On the frustrations of incorporating a new coop

Four years or so back I undertook myself the legal incorporation of a new member-run community organisation (a local development trust), established under the Companies Act as a charitable company limited by guarantee.  The process was a doddle and pretty well cost-free.  We were able to use model rules provided by the Charity Commission, which we amended to meet our needs.

Now I am trying to incorporate a new charitable community benefit society (a local community land trust I’m involved in) under what was the old Industrial & Provident Societies Act and is now the Co-operative and Community Benefit Societies Act.  It is a very much complex, costly and lengthy process, despite the best efforts of various people to speed things along.  A doddle?  Absolutely not.

I’m afraid one reason for this is that Co-operatives UK obtains a useful income stream from incorporations of new cooperatives and community benefit societies undertaken using its model rules (as most are).  This is a practice it inherited from the old Industrial Common Ownership Movement, and ICOM’s reliance on income from incorporations was in my opinion highly regrettable.  I am sympathetic to Co-operatives UK’s funding difficulties, but ultimately this has to change.  We need equality in Britain between Companies Act and Co-operative and Community Benefit Societies Act incorporations.

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Going for ever: ‘industrial and provident societies’

Tomorrow we say farewell to the Industrial and Provident Societies Act, the legislation which has provided a legal framework for the vast majority of Britain’s coops for over 110 years.  We welcome instead the new Co-operative and Community Benefit Societies Act.

It was two early cooperative pioneers (both members of the group known as the Christian Socialists) J M F Ludlow and Edward Vansittart Neale who shepherded the first IPSA through Parliament in 1852, giving cooperative societies at least some of the legal protection which they needed to develop.  In hindsight it might have been even better if Neale and Ludlow could have arranged for the legislation to be called the Co-operatives Act but, never mind, we’ve learned to live with ‘industrial and provident societies’ over the years and in fact I will almost mourn their disappearance into history.

Don’t get too excited,  however: the new law is simply an act consolidating existing legislation, and won’t introduce any new powers for cooperatives.  I wrote about the change earlier in the year for the Guardian: it’s here, if you’re interested.