FID Trust International

An SCE needs to have as its principal object the satisfaction of its members' 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. An SCE may also have as its object the satisfaction of its members' by promoting, in the manner set forth above, their participation in economic activities, in one or more SCEs and/or national cooperatives. An SCE may conduct its activities through a subsidiary.

An SCE cannot extend the benefits of its activities to non-members or allow them to participate in its business, except where its statutes provide otherwise.

A European cooperative society (hereinafter referred to as "SCE") need to have as its principal object the satisfaction of its members' needs and/or the development of their economic and/or social activities, in compliance with the following principles:

  1. its activities need to be conducted for the mutual benefit of the members so that each member benefits from the activities of the SCE in accordance with his/her participation,
  2. members of the SCE need to also be customers, employees or suppliers or need to be otherwise involved in the activities of the SCE,
  3. control needs to be vested equally in members, although weighted voting may be allowed, in order to reflect each member's contribution to the SCE,
  4. there needs to be limited interest on loan and share capital,
  5. profits needs to be distributed according to business done with the SCE or retained to meet the needs of members,
  6. there needs to be no artificial restrictions on membership,
  7. net assets and reserves need to be distributed on winding-up according to the principle of disinterested distribution, that is to say to another cooperative body pursuing similar aims or general interest purposes.

The introduction of a European legal form for cooperatives, based on common principles but taking account of their specific features, needs to enable them to operate outside their own national borders in all or part of the territory of the Community. The rules on the involvement of employees in the European cooperative society are laid down in Directive 2003/72/EC(12), and those provisions thus form an in dissociable complement to this Regulation and are to be applied concomitantly.

Formation of the SCE

A cooperative society may be set up within the territory of the Community in the form of a European Cooperative Society (SCE) on the conditions and in the manner laid down in this Regulation.

The subscribed capital of an SCE has to be divided into shares.

The number of members and the capital of an SCE has to be variable.

Unless otherwise provided by the statutes of the SCE when that SCE is formed, no member has to be liable for more than the amount he/she has subscribed. Where the members of the SCE have limited liability, the name of the SCE has to end in "limited".

An SCE may be formed as follows:

  1. by five or more natural persons resident in at least two Member States,
  2. 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,
  3. 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 governed by the law of at least two different Member States,
  4. 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,
  5. 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 a legal body, the head office of which is not in the Community, to participate in the formation of an SCE, provided that the 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.

Minimum capital

The capital of an SCE has to be expressed in the national currency. An SCE whose registered office is outside the Euro-area may also express its capital in euro.

The subscribed capital needs be less than 30000 EUR.

The laws of the Member State requiring a greater subscribed capital for legal bodies carrying on certain types of activity needs to apply to SCEs with registered offices in that Member State.

The statutes have to lay down a sum below which subscribed capital may not be allowed to fall as a result of repayment of the shares of members who cease to belong to the SCE. This sum may not be less than the amount laid down in paragraph 2. The date laid down in Article 16 by which members who cease to belong to the SCE are entitled to repayment has to be suspended as long as repayment would result in subscribed capital falling below the set limit.

The capital may be increased by successive subscriptions by members or on the admission of new members, and it may be reduced by the total or partial repayment of subscriptions.

Variations in the amount of the capital cannot require amendment of the statutes or disclosure.

Capital of the SCE

An SCE has legal personality.

Employee involvement in an SCE needs to be governed by the provisions of Directive 2003/72/EC.

The subscribed capital of an SCE has to be represented by the members' shares, expressed in the national currency. An SCE whose registered office is outside of the Euro-area may also express its shares in euro. More than one class of shares may be issued.

The statutes may provide that different classes of shares can confer different entitlements with regard to the distribution of surpluses. Shares conferring the same entitlements need to constitute one class.

The capital may be formed only of assets capable of economic assessment. Members' shares may not be issued for an undertaking to perform work or supply services.

Shares has to be held by named persons. The nominal value of shares in a single class has to be identical. It has to be laid down in the statutes. Shares may not be issued at a price lower than their nominal value.

Shares issued for cash has to be paid for on the day of the subscription to not less than 25 % of their nominal value. The balance has to be paid within five years unless the statutes provide for a shorter period.

Shares issued otherwise than for cash has to be fully paid for at the time of subscription.

The law applicable to public limited-liability companies in the Member State where the SCE has its registered office, concerning the appointment of experts and the valuation of any consideration other than cash, have to apply by analogy to the SCE.

The statutes need to lay down the minimum number of shares which must be subscribed for in order to qualify for membership. If they stipulate that the majority at general meetings has to be constituted by members who are natural persons and if they lay down a subscription requirement for members wishing to take part in the activities of the SCE, they may not make membership subject to subscription for more than one share.

When it considers the accounts for the financial year, the annual general meeting have to by resolution record the amount of the capital at the end of the financial year and the variation by reference to the preceding financial year.

At the proposal of the administrative or management organ, the subscribed capital may be increased by the capitalisation of all or part of the reserves available for distribution, following a decision of the general meeting, in accordance with the quorum and majority requirements for an amendment of the statutes. New shares have to be awarded to members in proportion to their shares in the previous capital.

The nominal value of shares may be increased by consolidating the shares issued. Where such an increase necessitates a call for supplementary payments from the members under provisions laid down in the statutes, the decision has to be taken by the general meeting in accordance with the quorum and majority requirements for the amendment of the statutes.

The nominal value of shares may be reduced by subdividing the shares issued.

In accordance with the statutes and with the agreement either of the general meeting or of the management or administrative organ, shares may be assigned or sold to a member or to anyone acquiring membership.

An SCE may not subscribe for its own shares, purchase them or accept them as security, either directly or through a person acting in his/her own name but on behalf of the SCE.

An SCE's shares may, however, be accepted as security in the ordinary transactions of SCE credit institutions.

Statutes

The founder members need to 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 have to be in writing and signed by the founder members.

The law for the precautionary supervision applicable in the Member State in which the SCE has its registered office to public limited-liability companies during the phase of the constitution have to apply by analogy to the control of the constitution of the SCE.

The statutes of the SCE need to include at least:

  1. the name of the SCE, preceded or followed by the abbreviation "SCE" and, where appropriate, the word "limited",
  2. a statement of the objects,
  3. 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,
  4. the address of the SCE's registered office,
  5. the conditions and procedures for the admission, expulsion and resignation of members,
  6. the rights and obligations of members, and the different categories of members, if any, and the rights and obligations of members in each category,
  7. the nominal value of the subscribed shares, the amount of the subscribed capital, and an indication that the capital is variable,
  8. specific rules concerning the amount to be allocated from the surplus, where appropriate, to the legal reserve,
  9. the powers and responsibilities of the members of each of the governing organs,
  10. provisions governing the appointment and removal of the members of the governing organs,
  11. the majority and quorum requirements,
  12. the duration of the existence of the society, where this is of limited duration.

Registered office

The registered office of an SCE has to be located within the Community, in the same Member State as its head office. A Member State may, in addition, impose on SCEs registered in its territory the obligation of locating the head office and the registered office in the same place.

The registered office of an SCE may be transferred to another Member State. Such transfer will not result 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 has to 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.

Particulars to be stated in the documents

The law applicable, in the Member State where the SCE has its registered office, to public limited-liability companies regulating the content of the letters and documents sent to third parties need to apply by analogy to that SCE. The name of the SCE has to be preceded or followed by the abbreviation "SCE" and, where appropriate, by the word "limited".

Only SCEs may include the acronym "SCE" before or after their name in order to determine their legal form.

Registration and disclosure requirements

Every SCE has to 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.

An SCE may not be registered unless an agreement on arrangements for employee involvement pursuant to Article 4 of Directive 2003/72/EC has been concluded, or a decision pursuant to Article 3(6) of the Directive has been taken, or the period for negotiations pursuant to Article 5 of the Directive has expired without an agreement having been concluded.

In order for an SCE established by way of merger to be registered in a Member State which has made use of the option referred to in Article 7(3) of Directive 2003/72/EC, either an agreement pursuant to Article 4 of the Directive must have been concluded on the arrangements for employee involvement, including participation, or none of the participating cooperatives must have been governed by participation rules before registration of the SCE.

Publication of documents in the Member States

Publication of documents and particulars concerning an SCE which must be made public under this Regulation have to 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.

The national rules adopted pursuant to Directive 89/666/EEC can apply to branches of an SCE opened in a Member State other than that in which it has its registered office. However, Member States may provide for derogations from the national provisions implementing that Directive to take account of the specific features of cooperatives.

Notice in the Official Journal of the European Union

Notice of an SCE's registration and of the deletion of such a registration has to be published for information purposes in the Official Journal of the European Union after publication in accordance with Article 12. That notice needs to state the name, number, date and place of registration of the SCE, the date and place of publication and the title of publication, the registered office of the SCE and its sector of activity.

Where the registered office of an SCE is transferred in accordance with Article 7, notice has to be published giving the information provided for in paragraph 1, together with that relating to the new registration.

The particulars referred to in paragraph 1 has to be forwarded to the Office for Official Publications of the European Communities within one month of the publication referred to in Article 12(1).

Acquisition of membership

Without prejudice to Article 33(1)(b) the acquisition of membership of an SCE has to be subject to the approval of the management or administrative organ. Candidates refused membership may appeal to the general meeting held following the application for membership.

Where the laws of the Member State of the SCE's registered office so permit, the statutes may provide that persons who do not expect to use or produce the SCE's goods and services may be admitted as investor (non-user) members. The acquisition of such membership has to be subject to approval by the general meeting or any other organ delegated to give approval by the general meeting or the statutes.

Members who are legal bodies have to be deemed to be users by virtue of the fact that they represent their own members provided that their members who are natural persons are users.

Unless the statutes provide otherwise, membership of an SCE may be acquired by natural persons or legal bodies.

The statutes may make admission subject to other conditions, in particular:

  1. subscription of a minimum amount of capital,
  2. conditions related to the objects of the SCE.

An alphabetical index of all members has to be kept at the registered office of the SCE, showing their addresses and the number and class, if appropriate, of the shares they hold. Any party having a direct legitimate interest may inspect the index on request, and may obtain a copy of the whole or any part at a price not exceeding the administrative cost thereof.

Please contact us by telephone 0207 439 3400 (0044 207 439 3400 – International) or E-mail if you wish to incorporate European Cooperative Society (SCE) in the United Kingdom.