Key steps
to forming a cooperative
Establishing a cooperative requires commitment, collaboration, and a clear shared vision. By following these steps, you can create a solid and democratic structure, capable of meeting the needs and aspirations of its members.
1
Defining the Idea and Objectives
First and foremost, it is important to clearly define the cooperative concept and the goals you intend to achieve. Discuss with future members why you want to create a cooperative, the benefits you expect to gain, and the sector in which the cooperative will operate.
2
Forming the Promoting Group
Gather a group of people interested and motivated to establish the cooperative. It is essential that the founding members share the vision and are willing to work together to realize common goals.
3
Feasibility Study
Conduct a feasibility study to evaluate the cooperative’s chances of success. This study should include a market analysis, an assessment of necessary resources, an estimate of initial costs and potential revenues, as well as a risk assessment.
4
Drafting the Bylaws (Statuto)
The bylaws are the fundamental document defining the rules for the cooperative’s operation. They must include:
- Name and registered office of the cooperative
- Corporate purpose (Oggetto sociale)
- Requirements for member admission
- Rights and duties of members
- Procedures for convening and conducting meetings
- Election procedures for corporate bodies (Board of Directors, President, etc.)
- Rules for the distribution of profits and management of losses
5
Articles of Association (Atto Costitutivo)
Draft the Articles of Association, which is the legal document through which the cooperative is formed. This document must be signed by all founding members and must contain:
- Personal details of the founding members
- The formal intent to establish a cooperative
- The approval of the bylaws
6
Registration
To legally bring the cooperative to life, the Articles of Association and the bylaws must be registered before a Notary. The notary authenticates the signatures and handles registration with the Register of Companies (Registro delle Imprese).
7
Obtaining a Tax Code and VAT Number
Following registration, you must apply for a Tax Code (Codice Fiscale) and a VAT number (Partita IVA) from the Revenue Agency (Agenzia delle Entrate).
8
Enrollment in the Register of Cooperatives
It is mandatory to enroll the cooperative in the National Register of Cooperatives (Albo delle Cooperative), which can be managed by trade associations in the cooperative sector (such as Legacoop).
9
Opening a Bank Account
Open a bank account in the name of the cooperative to manage finances officially and transparently.
10
Tax and Social Security Compliance
Register the cooperative with social security and insurance institutions (INPS, INAIL) and manage the tax and contribution requirements necessary to begin operations.
11
Launch of Activity
Once all bureaucratic and legal requirements are completed, you can officially start the cooperative’s activities. Organize an inaugural meeting to present the operational plan to members and assign roles and responsibilities.
12
Continuous Training and Member Involvement
Invest in the continuous training of members to ensure everyone is well-informed and prepared to contribute to the cooperative’s success. Promote active member involvement in business decisions and operational activities.
FAQ Starting a cooperative
How much does it cost to start a cooperative?
To start a cooperative, you must budget for certain initial costs, primarily related to its formal establishment. A cooperative must be formed through a public deed, making the intervention of a notary essential to authenticate and register the articles of association and the bylaws.
In addition to these fees, there are other mandatory requirements to consider, such as:
• Registration with the Register of Companies and the Chamber of Commerce
• Opening a VAT number (Partita IVA)
• Enrollment in the Register of Cooperative Societies
• Purchase and certification (vidimazione) of corporate and accounting books
The total initial investment is approximately 2,000 euros.
There are also several fixed operating costs, such as:
• Annual Chamber of Commerce fees
• Biennial costs for the mandatory audit (revisione obbligatoria)
• Fees for filing the financial statements
• Potential membership dues for representative organizations (such as Legacoop)
Each member must contribute a share of the capital stock, with a legal minimum of 25 euros, although cooperatives often start with more substantial capital to cover startup costs. Furthermore, the cooperative’s bylaws may set minimum capital requirements higher than those mandated by law.
Who can start a cooperative?
Anyone can start a cooperative, as long as there is a minimum group of people united by a common goal, which can be professional, social, or cultural.
In detail, a cooperative can be founded by:
• At least 3 natural persons (generally the minimum number of members required)
• Legal entities (companies, institutions, associations), which can also be members of a cooperative
• Joint-stock companies or existing cooperatives, which can participate as members for specific purposes
All members must share the mutualistic purpose of the cooperative, meaning they work together for the common benefit, and must accept the internal rules established in the bylaws. In certain sectors, such as agriculture or social services, there may be specific regional or national regulations to follow; therefore, it is always advisable to seek information based on the specific type of cooperative you wish to launch.
Why start a Cooperative?
Establishing a cooperative can be advantageous for several reasons, especially for those looking to start a business based on collaboration and mutual support among members. Here are some compelling reasons to choose this type of company:
- Democratic Management: In cooperatives, each member has one vote regardless of the amount of capital held. This ensures a participatory and shared approach to decision-making.
- Benefit for Members: Cooperatives exist to meet the economic and professional needs of their members through a management style that aims for collective well-being rather than pure profit.
- Tax Incentives: Cooperatives enjoy tax benefits, such as reductions on certain taxes and contributions, and often have access to specific grants and financing at the regional, national, and European levels.
- Flexibility and Resilience: Being based on a model of shared risks and rewards, cooperatives can be more resilient during times of crisis, as members work together to sustain the business.
- Community Support: Cooperatives are often created to address local or sectoral needs, contributing positively to the economic and social development of the area.
- Continuity and Sustainability: The cooperative model can foster business continuity through a sustainable framework that allows new members to step in and keep the company active over the long term.
Forming a cooperative is a choice that aims to create a balance between economic and social goals, providing benefits for both the members and the surrounding community.
What are the advantages compared to other types of companies?
What are the advantages compared to other types of companies?
Establishing a cooperative offers specific benefits over other corporate forms, particularly regarding governance, tax incentives, and social orientation. Here are the primary advantages:
- Democratic Management: Unlike joint-stock companies (such as an SRL or SPA), every member in a cooperative has the same decision-making power, regardless of their capital contribution. This promotes a fairer, more participatory governance model.
- Tax Benefits: Cooperatives enjoy tax incentives, such as reduced rates and partial exemptions on profits reinvested into the business. This advantage is designed to encourage the use of earnings for the benefit of the cooperative and its members.
- Reduced Minimum Capital: Unlike an SRL or SPA, starting a cooperative does not require a high minimum capital. The minimum share capital for each member is set at €25, making this corporate form much more accessible.
- Mutualistic Purpose: Cooperatives are created to meet the needs of their members—such as employment, services, or production—with a goal of mutual aid. This purpose makes cooperatives ideal for those seeking a model oriented toward collective benefit rather than just profit.
- Access to Dedicated Funding: Specific funds and grants exist for cooperatives, especially those operating in sectors like agriculture, social work, personal services, and local development. This makes obtaining financial support easier.
- Greater Resilience: Thanks to shared risks and solidarity among members, cooperatives tend to be more resilient during economic crises compared to purely profit-driven companies. Members can collaborate to overcome difficulties and keep the business running.
- Employment Support and Incentives: Cooperatives often have advantages when hiring members as workers and, in some cases, can access reductions in social security contributions. This makes the cooperative a strategic choice for those looking to create new job opportunities.
The advantages of cooperatives over other companies are mainly related to fairer management, tax incentives, resilience, and a strong focus on the well-being of members and the community.
Who can be a member of a cooperative?
Various categories of individuals and entities can become members of a cooperative, provided they share the cooperative’s purpose and commitment to mutual aid. Here is who can be a member:
- Natural Persons: Anyone can become a member, as long as they commit to respecting the bylaws and actively participating in the life of the cooperative. This includes workers, users, or community members who benefit from the cooperative’s activities.
- Legal Entities: Organizations, associations, businesses, and other companies can also be members of a cooperative, especially if the goal is to contribute to achieving common objectives. This is common in “second-level” cooperatives, where cooperatives themselves join together for broader purposes.
- Worker-Members: These members contribute through their own labor and participate directly in the cooperative’s operational activities. They may also benefit from specific tax and social security incentives.
- User or Consumer Members: These are individuals who utilize the services or goods offered by the cooperative (for example, in consumer cooperatives). They participate as members to improve services and have a say in decision-making.
- Investor Members: Some cooperatives allow external parties to invest in the share capital without participating in the day-to-day management. Investor members have financial rights but limited voting rights, in line with the mutualistic purpose.
- Public Bodies: In specific cases, public entities can also participate in cooperatives, particularly in projects with strong social value or local development goals.
Being a member of a cooperative means joining a participatory structure oriented toward the common good, sharing both rights and responsibilities with the other members.
How many members must a cooperative have?
To establish a cooperative, generally at least 3 individual members are required, as provided by law for the majority of cooperatives. However, there are some specific cases:
- Ordinary Cooperatives: To form an ordinary cooperative, a minimum of 3 founding members is required.
- Production and Labor Cooperatives: Here too, the minimum number is 3 members, but many labor cooperatives aim for a larger initial group to better support operational activities.
- Social Cooperatives: For social cooperatives, designed to promote social inclusion and provide personal services, the same requirements apply, though they often operate with a higher number of members to ensure greater effectiveness.
- Large Cooperatives (such as “predominantly mutual” cooperatives): Depending on the sector and type of activity, some cooperatives may have specific regulations and must maintain a minimum number of members to guarantee their mutualistic character.
It is important that the number of members is sufficient to support the activities and respect the rules of democratic participation, which is one of the founding principles of a cooperative.
What is share capital and how much must it be?
The share capital of a cooperative is the sum contributed by members to finance the activities and the initial operations of the cooperative. This capital is a fundamental resource, as it covers startup costs and ensures a stable economic foundation.
Characteristics of Share Capital in a Cooperative
- Individual Shares: Each member contributes a share of capital, the minimum value of which is established by law at €25.
- Maximum Amount: An individual member cannot contribute more than €100,000. This limit exists to prevent concentrations of power and to maintain management equity.
- Determining the Total Amount: Although there is no mandatory minimum total capital like in other companies (such as an SRL), the overall share capital should be sufficient to cover initial costs and support the first phases of operation. Many cooperatives set an initial amount that varies based on the nature and objectives of the business.
Obligations and Variations
The bylaws (statuto) of the cooperative can define a minimum amount per share higher than the €25 required by law to ensure more solid resources from the start. The share capital is variable, meaning it can increase or decrease based on the entry or exit of members.
The share capital of a cooperative represents the initial investment of the members and the economic base necessary to launch and sustain the cooperative’s activities.