The Law Commission has outlined a series of potential reforms to co-operatives and community benefit societies, including revised statutory definitions
The law relating to society shares would be overhauled, with definitions of withdrawable and transferable shares, and prescribed conditions for withdrawal and transfer, under the proposals, set out in a consultation paper last week. There would be protections for class rights, limits to interest payable on shares, and confirmation that shares can be issued with varying rights and to non-user investors.
More than 7,000 co-operatives exist in the UK, with about 14m members. Community benefit societies engage in activities to benefit the community, for example, owning a local pub or providing social housing.
Sir Peter Fraser, chair of the Law Commission, said: ‘Some of the laws governing co-ops and community benefit societies are over 100 years old and are in need of review.’
The consultation, ‘Co-operatives and community benefit societies’, is open until 10 December.
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