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

The Norwegian Cooperative Centre Established 1 January 2008 Founding fathers: 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

Co-operatives in Norway – co-operatives altogether(?) Members ?? The biggest sectors: Consumer, agriculture, fisheries and housing Other important sectors: Energy, water supply, sewage, transport, kindergardens, sports and leisure Coming sectors – after 2008: Consultancy services, design and arts, tourism, health, education, regional food concepts, etc.

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”… The legal status before 1 January 2008

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)

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 The Co-operative Societies’ Act - Purpose

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 The Co-operative Societies’ Act - The attitude of the existing co-operatives?

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 The Co-operative Societies’ Act - Survey of the content (1/2)

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 The Co-operative Societies’ Act - Survey of the content (2/2)

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 The Co-operative Societies’ Act - The co-operative identity?

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 The Co-operative Societies’ Act - Results?