Co-operative Legislation in Norway Reasons, requirements and results

1. Co-operative Legislation in Norway Reasons, requirements and results Nordic Cooperative Network Conference Reykjavik, 21 March 2014 May Woldsnes Director The Norwegian Cooperative Centre www.samvirke.org

2. The Norwegian Cooperative Centre • Established 1 January 2008 • Foundingfathers: 7 big co-operative organizations Today • 18 member organizations • Entirely financed by the members • 1 employee Main functions • A centre of information and documentation • A centre of expertise – advisory services • Lobbying for good framework conditions • Network of and for co-operatives

3. Co-operatives in Norway • 9 000 – 10 000 co-operatives altogether(?) • Members ?? • The biggestsectors: Consumer, agriculture, fisheries and housing • Otherimportantsectors:Energy, water supply, sewage, transport, kindergardens, sports and leisure • Comingsectors– after 2008: Consultancy services, design and arts, tourism, health, education, regional foodconcepts, etc.

4. The legal status before 1 January 2008 • No specific, universal co-operative legislation • Co-operatives were regulated by exceptions in other legislation • The bylaws were of major importance By consequence: • Difficult to set up and run a co-operative • Very little knowledge about co-operatives among lawyers, auditors, accountants and other advisors • Very little awareness of the existence of the co-operative model • Very little knowledge about how to set up a co-operative • A feeling of “What is not regulated by law does not exist”…

5. The Co-operative Societies’Act- Background • Public commission (1999 – 2002) • Adopted by the Norwegian Parliament 27 June 2007 • Entered into force 1 January 2008 • Based upon the co-operative principles and values, protecting the distinctiveness of co-operatives • One common law for all co-operatives Exceptions: Co-operatives with already specific sector legislation - building and housing associations, - mutual insurance companies • Period of transition for co-operatives established before 1 January 2008: Five years (2008 – 31 December 2012)

6. The Co-operative Societies’Act- Purpose • To defend and to protect the distinctiveness of co-operatives • To make it easier to establish co-operatives • To put co-operatives as a business model on the agenda • To change the common attitude to co-operatives • To give higher status to the co-operative business model • To give higher status to co-operatives

7. The Co-operative Societies’Act- The attitude of the existing co-operatives? • Mainly positive • 3 representatives from co-operatives in the Public Commission • A real feeling that the purpose was to promote co-operatives • The draft opened up for flexibility in bylaws etc. • A Co-operative Societies’ Act would raise the status of co-operatives and of the co-operative model • New co-operatives would give legitimacy to the business model and to already existing co-operatives

8. The Co-operative Societies’Act - Survey of the content(1/2) 164 sections grouped into 14 main chapters: • Chapter 1, Sections 1 – 7: Introductory provisions (i.a. definition) • Chapter 2, Sections 8 – 13: Formation of a co-operative (bylaws) • Chapter 3, Sections 14 – 24: Membership • Chapter 4, Sections 25 – 34: Economic and financial issues • Chapter 5, Sections 35 – 63: The annual meeting, etc. • Chapter 6, Sections 64 – 96: The management of the co-operative • Chapter 7, Sections 97 – 101: Audits

9. The Co-operative Societies’Act - Survey of the content (2/2) • Chapter 8, Sections 102 – 118: Merger • Chapter 9, Sections 119 – 126: Demerger • Chapter 10, Sections 127 – 144: Dissolution • Chapter 11, Sections 145 – 152: Conversion to - a private limited liability company or - a public limited liability company • Chapter 12, Sections 153 – 159: Compensation • Chapter 13, Sections 160 – 161: Rules governing legal proceedings • Chapter 14, Sections 162 – 164: Entry into force Transitional rules Amendments to other acts

10. The Co-operative Societies’Act - The co-operative identity? • 2 physical and/or legal persons • Covers both «company» and «association» • Members´ economic advantage • Wide definition of «economic advantage» • One member – one vote, or according to participation • Limited interest on share capital • Distribution of capital upon dissolution – according to participation • No external investors • Members´ capital accounts or «postponed payment» fund

11. The Co-operative Societies’Act - Results? • The Co-operative Societies’ Act functions basically according to the intentions • The Act makes it very easy to set up and to run a co-operative • Greater interest in co-operatives and the co-operative model • Increase in co-operatives in new areas – consultants, arts, tourism, But: • Still, a great need for information and knowledge • Changes in other legislation – need for changes in co-op legislation

12. www.samvirke.org