Reinventing Co-operatives - Seamus O Donohoe
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Presented at the Irish National Rural Network conference on the 1st of December 2009
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Reinventing Co-operatives - Seamus O Donohoe
- 1. Reinventing Co-operatives Seamus O'Donohoe National Rural Network Secretary Annual Conference ICOS Ltd Tuesday 1 st December 2009 www.nrn.ie
- 3. The Co-operative Identity IMPROVE MEMBERS INCOMES/SERVICES PIONEER NEW DEVELOPMENTS IMPROVE THE SOCIAL ENVIRONMENT A BUSINESS ORGANISATION
- 20. Co-op v Private Company Yes No Audit Exemption No Yes Individual Share Investment Limit No Yes, with permission Funds from Public To amt authorised Unlimited Share Capital 1 to 100 7 to No limit Membership One vote per share One man one Vote Voting Private Company Co-op Issue
- 21. Co-op v Private Company Yes but constraints Yes Increase /Reduce Share Capital - Conduct an annual audit - Submit annual return - Notify changes of directors - Significant fines/ penalties - Answerable to DCE - Conduct an annual audit, - Submit annual/triennial returns Compliance Burden Same Same Tax Burden € 60, plus cost of model memo and articles plus solicitor/accountants fees € 228 if model rules are used unchanged plus initial administration/affiliation charge to ICOS of €407 Incorporation Costs Private Company Co-op Issue
- 22. Co-op v Private Company No Up to €10,000 Intestacy Memorandum delimits Rules delimit Transfer of Shares No Up to €15,000 Powers of Nomination Solicitor/Accountant ICOS Principle Source of Professional Advice - Customisation of rules - Registration of the Society - Interpretation of rules, - Disputes resolution, - Attendance at Board & AGM’s Private Company Co-op Issue
Editor's Notes
- There are a number of definitions as to what constitutes a co-operative. The definition that appears to most accurately reflect the ideal which farmer co-operatives is as follows; “ A Co-operative is a user owned user controlled business that distributes benefits on the basis of use ” For various reasons, very few co-operatives can fully accord in practice with this definition in all respects. This definition however, remains a useful yardstick for measuring the extent to which our various farmer owned businesses are attaining this definition of a co-operative.
- Cooperatives are essentially economic enterprises with a social concern. Most people agree that this is a practical interpretation of the cooperative idea. Members in a cooperative give varying degrees of emphasis to the economic developmental and social role of their cooperative. Most farmers value primarily the strength and control that their cooperative gives them in the marketplace when operating as an efficient business organisation. There is however a recognition that the social and developmental functions of the cooperative are important to members, their families and the community at large. Farmers see co-operation as a more equitable form of capitalism, providing a countervailing force against the concentration of land and capital into the hands of the few.
- MARKET FAILURE : For most farmers their first choice if they have surplus cash for investment would be to invest it in their own farm enterprise. In Ireland, however as in many other countries there are many constraints on the scale to which the average farm unit can grow. The price of land and quotas are just two examples of resources whose supply is scarce. Even allowing for these barriers why do farmers to invest their savings in cooperatives when other investments appear to give a higher return on capital ? The most common answer provided to this question by farmers is that without some structure in the market place to protect their interests they would be very weak buyers and sellers of goods and services. What farmers are recognising is that markets do not work perfectly and unless they organise themselves in to some form of association, the marketplace will fail to protect their interest
- THE COOPERATIVE ROLE In all of the above situations an effective cooperative can service farmers without fear of monopolistic profits being extracted. If operated at cost and effectively controlled by farmers, it would bring the benefits of an efficient plant size to farmers without the adverse affects resulting from loss of competition.