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Co-operative Legislation in Norway
Reasons, requirements and results
Nordic Cooperative Network Conference
Reykjavik, 21 March 2014
May Woldsnes
Director
The Norwegian Cooperative Centre
www.samvirke.org
The Norwegian Cooperative Centre
• Established 1 January 2008
• Founding fathers: 7 big co-operative organizations
Today
• 18 member organizations
• Entirely financed by the members
• 1 employee
Main functions
• A centre of information and documentation
• A centre of expertise – advisory services
• Lobbying for good framework conditions
• Network of and for co-operatives
Co-operatives in Norway
• 9 000 – 10 000 co-operatives altogether(?)
• Members ??
• The biggest sectors:
Consumer, agriculture, fisheries and housing
• Other important sectors:
Energy, water supply, sewage, transport, kindergardens,
sports and leisure
• Coming sectors – after 2008:
Consultancy services, design and arts, tourism, health,
education, regional food concepts, etc.
The legal status before 1 January 2008
• No specific, universal co-operative legislation
• Co-operatives were regulated by exceptions in other legislation
• The bylaws were of major importance
By consequence:
• Difficult to set up and run a co-operative
• Very little knowledge about co-operatives among lawyers,
auditors, accountants and other advisors
• Very little awareness of the existence of the co-operative model
• Very little knowledge about how to set up a co-operative
• A feeling of “What is not regulated by law does not exist”…
The Co-operative Societies’ Act
- Background
•
Public commission (1999 – 2002)
•
Adopted by the Norwegian Parliament 27 June 2007
•
Entered into force 1 January 2008
•
Based upon the co-operative principles and values, protecting the
distinctiveness of co-operatives
•
One common law for all co-operatives
Exceptions: Co-operatives with already specific sector legislation
- building and housing associations,
- mutual insurance companies
•
Period of transition for co-operatives established before
1 January 2008: Five years (2008 – 31 December 2012)
The Co-operative Societies’ Act
- Purpose
• To defend and to protect the distinctiveness of co-operatives
• To make it easier to establish co-operatives
• To put co-operatives as a business model on the agenda
• To change the common attitude to co-operatives
• To give higher status to the co-operative business model
• To give higher status to co-operatives
The Co-operative Societies’ Act
- The attitude of the existing co-operatives?
• Mainly positive
• 3 representatives from co-operatives in the Public Commission
• A real feeling that the purpose was to promote co-operatives
• The draft opened up for flexibility in bylaws etc.
• A Co-operative Societies’ Act would raise the status of
co-operatives and of the co-operative model
• New co-operatives would give legitimacy to the business model
and to already existing co-operatives
The Co-operative Societies’ Act
- Survey of the content (1/2)
164 sections grouped into 14 main chapters:
• Chapter 1, Sections 1 – 7:
Introductory provisions (i.a. definition)
• Chapter 2, Sections 8 – 13:
Formation of a co-operative (bylaws)
• Chapter 3, Sections 14 – 24: Membership
• Chapter 4, Sections 25 – 34: Economic and financial issues
• Chapter 5, Sections 35 – 63: The annual meeting, etc.
• Chapter 6, Sections 64 – 96: The management of the co-operative
• Chapter 7, Sections 97 – 101: Audits
The Co-operative Societies’ Act
- Survey of the content (2/2)
• Chapter 8, Sections 102 – 118: Merger
• Chapter 9, Sections 119 – 126: Demerger
• Chapter 10, Sections 127 – 144: Dissolution
• Chapter 11, Sections 145 – 152: Conversion to
- a private limited liability company
or
- a public limited liability company
• Chapter 12, Sections 153 – 159: Compensation
• Chapter 13, Sections 160 – 161: Rules governing legal proceedings
• Chapter 14, Sections 162 – 164: Entry into force
Transitional rules
Amendments to other acts
The Co-operative Societies’ Act
- The co-operative identity?
• 2 physical and/or legal persons
• Covers both «company» and «association»
• Members´ economic advantage
• Wide definition of «economic advantage»
• One member – one vote, or according to participation
• Limited interest on share capital
• Distribution of capital upon dissolution – according to participation
• No external investors
• Members´ capital accounts or «postponed payment» fund
The Co-operative Societies’ Act
- Results?
• The Co-operative Societies’ Act functions basically according to the
intentions
• The Act makes it very easy to set up and to run a co-operative
• Greater interest in co-operatives and the co-operative model
• Increase in co-operatives in new areas – consultants, arts, tourism,
But:
• Still, a great need for information and knowledge
• Changes in other legislation – need for changes in co-op legislation
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