Co-op, Bencom, and Credit Union Law Changes from 08.01.12: A Summary
The text of the Order can be found here
The history of its development and the rationale for it can be found here
Co-operative and Community Benefit Societies are still officially called industrial and provident societies as section 2 of the Co-operative Community Benefit Society and Credit Unions Act 2010 which renames them is not yet in force but here they will be given their new name on the basis that the 2010 Act will be brought into effect one day.
Summary of Changes
The LRO makes the following changes by amending the relevant Acts of Parliament
These changes apply to societies other than credit unions:
- The limit on the value the shares that can be held in a society is abolished for shares which are not withdrawable
- Societies can decide their own years of account for the purpose of their annual returns
These changes apply to any society including a credit union:
- Societies can charge up to £5 to provide a copy of their rules to people who are not members or to members who have already had a copy
- The minimum age limit of 16 for membership of a society is abolished and the minimum age for serving on the board and signing documents and receipts becomes 16. The society's rules may still limit membership to people aged 18 or more
- Dormant societies with no transactions in their accounts (apart from FSA fees, dividend payment and interest payments) for two years before the current accounting year can be dissolved by special resolution of their members. A credit union also has to have FSA confirmation of the resolution.
- Societies may publish unaudited interim revenue accounts and balance sheets together with its latest year end account and balance sheet as long as it clear marks them as unaudited.
These changes apply only to credit unions:
- New and more liberal Common Bond requirements
- Corporate members permitted subject to conditions and limits
- limit on percentage of non-qualifying members removed
- Deferred shares and interest bearing shares allowed
- Effect of securing loan on member's shares clarified
- Fee for ancillary services not limited to recovery of cost of providing them
- Liberalisation of limit on share dividend payable by credit unions