Business is a means of not only personal enrichment, but also a way to significantly support financially the area or other entity in which the segment of small or medium-sized enterprises is significantly developed. Knowing this, most self-government bodies actively support (sometimes not even on paper) citizens' initiatives.
One of these forms of business is a production cooperative. This is a voluntary (!) Association of any citizens on a membership basis with the aim of carrying out production activities. As a rule, members of a cooperative personally participate in the production process or support it technically or materially. Each cooperative is a legal entity. In any case, each of the participants has a personal share contribution. He is returned if the employee leaves the company.
Any production cooperative is an enterprise founded with the goal of making a profit. If it is provided for by the constituent documents, other legal entities may participate in its activities. That's what a cooperative is.
the federal law
All activities of such enterprises are regulated by the Federal Law, which was adopted on April 10, 1996. In addition, in addition to it, the Federal Law “On Production Cooperatives” of May 8, 1996 was adopted. Their general provisions address the following issues:
- Definition of a production cooperative.
- Basic rights and obligations of its members.
- The organization and liquidation of the enterprise.
- Other issues that we will consider in this article (they are also set forth in the Federal Law "On Production Cooperatives", but in a more concise form).
The law immediately stipulates that the charter of an enterprise should not contradict the Constitution, as well as other laws of the Russian Federation.
What is the number of cooperative members?
Under the terms of domestic law, less than five people cannot be members of a production association. It has been established that they can be both citizens of our state and citizens of foreign powers. This small (medium) business is no different from other organizations that operate in our country.
In addition, stateless persons are allowed to participate . As we have already said, another legal entity may take part in the activities of the organization. The company can do this through its representative on the grounds approved by the constituent documents.
Who can be a member of a cooperative?
The composition of the participants can include any person over 16 years old who has made a share contribution to the general cooperative fund. Important! It is allowed the presence of persons who have made a share contribution, participate in the direct management of the enterprise, but do not take any personal labor participation in its activities. The number of such people can be no more than 25% of the number of those members who themselves serve the production cooperative. This ensures an honest distribution of the parts of the profit received from the sale of products.
Unit fund sizes
Legislation has not established its size. There may be doubt about the ability of the cooperative to meet its obligations, but in this case the law says that all participants in this type of enterprise also bear personal (subsidiary) responsibility for all arising debt obligations.
What is it created for?
As we have already said, the creation of a production cooperative pursues solely profit. Moreover, a newly created enterprise can engage in any activity that is not prohibited in our country. Note that for the production of certain groups of goods it is necessary to additionally obtain special licenses.
Governing body
The meeting of members of the cooperative is the main body of its board. If the number of members exceeds fifty, a decision may be made to create a special monitoring committee. If we talk about the executive bodies, then their board again acts in their role (or / and the chairman of the cooperative).
Important! Members of the board (and the chairman) can only be persons personally participating in the activities of the organization, who are its members. Note that it is impossible to be a member of the supervisory board and board at the same time.
In what cases is a general meeting held?
Legislatively established that the general meeting of all members of the cooperative can be convened in any case, which in one way or another relates to the activities of the enterprise. Although there are exceptional situations in which the convening of this kind of meeting is strictly mandatory:
- In case of approval of the charter or, if necessary, making any changes to it.
- Determining the direction of the organization.
- In the case when the adoption or exclusion from the membership of the cooperative.
- In addition, the meeting is necessary for making decisions on establishing the size of the mutual fund, as well as for some changes regarding the rational use of the funds of the enterprise. In addition, support for entrepreneurship (obtaining investments) is also impossible without the approval of such measures by members of the organization.
- Of course, without this event it is impossible to create a supervisory committee, as well as the termination or assumption of some executive functions by other bodies of the committee. However, if the charter enshrines the right of the supervisory meeting to decide such issues on its own, the meeting is not held.
- It is necessary if the revision commission is formed in the cooperative or its activity is terminated.
- When approving annual reports, conclusions of audits or audits, as well as the distribution of profits resulting from the activities of the cooperative.
- A meeting is also held if the organization itself is being liquidated.
- In addition, it is necessary in case of creation or liquidation of branches of the enterprise.
- Finally, the members of the cooperative gather if a decision is made to join any other unions and associations.
Thus, a production cooperative is a full-fledged enterprise with its own controlling and implementing bodies.
Other meeting details
If this is provided for by the charter, other decisions may be taken by the meeting of members. In the event that such a right is assigned to this body, at a meeting should be simultaneously attended by more than 50% of all participants in the enterprise who personally take part in its activities. The decision is made by simple voting, based on the results of the vote count. However, some other methods may be introduced, but all of them should be clearly reflected in the charter of the enterprise. Regardless of the size of his share, each member of the cooperative has the right to one vote.
If we are talking about making changes to the charter of the organization or about its reorganization (the only exception is the case of transformation into a business partnership or company) and liquidation, then a decision can only be made if at least Âľ of the number of members voted for it cooperative. An enterprise can be reorganized into a business partnership or company only if the decision on this is adopted unanimously.
In the case when it is required to accept or expel a citizen from the organization, a decision on this can be taken by a minimum of 2/3 of the vote. All issues whose resolution is exclusively within the competence of the meeting cannot be delegated to other executive committees formed as part of the enterprise.
About the Supervisory Committee
As already noted, with the growth of the cooperative over fifty members by decision of the meeting, a supervisory committee can be created, whose functions should also be immediately fixed in the charter. We have already said that only a member of an organization can be a member of such a committee. The number of committee employees, as well as the duration of their authority, is determined by the results of the meeting.
The elected supervisory board has the right to independently choose its chairman. Committee meetings are held if necessary, but at least once every six months. Despite their authority, members of the supervisory board are not entitled to carry out any meaningful actions on behalf of the entire cooperative. Conversely, issues decided solely by the supervisory authority cannot be decided by a meeting of members of a cooperative.
Other executive bodies of the enterprise
Executive bodies are used to control all the daily functions of the enterprise. So, if the cooperative has more than ten people, it is required to elect members of the board. The term of office is immediately reflected in the charter. It considers all production issues that arise in a cooperative between the general meetings of its members. His competence is the resolution of all tasks that cannot be mastered by other executive bodies.
The board is chaired by the chairman. All members of the cooperative choose it at a general meeting, and only these persons can be candidates. If the company has already managed to create a supervisory committee, then it is he who nominates the chairman of the board. In any case, his powers should be strictly prescribed in the charter.
So, immediately it is necessary to establish the period during which the chairman has the right to work, clearly describe the breadth of his authority, especially in the field of the right to dispose of the property of the organization. In addition, the following information is entered into the main document on mandatory conditions: the size of the salary, the consequences of harm and loss to the enterprise.
If the cooperative already has a board, the charter should also have a list of issues that the chairman has the right to decide individually.
As a rule, the authority granted to him is enough to work on behalf of the cooperative without providing him with a separate power of attorney. He can represent the cooperative in all bodies of the municipality and state power, as well as dispose (within clearly defined boundaries) of the organization’s property. Only he has the right to conclude contracts and sign powers of attorney (especially those subject to the right of transfer), open and close settlement accounts, accept and dismiss new employees (if this clause is in the charter). In any case, the chairman is fully controlled by the general meeting of members of the organization.
About the Audit Commission
In the event that it becomes necessary to control the financial work of an enterprise, a special commission may be selected by its general meeting. If the number of members of the enterprise is less than twenty, one auditor may be appointed to this position. In no case can a member of the audit commission be an employee of another executive body of a cooperative.
The commission is assigned the obligation to fully verify the financial condition of the enterprise for the past reporting period. In addition, it can audit the financial part on special instructions from the general meeting of members of the cooperative, the supervisory board, as well as at the same time more than 10% of the organization’s workers.
Checks are also allowed on the personal initiative of members of the commission. All its members have the right to require any head of the enterprise to provide all the necessary financial and material reports and other documents.
The results of the checks are presented for discussion by the members of the general meeting, as well as the monitoring committee. If the competence of the members of the audit commission is not enough to clarify any difficult accounting issues, they are entitled to attract external auditors (or audit companies), if they have a license to carry out activities of a standard form.
Important! If verification was required by 10% of the cooperative’s employees, then the entire cost of hiring auditors (if such a need arises) is paid by them.
What is the responsibility of a production cooperative?
For all obligations arising, the organization is responsible for all the property it has. The charter of the cooperative also provides for the size and conditions of subsidiary liability, which is imposed on all members of the organization, regardless of the size of their opening share. For the obligations of individual employees, the company is not responsible in any way. This is also indicated by the law “On Production Cooperatives”.
Only if a member of the cooperative must pay debts whose value exceeds the total price of all his property, is it also possible to collect all of his share. However, an indivisible fund and other financial assets of an enterprise cannot be affected in any case. Thus, a production cooperative is a classic enterprise with additional responsibility.
List of constituent documents
It will be short, since such a document is only the charter of the enterprise. The full name of the organization, as well as information about its actual location, must be included in it. It is in the charter that all information about the size of shares, as well as the conditions for their payment, must be provided. It also contains information on the liability of members of a cooperative in violation of the procedure for their submission, as well as on the conditions of personal labor participation in the activities of the enterprise. For some violations fines or other measures may be applied, information about which is also recorded in the charter.
In addition, there should be information on the procedure for the distribution of profits and losses, as well as the detailed responsibility of the production cooperative and all its members. The functions and powers of all executive bodies are described in full and in great detail, including in those cases when decisions can be taken by the chairman of the board individually.
If it is about termination of membership in the organization, then information on the procedure for paying the share contribution is also entered in the document, and the procedure for accepting new members and exclusion of employees from the enterprise should also be considered. The process of secession from the membership of the cooperative is also described in detail there, as well as all cases where a member of the organization can be expelled from it. Data on all existing branches, as well as on a possible procedure for reorganization and complete liquidation, are also entered. In the process of the organization’s activities, other information necessary for its work may be entered into the charter of the production cooperative.
About the transformation ...
As we have repeatedly mentioned, by unanimous decision of the general meeting, an enterprise can be reorganized with the formation of a partnership or business entity. The procedure for such a transfer is enshrined in law, it should be guided by all production and consumer cooperatives.
What rights do members of a cooperative have?
Firstly, each employee has the right to participate in the activities of the enterprise, and also has one vote at the general cooperative meeting. Workers can also be elected to all executive bodies, as well as supervisory commissions.
If there is a reason, the members of the enterprise are free to make proposals on optimizing the organization’s activities, as well as to state the identified shortcomings in the work of managers. In addition, all members of a production cooperative are entitled to their share of the profit that was received as a result of the production activities of the enterprise.
Each member of the cooperative can at any time request all the necessary information from the organization’s officials, as well as withdraw from its membership at any time, after which they are required to pay an amount equivalent to the size of their share contribution. If the employee’s rights have been violated, he has the right to apply to the judicial authorities, including to appeal against decisions of board members who in one way or another infringe on the interests of all members of the cooperative.
Of course, the charter (and the laws of the Russian Federation) enshrines the right to receive wages, which is calculated from the amount of the employee’s personal labor participation in the organization’s activities. In general, all this information is contained in the Law on Production Cooperatives, which we spoke about above.
Duties of cooperative members
The employee is obliged to make a share contribution, as well as participate in the organization, taking direct labor participation in it. In addition, he is obliged in everything to obey the internal routine and follow other rules that have been adopted by the board of the cooperative. Also, all participants in a production cooperative bear subsidiary liability, which should cover all emerging debt obligations of the company.
About profit distribution
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