Legal News for UK Co-ops and Mutuals

This is a blog where brief information about developments in UK Co-op and mutual law will be reported. Readers of this blog will also find Linda Barlow's Co-operatives UK Blog at http://www.uk.coop/blogs/linda.barlow helpful. For an network of academics working on co-ops, mutuals and social enterprises visit http://blogs.kent.ac.uk/r-comuse/2012/09/welcome-to-r-comuse/

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Interested in sharing information and knowledge around legal issues for co-ops and social enterprises in the co-oplawnews blog and thoughts on random issues in the "real" blog.

Saturday, April 15, 2006

Co-operatives and Community Benefit Societies Act 2003 Extended to Northern Ireland

The Industrial and Provident Societies (Northern Ireland) Order 2006 SI 2006/314
http://www.opsi.gov.uk/si/si2006/20060314.htm
extends to Northern Ireland industrial and provident societies the provisions introduced in Great Britain by the Industrial and Provident Societies Act 2002 and the Co-operatives and Community Societies Act 2003. The Order applies in Northern Ireland from a date yet to be appointed. Interestingly, the order also applies the Company Director Disqualification order to NI I & P societies - the GB Company Director Disqualification Act 1986 does not apply to GB I & P society Directors.

Monday, April 10, 2006

New Audit Exemption for Co-ops and Mutuals

© Ian Snaith 2006
This work is licensed under the Creative Commons Attribution-NonCommercial-Noderivs 2.0 England and Wales Licence. To view a copy of this licence visit http://creativecommons.org/licenses/by-nc-nd/2.0/uk/ or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA.


The Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006 was made on 7th February and came into force on 6th April 2006 for years of account ending two months or more after that date.

It means that non-charitable industrial and provident societies need not appoint an auditor and have their accounts audited if their assets do not exceed £2,800,000 and its turnover does not exceed £5,600,000. This does not apply to credit unions, registered social landlords, insurance societies or societies holding deposits other than withdrawable share capital. Where this applies and the society's turnover is more than £90,000 per annum they will have to have an accountant's report (cheaper than a full audit) prepared on their revenue accounts and balance sheet.

For charitable societies, the figures for not needing a full audit are £2,800,000 in assets and £250,000 turnover under this change but will rise when the Charities Bill is passed to £500,000 turnover.

This is the first use of the Industrrial and Provident Societies Act 2002 (the "Thomas" Act) to bring industrial and provident society law into line with Company Law after Company law has changed.

With the Company Law Reform Bill before Parliament, it may not be the last!


For details see:
SI 2006/265 - Web version (HTML)
SI 2006/265 - Print version (PDF - 42 KB)
SI 2006/265 - Explanatory Memorandum (PDF - 105 KB)

Asset Lock for Community Benefit I & P's

© Ian Snaith 2006
This work is licensed under the Creative Commons Attribution-NonCommercial-Noderivs 2.0 England and Wales Licence. To view a copy of this licence visit http://creativecommons.org/licenses/by-nc-nd/2.0/uk/ or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA.


The Community Benefit Societies (Restriction on Use of Assets) Regulations 2006 SI 2006/264 were made on 7th February and in force from 6th April 2006

They implement the provisions of the Co-operatives and Community Benefit Societies Act 2003 to "lock in" the value of the assets and resources of I & P societies registered as "bencoms" to benefit groups other than their own members.

This means that by amending their rules or incorporating a rule from the time of registration, any bencom, except a registered social landlord or a charity, may, by unalterable rule, prevent the payment of any amounts of value out to members or others except to pay members ,or their successors on death or bankruptcy, the nominal value of any withdrawable shares plus interest.

Otherwise any surplus has to go to another society with a similar restriction, a community interest company, a registered social landlord,or a charity - all of which lock value in for their purposes.

The FSA is given power to enforce such restrictions on surplus distribution by enforcement notice and can order restitution from society officers if the society suffers loss. It can also seek a court order to prevent or end violation of such a rule.

See http://www.opsi.gov.uk/si/si2006/20060264.htm for details