Organisations which operate primarily for the benefit of the community, such as Registered Social Landlords, have the opportunity to register under the Industrial and Provident Societies Act, rather than under the Companies Acts. A number of changes aimed at modernising the law which applies to Industrial and Provident Societies are set to come into force in 2014.
From 6th April 2014:
- The capital limit on withdrawable shares held by each member of an Industrial and Providential Society is set to increase from ?20,000 to ?100,000. This will be beneficial to societies which are in need of a higher level of capital investment from their members. If a society?s rules state a ?20,000 (or lower) limit on withdrawable shares, these will need to be amended in order to allow the society to take advantage of the increase. The limit in a society?s rules can be amended by a resolution of the committee at any time up until the 5th October 2015 and the date of registration of any other amendment to the society?s rules.
- Industrial and Providential Societies shall be subject to the Company Directors Disqualification Act 1986 in the same way that companies currently are. Therefore, if committee members of Industrial and Providential Societies are found guilty of mismanagement they may be disqualified and prevented from taking up similar positions of power in other societies.
From 1st August 2014:
- Industrial and Provident Societies (other than credit unions) shall be referred to as either Co-operative or Community Benefit Societies. This is due to widespread opinion that the ?industrial and providential society? label is old fashioned.
In addition, all relevant Industrial and Provident legislation is set to be re-named to refer to Co-operative and Community Benefit Societies.
If your organisation is affected by these changes to the?Industrial and Provident Societies Act, and you wish further information, please get in touch with our commercial team, who would be happy to help.