In both the Republic of Ireland (ROI) and Northern Ireland (NI), the main legal form for registration of a cooperative is the industrial and provident society (IPS). IPSs are registered (but not regulated) through the Financial Conduct Authority (FCA) in NI and byThe Registrar of Friendly Societies in ROI.
IPS cooperatives are registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 in Northern Ireland and the registration is carried out by the Registrar based in the Department of Enterprise, Trade and Investment (DETI). In the Republic of Ireland, cooperatives register under the Industrial and Provident Societies Acts 1893-1978.
In Northern Ireland (and the rest of the UK), there are two main structures of IPS:
– Bona fide co-operatives which trade for the mutual benefit of their members. Its basic characteristics are:
- One member, one vote;
- Return on capital must be limited
- Profits shared among members must be shared using an equitable formula
- There is no artificial restriction on membership.
– Community Benefit Societies or “bencom” have the same characteristic as cooperative societies but they are set up to benefit the community more widely, whether people are members or not. Moreover, Bencoms can apply for charitable status to the HM Revenue & Customs. Recent UK legal developments introduce the possibility of asset lock for Bencoms.
In Northern Ireland, at least three members are needed to register an IPS. In the Republic of Ireland, the minimum number of members for an IPS is seven.