The Cooperative Association (in Dutch:”coöperatieve vereniging”) can be incorporated as a legal entity with limited liability for its participants (members). The Cooperative will be comparable with an ordinary limited liability company.
The Cooperative is in fact a species of the legal form of Association (in Dutch: ‘vereniging’), and therefore it does not have shareholders, but members. As such, it should always have at least two members upon incorporation.
Objective of a Cooperative
In general terms, the statutory objective of a Cooperative is to provide for certain material needs of its members pursuant to their “membership rights”. The basic idea is that a Cooperative conducts activities for the benefit of its members. The objective of a Cooperative can be to act as holding (or finance) company and perform related activities.
Fast Facts about the Cooperative
- The Cooperative can be set up in such a way that the members of the Cooperative will be entitled to the profit of the Cooperative, which makes the position of the “member” comparable to the one of “shareholder” in a limited liability company . The Cooperative does not have a capital divided in shares and there is no minimum capital or minimum equity requirement.
- The Cooperative has legal personality, which implies that the articles of association of the Cooperative can be worded in such a way that the Cooperative can independently own assets and liabilities in its own name.
- The articles of the Cooperative can be worded in such a way that the members have limited liability for the losses and liabilities of the Cooperative.
- Normally speaking a Cooperative has a general members meeting (comparable with the general meeting of shareholders of a B.V.) and a board of Directors. The articles of association of a Cooperative may provide for other bodies, such as a supervisory board.
- As a general rule, each member has one vote, unless the articles of association provide for a certain member to have more than one vote. There are no mandatory rules with respect to contributions and distributions.
- The articles of association of the Cooperative can provide for transferability of the membership rights. However, the acquirer of the membership rights cannot become a member before admittance by the board of directors and written notification to the Cooperative.
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