The European Cooperative Society Regulations 2006

PART 3 Formation, registration, structure and proceedings of an SCE

Formation of an SCE

Participation by a body whose head office is not in the Community

4.  A body whose head office is not in the Community may participate in the formation of an SCE if the body—

(a) is formed under the law of an EEA State;

(b) has its registered office in that EEA State; and

(c) has a real and continuous link with any EEA State’s economy.

Provision of documents by a cooperative which participates in the formation of an SCE by merger

5.—(1) A cooperative which—

(a) has its registered office in the United Kingdom; and

(b) proposes to take part in the formation in any EEA State of an SCE by merger,

must send the competent authority a copy of each of the documents listed in paragraph (2) at least two months before the general meeting called to decide on the merger.

(2) The documents referred to in paragraph (1) are—

(a) the draft terms of merger; and

(b) the report drawn up in accordance with Article 23.

(3) The cooperative must send the competent authority written notice of the completion of the merger within one month of the completion.

Power to oppose the participation of a cooperative in the formation of an SCE by merger

6.—(1) The competent authority may decide on the grounds of public interest to oppose the participation of a cooperative which has its registered office in the United Kingdom in the formation in any EEA State of an SCE by merger.

(2) The competent authority must give the cooperative written notice of its decision, including the grounds for its opposition, before the issue of the certificate referred to in Article 29(2).

(3) The cooperative may not take part in the formation of the SCE following its receipt of a notice given in accordance with paragraph (2), subject to the determination of any appeal under regulation 25 against the competent authority’s decision.

Publication of a proposal to convert into an SCE

7.—(1) A cooperative which—

(a) has its registered office in the United Kingdom; and

(b) proposes to convert into an SCE,

must send the competent authority a copy of each of the documents listed in paragraph (2) at least two months before the general meeting called to decide on the conversion.

(2) The documents referred to in paragraph (1) are—

(a) the draft terms of conversion;

(b) the report drawn up in accordance with Article 35(3); and

(c) the certificate referred to in Article 35(5).

(3) The cooperative must permit its members, creditors and holders of other rights in the cooperative—

(a) to examine the documents listed in paragraph (2)(a) and (b) at the SCE’s registered office; and

(b) to obtain copies of these documents,

free of charge at least one month before the general meeting.

(4) The cooperative must notify in writing—

(a) its members; and

(b) every creditor and holder of other rights of whose claim and address it is aware,

of their entitlement under paragraph (3) in advance of it arising.

(5) At any time between the date on which—

(a) the entitlement under paragraph (3) arises; and

(b) the cooperative converts into an SCE or the conversion is discontinued,

every invoice, order for goods or business letter which is issued by or on behalf of the cooperative must contain a statement that the cooperative is proposing to convert into an SCE.

Registration of SCEs

Register of SCEs

8.—(1) The Financial Services Authority must establish and maintain a register of SCEs which have their registered office in Great Britain.

(2) The Registrar of Credit Unions for Northern Ireland must establish and maintain a register of SCEs which have their registered office in Northern Ireland.

(3) The registers established under paragraphs (1) and (2) are designated for the purposes of Article 11(1).

Provision of documents for registration

9.—(1) A body proposing to be registered in the United Kingdom as an SCE must send—

(a) a copy of its statutes;

(b) a list of the members of the competent organ signed—

(i) by or on behalf of the members of the SCE, and

(ii) by each person named in the list giving his consent to act as a member of the competent organ; and

(c) a statutory declaration signed by—

(i) a solicitor engaged in the formation of the SCE, or

(ii) a person named as a member of the competent organ in the list sent under sub-paragraph (b),

to the person who is required under regulation 8(1) or (2) to register it as an SCE.

(2) The list referred to in paragraph (1)(b) must include, in relation to each member of the competent organ—

(a) his name, any former name, date of birth, usual residential address, nationality and business occupation; or

(b) in the case of a body corporate, its name, any former name, date of incorporation and the address of its registered office.

(3) The statutory declaration referred to in paragraph (1)(c) must confirm compliance in respect of the SCE with—

(a) in the case of an SCE formed under Article 2(1), the requirements for formation under the EC Regulation and these Regulations and the requirement for registration in Article 11(2);

(b) in the case of an SCE that proposes to transfer its registered office to the United Kingdom under Article 7, the requirements for transfer under the EC Regulation and these Regulations.

Registration

10.—(1) The competent authority must register an SCE if it is satisfied that—

(a) the requirements for the formation and registration of the SCE have been met; or

(b) the requirements for the transfer of the SCE’s registered office to the United Kingdom have been met.

(2) The competent authority may accept a statutory declaration made in accordance with regulation 9(1)(c) as sufficient evidence that the requirements—

(a) in the case of the formation of an SCE, referred to in regulation 9(3)(a);

(b) in the case of the transfer of a registered office, referred to in regulation 9(3)(b),

are satisfied.

Provision of documents following registration

11.  An SCE must send the competent authority—

(a) a copy of its amended statutes within one month of any amendment to the statutes;

(b) a revised copy of the list referred to in regulation 9(1)(b) within one month of any change to the membership of the competent organ or the information required to be included in the list in accordance with regulation 9(2).

Cancellation of registration

12.—(1) The competent authority must cancel the registration of an SCE—

(a) if the SCE converts under Article 76 into a cooperative;

(b) if the SCE has ceased to exist; or

(c) in accordance with Article 7(11), if the SCE transfers its registered office to another EEA State.

(2) The competent authority may cancel the registration of an SCE at the request of the SCE.

Branches

13.—(1) The Financial Services Authority must establish and maintain a register of any branch in Great Britain of an SCE which has its registered office in another EEA State.

(2) The Registrar of Credit Unions for Northern Ireland must establish and maintain a register of any branch in Northern Ireland of an SCE which has its registered office in another EEA State.

(3) An SCE which is registered in another EEA State must within one month of opening a branch in the United Kingdom send—

(a) a copy of its statutes;

(b) a list of the members of the competent organ; and

(c) a copy of the information about the branch specified in paragraph (5),

to the person who is required under paragraph (1) or (2) to register that branch (the “registrar”).

(4) The list referred to in paragraph (3)(b) must include, in relation to each member of the competent organ—

(a) his name, any former name, date of birth, usual residential address, nationality and business occupation; or

(b) in the case of a body corporate, its name, any former name, date of incorporation and the address of its registered office.

(5) The following information is specified for the purposes of paragraph (3)(c)—

(a) the address of the branch;

(b) the date on which the branch opened;

(c) the business carried on at the branch;

(d) the name under which that business is carried on if different from the name of the SCE;

(e) a list of the names and addresses of all persons resident in the United Kingdom authorised to accept on the SCE’s behalf service of proceedings in respect of the business of the branch and of any notices required to be served on the SCE in respect of the business of the branch;

(f) a list of the names and usual residential addresses of all persons authorised to represent the SCE for the business of the branch;

(g) the extent of the authority of any person falling within sub-paragraph (f), including whether that person is authorised to act alone or jointly; and

(h) if a person falling within sub-paragraph (f) is not authorised to act alone, the name of any person with whom he is authorised to act.

(6) The SCE must send the registrar—

(a) a copy of its amended statutes within one month of any amendment to the statutes;

(b) a revised copy of the list referred to in paragraph (3)(b) within one month of any change to the membership of the competent organ or the information required to be included in the list in accordance with paragraph (4); and

(c) written notice of any change to the information required to be provided in accordance with paragraph (3)(c) within one month of any such change.

(7) The SCE must send the registrar a copy of the information referred to in Article 68(1) within three months of its publication in the EEA State in which the SCE is registered.

(8) The SCE must send the registrar written notice of—

(a) the initiation and termination of winding-up, including voluntary winding-up, liquidation or insolvency of the SCE or suspension of the SCE’s payment procedures and any decision to continue operating the SCE (within the meaning of Article 74); and

(b) the closure of the branch,

within one month of that event or decision.

(9) Where information required to be sent to the registrar in accordance with this regulation is in a language other than English, the SCE must also provide a translation in English of that information.

(10) In this regulation, “branch”—

(a) has the meaning given by the Eleventh Council Directive 89/666/EEC of 21st December 1989 concerning disclosure requirements in respect of branches opened in an EEA State by certain types of company governed by the law of another State (1); and

(b) refers to the principal branch in the United Kingdom of an SCE where the SCE has more than one branch in the United Kingdom.

Transfer of registered office to another EEA State

Provision of a solvency statement

14.—(1) The administrative organ (in a one-tier SCE) or the management organ (in a two-tier SCE) of an SCE which proposes to transfer its registered office to another EEA State must make a solvency statement in the terms set out in paragraph (4) in order to satisfy the competent authority that the interests of creditors and holders of other rights in respect of the SCE (including those of public bodies) have been adequately protected in respect of any liabilities arising, or that may arise, prior to the transfer.

(2) The solvency statement must be made by all of the members of the administrative organ or, as the case may be, the management organ.

(3) The management organ may not make a solvency statement unless that statement has been authorised by the supervisory organ.

(4) The solvency statement must state that the members of the administrative organ or, as the case may be, the management organ have formed the opinion that, for the twelve months immediately following the date on which the transfer is proposed to be made, the SCE will be able to carry on business as a going concern and will accordingly be able to pay its debts as they fall due.

(5) In forming their opinion for the purposes of paragraph (4), the members of the administrative organ or, as the case may be, the management organ must take into account—

(a) their intentions in relation to the management of the SCE’s business during that year;

(b) the amount and character of the financial resources which will, in their view, be available to the SCE during that year; and

(c) the same liabilities (including prospective and contingent liabilities) as would have been relevant—

(i) in relation to an SCE which has its registered office in Great Britain, under section 122 of the Insolvency Act 1986(2) (circumstances in which company may be wound up by the court); or

(ii) in relation to an SCE which has its registered office in Northern Ireland, under Article 102 of the Insolvency (Northern Ireland) Order 1989(3) (circumstances in which company may be wound up by the High Court),

to the question of whether a company is unable to pay its debts.

Additional forms of publication of a proposal to transfer a registered office

15.—(1) An SCE which proposes to transfer its registered office to another EEA State must send the competent authority a copy of each of the documents listed in paragraph (2) at least two months before the general meeting called to decide on the transfer.

(2) The documents referred to in paragraph (1) are—

(a) the draft transfer proposal;

(b) the report drawn up in accordance with Article 7(3); and

(c) the solvency statement made in accordance with regulation 14.

(3) The SCE must notify in writing—

(a) its members; and

(b) every creditor and holder of other rights of whose claim and address it is aware,

of their entitlement under Article 7(4) to examine and obtain copies of the documents listed in paragraph (2)(a) and (b) in advance of it arising.

(4) At any time between the date on which—

(a) the entitlement under Article 7(4) arises; and

(b) the SCE’s old registration is deleted under Article 7(11) or the transfer is discontinued,

every invoice, order for goods or business letter which is issued by or on behalf of the SCE must contain a statement that the SCE is proposing to transfer its registered office to another EEA State and identify that EEA State.

Power to oppose the transfer of a registered office

16.—(1) The competent authority may decide to oppose the transfer of an SCE’s registered office to another EEA State on grounds of public interest if the transfer would result in a change of the law applicable to the SCE.

(2) The competent authority must give the SCE written notice of its decision, including the grounds for its opposition, within two months of the publication of the draft transfer proposal.

(3) The SCE may not transfer its registered office to another EEA State following its receipt of a notice given in accordance with paragraph (2), subject to the determination of any appeal under regulation 25 against the competent authority’s decision.

Structure and proceedings of an SCE

Arrangements for employee involvement

17.  The administrative organ (in a one-tier SCE) or management organ (in a two-tier SCE) of an SCE may, without any decision from the general meeting, amend the statutes to the extent that is necessary to resolve a conflict between the statutes and the arrangements for employee involvement.

Power of general meeting to appoint or remove members of the management organ

18.  The statutes of an SCE may provide for a member of the management organ to be appointed or removed by the general meeting.

Minimum number of members

19.  The minimum number of members of each of—

(a) an administrative organ;

(b) a management organ; and

(c) a supervisory organ,

of an SCE is three.

Supervisory organ’s power to require information

20.  In a two-tier SCE, any member of the supervisory organ may require the management organ to provide information that the supervisory organ needs to exercise supervision in accordance with Article 39(1).

Acts of competent organ which are outside the SCE’s objects

21.—(1) An SCE is not bound by the acts of its competent organ in relation to third parties where such acts are outside the objects of the SCE if the SCE proves that—

(a) the third party knew that the act was outside the SCE’s objects; or

(b) the third party could not, in the circumstances, have been unaware that the act was outside the SCE’s objects.

(2) Disclosure of the SCE’s statutes is not of itself sufficient proof for the purposes of sub-paragraph (a) or (b) of paragraph (1).

Power to represent an SCE

22.—(1) The statutes of an SCE may confer the power to represent the SCE on a single person or on two or more persons acting jointly.

(2) A provision included in the statutes of the SCE in accordance with paragraph (1) may be relied on as against third parties—

(a) provided that it concerns the general power of representation; and

(b) subject to Article 47(2) and regulation 21.

First general meeting of an SCE

23.  An SCE may hold its first general meeting at any time in the 18 months following the SCE’s incorporation.

Sectorial or section meetings of an SCE

24.  The statutes of an SCE may provide for sectorial or section meetings if the SCE—

(a) undertakes different activities;

(b) undertakes activities in more than one territorial unit;

(c) has several establishments; or

(d) has more than 500 members.

Appeals

Appeals against competent authority’s decision

25.—(1) An SCE or a cooperative may appeal from a decision of the competent authority under regulation 6(1) or 16(1)—

(a) in the case of an SCE or cooperative that has (or in the case of an SCE, proposes to have) its registered office in England or Wales, to the High Court;

(b) in the case of an SCE or a cooperative that has (or in the case of an SCE, proposes to have) its registered office in Scotland, to the Court of Session; or

(c) in the case of an SCE or cooperative that has (or in the case of an SCE, proposes to have) its registered office in Northern Ireland, to the High Court in Northern Ireland.

(2) Any appeal under paragraph (1) must be brought within one month of the date of issue of the written notice of the competent authority’s decision.

(3) On an appeal under paragraph (1), the High Court, the Court of Session or the High Court in Northern Ireland may vary or set aside the decision that is the subject of the appeal.

(1)

O.J. L.395, 30.12.1989, p.36.

(2)

1986 c. 45.

(3)

S.I. 1989/2405 (N.I. 19) as amended by S.R. 1992 No.405, S.I. 2002/3152 (N.I.16) and S.R. 2004 No.307.