Legal Frameworks

1. Legal Framework
Module Number 2

2. Project No: 2017-1-IE01-KA202-025711
This project has been funded with the support of the European
Commission. This publication reflects the views only of the author, and the
Commission cannot be held responsible for any use which may be made of
the information contained therein.
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Module 2: Legal Framework of Cooperativism
Coming together is a beginning. Staying
together is progress. Working together
is a success.
Henry Ford.

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Develop competencies to implement relevant internal,
external, sectoral and institutional legal provisions in
the enterprise management of co-operatives.
Objective of the Module

5. What's in this module?
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1. Cooperative Legislation
2. The Rules of Procedure
3. Roles and responsibilities of cooperative participants
4. Statutory responsibilities and rights of employees and
employers in cooperative societies
5. Statutory Responsibilities and Product Liability
6. Statutory responsibilities and fraud prevention

6. A cooperative is a society voluntarily organized by a
group of people to serve themselves and the
community.
It is based on mutual help and the assurance that its
members work together for a common good.
1. Cooperative Legislation
What is a Cooperative?
Remembering...

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Values of cooperativism
VALUES
ETHICAL CO-OPERATIVES
1. HONESTY 1. MUTUAL HELP
2. TRANSPARENCY 2. ACCOUNTABILITY
3. DECENCE 3. DEMOCRACY
4. SOCIAL RESPONSIBILITY 4. EQUALITY
5. CONCERN FOR OTHERS 5. EQUITY
6. SOLIDARITY

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The 7 cooperative principles
PRINCIPLES1. Voluntary
and open
membership
2. Democratic
control of
members
3. Economic
participation of
members
4. Autonomy and
independence
5. Education,
training and
information
6. Cooperation
between
cooperatives
7. Interest in
the community

9. Cooperative enterprise models and
other corporate models
COOPERATIVE ANOTHER CORPORATE
MODEL
The authority is held by the
partners
The authority is held by the person
who owns most of the capital.
Capital is a basic tool to
provide service to the partner
Work, customers, suppliers... To
achieve the capital objectives
Distribution of benefits
according to participation in
cooperative activity
Capital-based distribution of profits

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1. Cooperative Legislation
Each country has its own cooperative legislation.
SPAIN: Law on Cooperative Societies in Spain:
http://www.infoagro.com/legislacion/leyes_cooperativas/ley_espana.htm
IRELAND: Cooperatives Act in Ireland:
FRANCE: Cooperative law in France:
LATVIA: Cooperative law in Latvia:

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1. Cooperative Legislation
However, for cooperatives with members in several
European countries:
• Council Regulation (EC) No 1435/2003 of 22 July
2003 on the Statute for a European Cooperative
Society (SCE).
• The involvement of employees in the SCE shall
be governed by the provisions of Directive
2003/72/EC.
• Law No 3/2011 of 4 March 2001 regulating
European cooperative societies with their
registered office in Spain.

12. • The Statutes of a cooperative.
Regulate the social aspects of the
cooperative.
• Internal Regulations (IR).
Regulates working conditions
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1. Rules of Procedure

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3. Roles and Responsibilities of
Cooperative Participants
ASSEMBLY
BOARD OF DIRECTORS
MANAGER
+
TECHNICAL EQUIPMENT

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3. Roles and Responsibilities of
Cooperative Participants
It is the meeting of the members
constituted for the purpose of
deliberating and adopting agreements
on matters that are legally within its
competence, linking decision-making to
the whole co-operative (including
absentees and dissenters).
The General Assembly

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3. Roles and Responsibilities of
Cooperative Participants
The Assembly: Competencies
 Performs the analysis of social management.
 Approves the annual accounts, management
report and the use of available surpluses or
imputation of losses.
 Appoints and revokes the members of the
board of directors, auditors.
 Approves the amount of remuneration of
managers and administrators.
F

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3. Roles and Responsibilities of
Cooperative Participants
 Modify the statutes, approve or modify the
internal rules of the cooperative.
 Approve new compulsory participations,
admission of voluntary participations, fix the
participations of new members, establish
the periodic incomes or quotas.
The Assembly: Competencies

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3. Roles and Responsibilities of
Cooperative Participants
The Assembly:
Competencies
The right
to vote
…One vote
per
representative
Adoption of
resolutions

18. 3. Roles and Responsibilities of
Cooperative Participants
The assembly is the highest
decision-making body in a
cooperative...
... but it is NOT the most appropriate
decision-making body.

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3. Roles and Responsibilities of
Cooperative Participants
The Board of Directors:
It is the collegiate governing body to which
corresponds, at least, the maximum management,
the supervision of the directors and the
representation of the cooperative, subject to the
laws, statutes and general policy established by the
general assembly.
The Board of Directors is the exclusive
representative and management body of the
cooperative.

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3. Roles and Responsibilities of
Cooperative Participants
The Board of Directors:
Jurisdiction and Representation
 The board of directors is responsible to other legal
entities for any competence not reserved by law or by
the statutes.
 The president of the board of directors will legally
represent it.

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3. Roles and Responsibilities of
Cooperative Participants
The Board of Directors: Functions
 Provides guidelines for developing and
implementing the co-operative's strategic plan.
 Controls the evolution of the cooperative based on
market and adopted planning.
 It chooses and evaluates the management and
replaces it if necessary.
 Controls and enhances the development of the
company's managers and technicians.
F

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3. Roles and Responsibilities of
Cooperative Participants
The Board of Directors: Structure
 The structure will be established by the
statutes of the cooperative.
 The number of members should not be less
than 3 or more than 15 and in any case there
will be a president, a vice-president and a
secretary.
 A workers' representative may be included.
ORGANISATION CHART BOARD OF
DIRECTORS
PRESIDENT
SECRETARYTREASURE VOCAL
VICE-
PRESIDENT

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3. Roles and Responsabilities of
cooperative participants
The Boards of Directors: Election
 Directors shall be elected by general assembly by
secret ballot and by relative majority.
 The statutes or rules of procedure shall govern the
electoral process.
 The offices of president, vice-president and
secretary shall be elected, from among the
members, by the board of directors or by the
assembly in accordance with the legal provisions.

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3. Roles and Responsabilities of
Cooperative Participants
The Boards of Directors:
 DURATION: Period defined by the statutes,
between three and six years, they can be re-
elected.
 RESCISSION: The members may be dismissed by
agreement of the general assembly, even if it does
not appear on the agenda.
 VACANCY: The resignation of the directors must
be accepted by the board of directors or by the
general assembly.

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3. Roles and Responsabilities of
Cooperative Participants
The Manager:
The complex management of any company
requires computer skills, accounting, tax and
labor, there are more and more deadlines to
meet, more legal requirements, and more
administrative bureaucracy that makes that
traditional way of running cooperatives
unviable.
The Manager is an important cog in the
organization.

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The Governing Council defines the
powers of the Manager; in addition, it
may dismiss whoever occupies that
position, as well as modify and limit the
powers granted.
• Economic management - business
• Commercial management -
articulation to the market
• Production management - technology
• Social management of the entity.
The Manager: Functions
3. Roles y Responsabilities of
Cooperative Participants
Planning
Control
Directing
Organize

27. 4. Statutory responsibilities and rights of
employees and employers in cooperative societies
Workers' rights under European law can
be found in two major laws:
• The Treaty of the European
Community, signed in Rome in 1957.
• The Treaty on European Union, signed
in Maastricht in 1992.

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• Hire employees under clearly defined and
documented conditions.
• Labour productivity is higher when staff
understand their functions correctly.
• Employment contracts must be in
accordance with applicable law.
4. Statutory responsibilities and rights of
employees and employers in cooperative societies
4.1. Staff contract:

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• Working conditions must comply with
applicable laws and EC conventions.
• Employees and employers must live up to
the physical and mental demands of
working in the co-operative.
• Employers must have realistic expectations
of their employees.
• The working day must be sustainable and
not exceed legal limits.
4. Statutory responsibilities and rights of
employees and employers in cooperative societies
4.2. Working Conditions:

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• Infrastructure and equipment must not pose a
risk to the health and safety of personnel.
• Facilities must be well designed, properly
maintained and provided with the necessary
means of safety.
• Ensure the general health of staff by carrying
out routine health examinations.
4. Statutory responsibilities and rights of
employees and employers in cooperative societies
4.3. Work environment regulations:
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31. 5. Statutory Responsibilities and
Product Liability
"A product is an item, service or idea
consisting of a set of tangible or
intangible attributes that satisfies
consumers and is received in
exchange for money or another unit of
value”
• Agent responsible for the product
• Defective product

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Extended responsability of the product
manufacturer:
The manufacturer is responsible for the
management of products that become waste.
• Council Directive 85/374/EEC on liability for
defective products
• Directive 2001/95/EC on general product safety
• Waste Directive 2008/98/EC
It is important to take out liability insurance.
5. Statutory Responsibilities and
Product Liability

33. 6. Statutory responsibilities and
fraud prevention
Fraud:
• An action contrary to the truth that harms
the person against whom it is committed.
• Acting to circumvent a legal provision
Types of fraud:
• Commercial Fraud
• Tax Fraud
• Financial Fraud
• Food fraud
J

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Commercial fraud: Corruption, money
laundering, transparency and good
business practices.
Tax fraud causes public money to be lost.
Financial fraud is the crime of making
one's own economic profit through illegal
channels, despite the prejudice of others.
6. Statutory responsibilities and
fraud prevention
F

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Food Fraud:
• Deliberate production and/or marketing of
non-compliant food for economic purposes
that could affect the health of the
consumer.
• Food fraud occurs when products do not
comply with current legislation.
Regulation (EU) No 1169/2011: Food
information provided to the consumer.
6. Statutory responsibilities and
fraud prevention

36. Thank you!