The French National Assembly passed a new social economy law that could help grow the co-operative sector. The Social and Solidarity Economy law was first presented to the Council of Ministers in July last year. It was adopted without any opposing votes on 21 July and enacted on 31 July.
The law was designed to give employees the power to act, consolidate social economy enterprises and support sustainable development. It also aimed to recognise the social and solidarity economy as a distinct entrepreneurial model.
Under the new law, employees are granted the right to be informed in case their enterprise is to be taken over. Enterprises with less than 250 employees will have to inform them of their intention to sell at least two months in advance.
The law also provides for the creation of transitional co-operative societies, enabling the taking over of a company under the co-operative model even when employees do not have the majority of capital. They would retain majority in terms of decision-making. An external investor in such co-operative societies could own over 50% of the capital of the co-operative society (SCOP), but only for a limited period of seven years. This would give employees the chance to become majority stakeholders 8 years on from the transformation of the enterprise into a co-operative society.
During this seven-year period the general assembly of the newly formed SCOP decide to the reserve funds to rebuy the capital shares from the external investor. The new law facilitates the creation of co-operative societies of collective interest (SCIC), with local groups being able to contribute up to 50% of the capital.
Employees will be able to become members of other worker co-operatives, without having to work for that particular enterprise, as long as the enterprise that employs them and the one of which they become members are part of a group of the same society of worker co-operatives.
The law authorises the creation of groups of SCOPs. Thus a SCOP will be able to have the majority of voting rights within another SCOP, which was not possible before. This will enable them to set up subsidiaries as SCOPs, rather than as non-SCOPs.
Another objective of the law is to modernise the co-operative sector by providing subventions and other forms of finance. An independent auditor will also check if co-operatives abide by co-operative values and principles. The law also provides for the development of Territorial Poles of Economic Cooperation, with the state being able to fund some projects.
Following the adoption of the law, Carole Delga, Secretary of state for Trade, Handcrafts and Consumption and of Social and Solidarity Economy, described the social and solidarity economy as an economy of “transformation and innovation”.
She said: “It’s also an economy that has a meaning, founded on values that place the people as actors, drivers and most importantly, as an absolute norm, as the standard. It’s an economy that shows the path for tomorrow, towards a sustainable and responsible economy, situated across our territory and communities”.
For an overview of the law (in French) go to http://www.economie.gouv.fr/files/files/PDF/20140722_loi_ess.PDF
Photo: Carole Delga speaking in the National Assembly on 21 July when the law was passed (c) Ministère de l’économie, du redressement productif et du numérique
