When setting up, most businesses “incorporate”. This means they take on a legal form and in so doing, they become a corporate body rather than a collection of individuals. One of the key reasons to incorporate is because the members of the incorporated body enjoy legal protection if they have made appropriate and legal decisions. Someone can potentially take legal action against the body as a whole, but usually not against individual members.

Registering a society

It is possible for a new organisation to register a co-operative society direct with the Financial Conduct Authority. However, doing so will incur an automatic registration fee of £950 (no VAT) as the FCA is charged with reviewing the rules submitted to ensure that they comply with legislation and meet the condition for registration.

For this reason, we recommend that your organisation registers via a sponsoring body. A sponsoring body is an agent that has had model rules accepted by the FCA as complying with the requirements for registration.  CCH works with Co-operatives UK’s registration service as it is the sponsoring body for our model rules.  Find out more about the start-up process here.

This is a simple, subsidised digital registration service and will:

• Register your housing co-operative with the Financial Conduct Authority.
• Guide you through the process wherever you get stuck.

Registration costs £200 + VAT* which includes the statutory fee. This fee is subsidised thanks to The Co‑operative Bank. If you use this service, you will also receive one year’s membership to Co‑operatives UK.

*The £200 + VAT subsidised fee includes up to 6 amendments to the model governing documents. If you wish to make more than 6 amendments please contact Co-operatives UK for confirmation on the final fee.

Co‑operatives UK reserves the right to charge more for the registration if your co-operative requires additional advice or services not accounted for in their package of support.

Before instructing Co-operatives UK, organisations should seek advice about the correct model to suit their needs.

CCH can provide some advice on this, however we are not legally qualified or indemnified and advise organisations to also get appropriate legal advice.

Please note; there are fees associated with our CCH advice and the registration service.

Common features of the housing co-operative model rules

One feature that all the rules have in common is that they refer to and are in compliance with the Co‑operative and Community Benefit Societies Act 2014 which governs the legal status of co‑operative societies.

The rules set out how the co-operative’s membership arrangements work and how it is governed.  Rules for societies must cover the following issues:

• the objects of the co-operative – defining what the co-operative is permitted to do (ie providing or managing housing in some way under co-operative principles)
• the powers the co-operative has – usually doing what it needs to do to achieve the objects
• saying where the registered office is
• information about who can be co-operative members and the shares that they can buy
• how people apply to be members
• how membership ends and how members can be expelled
• how general meetings (which all members can attend) are held, particularly the annual general meeting
• if there is a management committee, how it works, how its members are elected and removed and what powers it has
• what borrowing the co-operative can make
• auditing requirements for the co-operative’s accounts
• how disputes in the rules are dealt with
• how the rules can be amended
• what happens if the co-operative is wound up

CCH approach to rules

One feature of the rules the CCH has produced is that they include a lot of detail.  Some advocate that rules should not contain considerable detail so that co-operatives can produce supplementary detail in policies and standing orders which would be easier to change.  Our experience is that in practice in housing co-operatives, not including detail in the rules means that, as co‑operative memberships change over the years, co-operatives can lose their clarity about how things should be done on key governance issues.  Our intention with including detail is to ensure that co-operative members, now and in the future, will be able to get the information they need by looking at the rules.