The Co-operative and Community Benefit Societies Act 2014 came into force on 1 August 2014, consolidating and replacing previous industrial and provident society legislation, including the Industrial and Provident Societies Act 1965, which has been renamed the Co-operative and Community Benefit Societies and Credit Unions Act 1965. It should be noted that the new 2014 Act does not apply to Northern Ireland, where the Industrial and Provident Societies Act (Northern Ireland) 1969 remains in place, and societies are registered by the Northern Ireland Department of Enterprise Trade and Investment. In the rest of the UK, societies are registered by the Financial Conduct Authority (FCA).
A major consequence of the 2014 Act is to create two categories of society:
- Societies registered prior to 1 August 2014
- Societies registered under the new Act from 1 August 2014 onwards
Societies registered under the new Act are registered specifically as a co-operative society or a community benefit society (including a charitable community benefit society). Prior to 1 August 2014, a society had to have the characteristics of either a co-operative society or a community benefit society, but it was not registered as a specific type of society. The FCA, and its predecessor registration bodies, kept no record of what type of society was being registered. A society registered before 1 August 2014 is referred to as a pre-commencement society by the FCA, and it must describe itself as either a “registered society” or a “society”, on its business stationery; it must not refer to itself as a co-operative society or a community benefit society. A registered society that wants to refer to itself as a specific type of society on its business stationery must register a new society and transfer its engagements to this new society (see Section 2.7).
The 2014 Act brought in other significant changes, including a new maximum limit of £100,000 on individual shareholdings of withdrawable share capital, new procedures for societies facing insolvency, and new additional powers for the FCA to investigate societies. The old £20,000 maximum limit on individual shareholdings still applies in Northern Ireland.
In November 2015 the FCA published its finalised guidance in its registration function under the 2014 Act. This followed a lengthy period of public consultation into proposed changes to its guidance, in the light of these legislative changes, and other concerns about current practice.
This Handbook focuses on three main types of societies: bona fide co-operative societies, community benefit societies, and charitable community benefit societies. There are other types of society, including credit unions, building societies and friendly societies, but these are subject to separate legislation and are outside the scope of this guidance.
If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at [email protected]