An unlevel playing field for co-operatives?

In recent years I’ve been involved in two local community projects and have in each case taken on the responsibility for arranging for them to be legally incorporated. The first we registered as a charitable company limited by guarantee, using the model articles of association which the Charity Commission makes freely available on their website and adapting them slightly to meet our own requirements. We sent off the forms to Companies House together with, I think, a £15 cheque, and all was done and dusted very quickly.

This time we chose to register under the Co-operatives and Community Benefit Societies Act as a community benefit society (‘bencom’) and the experience has been altogether different. It cost very much more, and we had to make do with model rules which ideally we’d have slightly altered. And the process of registration as a charity with HMRC (bencoms do not fall under the Charity Commission’s remit and have to be separately registered with HMRC) was exceptionally tedious, taking in the end over seven months.

I’ve drawn (although only indirectly) on these personal experiences for a piece in this week’s issue of Co-operative News, which has come out with the headline The co-operative disadvantage: why the movement needs a level playing field. My opening sentences were designed to be provocative:  who would voluntarily choose to register a new co-operative business or a new community organisation under the Co-operative and Community Benefit Societies Act when other legal models are arguably simpler, cheaper and more flexible?”

I expect my piece may be controversial with some, and I’m looking forward to seeing what letters come through in reply to CN.  You can always start a debate here too, by commenting on this blog


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