3.1 Registration processes
Any organisation seeking to become a co-operative society or a community benefit society in the United Kingdom (UK) must register its rules with the Financial Conduct Authority (FCA). The registration function of the FCA is distinct from its role as the regulator of the financial services industry.
There are several matters to consider in deciding when to register a new society. Early registration can give a new initiative some momentum, provide it with a legal identity, and limit the personal liability of the promoters. It also enables a society to begin the work of community engagement, allowing people to become members of the society. A consideration against early registration is the cost involved. Pre-start groups may simply not have the resources to cover the cost of registration. There is also the danger of adopting rules that will not be fit for the purposes of the society by the time it is ready to trade.
The FCA website has a section devoted to the registration of new societies, which provides all the necessary forms and notes. The application form states that the FCA service standard for societies is to register 90% of valid applications within 15 working days. There is no provision for the directors of societies to self-certify that the governing document is compliant with society law, as there is for companies.
Applicants are required to submit a set of rules that must cover 14 matters required by law (see Section 3.2). Rules can cover additional matters as long as they do not conflict with legislation and are acceptable to the FCA. Once approved, a society is obliged to follow its rules, so it is important that it is committed to implementing all the rules it adopts, including those that are supplementary to the rules required by law. Rules can be added, amended or rescinded, but only with the support of a general meeting of members and the permission of the FCA.
The application form also requires applicants to state whether they are registering a co-operative society or a community benefit society, and to provide additional details if they are registering the latter, including whether it will be a charitable community benefit society. An application can be made to register a new society, or to convert an existing company, including a community interest company, into a society, subject to certain conditions. A company that is a registered charity can only convert into a charitable community benefit society, and this must be approved by the relevant national charity regulator. Similarly, a CIC can only convert into a prescribed community benefit society (see Section 2.6.2).
To register a new society, the FCA requires the name, contact details and signature of at least three founder members, including the secretary of the proposed society. Applications to register a charitable community benefit society must provide more extensive details of all the proposed charity trustees so the FCA can check that the persons named have not been disqualified from acting as charity trustees.
The FCA has a duty to examine the rules of all applicant societies. This is reflected in the fees the FCA charges to register societies. The fees are lower if the applicant society uses the model rules of a sponsoring body (see Section 3.3). Model rules have been pre-approved by the FCA. It charges an additional fee for inspecting amendments to model rules made by applicant societies.
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]