Establish a cooperative & overcome bureaucracy obstacles

Actually, therefore, ideal conditions exist for cooperative foundations in Germany. The same would have to shoot like Polse from the ground. Why do not they do it? Because the cooperatives also have some disadvantages.

Boom thanks to bureaucracy

Debt The main reason for the non-existent boom is the bureaucracy. Already the Foundation an eG is associated with considerable effort, which even exceeds the founding effort of a corporation.

First of all, you have to go through a start-up examination that lasts several weeks and can cost you more than 3.000 Euro. In addition, the eG must become a member of a cooperative audit association, which usually costs a basic contribution of several hundred euros per year.

Other duties

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Thereafter, the cooperative must undergo a legal review every two years, for which 4.000 may incur Euro or more. And it goes on with the duties:

The cooperative must be entered in the commercial register as a form merchant, no matter how large it is. That's with more Costs related: The eG must become a member of the Chamber of Industry and Commerce and pay corporation tax. In addition, it is obliged to keep accounts.

Commercial register and accounting required

In turn, the cooperative members need accounting skills, which in small Companies often are absent. So you have to hire a tax consultant, which causes further costs. This considerable effort makes the cooperative in Germany unprofitable, especially for small companies that should actually benefit from the legal form.

And yet it is precisely small, ambitious companies with special niche products that have recently come back to the legal form of the eG: "Most of our member cooperatives have been founded in the past five years," says Burchard Bösche from the board of the central association German consumer cooperatives eV

Successful cooperatives

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For example, Bremer Energiehaus-Genossenschaft eG, 2006, was founded in order to supply its members with electricity and gas at low prices. In Aalen, 162 cineastes joined forces in the same year to show off-mainstream films in a program cinema - meanwhile, the program cinema Aalen eG has 520 members. And Missing Link Versandbuchhandlung eG is an import bookstore that specializes in getting English-language titles.

The list could be continued indefinitely: In Germany, there are some 7.000 cooperatives with around 20 million members, including names such as Edeka, Rewe, Coop, various housing cooperatives, Volksbanken and Raiffeisenbanken and the most diverse types of cooperatives in the service sector.

The eG stands and falls with the commitment of its members

However, a cooperative not only has bureaucratic disadvantages: the cooperative is also attractive, especially in economically uncertain times, because there is no Financing through the banks, the deposits of the members, i.e. the shares and the entrance fee that may be charged, are a good one Alternatives represent that Capital provide for the company.

However, this capital is correspondingly small if the cooperative has only a few members. However, if the cooperative grows by adding more and more members, the organizational effort also increases. In other words, the ability of the eG to act stands and falls with it Commitment of its members, which is often provided on a voluntary basis.

Disadvantages of cooperatives

Another disadvantage of cooperative foundations is that they can hardly benefit from state subsidies. Because it leaves something to be desired. This makes a co-operative foundation unattractive for many entrepreneurs.

Funding is usually given to support entrepreneurs, ie Peoplewho personally run a company. These can be individual entrepreneurs, personally liable partners in partnerships or managing directors of a GmbH.

State support uninteresting

For cooperatives, this promotion is usually uninteresting, since the board members are not even involved with substantial capital in the financing of the company.

However, there is no special funding for people who join forces with common economic interests. The result: The enormous potential that lies in the cooperative idea remains untapped.

Abroad in comparison

In other countries there are significant differences in direct comparison: in Italy, for example, where cooperatives are traditionally strongly represented, there are more than 70.000 cooperatives. Each year, new cooperatives are set up there via 2.000 - with an upward trend.

And even in small Switzerland, 13.000 Cooperatives have remained virtually constant for fifty years. The fact that the situation is so much better here is due to the fact that the future-oriented value of this legal form has long been recognized abroad. In Italy, for example, cooperatives can borrow cheaply from their members and deduct their profits tax-free.

Other countries promote more

Therefore, the Italian cooperatives have a much higher capital than their comrades in Germany. Spain and Portugal also enjoy such tax breaks. In Switzerland and many other countries, small cooperatives do not have to pay any or only small auditing costs.

And in Sweden, there are 25 publicly funded start-up agencies for new cooperatives.

Cooperative Law: simplification necessary!

This shows that cooperative law in Germany urgently needs to be simplified, so that this legal form will become attractive again, especially for small companies, so that they can adapt to economic changes.

The first efforts are already underway, as Burchard Bösche from the Central Association of German Consumer Cooperatives explains: "As the Central Association of German Consumer Cooperatives, we are currently working hard to simplify the cumbersome examination procedure, especially for smaller cooperatives."

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