My Sam says enjoy life! dream
I would like to create a kind of artistic cooperative. I am not quite sure exactly how to go about this as I live in Spain and most of the people so far involved in the Sam says enjoy life! art project all live in Spain as well. Accept Emmanuel Pajón who lives in Argentina.
But the idea would be that the excess profit that the cooperative makes would go to support the Sam and Ruby Charity, which is a UK based charity. Therefore I wonder if we can set up a UK Cooperative with Spanish residents? Or is there such a thing as an international cooperative?
You see I really think that now during this economical crisis we all really need to join forces and help one another. I also think that by passing on the positive message of Sam says enjoy life! through different artistes who all in their own right should earn money with the project and instead of me commissioning artistes to draw their Sam says enjoy life! vision, each artistes would produce a small production of their art on the article of merchandising that they prefer. This way each artiste can decide how they want to protect their copyrights or not.
Then we would have to work out together how a percentage of each artistes profit would go towards the www.samandruby.com charity.
So far most of Sam says enjoy life! products have been printed in expensive printing shops as I have not had the capital to invest in large quantities, therefore each sample is usually about 3 times more expensive that if you place a large order.
The cooking set (aprons, tea towels, oven gloves and shopping bags) have all been made by Ared which is a Foundation that teaches women who have been in prison a trade. Ared specialize in teaching the rag trade and catering. And the Prisbe foundation is a local Barcelona foundation that looks after the aged.
I think that we could form a mixed cooperative of Arts and crafts, retailing and printing, designing and communications.
I have always been a big fan of the John Lewis partnership group, who also own Peter Jones and Waitrose supermarkets.
I have been trying to investigate what the difference is between a cooperative and a Partnership.
I found a web called www.uk.coop
I have copied what they say for you to read:
The Co-operative Principles
Co-operatives are based on seven principles agreed by the International Co-operative Alliance:
1. Voluntary and open membership. Co-operatives are voluntary organisations, open to all persons able to
use their services and willing to accept the responsibilities of membership, without gender, social, racial,
political or religious discrimination.
2. Democratic member control. Co-operatives are democratic organisations controlled by their members,
who actively participate in setting their policies and making decisions. Men and women serving as elected
representatives are accountable to the membership. In primary co-operatives members have equal voting
rights (one member, one vote), and co-operatives at other levels are also organised in a democratic manner.
3. Member economic participation. Members contribute equitably to, and democratically control,
the capital of their co operative. At least part of that capital is usually the common property of the
co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any of the following purposes: developing their co-operative,possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4. Autonomy and independence. Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5. Education, training and information. Co-operatives provide education and training for their members,
elected representatives, managers and employees so they can contribute effectively to the development of
their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
6. Co-operation among co-operatives. Co-operatives serve their members most effectively and strengthen
the co-operative movement by working together through local, national, regional and international
structures.
7. Concern for community. Co-operatives work for the sustainable development of their communities
through policies approved by their members.
Why set up a co-operative?
What is a co-operative?
Types of co-operative
Areas of co-operative activity
What legal structure should be adopted?
How to set up a co-operative
Sources of advice
Finance
“For many people in the UK their perception of ‘the co-op’ will be defined by the local retail stores that they know and visit. But this view of co-operative enterprise in the UK only tells part of the story.
There are over 4,000 co-operatives in the UK, creating and sustaining well over 195,000 jobs, with a
collective turnover of £27billion per annum.”
Ben Reid, Chair of Co-operatives UK and Chief Executive of The Midcounties Co-operative
Why set up a co-operative?
Co-operatives are a vehicle for people collectively‘doing it for themselves’ - whether that’s responding
to a market opportunity, or meeting an identified need that neither the market nor the public purse provides.They engage people in their own solutions and enable members to share the risks and development costs of the business. They also draw from the knowledge, skills and expertise that diverse members bring. Co-operatives provide their members with mutual
support. They link members together so that they can help one another - perhaps by sharing ideas,
costs, resources and equipment. In multi-stakeholder co-operatives workers, users and the community can be linked for mutual endeavour. Co-operatives are democratically owned and run, giving members real control over the direction of their enterprise and enabling all stakeholders to contributeto the success of the business. In worker co-operatives this can galvanise the creativity and commitment of the employees in a way many other businesses cannot. The members of consumer or community co-operatives are able to define the business that meets their needs and bring their skills and commitment to its success. Co-operatives are often very attractive to public service
workers who want to be liberated to provide a high
quality service.
Why do co-operatives interest the economic development community and government?
• Co-operatives keep the business - and the wealth it creates - local. They are owned by their members, so they tend to support the local economy.
• Co-operatives are more sustainable than other forms of small business - survival rates are higher and they create more jobs which are less likely to leave the local area when the business is successful.
• Co-operatives contribute to local community regeneration and supply chain development.
• Co-operatives encourage all-round personal development, including entrepreneurial and business skills in all their members.
A co-operative is a business that is jointly owned and democratically controlled by its members.
Co-operatives are trading enterprises, providing goods and services and generating profits, but these profits are not taken by outside shareholders as with many investor owned business - they are under the control of the members, who decide democratically how the profits should be used. Co-operatives use their profits for investing in the business, in social purposes, in the education of members, in the sustainable development of the community or the environment, or for the welfare
of the wider community. Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others. The Co-operative Principles (see page
2) are guidelines by which co-operatives put their values into practice.
Co-operation has always existed, but co-operative business became a significant social and economic force in the 19th century, when people engaged in self-help to ensure that their basic needs were met. Today the co-operative movement is a global force and employs approximately 1 billion people across the world. The UN estimates that the livelihoods of half the world’s population are made secure by co-operative enterprise. In Britain there are over 4,000 co-operatives ranging from small community-run enterprises and worker owned business to large consumer-owned businesses
such as the Co-operative Group.
Types of co-operatives
Consumer co-operatives:
Owned and controlled by their customers. At a minimum, customers who choose to become members
are involved in the co-operative by buying from it, but they can also be involved at many levels in the
democratic process of the co-operative.
Worker co-operatives:
Owned and controlled by their employees. Some worker co-operatives are managed on a collective
basis, where all employees will be members and will also be committee members or directors. Other
worker co-operatives are managed through a smaller committee or board of directors that is democratically
elected by and from the employee members.
Community co-operatives:
Enterprises that are owned and controlled by people belonging to a particular community. This may be a
geographical community or a community of interest. Normally they will carry out activities that are of benefit to the whole community.
Co-operative consortia:
Co-operatives formed by a number of independent businesses, organisations or individuals, and owned
and controlled by them. The members enhance their trade or reduce costs by working together on key
activities such as leasing premises, buying equipment or marketing the members’ products and services.
Multi-stakeholder co-operatives:
Enterprises that are owned and controlled by members drawn from a variety of areas. Membership might
include employees of the co-operative, users of the co-operative, local residents, partnership organisations
or relevant professionals.
Secondary co-operatives:
Enterprises whose members are other co-operatives.
Areas of co-operative activity
Co-operatives operate across nearly every sector of the economy - from education and consultancy to
manufacturing and engineering. Here are just a few examples:
Retailing and community services
The co-operative movement began in the retail sector, with people pooling their earnings in order to buy unadulteratedfood wholesale. Since then, co-operatives have established a firm position in retailing.
Consumer co-operatives are major operators of convenience shops, and the UK has numerous other co-operatively run shops, from worker co-operatives selling wholefoods, clothing, bikes and books, to community co-operatives owning and running pubs, village shops and post offices.
Food and agricultural
There are over 4 00 agricultural co-operatives in the UK with a collective turnover of £ .4.6
billion. Many are large co-operative consortia set up to enable members to share machinery or production costs, but there are many small-scale farmers and market gardens that co-operate with one another or who operateas worker co-operatives. There are also a huge number of local food co-operatives and buying
groups, some to enable access to fresh food for poorer communities, others to access organic,
wholefoods or free-range foods, others help farmers gain a fair livelihood.
Arts and crafts
There is a long tradition of independent artists and crafts-people coming together to form co-operative consortia to sell products, often pooling resources to lease or buy premises or to market their goods.
Printing, design and
communications
Worker co-operatives have a long tradition of working in printing, design and communications. Some of the most successful and long-standing worker co-operatives operate in these industries.
Care
Co-operative structures have a strong presence in social care. There are numerous childcare co-operatives,
particularly worker co-operatives and multi-stakeholder co-operatives with parents and professionals, as well as employees, eligible for membership. There are also co-operative consortia providing homecare services to the elderly and consortia of GPs providing quality out of hours care.
Energy
Co-operatives have been quick to create collective opportunities in sustainable energy production and supply. In 199 Baywind Energy Co-operative formed, for example, and established a wind farm in
Cumbria entirely owned by its consumers, and subsequently established a company to set up co-operatively run community wind farms across the UK.
“The co-operative model is a great business structure. It enables members to share resources, ideas and
expertise, as well as maintain democratic control over the enterprise. There is no doubt, too, that co-operatives are at the forefront of innovation, breaking new ground in the provision of everything from ethical goods, local food and green energy to social care and public services.”
Dame Pauline Green, Chief Executive of Co-operatives UK
Starting a Co-operative
What legal structure should be adopted?
Currently there is no co-operative legal form in the UK, and so organisations wishing to become co-operatives have to choose one of the existing legal forms to begin operation. It is usually advisable for a co-operative, whatever its type, to incorporate to limit the liability of its members and governing body.
However, co-operatives can also choose to operate on an unincorporated basis when they first start up or if limited liability is not required, in which case they will still need to adopt a written constitution.
All types of co-operative, regardless of the legal form,
can be registered through Co-operatives UK
.
If a co-operative wishes to incorporate there are a number of different legal forms that may be considered.
Industrial and provident society (IPS). It is generally accepted that the IPS route is the stronger form for a co-operative. It contains statutory protection of the co-operative principles - for example,
co-operative - particularly a community co-operative - wishes to raise funds from the public then the IPS legal form is probably the most appropriate one to choose. The cost of registering as an IPS is reduced if registration is undertaken through a sponsoring body such as
Co-operatives UK
. Registration takes on average three to four weeks to complete
Private company limited by guarantee/shares. The limited company legal form is the most well known. It is widely used by co-operatives and is very familiar to the majority of advisers, professionals and funders. Company law does not offer any protection of the co-operative principles, but, it is flexible and its
governing legislation is accessible and up to date. Private companies limited by shares are prohibited
from offering shares to the public, so if the proposed co-operative wishes to raise funds from the public this legal form should be avoided. Companies can be set up in as little as 24 hours, and
are registered by Companies House directly, or through Co-operatives UK
.
Community interest company (CIC)
limited by guarantee/shares
The CIC is a relatively new legal form. It is a limited company but with special features and is available for use by organisations that wish to conduct their business for community benefit.
One of its key features is an asset lock, whereby assets of a CIC are protected and cannot be distributed
for private benefit. The asset lock may be useful for co-operatives wishing to apply for funding or promote themselves as not-for-private profit. It is not possible for a CIC limited by guarantee to pay dividends to members and a dividend would be subject to a cap in a CIC limited by shares. The asset lock would also prohibit distribution of assets to members at the pointof winding up.
Like limited companies, CICs don’t offer any protection of the co-operative principles and, as with a company limited by shares, public share issues are prohibited.
A number of co-operatives have registered as CICs and the legal form will accommodate the needs of most types of co-operatives.
Co-operatives and social enterprise
Social enterprises are businesses with primarily social or environmental objectives. Their surpluses are reinvested in the business or community, rather than being driven by the need to maximise profit for shareholders and owners. There are over 55,000 social enterprises in the UK, ranging from large businesses such as the Co-operative Group or the Big Issue through to smaller enterprises like community-owned shops.
Co-operatives are firmly embedded in the social enterprise sector. Co-operatives are trading businesses which use their surpluses for the benefit of their members. Sometimes the members are the people working in business, but they can be users of the co-operative’s services, consumers of its products, or the local community.
In addition, co-operatives often have other social or environmental commitments - they have helped bring green, Fairtrade,
ethical and organic goods into the mainstream, for example, and many commit a percentage of their surpluses to helping
co-operative development, environmental protection and other causes. And, of course, unlike traditional businesses and other kinds of social enterprises, co-operatives are owned by their members, meaning that the workers, users and others have control over the business.
How to set up a co-operative
A co-operative is a business, so setting up a co-operative is like setting up any other business - you
need a market, products/services, labour, finance and (usually) premises.
What makes a co-operative different from a conventional business is:
• It fulfils a social or environmental objective, or is
formed to fulfil its members’ needs
• Its democratic ownership and control
• Its way of working
• Its legal structure
If you want to set up a co-operative, you should seek professional advice from a co-operative development body if there is one in your area.The following sets out the stages in setting up a
co-operative, though some of these will vary according to the type of co-operative, and they may not happen in this order.
1 Outline a broad feasibility plan: what are the objectives of the business? Discuss these with the
rest of the group setting up the business.
2 Discuss a draft legal structure: who are the members - are they the staff, the consumers or community,
or other small businesses? What are the benefits of membership and the responsibilities? Seek help
from your local co-operative development body or Co-operatives UK
.
3 Develop a business strategy and an outline business plan setting out:
• Business objectives
• Market
• Staffing needs
• How the business will work
• Finance: financial projections; raising finance
• Marketing
• Governance (legal structures, decision-making procedures, the roles and responsibilities of the
members, directors and staff)
4 Incorporate the new business, if appropriate. This is strongly recommended if you are trading with
external customers as it gives you limited liability status
5 Carry out detailed financial planning - build the financial model including start-up costs, overheads,
6 Seek start-up finance. Most co-operatives do this
7 Carry out organisational planning - a detailed action
8 Develop a marketing plan
I would like to create a kind of artistic cooperative. I am not quite sure exactly how to go about this as I live in Spain and most of the people so far involved in the Sam says enjoy life! art project all live in Spain as well. Accept Emmanuel Pajón who lives in Argentina.
But the idea would be that the excess profit that the cooperative makes would go to support the Sam and Ruby Charity, which is a UK based charity. Therefore I wonder if we can set up a UK Cooperative with Spanish residents? Or is there such a thing as an international cooperative?
You see I really think that now during this economical crisis we all really need to join forces and help one another. I also think that by passing on the positive message of Sam says enjoy life! through different artistes who all in their own right should earn money with the project and instead of me commissioning artistes to draw their Sam says enjoy life! vision, each artistes would produce a small production of their art on the article of merchandising that they prefer. This way each artiste can decide how they want to protect their copyrights or not.
Then we would have to work out together how a percentage of each artistes profit would go towards the www.samandruby.com charity.
So far most of Sam says enjoy life! products have been printed in expensive printing shops as I have not had the capital to invest in large quantities, therefore each sample is usually about 3 times more expensive that if you place a large order.
The cooking set (aprons, tea towels, oven gloves and shopping bags) have all been made by Ared which is a Foundation that teaches women who have been in prison a trade. Ared specialize in teaching the rag trade and catering. And the Prisbe foundation is a local Barcelona foundation that looks after the aged.
I think that we could form a mixed cooperative of Arts and crafts, retailing and printing, designing and communications.
I have always been a big fan of the John Lewis partnership group, who also own Peter Jones and Waitrose supermarkets.
I have been trying to investigate what the difference is between a cooperative and a Partnership.
I found a web called www.uk.coop
I have copied what they say for you to read:
The Co-operative Principles
Co-operatives are based on seven principles agreed by the International Co-operative Alliance:
1. Voluntary and open membership. Co-operatives are voluntary organisations, open to all persons able to
use their services and willing to accept the responsibilities of membership, without gender, social, racial,
political or religious discrimination.
2. Democratic member control. Co-operatives are democratic organisations controlled by their members,
who actively participate in setting their policies and making decisions. Men and women serving as elected
representatives are accountable to the membership. In primary co-operatives members have equal voting
rights (one member, one vote), and co-operatives at other levels are also organised in a democratic manner.
3. Member economic participation. Members contribute equitably to, and democratically control,
the capital of their co operative. At least part of that capital is usually the common property of the
co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any of the following purposes: developing their co-operative,possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4. Autonomy and independence. Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5. Education, training and information. Co-operatives provide education and training for their members,
elected representatives, managers and employees so they can contribute effectively to the development of
their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
6. Co-operation among co-operatives. Co-operatives serve their members most effectively and strengthen
the co-operative movement by working together through local, national, regional and international
structures.
7. Concern for community. Co-operatives work for the sustainable development of their communities
through policies approved by their members.
Why set up a co-operative?
What is a co-operative?
Types of co-operative
Areas of co-operative activity
What legal structure should be adopted?
How to set up a co-operative
Sources of advice
Finance
“For many people in the UK their perception of ‘the co-op’ will be defined by the local retail stores that they know and visit. But this view of co-operative enterprise in the UK only tells part of the story.
There are over 4,000 co-operatives in the UK, creating and sustaining well over 195,000 jobs, with a
collective turnover of £27billion per annum.”
Ben Reid, Chair of Co-operatives UK and Chief Executive of The Midcounties Co-operative
Why set up a co-operative?
Co-operatives are a vehicle for people collectively‘doing it for themselves’ - whether that’s responding
to a market opportunity, or meeting an identified need that neither the market nor the public purse provides.They engage people in their own solutions and enable members to share the risks and development costs of the business. They also draw from the knowledge, skills and expertise that diverse members bring. Co-operatives provide their members with mutual
support. They link members together so that they can help one another - perhaps by sharing ideas,
costs, resources and equipment. In multi-stakeholder co-operatives workers, users and the community can be linked for mutual endeavour. Co-operatives are democratically owned and run, giving members real control over the direction of their enterprise and enabling all stakeholders to contributeto the success of the business. In worker co-operatives this can galvanise the creativity and commitment of the employees in a way many other businesses cannot. The members of consumer or community co-operatives are able to define the business that meets their needs and bring their skills and commitment to its success. Co-operatives are often very attractive to public service
workers who want to be liberated to provide a high
quality service.
Why do co-operatives interest the economic development community and government?
• Co-operatives keep the business - and the wealth it creates - local. They are owned by their members, so they tend to support the local economy.
• Co-operatives are more sustainable than other forms of small business - survival rates are higher and they create more jobs which are less likely to leave the local area when the business is successful.
• Co-operatives contribute to local community regeneration and supply chain development.
• Co-operatives encourage all-round personal development, including entrepreneurial and business skills in all their members.
A co-operative is a business that is jointly owned and democratically controlled by its members.
Co-operatives are trading enterprises, providing goods and services and generating profits, but these profits are not taken by outside shareholders as with many investor owned business - they are under the control of the members, who decide democratically how the profits should be used. Co-operatives use their profits for investing in the business, in social purposes, in the education of members, in the sustainable development of the community or the environment, or for the welfare
of the wider community. Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others. The Co-operative Principles (see page
2) are guidelines by which co-operatives put their values into practice.
Co-operation has always existed, but co-operative business became a significant social and economic force in the 19th century, when people engaged in self-help to ensure that their basic needs were met. Today the co-operative movement is a global force and employs approximately 1 billion people across the world. The UN estimates that the livelihoods of half the world’s population are made secure by co-operative enterprise. In Britain there are over 4,000 co-operatives ranging from small community-run enterprises and worker owned business to large consumer-owned businesses
such as the Co-operative Group.
Types of co-operatives
Consumer co-operatives:
Owned and controlled by their customers. At a minimum, customers who choose to become members
are involved in the co-operative by buying from it, but they can also be involved at many levels in the
democratic process of the co-operative.
Worker co-operatives:
Owned and controlled by their employees. Some worker co-operatives are managed on a collective
basis, where all employees will be members and will also be committee members or directors. Other
worker co-operatives are managed through a smaller committee or board of directors that is democratically
elected by and from the employee members.
Community co-operatives:
Enterprises that are owned and controlled by people belonging to a particular community. This may be a
geographical community or a community of interest. Normally they will carry out activities that are of benefit to the whole community.
Co-operative consortia:
Co-operatives formed by a number of independent businesses, organisations or individuals, and owned
and controlled by them. The members enhance their trade or reduce costs by working together on key
activities such as leasing premises, buying equipment or marketing the members’ products and services.
Multi-stakeholder co-operatives:
Enterprises that are owned and controlled by members drawn from a variety of areas. Membership might
include employees of the co-operative, users of the co-operative, local residents, partnership organisations
or relevant professionals.
Secondary co-operatives:
Enterprises whose members are other co-operatives.
Areas of co-operative activity
Co-operatives operate across nearly every sector of the economy - from education and consultancy to
manufacturing and engineering. Here are just a few examples:
Retailing and community services
The co-operative movement began in the retail sector, with people pooling their earnings in order to buy unadulteratedfood wholesale. Since then, co-operatives have established a firm position in retailing.
Consumer co-operatives are major operators of convenience shops, and the UK has numerous other co-operatively run shops, from worker co-operatives selling wholefoods, clothing, bikes and books, to community co-operatives owning and running pubs, village shops and post offices.
Food and agricultural
There are over 4 00 agricultural co-operatives in the UK with a collective turnover of £ .4.6
billion. Many are large co-operative consortia set up to enable members to share machinery or production costs, but there are many small-scale farmers and market gardens that co-operate with one another or who operateas worker co-operatives. There are also a huge number of local food co-operatives and buying
groups, some to enable access to fresh food for poorer communities, others to access organic,
wholefoods or free-range foods, others help farmers gain a fair livelihood.
Arts and crafts
There is a long tradition of independent artists and crafts-people coming together to form co-operative consortia to sell products, often pooling resources to lease or buy premises or to market their goods.
Printing, design and
communications
Worker co-operatives have a long tradition of working in printing, design and communications. Some of the most successful and long-standing worker co-operatives operate in these industries.
Care
Co-operative structures have a strong presence in social care. There are numerous childcare co-operatives,
particularly worker co-operatives and multi-stakeholder co-operatives with parents and professionals, as well as employees, eligible for membership. There are also co-operative consortia providing homecare services to the elderly and consortia of GPs providing quality out of hours care.
Energy
Co-operatives have been quick to create collective opportunities in sustainable energy production and supply. In 199 Baywind Energy Co-operative formed, for example, and established a wind farm in
Cumbria entirely owned by its consumers, and subsequently established a company to set up co-operatively run community wind farms across the UK.
“The co-operative model is a great business structure. It enables members to share resources, ideas and
expertise, as well as maintain democratic control over the enterprise. There is no doubt, too, that co-operatives are at the forefront of innovation, breaking new ground in the provision of everything from ethical goods, local food and green energy to social care and public services.”
Dame Pauline Green, Chief Executive of Co-operatives UK
Starting a Co-operative
What legal structure should be adopted?
Currently there is no co-operative legal form in the UK, and so organisations wishing to become co-operatives have to choose one of the existing legal forms to begin operation. It is usually advisable for a co-operative, whatever its type, to incorporate to limit the liability of its members and governing body.
However, co-operatives can also choose to operate on an unincorporated basis when they first start up or if limited liability is not required, in which case they will still need to adopt a written constitution.
All types of co-operative, regardless of the legal form,
can be registered through Co-operatives UK
.
If a co-operative wishes to incorporate there are a number of different legal forms that may be considered.
Industrial and provident society (IPS). It is generally accepted that the IPS route is the stronger form for a co-operative. It contains statutory protection of the co-operative principles - for example,
one member one vote - and is designed to enhance democracy and protect the rights of the members.
IPSs are registered with the Financial Services Authority (FSA). The FSA scrutinises the governing document (Rules) of applications to register as an IPS. Before a co-operative is registered, the FSA checks to ensure that the Rules meet the requirements of the Act to register as a co-operative, and it also has the power to refuse any amendments to the Rules post registration if it believes that they are not in keeping with the original ethos of the society. IPSs are permitted to issue shares to the public, so if aco-operative - particularly a community co-operative - wishes to raise funds from the public then the IPS legal form is probably the most appropriate one to choose. The cost of registering as an IPS is reduced if registration is undertaken through a sponsoring body such as
Co-operatives UK
. Registration takes on average three to four weeks to complete
Private company limited by guarantee/shares. The limited company legal form is the most well known. It is widely used by co-operatives and is very familiar to the majority of advisers, professionals and funders. Company law does not offer any protection of the co-operative principles, but, it is flexible and its
governing legislation is accessible and up to date. Private companies limited by shares are prohibited
from offering shares to the public, so if the proposed co-operative wishes to raise funds from the public this legal form should be avoided. Companies can be set up in as little as 24 hours, and
are registered by Companies House directly, or through Co-operatives UK
.
Community interest company (CIC)
limited by guarantee/shares
The CIC is a relatively new legal form. It is a limited company but with special features and is available for use by organisations that wish to conduct their business for community benefit.
One of its key features is an asset lock, whereby assets of a CIC are protected and cannot be distributed
for private benefit. The asset lock may be useful for co-operatives wishing to apply for funding or promote themselves as not-for-private profit. It is not possible for a CIC limited by guarantee to pay dividends to members and a dividend would be subject to a cap in a CIC limited by shares. The asset lock would also prohibit distribution of assets to members at the pointof winding up.
Like limited companies, CICs don’t offer any protection of the co-operative principles and, as with a company limited by shares, public share issues are prohibited.
A number of co-operatives have registered as CICs and the legal form will accommodate the needs of most types of co-operatives.
Co-operatives and social enterprise
Social enterprises are businesses with primarily social or environmental objectives. Their surpluses are reinvested in the business or community, rather than being driven by the need to maximise profit for shareholders and owners. There are over 55,000 social enterprises in the UK, ranging from large businesses such as the Co-operative Group or the Big Issue through to smaller enterprises like community-owned shops.
Co-operatives are firmly embedded in the social enterprise sector. Co-operatives are trading businesses which use their surpluses for the benefit of their members. Sometimes the members are the people working in business, but they can be users of the co-operative’s services, consumers of its products, or the local community.
In addition, co-operatives often have other social or environmental commitments - they have helped bring green, Fairtrade,
ethical and organic goods into the mainstream, for example, and many commit a percentage of their surpluses to helping
co-operative development, environmental protection and other causes. And, of course, unlike traditional businesses and other kinds of social enterprises, co-operatives are owned by their members, meaning that the workers, users and others have control over the business.
How to set up a co-operative
A co-operative is a business, so setting up a co-operative is like setting up any other business - you
need a market, products/services, labour, finance and (usually) premises.
What makes a co-operative different from a conventional business is:
• It fulfils a social or environmental objective, or is
formed to fulfil its members’ needs
• Its democratic ownership and control
• Its way of working
• Its legal structure
If you want to set up a co-operative, you should seek professional advice from a co-operative development body if there is one in your area.The following sets out the stages in setting up a
co-operative, though some of these will vary according to the type of co-operative, and they may not happen in this order.
1 Outline a broad feasibility plan: what are the objectives of the business? Discuss these with the
rest of the group setting up the business.
2 Discuss a draft legal structure: who are the members - are they the staff, the consumers or community,
or other small businesses? What are the benefits of membership and the responsibilities? Seek help
from your local co-operative development body or Co-operatives UK
.
3 Develop a business strategy and an outline business plan setting out:
• Business objectives
• Market
• Staffing needs
• How the business will work
• Finance: financial projections; raising finance
• Marketing
• Governance (legal structures, decision-making procedures, the roles and responsibilities of the
members, directors and staff)
4 Incorporate the new business, if appropriate. This is strongly recommended if you are trading with
external customers as it gives you limited liability status
5 Carry out detailed financial planning - build the financial model including start-up costs, overheads,
etc, and finalise a full business plan
6 Seek start-up finance. Most co-operatives do this
by raising money from members and/or seeking a business loan. Suitable grants may also be available.
7 Carry out organisational planning - a detailed action
plan, quality and performance standards, staff policies
8 Develop a marketing plan
9 Develop a communication plan for ongoing
interaction with members
Remember - a co-operative is about groups of people and it is critical to keep all the members or potential
members on board. Active and engaged members - whether they be consumers or employees - are one of a co-operative’s greatest sources of strength!
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