About Co-ops

by | Feb 28, 2022

In this section:

About CoopsSetting Up a Co-opOur Network of Co-opsECI BenefitsICOS Benefits

What are Co-ops?

A co-operative is an enterprise or business association which is owned by and controlled by its members.

What are the benefits of forming a co-op?

Co-operatives are subject to less complicated regulations than limited companies. They are democratic in structure and give as much emphasis to sustainability and community building as to the generation of profits and/or benefits to their members. They benefit from their association’s with other co-operatives. A co-op is significantly different from other forms of companies in a way which make it the ideal choice of business structure for community based energy generation projects.

How are Co-ops different from limited companies?

While Co-ops and Limited Companies are very similar in many ways there are a few core, critical differences. Co-ops place a greater emphasis on their transparency and their democratic structures. This means that co-ops often enjoy greater levels of loyalty and sense of community than limited companies. While co-ops are intended to produce benefits and profits for their members, this is often only one aspect of their mission: building long-term and sustainable business and community relationships are often an important aspect to their work.

Similarities between co-ops and limited companies:

  • Same Taxation status
  • They both require audited accounts
  • Both Limited liability (in a co-op this is limited to the value of the share capital owned by the co-op members)
  • Both can issue shares which are inheritable

Main differences between co-ops and limited companies:

  • Co-ops must have at least 8 members but can have unlimited membership
  • Accounts can be submitted annually or tri-annually
  • Limited companies must submit returns in regard to changes of directors and officers
  • Co-ops can adopt model rules of association at very little cost whereas limited companies often incur considerable legal expenses to establish similar rules

Thus there are many similarities between co-ops and limited companies. However, a major advantage for co-ops is that while their means of  regulations are equally strict, they are more simplified and less administratively onerous. There are three statutorily recognised bodies charged with facilitating the establishment of co-ops, who charge for this affiliation, but it is not necessary to be affiliated with these to establish a co-operative

Setting up a Co-op

The steps to establishing a co-operative are quite similar to those required setting up a limited company with one or two differences: co-ops are supported by advisory bodies and the procedures are in many ways simpler. However, you shouldn’t forget that co-operatives can be commercial enterprises. Many, but not all, are intended to generate income or benefits for their members.

The main steps in establishing a co-op are:

  • to bring together at least eight people who wish to come together in the enterprise
  • decide on the aims and objectives of the co-op.
  • accept and sign appropriate rules of association for the co-op and submit these to the Companies Registry Office with your fee. Energy Co-ops Ireland can guide you through every step of this process  ensuring a smooth co-op establishment. Email us to info@energyco-ops.ie for further details.
  • draw up a business plan to determine how the members and future members will benefit from the co-op
  • determine members levels of commitment: what initial investment are they willing to contribute, how much time and effort will they put into running the co-op

We at Energy Co-ops Ireland are more than happy to guide you through this process. We also have expert advice on  renewable technologies and energy conservation techniques available. In addition we can assist you in your dealings with the energy distribution system.

Co-op Legislation:

Co-ops and other ‘friendly societies’ are regulated by the Industrial and Provident Societies Acts 1893 -1978. This legislation is in the process of being updated to better suit the conditions of the 21st century, including in relation to the establishment of co-ops in the renewables sector. The Public Consultation document on the proposed legislation available here (LINK) indicates the likely direction of the legislative changes. 

Making sure that your co-operative complies with this legislation is essential. However,  Energy Co-ops Ireland can assist you in this.

What are the benefits of working with Energy Co-operatives Ireland?

There are a wide range of benefits to associating your co-op with Energy Co-operatives Ireland.  Owing to their more democratic and diverse membership structures, co-ops require a very specific set of communications practices. The continued success of a co-op in the long term requires the membership to be kept informed and positively involved throughout the lifetime of the enterprise. We are happy to help you to achieve this membership cohesion. The benefits of working with us at Energy co-ops Ireland are:

  • Best legal supports (in partnership with ICOS)
  • Expertise in Renewable energy technologies
  • Excellent contacts with major stakeholders
  • Communications network and advice
  • Benefits of collective bargaining with major customers/energy distributors
  • Expertise in compliance and regulation
  • Advice on intra-co-op communication

Contact Us:

We would be delighted to hear from you to assist you in establishing your co-operative. If you would like to talk to us more, contact us here.