Just what is a co-operative society?
A co-operative society is like an association, but with a difference: Its members get together to do business. The co-operative society is an enterprise; a way for workers to co-own an organization, which in turn owns the means of production.
There have been a number of successful co-operatives in the world. Part of their success can be traced to their enabling the socialization of the means of production; which meant that poor workers could have a small stake in a large, successful organization, and the same workers could benefit from the co-operative society’s success.
Co-operative Societies in Malaysia
In Malaysia, co-operative societies are under the purview of the Suruhanjaya Koperasi Malaysia. It is not known how many new co-operative societies have been formed in recent years. However, a recent 2019 snapshot of the state of co-operative societies in Malaysia shows that there were 14,417 co-operatives in the country.
In that year, 6,046,031 people were signed up as members of those cooperative societies; which generated RM24.65 billion in annual turnover — quite a huge contribution for the economy. Co-operative societies also held RM147.3 billion in assets during that year.
Interestingly, only two out of the many co-operative societies are involved in the banking sector. One of those, is Bank Rakyat, a familiar name for many Malaysians.
Examples of successful co-operative societies abroad
There are a number of successful co-operative societies outside Malaysia. Here are a few examples.
Mondragon Corporation is a federation of worker cooperatives in the Basque region of Spain, and it is one of the largest and most successful cooperatives in the world. Mondragon operates in a variety of industries, including manufacturing, retail, and finance, and it has over 70,000 worker-owners who collectively own and control the company.
Suma Wholefoods is a worker-owned cooperative in the UK that distributes organic and ethical food products. Suma has been in operation since 1977, and it has a reputation for being socially and environmentally responsible, as well as profitable.
Co-operative Group is a consumer cooperative in the UK that operates in a variety of sectors, including food retail, funeral care, and insurance. The Co-operative Group has over 4 million members, and it has a strong focus on sustainability and community development. (Unfortunately, we had trouble accessing the site from Malaysia, but managed to get in thanks to Google Translate.)
Organic Valley is a farmer-owned cooperative in the US that produces and distributes organic dairy and other food products. Organic Valley has over 1,800 farmer-owners, and it has been successful both financially and in terms of promoting organic agriculture and rural development.
Park Slope Food Coop is a consumer cooperative in New York City that operates a grocery store and other community services. The Park Slope Food Coop has over 17,000 members who work in the store in exchange for discounted prices on groceries, and it has been successful in creating a sense of community and promoting healthy and sustainable food.
The success of cooperatives often depends on factors such as the industry, the level of member engagement, and the social and economic context in which they operate.
Formation of a Co-operative Society in Malaysia
Under the original 1993 Act, the minimum requirement for the formation of a “koperasi asas”, or a “basic co-operative”, was 100 persons. However, in 2007, the law was passed to amend it to 50 persons. In 2021, the law was changed again, and it now stands at 20 persons. So, as of 2023, you need a minimum of 20 persons to form the membership of your basic co-operative society.
There are two other requirements: The number of people signing the application form, and the number of people signing the minutes for the first AGM. In the 1993 Act, at least 10 persons were needed to submit an application to form a new co-operative society; and at least 50 persons who attended the AGM would have to sign the minutes.
Following the 2021 amendments, these requirements were reduced:
Only 5 persons were required to sign the application form (requesting to form a new co-operative society). And only 10 attendees were required to sign the minutes of the first AGM.
So, as of 2023, if you wanted to form a basic co-operative, you would need 20 members, with 5 members signing the application form to form the co-operative, and only 10 members would need to sign the minutes of the first AGM.
Thank you for reading!
This article has been prepared to provide general information. Please consult with a lawyer before making any decision or taking any action. This article has not been checked by any third party for factual correctness.