Understanding Cooperative Societies: Structure and Benefits

Cooperative Society: Structure and Regulations

The classes of cooperatives defined under general law are varied; however, this analysis focuses specifically on worker cooperatives.

Regulatory Framework

Relevant regulations are complex, as each region has adopted its own autonomy law. Cooperatives are categorized into two levels:

• 1st Degree: Requires a minimum of 3 members (individuals or legal entities).
• 2nd Degree: Requires two or more cooperative partners.

Liability and Capital

Partners are liable for the debts of the society on a limited basis. Notably, there is no required minimum capital figure for its formation.

Incorporation and Registration

Following the drafting of statutes and the execution of the deed of incorporation before a notary, the entity must be registered in the autonomous register of cooperatives rather than the commercial register.

Management Bodies

The governing bodies include:

• The General Assembly of members.
• The Board of Governors.
• Auditors (not required for small cooperatives).

Financial and Tax Considerations

Profits are allocated to pay the "cooperative return" and to fund specific mandatory reserves. Key operational details include:

• Taxation: Taxed at a reduced rate of 20%.
• Social Security: Members are registered under the general Social Security scheme.
• Voting Rights: Each cooperative member holds one vote.