A cooperative is an association of natural or legal persons who wish to achieve mutual promotion through economic activity. So what stands as a primitive, economic community of interest also has a long history. Cooperatives are used in many areas. For example, there are agricultural cooperatives, housing cooperatives or cooperative banks. The exciting aspect here is that cooperatives offer a very special advantage. It follows the motto “Together we are strong.” Cooperatives are a mixed form between a registered association and a corporation. Over time, an independent civil law law was created, the Cooperative Act. It regulates the representation of the cooperative in external relations and the relationship of its members in internal relations. In addition, many other special regulations are contained in the cooperative law, such as examination regulations and, of course, the conditions for their establishment.

We explain the property swings:

Through this design model, spouses in the property regime of a joint-profit community can transfer assets without gift tax among themselves.

1. What is a cooperative?

In the economic world, one usually has to deal either with individual companies, partnerships or corporations. However, in parallel with these forms of enterprise, the cooperative also exists. Although the cooperative appears to be under-represented at first glance, there are indeed a number of smaller to large, well-known companies that operate successfully in this legal form. But what exactly is a cooperative if it is not a society in the narrower sense?

A simple definition of a cooperative can be formulated as an association of several natural or legal persons whose aim is mutual promotion through joint economic activity. Therefore, the cooperative contains aspects which correspond both to the character of a registered association and a limited company.

Historical consideration of the emergence of cooperatives

Because all forms of human cooperation are intrinsically cooperative, when considering its historical dimension it must be noted at the outset that it is as old as humanity itself. Because cooperation is actually one of our characteristics that characterizes us humans. What is more, coupled with the phenomenon of altruism and the ability to communicate, it is one of the reasons why humans had such a dominant influence on the destinies of this planet.

Enough of philosophical considerations. Now we come to the historically comprehensible aspects of the development of cooperatives.

The beginnings of cooperatives in Germany date back to the 19th century and are closely linked to two important names: Friedrich Wilhelm Raiffeisen and Hermann Schulze-Delitzsch. Independently of each other, they founded the first cooperatives in Germany around 1850. At that time they had a primary objective, namely the improvement of the economic situation of craftsmen, workers and farmers. Right at the beginning, the credit system was also added as an object for cooperatives. These early beginnings are also traced back to the Volksbanken and Raiffeisenbanken, which we still know today.

It is in the nature of the thing, and therefore logical, that over time more and more ideas for cooperation were realized through the cooperative. In addition, it is not surprising that the cooperative played a major role in the GDR. But also in the Federal Republic there were and are many examples of successful cooperatives. Recently, interest in the establishment of housing cooperatives and family cooperatives has increased. Finally, the EU is now also promoting the transnational establishment of cooperatives.

So it is logical that cooperatives also founded their own national and international umbrella associations for interest representation. This culminated in the creation of the International Co-operative Alliance (ICA), a member of cooperatives from many different countries worldwide. Today, however, the ICA acts primarily as a community of values.

3. The Cooperative in Civil Law

Since the cooperative does not constitute a genuine commercial partnership or corporation or a registered association, the legislature has consequently created its own civil law law for it: the Cooperative Act (GenG). This regulates all regulations concerning the formation, statutes, capital and representation of a cooperative as well as the position of members among themselves. In addition, the GenG also contains provisions on the withdrawal of a member as well as the insolvency and dissolution of a cooperative. Examination regulations as well as penal regulations and fines regulations are also important elements of the GenG.

A striking difference to society can also be seen in the name of the participants in the cooperative (who has read the previous paragraph attentively, perhaps even already noticed it). Instead of shareholders, we speak of members. This circumstance alone makes it clear that the cooperative in certain aspects is quite similar to an association. In others, they are treated like a corporation. This also applies to taxation, for example.

Next, we look at the most significant advantages of the cooperative. Since the essential criterion has remained unchanged since its beginnings, it is easy to put it in a nutshell: common strength. Because if one pursues a cause or goal that others have, then it is often easier to achieve if one seeks union with like-minded people. On the one hand, this can be related to a more advantageous negotiating position vis-à-vis third parties. On the other hand, the use of synergy effects or the bundling of tasks, such as administration or the development of solutions for process optimization, is also conceivable as an advantage of a cooperative.

In principle, two types of cooperatives can be distinguished, namely the Fördergenossenschaft and the Produktivgenossenschaft.

4.1. Cooperatives

A support cooperative is a cooperative whose primary goal is to create advantages for its own members in procurement or distribution. So this applies, for example, to negotiate favorable conditions when purchasing objects of fixed assets or working capital. Large retail chains, such as Edeka and REWE, are representative. Conversely, the sale of products is also considered as the goal of a support cooperative.

In addition, a support cooperative can serve the goal of centrally processing administrative tasks. This saves the individual members the effort that a respective own administration would mean.

In addition, a support cooperative can also serve to develop technical or other solutions. For example, DATEV eG is a support cooperative. Their purpose is to provide and provide their members with the data processing requirements that they need in their everyday practice for the exercise of their profession.

So a general feature of promotional cooperatives is that their members, independently of the cooperative, also run their own companies.

4.2.Productive cooperatives