a specific legislative basis for co-operative societies for the first time.
- Introducing modern corporate governance, accounting, compliance, and reporting requirements.
- Updating and modernising across a range of areas including the functions and powers of the Registrar and matters relating to registration, amalgamation, strike-off and restoration; shares and share capital.
- Making it easier to set-up and operate a co-operative society – by reducing the minimum number of founding members (from seven down to three) and providing for audit exemptions, where appropriate.
- Setting out key provisions in the legislation but providing flexibility so that co-operative societies can address other issues in their own society rules (in recognition of the significant diversity across the co-operative sector and the importance of decision making remaining with members, where appropriate).
A link to the public consultation can be found at Public Consultation on proposed legislation regarding Co-operative Societies
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