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Statute for a European Cooperative Society

ACTS

Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE).

Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees.

SUMMARY

The
completion of the internal market and the improvement it brings about
in the economic and social situation throughout the Community mean not
only that barriers to trade should be removed, but also that the
structures of production should be adapted to the Community dimension.
For that purpose it is essential that companies of all types, the
business of which is not limited to satisfying purely local needs,
should be able to plan and carry out the reorganisation of their
business on a Community scale. However, the legal framework within
which business is carried on in the Community is still based largely on
national laws. This situation forms a considerable obstacle to the
creation of groups of companies from different Member States, which is
why the Council adopted Regulation (EEC) No 2137/85 on the European Economic Interest Grouping and Regulation (EC) No 2157/2001
establishing the legal form of the European Company. These two
instruments are not, however, suited to the specific features of
cooperatives (independent associations of individuals voluntarily
associated to satisfy their common economic, social and cultural
aspirations and needs by means of a collectively-owned enterprise in
which power is exerted democratically by the members). Anxious to
ensure equal terms of competition and to contribute to its economic
development, the Community therefore decided to provide cooperatives,
which are a form of organisation generally recognised in all Member
States, with adequate legal instruments capable of facilitating the
development of their cross-border activities, through collaboration,
cooperation or mergers between existing cooperatives in the different
Member States, or through the creation of new cooperative enterprises
at European level.

With the adoption of this Regulation, a
genuine single SCE entity has been established. These new texts do in
effect permit the creation of a cooperative by persons residing in
different Member States or by legal entities established in different
Member States. With a minimum capital requirement of 30 000 euros,
these new SCEs can operate throughout the internal market with a single
legal identity, set of rules and structure. They can expand and
restructure their cross-border operations without the costly and
time-consuming exercise of setting up of a network of subsidiaries.
Cooperatives from several different countries can also now merge as
SCEs. Finally, a national cooperative operating in a different Member
State from the one in which it has its registered office can be
converted into a European cooperative without first having to be wound
up.

In order to promote the social objectives of the Community,
special provisions have also been adopted by means of a Directive,
particularly as regards employee involvement in the SCE, aimed at
ensuring that the establishment of an SCE does not entail the
disappearance or reduction of practices of employee involvement
existing within the entities participating in its establishment.

THE COUNCIL REGULATION ON THE STATUTE FOR AN SCE

Form of the SCE

The
SCE is defined as a body with legal personality for which the capital
subscribed by its members is divided into shares. Its registered
office, which is to be specified in its rules, must be within the
Community and must be in the same place as its central administration.
The SCE is to have legal personality from the day of its registration
in the State in which it has its registered office.

An SCE shall
have as its principal object the satisfaction of its members' needs
and/or the development of their economic and social activities, in
particular through the conclusion of agreements with them to supply
goods or services or to execute work of the kind that the SCE carries
out or commissions.

Formation of the SCE

Subject
to this Regulation, the formation of an SCE is governed by the law
applicable to cooperatives in the State in which it has its registered
office. An SCE may be formed as follows:

• by five or more natural persons resident in at least two Member States,
• by
  five or more natural persons and companies and firms within the meaning
  of the second paragraph of Article 48 of the Treaty and other legal
  bodies governed by public or private law, formed under the law of a
  Member State, resident in, or governed by the law of, at least two
  different Member States,
• by companies and firms within the
  meaning of the second paragraph of Article 48 of the Treaty and other
  legal bodies governed by public or private law formed under the law of
  a Member State which are resident in, or governed by the law of, at
  least two different Member States,
• by a merger between
  cooperatives formed under the law of a Member State with registered
  offices and head offices within the Community, provided that at least
  two of them are governed by the law of different Member States,
• by
  conversion of a cooperative formed under the law of a Member State,
  which has its registered office and head office within the Community if
  for at least two years it has had an establishment or subsidiary
  governed by the law of another Member State.

A Member
State may provide that a legal body the head office of which is not in
the Community may participate in the formation of an SCE provided that
legal body is formed under the law of a Member State, has its
registered office in that Member State and has a real and continuous
link with a Member State's economy.

Capital of the SCE

The
capital of an SCE shall be represented by the members' shares,
expressed in the national currency. It may not be less than 30 000
euros or the equivalent in national currency. An SCE whose registered
office is outside the Eurozone may also express its capital in euro.
The laws of a Member State requiring a greater subscribed capital for
legal bodies carrying on certain types of activity shall apply to SCEs
with registered offices in that Member State.

The capital may be
increased or reduced without amending the rules, and without any public
announcement, provided the minimum level is observed and that the
amount of the capital is disclosed annually. The general meeting is to
pass a resolution each year recording the amount of the capital at the
end of the financial year and the variation by reference to the
preceding financial year.

Statutes of the SCE

The
founder members shall draw up the statutes of the SCE in accordance
with the provisions for the formation of cooperative societies laid
down by the law of the Member State in which the SCE has its registered
office. The statutes shall be in writing and signed by the founder
members.

The statutes of the SCE shall include at least:

• the name of the SCE, preceded or followed by the abbreviation "SCE" and, where appropriate, the word "limited",
• a statement of the objects,
• the
  names of the natural persons and the names of the entities which are
  founder members of the SCE, indicating their objects and registered
  offices in the latter case,
• the address of the SCE's registered office,
• the conditions and procedures for the admission, expulsion and resignation of members,
• the
  rights and obligations of members, and the different categories of
  member, if any, and the rights and obligations of members in each
  category,
• the nominal value of the subscribed shares, the
  amount of the subscribed capital, and an indication that the capital is
  variable,
• specific rules concerning the amount to be allocated from the surplus, where appropriate, to the legal reserve,
• the powers and responsibilities of the members of each of the governing organs,
• provisions governing the appointment and removal of the members of the governing organs,
• the majority and quorum requirements,
• the duration of the existence of the society, where this is of limited duration.

Transfer of registered office

The
registered office of an SCE may be transferred to another Member State
without resulting in the winding-up of the SCE or in the creation of a
new legal person.

Principle of non-discrimination

Subject
to this Regulation, an SCE shall be treated in every Member State as if
it were a cooperative formed in accordance with the law of the Member
State in which it has its registered office.

Registration and disclosure

Every
SCE shall be registered in the Member State in which it has its
registered office in a register designated by the law of that Member
State in accordance with the law applicable to public limited-liability
companies. Notice of an SCE's registration and of the deletion of such
a registration shall be published for information purposes in the
Official Journal of the European Union.

Publication of documents
and particulars concerning an SCE which must be made public under this
Regulation shall be effected in the manner laid down in the laws of the
Member State applicable to public limited-liability companies in which
the SCE has its registered office.

Structure of the SCE

The
Regulation provides for the SCE structure to be made up of a general
meeting on the one hand, and for either a management board with a
supervisory board monitoring its activities (the two-tier system), or
for an administrative board (the one-tier system), depending on which
option is chosen in the SCE statutes.

The general meeting must be held at least once a year, not later than six months after the end of the financial year.

In the two-tier system,
a management board is to manage the SCE. The member or members of the
management board have power to represent the SCE in dealings with third
parties and in legal proceedings. They are to be appointed and removed
by the supervisory board. The same person may not serve on both boards
of the same SCE at the same time. The supervisory board may, however,
nominate one of its members to occupy a vacancy through holiday absence
on the management board. During this period, the member concerned then
ceases to exercise his/her functions on the supervisory board.

In the one-tier system,
a single administrative board is to manage the SCE. The member or
members of the administrative board have power to represent the SCE in
dealings with third parties and in legal proceedings. The
administrative board may delegate powers of management, but not other
powers, to one or more of its members.

The statutes of the SCE shall list the categories of transactions requiring:

• under the two-tier system, authorisation from the supervisory organ or the general meeting to the management organ,
• under the one-tier system, an express decision adopted by the administrative organ or authorisation from the general meeting.

Auditing and disclosure of accounts

As
regards the drawing-up, auditing and disclosure of its annual accounts,
and its consolidated accounts if any, the SCE is to be subject to the
law of the State in which it has its registered office, giving effect
to the Community legislation in force.

Winding up, liquidation, insolvency and suspension of payments

An
SCE may be wound up either by a decision of the general meeting, in
particular where the period fixed in the rules has expired or where the
subscribed capital has been reduced below the minimum capital laid down
in the rules, or by the courts, for example where the registered office
has been transferred outside the Community.

As regards
liquidation, insolvency or suspension of payments, the SCE is to be
subject to the laws of the State in which it has its registered office.

COUNCIL DIRECTIVE SUPPLEMENTING THE STATUTE FOR AN SCE WITH REGARD TO THE INVOLVEMENT OF EMPLOYEES

The
Directive governs the involvement of employees in the affairs of SCEs.
It aligns the laws, regulations and administrative provisions in force
in the Member States so as to cater for the involvement of employees in
the running of the SCE. The arrangements for the involvement of
employees shall be established in every SCE in accordance with the
negotiating procedure or in accordance with the standard rules on the
involvement of employees set by this Directive.

Negotiating procedure applicable to SCEs established by at least two legal entities or by transformation

The special negotiating body:

Where
the management or administrative organs of participating legal entities
draw up a plan for the establishment of an SCE, they shall as soon as
possible take the necessary steps to start negotiations with the
representatives of the legal entities' employees on arrangements for
the involvement of employees in the SCE. For this purpose, a special
negotiating body representative of the employees of the participating
legal entities and concerned subsidiaries or establishments shall be
created in accordance with the following provisions:

• members
  are elected or appointed in proportion to the number of employees
  employed in each Member State by the participating legal entities and
  concerned subsidiaries or establishments, by allocating in respect of a
  Member State one seat per each portion of employees employed in that
  Member State which equals 10%, or a fraction thereof, of the number of
  employees employed in all the Member States taken together;
• in
  the case of an SCE formed by way of merger, there are such further
  additional members from each Member State as may be necessary in order
  to ensure that the special negotiating body includes at least one
  member representing each participating cooperative which is registered
  and has employees in that Member State and which it is proposed will
  cease to exist as a separate legal entity following the registration of
  the SCE;
• Member States shall determine the method to be used
  for the election and appointment of the members of the special
  negotiating body.

The special negotiating body and the
competent organs of the participating legal entities shall determine,
by written agreement, arrangements for the involvement of employees
within the SCE. To this end, the competent organs of the participating
legal entities shall inform the special negotiating body of the plan
and the actual process of establishing the SCE, up to its registration.

The
special negotiating body shall take decisions by an absolute majority
of its members, provided that such a majority also represents an
absolute majority of the employees. Each member shall have one vote.
However, should the result of the negotiations lead to a reduction of
participation rights, the majority required for a decision to approve
such an agreement shall be the votes of two thirds of the members of
the special negotiating body representing at least two thirds of the
employees, including the votes of members representing employees
employed in at least two Member States:

• in the case of an
  SCE to be established by way of merger, if participation covers at
  least 25% of the overall number of employees of the participating
  cooperatives, or
• in the case of an SCE to be established by
  any other way, if participation covers at least 50% of the overall
  number of employees of the participating legal entities.

With
the exception of an SCE established by way of transformation, the
special negotiating body may decide by a majority of the votes of two
thirds of the members representing at least two thirds of the employees
not to open negotiations or to terminate them. In this case, these
votes should represent employees employed in at least two Member States.

The
special negotiating body shall be reconvened at the written request of
at least 10 % of the employees of the SCE, its subsidiaries and
establishments, or their representatives, at the earliest two years
after the above-mentioned decision, unless the parties agree to
negotiations being reopened sooner.

The agreement on arrangements for the involvement of employees:

This
agreement shall be negotiated in a spirit of cooperation between the
competent organs of the participating legal entities and the special
negotiating body, in accordance with the legislation of the Member
State in which the registered office of the SCE is to be situated.
Negotiations shall commence as soon as the special negotiating body is
established and may continue for six months thereafter. The parties may
decide, by joint agreement, to extend these negotiations up to a total
of one year from the establishment of the special negotiating body.

This agreement specifies:

• the scope of the agreement itself;
• the
  composition, number of members and allocation of seats on the
  representative body which will be the discussion partner of the
  competent organ of the SCE in connection with arrangements for the
  information and consultation of the employees of the SCE and its
  subsidiaries and establishments;
• the functions and the procedure for the information and consultation of the representative body;
• the frequency of meetings of the representative body;
• the financial and material resources to be allocated to the representative body;
• the
  arrangements for implementing information and consultation procedures
  if, during negotiations, the parties decide to establish one or more of
  those procedures instead of establishing a representative body;
• the
  procedures to be followed so that employees can elect, appoint,
  recommend or oppose their members and their rights if, during
  negotiations, the parties decide to establish arrangements for
  participation, the substance of those arrangements including the number
  of members in the SCE's administrative or supervisory body which the
  employees will be entitled to elect, appoint, recommend or oppose;
• the
  date of entry into force of the agreement and its duration, cases where
  the agreement should be renegotiated and the procedure for its
  renegotiation, including, where appropriate, in the event of structural
  changes in the SCE and its subsidiaries and establishments which occur
  after the creation of the SCE.

Standard rules:

The
Member States shall lay down standard rules on employee involvement
which must satisfy the provisions set out in the Annex to the
Directive. As laid down by the legislation of the Member State in which
the SCE has its registered office, these standard rules shall apply
from the date of the registration of the SCE where either:

• the parties so agree, or
• no
  agreement has been concluded between the special negotiating body and
  the competent organs of the legal entities within the deadline given
  but where the latter decide to accept the application of the standard
  rules in relation to the SCE and so to continue with its registration
  of the SCE. This also implies that the special negotiating body has not
  taken the decision not to open negotiations or to terminate
  negotiations already opened with the competent organs of the
  participating legal entities.

Moreover, it should be
stressed that the standard rules set by the national legislation of the
Member State of registration shall only apply in the specific cases
listed by the Directive which differ depending on the way in which the
SCE was formed (conversion, merger, etc.).

Rules applicable to SCEs established exclusively by natural persons or by a single legal entity and natural persons

In
the case of an SCE established exclusively by natural persons or by a
single legal entity and natural persons, which together employ at least
50 employees in at least two Member States, the preceding provisions
shall apply.

In the case of an SCE established exclusively by
natural persons or by a single legal entity and natural persons, which
together employ fewer than 50 employees, or employ 50 or more employees
in only one Member State, employee involvement shall be governed by the
following provisions:

• in the SCE itself, the provisions of
  the Member State of the SCE's registered office, which are applicable
  to other entities of the same type, shall apply,
• in its
  subsidiaries and establishments, the provisions of the Member State
  where they are situated, and which are applicable to other entities of
  the same type, shall apply.

Miscellaneous provisions

This
Directive also specifies reservation and confidentiality obligations,
the operation of the representative body, the procedure for the
information and consultation of employees, the protection of employees'
representatives, and other minor details which are useful for its
smooth operation.

REFERENCES

RELATED ACTS

Communication
from the Commission to the Council and the European Parliament, the
European Economic and Social Committee and the Committee of the Regions
of 23 February 2004 on the promotion of co-operative societies in
Europe [COM(2004) 18 final - Not published in the Official Journal].
The
Commission believes that the potential of cooperatives has not been
fully utilised and that their image should be improved at national and
European levels. In this context, it sets out steps which may encourage
the wider use of co-operatives across Europe. These focus on increased
visibility, further improvement of national laws on co-operatives, and
enhancement of co-operatives' contribution to community policy. The
main issues of the Communication are:

• the promotion of the
  greater use of cooperatives across Europe by improving the visibility,
  characteristics and understanding of the sector;
• the further improvement of legislation governing cooperatives in Europe;
• the maintenance and improvement of cooperatives' place and contribution to Community objectives.

Last updated: 5.12.2007

Documents / Links

• Overview: Transposition process of the SCE Directive - November 2006(pdf)
• LINK: National transposition laws and overview of the transposition process (EU Commission website)

- for some countries inofficial translations into English are available


• Legal text: Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (Link)

Legal text: Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (Link)


• REPORT: Group of Experts 'SCE - European Cooperative Society"
  
  Report on the implementation of Directive 2003/72/EC of 22 July
  2003 supplementing the statute for a European Cooperative Society with
  regard to the involvement of employees: working papers and minutes
  (Link, availabel in EN and FR)
• Consultation Document - Co-operatives in Enterprise Europe (Link)
  
  The Commission services prepared the consultation document
  "Co-operatives in Enterprise Europe" in December 2001 in order to
  improve knowledge of the co-operative sector at European level, and to provoke a wider discussion of the issues of concern to co-operatives.

http://ec.europa.eu/enterprise/entrepreneurship/coop/statutes/statutes-coop.htm

11. EUROPEAN CO-OPERATIVE SOCIETY

Directive and Regulation on the European
Co-operative Society

Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute
for a European Cooperative Society with regard to the involvement of
employees.

Available in pdf format (200kb) in

Council Regulation (EC) No. 1435/2003 of 22 July 2003 on the Statute
for a European Cooperative Society (SCE).

Available in pdf format (300kb) in

REPORT

Group
of Experts 'SCE - European Cooperative Society" on the implemantation
of Directive 2003/72/EC of 22 July 2003 supplementing the statute for a
European Cooperative Society with regard to the involvement of
employees: working papers and minutes

Available in pdf format (800 kb) in

NATIONAL IMPLEMENTATION MEASURES OF DIRECTIVE 2003/72/EC

Please
note that these are unofficial English language translations and that
only the original language versions contain the authoritative text.

• Available in pdf format:

Country	Documents
General Table
Belgium	Collective Agreement Decree
Bulgaria	Labour Code Law
Czech Republic
Denmark
Germany
Estonia
Spain
Iceland	is
Ireland
Italy	Common opinion Decree
Cyprus
Latvia
Liechtenstein
Lithuania
Hungary
Malta
Netherlands
Norway	no
Austria
Poland
Romania
Slovenia
Slovakia
Finland
Sweden
United Kindom