3.2.2 3.2.2 Objects
Objects describe the purpose of an enterprise and the scope of its operations. Most sponsoring bodies provide standard objects rules that are broad and flexible enough to enable the enterprise to fully engage in all forms of business or trade. Some sponsoring bodies encourage societies to be more specific about their purpose, in order to protect the vision of the founders, and to prevent a society changing its purpose without the consent of at least three-quarters of its membership.
To register as a co-operative society, it is a legal requirement that the society should be carrying on “an industry, business or trade”. This excludes co-operatives that are set up just as investment vehicles in order to invest in the activities of other legal entities. This is reinforced by another requirement that “a society may not be a bona fide co-operative if it carries on business with the object of making profits mainly for paying interest, dividends or bonuses on money invested with or lent to it, or to any other person”.
To register a community benefit society, the objects rules must be consistent with other requirements of the FCA to test whether the society is of benefit to the community (see Sections 2.1.3 and 2.1.4).
The objects of a charitable community benefit society must be exclusively charitable if it is to be recognised as a charity. In Scotland, applications for charitable status must be made to the Scottish Charity Regulator (see www.oscr.org.uk/charities/becoming-a-charity). In England and Wales, even though a charitable community benefit society cannot register as a charity with the Charity Commission, it must comply with the Charity Commission’s guidance on public benefit if it is to be recognised as an exempt charity by HMRC. (See www.gov.uk/government/collections/charitable-purposes-and-public-benefit)
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