Bill to simplify setting up co-ops and update financial reporting rules

FARM co-ops will be easier to set up and will enjoy more relevant financial reporting obligations thanks to legislation to be promoted by Enterprise Minister Richard Bruton.

He has secured government approval for his planned draft legislation, which should ease the regulatory burden on co-operative societies and make it easier to start up and run a co-op as an alternative form of enterprise organisation.

The Irish Dairy Board and the Irish Co-operative Organisation Society has been pushing for this regulatory relaxation since last July, notably requesting greater freedom to determine their financial year end.

Mr Bruton said that he will now press ahead with the reforms. The move comes following his recent publication of the Companies Bill, which will drastically reduce red tape on companies and other moves to reduce the burden of government-imposed burdens on business.

Mr Bruton said: “I have consistently said that if we are to get the economy growing and create jobs in Ireland we will have to work hard to reduce business costs.

” A crucial part of this will be to reduce those costs, which are directly under the control of government: red tape.

“I made a start on this recently with the publication of major reforms to company law, which will make it much easier and cheaper to start and run a private limited company.

“However it is important to recognise that there are alternatives to the limited company. Other forms of enterprise organisation can play a role in meeting needs in different sectors, and I am determined to ensure the legislation governing these models is up to date and that the burden of red tape is kept to a minimum.

“This legislation addresses particular problems which have been identified in the co-operative sector, and will help ensure that this model can thrive and grow to its potential.”

The proposed new legislation will make the following main changes to the Industrial and Provident Societies Acts 1893 to 1978, the legislation applying to most co-operatives in Ireland:

- Ease financial reporting restrictions by extending the period for the preparation and submission of the annual return and accounts.

- Abolish the statutory limit on individual shareholdings in societies and the related triennial return of shareholders.

- Make available to societies the examinership process of the Companies Acts.

- Make it easier for cancelled societies to be restored to the register.

- Ease fundraising restrictions for non-agricultural societies.

The year 2012 has been designated by the UN as the International Year of the Co-operative, with the aim of highlighting the contribution of co-operatives to socioeconomic development, encouraging national governments to produce regulations conducive to the formation, growth and stability of co-operatives.

The coalition’s programme for government has also committed to promoting appreciation of the co-operative as a form of enterprise organisation.