5. Social Enterprise National Definitions

Poland (D2)

There are both social enterprises in Poland (social cooperatives and non-governmental organizations conducting economic activity), as well as social economy entities (including nongovernmental organizations engaged in economic activity, occupational therapy workshops). According to the statistics there are presently over 1000 cooperatives in Poland and the number is growing.

Until recently, there was no clear definition of social enterprise in Poland. Act on social enterprises is under development in Polish government. Poland does not have adequate legal provisions covering social enterprise as a business model geared to social objectives.

The legal forms of social enterprises in Poland are very wide (http://www.ekonomiaspoleczna.pl/x/433246 ):

–          Foundation

–          Association

–          Non-profit company

–          Social cooperative

–          Work cooperative

–          Co-operative of legal persons

There is an Act of April 27, 2006 about social cooperatives. The Act defines the principles of establishing, conducting business activities, merger and the liquidation of a social cooperative. The subject of activity of the social cooperative is to  lead a  joint company based on the personal work of members. The social cooperative works for:

–          social reintegration of its members, which should be understood as having activities to rebuild and maintain the ability to participate in local life and fully fulfil  social roles at the workplace, at home.

–          professional reintegration of its members, which should be understood as having activities to rebuild and maintain the ability to self-benefit from work in the labor market

And these activities are not carried out as part of a business activity.

Social cooperatives  can be established by persons belonging to groups strictly defined in the Act, excluded or threatened by social exclusion and by legal persons – non-governmental organizations, local government units, church legal persons. In the case of natural persons, the founders of the cooperative must belong to one of the following groups:

– unemployed persons within the meaning of the Act on employment promotion and labor market institutions,

– persons referred to in art. 1 point 2 points 1-4, 6, 7 of the Act on Social Employment, i.e .:

– homeless realizing an individual program of getting out of homelessness, in the  understanding of social welfare regulations,

–          addicted to alcohol, after completing the psychotherapy program at a detoxification

center,

–           addicted to drugs or other intoxicants after the end of the therapeutic program in a       healthcare facility,

–          mentally ill, within the meaning of the provisions on the protection of mental health,

–          dismissed from prisons, having difficulties in integration with the environment, in the meaning of the provisions on social assistance,

–           refugees implementing an individual integration program within the meaning of the provisions on social assistance,

–          Those who are subject to social exclusion and due to their situation –  life can not satisfy their basic life needs and find themselves in a situation that causes poverty and prevents or restricts participation in professional, social and family life

–          disabled people within the meaning of the Act on Vocational and Social Rehabilitation and Employment of People with Disabilities.

The regulations require that the cooperative be established by at least 5 people, and not more than 50 people (with the exception of co-operatives resulting from the transformation of disability co-operatives).

The members of the cooperative can also be people from outside the groups specified in the Act, which the law calls specialists, but their number cannot be greater than 50% of the total number

of members of the cooperative. Each member of the cooperative must be employed on the basis of a permanent contract of employment. When the founders of the cooperative are legal persons, there must be at least two of them.

Resources:

Agnieszka Pacut Przedsiębiorczość społeczna w Polsce – problemy i wyzwania  (Zarządzanie Publiczne)

Przedsiębiorstwo społeczne  w działaniu 2009 Autorzy;  Michał Guć, Wojciech Jagielski, Tomasz Schimanek, Anna Sienicka, Piotr Stronkowski, Krzysztof Więckiewicz i Jakub Wygnański

 

Romania (D3)

Until recently, there was no clear definition of social enterprise in Romania. This changed when a new law regulating the social economy defined the term and articulated a common understanding of the concept. This represents a great step forward, as the lack of a clear legal and regulatory framework was often cited as a challenge by most sector stakeholders in the past. The abovementioned 219/2015 law and its norms cover the following key areas:

  • Defines the social economy and clarifies two concepts—social enterprise and insertion social enterprise. As long as it is certified as such by the local labour agencies, any legal body can be a social enterprise. In order to be certified, a social enterprise must respect: ▪ – A set of principles, defined as (1) an independent legal body with priority given to the social mission as opposed to profits, (2) joint responsibility, (3) alignment with the interests of the local communities, (4) democratic control, (5) profits allocated to the social missions, (6) voluntary and free association, and ▪ – Legal criteria, defined as (1) social or community driven, (2) at least 90% of profits invested in the social mission, (3) transmits all its assets, in case of liquidation, to another SE, (4) equitable salary levels, with 1 to 8 the maximum accepted differences among employees. Social enterprises can be non-profit or for-profit in form. ● Sets up a certification process that provides a social enterprise label that is valid for three to five years and is also applicable to the enterprises’ products and services. It also sets up a National Register for Social Enterprises, aimed at gathering and providing access to data and statistics. The label brings a set of obligations for social enterprises, requiring them to submit financial, legal and social impact reports. They are also subject to annual controls to assess if the social enterprise complies with the criteria to preserve the label. Social enterprises employing at least 30% marginalized persons and already defined as such by the new law may ask the Social Economy Department—a structure within the local labor agency—for the social label. The social label, valid for three years, is different from the social enterprise label, and it’s aimed at emphasizing the job generation aspect of the impact.
  • Describes the state mechanisms to incentivize and support the development of social enterprises (i.e. tax incentives, right to use the local public real estate facilities, support in promoting their products/services, state aid mechanisms, counseling from public agencies). ● Ministry of Labour, Family, Social Affairs and Elderly. “Law no. 219/2015 on Social Economy.

The methodological norm for the Law on social economy appeared just in August 2016, so the amount of time they had to generate their effect is relatively limited. In the second Chapter, the conditions under which an enterprise can obtain the Social economic actor status is described into detailed. Subsequently, the obligations of social economy enterprises are described into detail. At article 20, the norms describe the obligation of the county level Council to propose a County level plan for social insertion in accordance with the National Strategy for Employment for 2015 – 2020 period.

 

Other literature:

  • Nicole Etchart, Despina Iancu, Andreja Rosandić, Vlada Mocanu & Ioana Paclea The State of Social Entrepreneurship in Romania, SEFORÏS Country Report; NESsT April, 2014 https://static1.squarespace.com/static/56d2eebbb654f9329ddbd20e/t/5773e6bbd1758ec815f7233 b/1467213501352/Country_Report_Romania.pdf
  • Doiciu, Maria, Elena Sabina Ganci, Ancuța Vameșu and Irina Sînziana Opincaru. “Romanian Social Enterprises’ Funding Needs and Access to Financial Services and Technical Assistance.” Eurom and the Social Economy Institute, 2016 ● Todor Arpad, Daniela Panica, Cristian Pirvulescu; National ReportROMANIA, COOPILOT Project; October 2017 http://www.coopilot-project.eu/wp-content/uploads/2017/10/National-Report-ROMANIACOOPilot.pdf
  • Ministry of European Funds, Romania. “Ex-ante assessment for financial instruments for SMEs in the 2014-2020 programming period,” Romania, 2015. ● Stănescu, Simona Maria (coord.), Romeo Asiminei and Daniela Vîrjan. “Social Economy Recommendations Report: Romania 2013” , ADD Media Communication, Bucharest, 2013 Wilkinson, Charu, “A Map of Social Enterprises and their Eco-System in Europe, Country Report: Romania,” ICF Consulting Services, the European Commission. October 2014
  • Roxana Damaschin-Țecu and Nicole Etchart; The Case of Romania – Building the Social Investment Industry in Central and Eastern Europe, NESsT, 2016. http://seif.org/en/wp-content/uploads/2016/11/NESsTPublication_Building_the_Social_Investment-Industry_Case-of-Romania.pdf

Ireland (D4)

The 2013 review of social enterprise by Forfas proposed the following criteria for defining a social enterprise, namely, (i) trade for a social / societal purpose, (ii) earn at least part of their income from their trading activity, (iii) be separate from government and (iv) primarily re-invest their surplus in

their social objective. The Irish Social Enterprise Network (2014) publish a directory of social enterprises and to be listed in that directory then organisations need to be

▪ Profit seeking, trading organisations and ▪ Have a social mission that is measured Although broader in its approach than the Forfas definition it is clear that in Ireland social enterprises must have a social mission and they must also be genuine ‘enterprises’ with income from market sources. The types of organisations that could be considered as social enterprises in Ireland are

  • Community based organisations ● Charities and voluntary organisations ● Friendly societies ● Socially-entrepreneurial individuals establishing socially motivated businesses ● Entrepreneurial sports, community and cultural organisations such as the Gaelic Athletic Association ● Credit Unions ● Cooperatives Generally, social enterprises in Ireland are formed as Companies Limited by Guarantee or as Cooperatives. If registered as the former companies may gain tax exemption status if registered as charities. In Ireland almost two thirds of non-profits are registered as charities. The recently commenced Charities Act in Ireland and the appointment of a charity regulator is considered to be a significant advancement in the professionalization of the non-profit sector.
  • Check with LIT for latest developments / definitions / references from European Commission (2016) A Map of Social Enterprises and their Eco-Systems in Europe: Updated Country Report: Ireland

 

Resources

Name of organisation

Website

Forfás: Policy Document  ‘Social Enterprise In Ireland: Sectoral Opportunities and Policy Issues’

https://dbei.gov.ie/en/Publications/Publicationfiles/Forfás/Social-Enterprise-in-Ireland-Sectoral-Opportunitiesand-Policy-Issues.pdf

Pobal: Community Services Programme

https://www.pobal.ie/programmes/community-servicesprogramme-csp/

Department of http://www.justice.ie/EN/PB/WebPages/WP17000016

Justice and Equality: Social Enterprise Strategy  Social Innovation Fund

Social Enterprise Dev Fund

Bnest  http://bnest.ie/  The Wheel  https://www.wheel.ie/  SEDCO  http://sedco.ie/  Irish Social Enterprise Network  https://www.socent.ie/  Community Finance Ireland  https://www.communityfinance.ie/  Clann Credo  http://www.clanncredo.ie/  CPA Ireland  http://www.cpaireland.ie/docs/default-source/Social-EnterpriseReport-2018/social-enterprise—the-irish-and-internationallandscapes.pdf?sfvrsn=0  Social Entrepreneurs Ireland  http://socialentrepreneurs.ie/about/  Social Innovation Fund  http://www.socialinnovation.ie/social-enterprise-development/  Social Enterprise Toolkit  https://socialenterprisetoolkit.ie/  Spark Awards  http://www.sparkawards.ie/  SESBA Learning Platform  http://courses.sesbaproject.eu/

 

Italy (D6)

The history of social enterprise in Italy spans nearly forty years and is linked to the development of its welfare system. The organisational types accepted as being involved with social enterprise include:

  • social cooperatives
  • associations and foundations
  • mutual aid societies
  • joint-stock and limited liability companies
  • traditional cooperatives (e.g. community cooperatives).

The Italian 1946 constitution recognised cooperatives, associations and foundations as quasi nonprofit organisations that not only looked after the mutual interests of their members but also had a

wider community role. This concept was broadened out in the 1980s and 1990s when the national government retreated from the provision of social services and subsequently a market was opened for private providers to compete for the delivery of such services. As a result private companies and volunteer groups took the initiative to deliver social services to an increasingly aged population or to integrate disadvantaged people such as the unemployed, the homeless or immigrants into the labour market. Such organisations gained a legal recognition in the 1991 Act on Social Cooperatives. This law on social cooperatives allowed such voluntary organisations to now

“pursue the general interest of the community in promoting personal growth and in integrating people into society by providing social, welfare and educational services and carrying out different activities for the purpose of providing employment for disadvantaged people”

The law distinguished between two types of social cooperatives, namely

  • Social cooperatives supplying social, health and educational services (type A social cooperatives) ● Social cooperatives integrating disadvantaged groups (physical, mental invalids, drug addicts, alcoholics, and some types of criminals)into the labour market (type B social cooperatives) The 2005 law on Social Enterprises allowed such organisations to become legally recognised as a social enterprise provided they complied with the following criteria namely
  • It is a private legal entity ● It engages in regular economic activity and derives at least 70% of its income from entrepreneurial activities related to the production and exchange of goods or services that have a social utility ● It reinvests any profits to either increase its assets or to further its aims in terms of its main beneficiaries ● It adopts a transparent, open and participatory approach to its governance and decision making processes The social enterprise legal category covers a broad range of activities such as :- welfare, social care, education, environmental and ecosystem conservation, cultural heritage development, social tourism, academic and post academic education and research institutes. More recent work by Venturi and Zandonai, Rapporto Iris Network (2012) “L’Impresa Sociale in Italia. Identità e sviluppo in un quadro di riforma”, identifies that further key changes have recently been introduced by Law 106/2016 reforming the ‘Third Sector’ (7). This law provides a common framework for the sector with a view to overcoming its fragmentation from different perspectives, including fiscal ones and defines a social enterprise a
  • ‘private organisation that runs entrepreneurial activities for civic, solidarity and social utility purposes and allocates profits principally to achieve its corporate purpose by adopting responsible and transparent management modalities and favour possible participation of employees, users, and other stakeholders interested in its activities’. The law 106 replaces the total distribution constraint with the remuneration caps foreseen for social cooperatives: while allowing investors to be remunerated, the law also ensures that the profits generated are mainly reinvested to achieve general interest aims. The law also redefines and

enlarges the fields of engagement and the categories of disadvantaged workers integrated and it provides for the recognition of benefits based on the degree of disadvantage such workers face.

It was published on July 3rd 2017 in the Official Gazette and comes into force the Legislative Decree “Revision of the Corporate Social Responsibility Law” (DL 3 July 2017, No. 112 Relating to the Reform of the Third Sector (Law 6 June 2016, 106) Here is what lines it contains.

 

Article 1 is devoted to the definition of the new subject: they can be defined as social enterprises, “all private entities that exercise in a stable and principal business an activity of general interest, not for profit and for civic, solidarity and social benefits, by adopting responsible and transparent management methods, and by encouraging the wider involvement of workers, users and other stakeholders in their activities. ” These are companies where, among other things, it is possible to carry out volunteering activities, although the number of volunteers, which the social enterprise has to keep a register, can not be higher than that of the workers.

 

The core of the reform – as Flaviano Zandonai and Paolo Venturi point out in this site – is the use of business utility, which the decree disciplines so. Profits are normally destined for ‘statutory activity or increase in assets’; it is forbidden to distribute, even indirectly, profits and surpluses of management to founders, associates or associates, workers and collaborators, directors and other members of the corporate bodies. No prizes, therefore, or any “individual non-proportionate remuneration for the activities carried out, the responsibilities assumed and the specific competences”, are nevertheless limited to salaries, which can not exceed 40% of those provided for by collective bargaining agreements. Limits are also imposed to avoid conflicts of interest (you will not be able to sell goods or provide services at favorable prices to the company’s components, nor to lenders, nor to their relatives). Instead, the social enterprise can make up some of the profits (less than 50%) to increase the share capital free of charge or – and this is a fundamental element – to distribute dividends to shareholders, “in any case not exceeding the maximum interest of the fringe postal vouchers , increased by two and a half percent over the actual paid-in capital. ” It may also award free allowances to third sector entities other than social enterprises, other than founders, associates, social security companies or subsidiaries.

 

Social enterprises can allocate a share of not more than 3% of fund profits established by social enterprise associations or the Fondazione Sociale Sociale, whose purpose is precisely the promotion and growth of social enterprises also through the financing of specific development programs. These are payments – it is good to remember – “deductible for the tax on the income of the acquiring company”.

 

Finally, the chapter on tax breaks (Article 18). It states that the profit and loss of management is not taxable income in the following cases: 1) if a reserve is reserved for the “statutory or increase in the assets” or contributions for the audit activity ; 2) if they are to increase the share capital.

 

Good news even for a socially-owned company: anyone who is a natural person or corporation will be recognized as having a 30% tax deduction on the capital investment of an enterprise or coop that becomes a social enterprise within the terms of the decree provided it has been less than three years old. The deduction is valid for three years and can not exceed 1 million in the case of natural persons and 1.8 million in the case of companies. However, these benefits will be valid after the receipt of the European Commission’s authorization, or before 2019.

A first finding is a table with Istat data that measures the degree of interpenetration between nonprofit institutions and profit-making companies in highly “social vocation” represented by the areas of intervention in which non-profit organizations operate [Istat, 2013]. From the crossing of censorship data for businesses and non-profit organizations there is a map in which you can highlight “territories” where the nonprofit is almost monopolistic, such as artistic, sports, cultural activities, but also residential and non-residential social services. In other areas, however, the report appears less unbalanced, leaving a glimpse of the relationship between profit and nonprofit more competitive, such as education and health, two areas where it is played the future of the social protection system, and broadly the development of the country. However, it is possible to further detail the analysis by attempting to classify the companies of capital (excluding corporations and univariate tax breaks) within the areas of intervention provided by the social enterprise standard. It comes from a population of over 60,000 companies for profit, mainly engaged in health care (31%) and therefore the “epicenter” of a comparison between profit and nonprofit is confirmed. But not the only one: even if less obviously, a significant presence of companies for profit in the field sports and recreation (25%), as well as in the field of cultural and editorial production (13.9%). The amount of companies for profit recorded in areas of intervention markedly “Social” is also associated with their size in terms of employment: they are in fact 446 thousand paid employees for an average of 7.6, denoting the large spread of small businesses. It is no coincidence that 88% do not exceed the size of 9 employees, and only 0.2% have more than 250 employees (although it contributes to 21% of total employment). Of course, this does not mean that all these companies are to be regarded as social enterprises and probably a large part of them do not even aspire to assume this statute. It is a measure which first informs that the production of social value is not exclusive to non-profit institutions (particularly in some sub-funds).

Secondly, the data highlight the challenge of regulatory reform to be really effective should be able to attract not only social businesses operating between voluntary organizations, associations, foundations, etc. but also the lucrative businesses interested in this particular legal sphere [European Union, 2014].

 

Here are the most important legislative measures on social enterprise, in chronological order. The Law 8/381, “Discipline of the social cooperatives”, introduced specific rules governing social cooperatives. Under the Law, social cooperatives fall into a special category, characterized by “the pursuing of the Community general interest, human promotion and social integration of citizens” through: ● management of social, health and educational services (type A); ● agricultural, industrial, commercial or services – aimed at the employment for disadvantaged people, carrying out various activities – environment, cultural heritage, university education,    tourism, research and furniture of cultural services, services to support social enterprises. (type B).

 

Social enterprises are required to maintain the objective of general interest but they may organize themselves in any form of private organization, within any corporate type and have also the possibility to form a group. A crucial element of the definition is that they cannot have the profit as an ultimate or main goal.

 

Two final notes: ➢ social enterprises must be registered in the dedicated Register;

➢ public administrations or those providing services and goods only to their members cannot be social enterprises.

 

  • Check with Archivio della Memoria for latest developments / definitions / references from European Commission (2016) A Map of Social Enterprises and their Eco-Systems in Europe: Updated Country Report: Italy

Lithuania (D7)

Stakeholders understand the term ‘social enterprise’ differently. Government policy makers understand the term to refer to work integration social enterprises whereas the social sector accepts that the term refers more widely to ‘social entrepreneurship’,. The Law on Social Enterprise (2004) defined social enterprise as

“any sort of enterprise that is set up to create employment for people that are severely disadvantaged in the labour market”

The law identified two types of social enterprise, namely social enterprise for the disabled and others, both types need to qualify for social enterprise status by being able to demonstrate that they are creating employment for disadvantaged individuals. The approved social enterprises then qualified for direct government support. However, growing demands for support caused tensions to develop

The Social Enterprise summit (2014) agreed that the mission and purpose of social enterprise was to conduct economic activity that aimed to generate profits that could be re-invested into the organisation but also develop social benefit in a broad sense and not just for the purpose of supporting employers who integrate disabled employees, long term unemployed, older workers, exoffenders, single parents and drug addicts.

On spring 2015, the Ministry of Economy approved the concept of Social Business. Also at the end of 2015 the Ministry of Economy approved the Social Business Promotion 2015-2017 year action plan. The plan contains specific measures to create a social business-friendly legal, financial and fiscal environment, promoting social business culture, and increase awareness. Social enterprises can have various legal forms, for instance public entities, associations, cooperatives or foundations.

In 2016 the Ministry of Economy distinguished Lithuanian social business criteria recommendations:

“Its important that the social goal can be achieved at any stage of the social business chain”: ·         finding resources,

  • recruiting staff,
  • creating a product (service) and marketing,
  • with the target audience[1].

By this point, Lithuania does not have adequate legal provisions covering social enterprise as a business model geared to social objectives. The law on social enterprise only recognises the model of social employment, i.e. companies recognised as social enterprises providing work for people from specific target groups, namely those no longer able to engage in professional or other activity,

those not economically active, and those who cannot compete on equal terms in the labour market. Such companies receive government support (subsidies for wages and social security). Thus other types of social enterprise are not legally recognised and there is no opportunity to develop them, while government support is granted only for one of the possible models of social enterprise[2]. And also all statistics data in Lithuania is based only on social firms of this legal status.

Social business is oriented to community and activities must to have more positive impact on the environment relative to the traditional business, and the benefits (through direct business or directing performance) is provided in one or more areas.

Social business company has to be based on profitable economic activity and to create working places. It separates social business from traditional non-governmental organizations or other forms of social economy activity when activity is based on social purposes, but no permanent economic activity, unpaid employees (i.e. acting solely on the basis of volunteering). According to this criterion, most of the social business income must come from market revenues (sale of goods and / or services) – more than 50 % is obtained of income from economic activities, apart from investing in business development[3].

But its also mean, that the legal definition of social enterprise does not accord with the European Commission’s criteria laid down for social enterprises. Lithuanian social enterprises continue to pursue the typical goal of the traditional business model, namely profit maximisation. Another criterion is that the biggest part of profit (more than 50 %) has to reinvest for the social purposes[4].

 

 

 

[1] Recommendations: https://ukmin.lrv.lt/uploads/ukmin/documents/files/Verslo%20aplinka/socialinis_verslas/Socialinio_ verslo_koncepcija_2015_isakymas.pdf

[2] Tapping the potential of social enterprises. http://www.eesc.europa.eu/en/documents/tappingpotential-social-enterprises

[3] Recommendations: https://ukmin.lrv.lt/uploads/ukmin/documents/files/Verslo%20aplinka/socialinis_verslas/Socialinio_ verslo_koncepcija_2015_isakymas.pdf

[4] Tapping the potential of social enterprises. http://www.eesc.europa.eu/en/documents/tappingpotential-social-enterprises

 

Spain (D8)

Spain has a long history in the creation of Cooperatives as an essential model of Social Economy companies, especially in the agricultural and livestock sector. In 2011 it was approved in the

Congress of Deputies of Law 5/2011, of March 29, of the Social Economy. The basic objective of this Law is to configure a legal framework that, without pretending to replace the current regulations of each of the entities that make up the sector, implies the recognition and better visibility of the social economy, granting it greater legal security through actions to define the social economy, establishing the principles that must be considered by the different entities that comprise it.

 

This Law includes in the Statement of Motives the historical framework of the birth of the modern concept of Social Economy structured through the first cooperative, associative and mutualist experiences that emerged since the end of the 18th century and developed throughout the 19th century in different countries of Europe. From this traditional concept of nineteenth-century origin that includes cooperatives, mutual societies, foundations and associations, were happening in the decade of the 70s and 80s of the last century and in different European countries, statements that characterize the identification of the economy social around different principles.

 

In Spain, it is interesting to highlight the legal basis on which the entities of the social economy are based, which obtains the highest rank derived from the articles of the Spanish Constitution. This is the case in several articles that refer, in a generic or specific way, to any of the social economy entities as in Article 1.1 when it states that “Spain is constituted as a social and democratic State of Law, which advocates as higher values of its legal system, freedom, justice, equality and political pluralism. “Also in Article 129.2 states that” The public authorities effectively promote the various forms of participation in the company and promote, through appropriate legislation, cooperative societies “Or as the 40, and 47, which reflect the strong roots of the aforementioned entities in the constitutional text.

 

The Law develops a definition of Social Economy, understanding it as the “set of economic and business activities, which in the private sphere are carried out by those entities that, in accordance with the principles set forth in Article 4, pursue well the collective interest of its members, either the general economic or social interest, or both. “The principles referred to in this article are the following:

 

  1. a) Primacy of people and of the social purpose over capital, which is embodied in autonomous and transparent, democratic and participative management, which leads to prioritizing decision-making more in terms of people and their contributions of work and services rendered to the entity or in function of the social purpose, that in relation to its contributions to the social capital.

 

  1. b) Application of the results obtained from the economic activity mainly in terms of the work contributed and service or activity carried out by the members and partners or by their members and, where appropriate, the social purpose object of the entity.

 

  1. c) Promotion of internal solidarity and with society that fosters commitment to local development, equal opportunities for men and women, social cohesion, insertion of people at risk of social exclusion, generation of stable employment and quality, the reconciliation of personal and family life.

 

Thanks to this Law we have in our legal system a list of the types of entities that are part of the so

called “Social Economy” and that are

 

Cooperatives Mutualities. Foundations and associations that carry out economic activity. Labour companies. Insertion companies and special employment centers. Fishing guilds and agrarian transformation societies. Other “singular entities” whose rules of creation are governed by the principles of Social Economy entities.

 

In the Autonomous Community of Andalusia the first Law of Cooperatives was approved in 1985, modified later in the year 1999 and 2002. The current legislation dates back to Law 14/2011, of December 23, of Andalusian Cooperative Societies. The purpose of this Law is to regulate the legal status of Andalusian cooperative societies, as well as that of their federations and that of the associations in which they are integrated. And all this following the general principles that inform the constitution and operation of the Andalusian cooperative societies are the following:

 

  1. a) Free adhesion and voluntary resignation of the partners.

 

  1. b) Democratic structure, management and control.

 

  1. c) Equality of rights and obligations of the partners.

 

  1. d) Participation of members in the activity of the cooperative, as well as in the results obtained in proportion to said activity.

 

  1. e) Autonomy and independence.

 

  1. f) Promotion of the training and information of its members.

 

  1. g) Business cooperation and, especially, inter-cooperation.

 

  1. h) Promotion of stable and quality employment, with a particular impact on the reconciliation of work and family life.

 

  1. i) Gender equality, with a transversal character to the rest of the principles.

 

  1. j) Business and environmental sustainability.

 

  1. k) Commitment to the community and dissemination of these principles in their environment.

 

In Spain, according to data from the Ministry of Employment and Social Affairs, there are 31,556 social economy companies of which 17.5 are Cooperatives and 14,551 Labor Societies. The Autonomous Community of Andalusia ranks first in the National Ranking with 7,667 Social Economy

Companies, accounting for 24.30% of the Spanish total. The Andalusian community is one of the Spanish regions with the greatest presence of cooperatives, exceeding the number of Labor Societies, both in number of companies, with 3,978, 19% of the national total, and workers, 48,537, 16% of the national total . Among the different sectors, the most representative in Andalusia is the Services Sector, which accounts for 59% of the total, followed by Industry, with 20%, Agriculture with 11% and Construction with 10%.

 

In addition, in Andalusia, cooperatives have incorporated innovation as a key element of their production model and have become “main players” in the internationalization of the Andalusian economy as they compete with international markets, contributing to the growth of exports, that are breaking records and already account for 20% of the GDP of the community. These are companies that stand out for their stability, with an average life of 17 years, demonstrating their strength in times of economic difficulties.

 

This same week the parliamentary procedure has been initiated in the Parliament of Andalusia to modify the current Cooperatives Law of 2014 in order to speed up the creation and operation of these entities. This modification of the Law of Cooperatives, will consist of a reduction of three to two the number of partners necessary to constitute this type of social economy companies. In addition, it also reduces to two the number of cooperatives needed to create a second level cooperative and introduces improvements in the sanctioning regime and other adjustments of a technical nature. The decrease in the number of partners will be undertaken without altering the principles or the legal form of cooperativism and, in addition, this formula will not have a time limit. For the constitution with two partners, it is specified that the contribution to the social capital of one of them may reach up to 75% of the total. In the statutes, the promoters may choose between a single or joint administration. It also reduces to two the number of cooperatives needed to constitute a second level, thus facilitating the union between companies and that they gain size, making them more competitive. It will therefore be the introduction of a series of changes that allow more people to benefit from this business model for an improvement in the quality of life and democratic citizenship of Andalusia.