Ireland-Farming Co-operatives.

IRELAND-FARMING CO-OPERATIVES.

THE Government has initiated moves to facilitate continuing growth and development of the co-operative sector by reviewing co-op legislation, much of which dates from the late 19th century.

"The main body of Industrial and Provident Societies legislation dates from the Victorian age and it must be questioned whether such legislation can be expected to serve, for much longer, the needs of the co-operative sector," said government sources in a consultation paper on the legislation launched by Junior Minister John McGuinness

The paper was launched to identify any practical difficulties for co-ops and what action should be taken to deal with them.

Co-operative societies and organisations have been part of economic life in Ireland for over a century.

Agricultural co-operatives (including companies associated with them) accounted for most of the €12.6 billion turnover attributable to the co-operative sector in 2007.

The current statutory limit on individual shareholdings is €150,000, or 1% of the total assets of the society, whichever is the greater.

The rationale for having such a limit, which dates originally from 1852, is not fully clear today, according to government sources.

The consultation paper raises the question of whether there should continue to be a statutory limit on individual shareholdings in societies, or whether this should be left to individual societies to decide for themselves.

Detailed financial reporting requirements, dating mainly from pre-1922 Acts, apply to co-ops.

These involve annual returns, balance sheets, triennial returns of members’ holdings, annual accounts as well as auditing.

The consultation paper seeks to ascertain whether these requirements are causing difficulties for societies and whether any changes are necessary or desirable.

In contrast, there is only limited provision for corporate governance matters such as duties of directors, making of rules and voting rights.

There could also be changes in legislation which imposes fundraising restrictions for certain societies, and laws on borrowing, cancellation of societies, amalgamations, winding up, examinership, distribution of property, registration fees and public enforcement.

The minister encouraged everybody involved with co-ops, or who has an interest in them, to participate in the consultation process.

Co-operative Societies: Consultation paper on the Industrial and Provident Societies Acts 1893 – 2005 is available on the www.entemp.ie/commerce/cooplaw website.

The review forms part of the Government’s better regulation programme which seeks to improve of regulation and reduce administrative burdens on business.