A New Era for Co-operative Societies

In the 2025 Autumn legislative programme, drafting of the Co-operative Societies Bill was put on the governmental priority list. The General Scheme of the Co-operative Societies Bill which was published in 2022 set out the general outline of the proposed reform and subsequently underwent pre-legislative scrutiny. Once enacted, the Bill aims to provide a modern legislative framework to specifically govern co-operative societies. It will largely repeal and replace the existing outdated Industrial and Provident Societies legislation.

What you need to know

The Bill will provide for:

• The largest legislative reforms in this area for over 130 years.
• A legislative basis specifically for co-operative societies.
• Co-operative societies to compete with companies on a level footing. This is because, once enacted, it will allow the co-operative to carry out any lawful activity within the State in accordance with their rules and the co-operative principles set out in the Bill.
• A body corporate to be a founding member of a co-operative for the first time.
• The minimum number of founding members to be reduced from 7 to 3.
• Audit exemptions to be available to co-operatives, which will reduce the administrative burden on smaller co-operatives.
• Co-operatives to hold general meetings on a hybrid or on a virtual basis.
• More modern provisions on shares, share capital and raising funds.

The detail

In Ireland, co-operatives can take many different forms and may vary in size from large to small co-operative societies. The International Cooperative Alliance states that a cooperative is an:

“autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly and democratically-controlled enterprise”.

In Ireland, co-operative societies either operate under the Industrial and Provident Societies Acts 1893 – 2021 (IPS Acts) or the Companies Act 2014. It is the IPS Acts that the General Scheme proposes to update and largely replace. The IPS Acts are considered significantly outdated and many provisions predate the establishment of the State. They are not considered sufficient for adequately dealing with what is required in a modern corporate law environment.

The new legislation will provide for the entire life cycle of a co-operative from the formation and operation to strike-off.

Under the Bill, a transitionary period of 30 months is envisaged once the Bill is commenced, where a co-operative society set up as an Industrial and Provident Society must make a decision to:

• Follow the procedures under the Bill and convert into a co-operative society
• Follow the procedure under the Bill and convert into a company, or
• Wind up if the society does not want to continue in either form

If the co-operative society fails to adopt one of the above approaches within the transitionary period then it will be dissolved automatically.

It is proposed that a new dedicated Registrar will be established to take over the functions of the Registrar of Friendly Societies who currently oversees Industrial and Provident Societies and will be named the Registrar of Co-operative Societies and Trade Unions. Following the commencement of the Bill, it should be noted that Friendly Societies will mainly continue to be governed under separate Friendly Societies legislation but that the regulatory function applicable to them will sit with the new Registrar of Co-operative Societies and Trade Unions. This is expected to be the key change in the Bill which affects Friendly Societies.

Our view

Once commenced, co-operative societies registered under the IPS Acts will need to make decisions regarding their status during the transitionary period or otherwise they will face automatic dissolution, so early planning is key. This welcome legislation will overhaul the governance of co-operative societies in Ireland that are currently registered as Industrial and Friendly Societies and provide them with a clear and modern legal platform. As we understand it, drafting of the Bill is nearing completion by the Parliamentary counsel.

We will continue to monitor developments in this area and keep you up to date on any further developments from a legislative perspective. Please get in contact with a member of our Corporate team if you wish to discuss the likely impact of the legislation.

This article was contributed by Karen Dunleavy, Corporate Knowledge Lawyer.

The content of this article is provided for information purposes only and does not constitute legal or other advice.