UK Co-op Law in 2015 & the 2014 Changes
Consolidation and Other Changes in 2014
Since 1st August 2014 the Co-operative and Community Benefit Societies Act 2014 has been the main source of law for co-operative and community benefit societies. It consolidated all existing legislation and modernised the language to make it easier to use, find and navigate. Despite the consolidation, some separate legal sources still apply. The 2014 Statutory Instruments which applied Insolvency Rescue Procedures and Companies Act Investigation Powers to societies are still separate because they apply to societies and adapt existing laws. So are the “Asset Lock” Regulations from 2006 which apply to community benefit societies which have an “asset lock” rule in their rule book. The links in this paragraph are to the free and open www.legislation.gov.uk but always be sure you have an up to date version by updating the one you’ve found in line with the note (if any) at the top of the page you are looking at. Life is easier for those with access to an expensive privately owned service such as WestlawUK which regularly updates all legislative text.
For an overview and some of the rationale see the powerpoint slides here and listen to the 2013 Co-op Fortnight lecture.
The process of Consolidation began with January 2012′s announcement from No 10 Downing Street.
On 26th September 2013, the Law Commission published an explanation of the process:
as well as the draft Bill:
the documents to be submitted as part of its journey through Parliament:
and its Table of Origins.
were published by the Law Commission for consultation. Responses to the Consultation were needed by 15th November 2013.
Co-operatives UK submitted a brief response Here supported by a longer report. I agree with those and submitted my own short response.
Changes to the Law to Coincide with the Consolidation
July 2013 the HMT Consultn IPS 07-09.13 document on Changes to IPS Law was published. Here it is as a PDF. This is part of the Consolidation process but deals with implementing changes to the limit on withdrawable share capital and the detailed application of insolvency rescue proceedures.
In August 2013 three draft Statutory Instruments were issued by HM Treasury to anyone who had asked for them. They are the planned legal instruments to bring about three of the changes dealt with in the July 2013 Consultation.
Here they are in PDF Form:
A fourth draft SI came out on 5th September 2013. Here it is:
Here is my detailed response to all but the last draft SI:
and here is my supplementary response on the later draft SI and the questions raised:
Government Response to Consultation
Here is the Government response of 18th December 2013 to the consultation on changes to coincide with the consolidation.
Lord Naseby’s Bill to Resolve the Share Capital Issue
In July 2013, the Mutuals Redeemable Shares Bill was presented to the House of Lords to permit co-ops, bencoms, friendly societies and mutual insurers issue redeemable share capital while retaining their mutual identity. the bill has been sponsored and supported by Mutuo. Here is my analysis of the original 2013 Bill and its rationale.
In late 2014, the plan to apply changes to co-operative and community benefit societies was dropped so the re-presented Bill (through all stages in the House of Lords and in the House of Commons by January 2015) only applies to friendly societies and mutual insurers and co-ops and community benefit societies are left without any powers to redeem or buy back their transferable shares on the same terms as companies.