BELFAST, Northern Ireland–A new law on cooperatives and credit unions is making its way through the Northern Ireland Assembly. The Credit Unions, Co-operative and Community Benefit Societies Bill was introduced in June 2015 and is currently going through the final stages where members will have a full debate on the bill, according to local media.
The Act is sponsored by the Minister of Enterprise, Trade and Investment, Jonathan Bell, and proposes two changes in the rules governing share capital in co-operatives. The first change is a fivefold increase in the limit on a member’s holdings in withdrawable share capital from £20,000 to £100,000. According to Co-operatives UK, the limit is a major impediment for many co-operatives, particularly in the capital-intensive agricultural sector.
Co-operatives UK’s research also shows that before the limit was raised to £100,000 in Great Britain it was costing co-operatives between £1.5m and £2.5m a year through additional borrowing, with over-reliance on debt finance, a significant risk.
The bill will also remove any limit on a member’s holdings in non-withdrawable share capital. Another change will give co-ops more flexibility when it comes to financial reporting.
The Bill also introduces new, clearer legal names for industrial and provident societies. Enterprises will no longer be industrial and provident societies, they will be identified as either a “co-operative society” or a “community benefit society”.