European Cooperative Society

SUMMARY OF:

• Regulation (EC) No 1435/2003 — Statute for a European Cooperative Society
• Directive 2003/72/EC — supplementing the Statute for a European Cooperative Society with regard to the involvement of employees

SUMMARY

WHAT DO THIS REGULATION AND THIS DIRECTIVE DO?

• They establish the legal status of a European Cooperative Society (SCE) which aims to help cooperatives who have activities in more than one EU country.
• They also provide a legal basis for other companies wishing to group together.

KEY POINTS

Formation

An SCE may be formed:

• by 5 or more people or companies:
  • based in at least 2 countries within the European Economic Area (EEA, i.e. the EU, Iceland, Liechtenstein and Norway),
  • formed under the law of an EU country
  • and governed by the law of at least 2 different EU countries;
• by a merger between cooperatives formed under the law of an EU country with registered offices and head offices in that country, provided that at least 2 of them are governed by the law of different EU countries;
• by the conversion of a cooperative formed under the law of an EU country, which has its registered office and head office within the EEA if the cooperative has had an establishment or subsidiary governed by the law of another EU country for at least 2 years.

An EU country may allow a company whose head office is not in the EEA to take part in forming an SCE if it:

• is formed under the law of an EU country;
• has its registered office in that EU country;
• has a real and continuous link with the EU country's economy.

Capital

The capital of an SCE, represented by its members' shares must be a minimum of €30,000. An SCE may have a limited proportion of ‘investor members’. They do not use the services of the cooperative and have limited voting rights.

Tax

An SCE has the same tax status as any multi-national company and must therefore pay tax in those countries in which it is permanently established.

Registeredoffice

The registered office of an SCE may be transferred to another EU country without resulting in the winding-up of the SCE or in the creation of a new company. The registered office and head office must be in the same place.

Winding up, liquidation, insolvency and suspension of payments

An SCE may be wound up either by:

• a decision of the general meeting, in particular where the period fixed in the rules has expired or where the capital has fallen below the minimum level;
• or by a court, for example where the registered office has been transferred outside the EEA.

In cases of liquidation, insolvency or suspension of payments, the SCE is subject to the laws of the country in which it has its registered office.

Involvement of employees

The arrangements for the involvement of employees (information, consultation and participation) must be established in every SCE. In defining these arrangements, the national rules of the country where the head office is located apply to SCEs established:

• exclusively by natural persons or by a single legal entity and natural persons; and
• which together employ fewer than 50 employees, or employ 50 or more employees in only 1 EU country.

Report

A 2012 Commission report, based on a public consultation, found that relatively few SCEs had been set up. It pledged to ask interested parties whether and how the Statute should be simplified.

At an EU Presidency Conference in Cyprus during the International Year for Cooperatives in 2012, it was decided not to proceed to any amendment of the regulation but to seek the reasons for the poor application of the SCE by the market operators.

Working Group

The Working Group on Cooperatives was established in 2013 to assess the specific needs of cooperative enterprises with regard to a wide variety of issues such as the appropriate EU regulatory framework, the identification of barriers at national level and the internationalisation of cooperatives. (See Report of the discussions of the Working Group and meeting minutes).

FROM WHEN DO THE REGULATION AND DIRECTIVE APPLY?

The directive applies from 18 August 2003. EU countries had to incorporate it into national legislation by 18 August 2006.

The regulation applies from 18 August 2006.

BACKGROUND

European cooperative society

ACTS

Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (OJ L 207, 18.8.2003, pp. 1-24)

Successive amendments to Regulation (EC) No 1435/2003 have been incorporated in the original text. This consolidated version is of documentary value only.

Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (OJ L 207, 18.8.2003, pp. 25-36)

See consolidated version.

RELATED ACTS

Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: The application of Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (COM(2012) 72 final of 23.2.2012)

last update 16.03.2016