Definition and legal basis:

The European Cooperative Society, also known as Societas Cooperativa Europaea (SCE), is a supranational legal form for cooperatives in the European Union. It was introduced by Council Regulation (EC) No. 1435/2003 of July 22, 2003 on the Statute for a European Cooperative Society. The aim is to facilitate and promote cross-border cooperative activities within the EU.

In Germany, the SCE is additionally regulated by the SCE Implementation Act (SCEAG). The SCE combines elements of national cooperative forms with a European dimension and enables cooperatives to operate in different EU memberstateswithout having to set up a network of subsidiaries.

Main features:

1. legal personality: The SCE is a legal entity with its own legal personality.
2. cross-border structure: at least two founding members must come from different EU Member States.
3. variable capital: The SCE’s capital is variable and adjusts as members join and leave the SCE.
4. democratic structure: As a rule, the principle of “one member, one vote” applies.
5. promotional purpose: The primary objective is to promote the economic and/or social activities of the members.

Foundation and structure:

An SCE can be established in various ways:

1. new formation by at least five natural persons and/or companies from at least two EU Member States
2. Merger of cooperatives from at least two EU Member States
3. Conversion of a national cooperative with a branch in another EU Member State

The minimum capital requirement is 30,000 euros. The SCE must have its registered office and head office in the same EU Member State.

Bodies of the SCE:

1. general meeting: supreme decision-making body in which all members are represented
2. management or administrative body: depending on the chosen system (monistic or dualistic)
3. supervisory body: In the dualistic system for monitoring the management
4. other possible bodies in accordance with the articles of association (e.g. advisory boards)

Membership and voting rights:

Membership of an SCE is open to natural persons and legal entities. The admission of new members requires the approval of the management or administrative body. As a rule, the principle of “one member, one vote” applies, although the articles of association may provide for multiple voting rights under certain conditions.

Financing and capital structure:

The SCE’s capital consists of:

1. members’ shares
2. Legal and statutory reserves
3. Possible securities issues or other forms of financing

The SCE may issue different categories of shares, which may confer different rights in relation to the distribution of profits.

Accounting and auditing:

The SCE is subject to the accounting regulations of the country in which it has its registered office. The annual financial statements and, where applicable, the consolidated financial statements must be audited by one or more persons authorized to audit financial statements in the country in which the SCE has its registered office.

Tax aspects:

The SCE is subject to the tax laws of the member state in which it has its registered office. Profits from transactions with members may be tax-privileged depending on national law. Cross-border activities can lead to complex tax situations that require careful planning.

Employee participation:

The SCE Regulation provides for rules on employee involvement. These are based on Directive 2003/72/EC supplementing the Statute for a European Cooperative Society with regard to the involvement of employees.

Advantages and disadvantages:

Advantages:
– Facilitating cross-border cooperative activities
– Uniform legal form in all EU member states
– Possibility of transferring the registered office within the EU without dissolution
– Combination of cooperative principles with a European dimension

Disadvantages:
– Complexity due to overlapping European and national legislation
– High formation and administrative costs
– Minimum capital requirement can be a hurdle for smaller cooperatives
– Lower awareness and acceptance compared to national legal forms

Practical significance and areas of application:

The SCE is particularly suitable for:
– Cross-border cooperation in the cooperative sector
– Large cooperative groups with a European focus
– Projects in the social economy and cooperative housing sector
– Agricultural cooperatives with an international focus

So far, the number of SCEs founded in Europe has been relatively low, which is partly due to the complexity of the legal form and the strong anchoring of national cooperative forms.

Current developments and future prospects:

1. increasing importance of cross-border cooperation in the cooperative sector
2. Growing role of cooperatives in the social and solidarity economy
3. Possible adjustments to the legal framework to simplify it and make it more attractive
4. Increased focus on sustainable and socially responsible business models

Summary:

The European Cooperative Society (SCE) is an innovative legal form that aims to facilitate cooperative activities at European level. It offers a platform for cross-border cooperation and combines cooperative principles with the advantages of an EU-wide recognized legal form. Although practical implementation has so far fallen short of expectations, the SCE offers interesting opportunities for cooperatives with a European focus. With the increasing importance of sustainability and social responsibility in the economy, the SCE could become more attractive in the future.