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What this means for your business

32 obligations

12 penalties

2 can imprison

1 guides

Applies to: United Kingdom
On this page: 32 compliance obligations, 1 practical guide

Read full text on legislation.gov.uk

What you must do

32 compliance obligations under this legislation — 2 can result in imprisonment.

Inspections 1

If you run a registered co‑operative or community benefit society, you must let any member (or anyone with a financial interest) look at their own account and the society’s member/officer register whenever they wish, provided you set reasonable opening times. The society’s general meeting may set the specific inspection times or procedures.

Director/Officer s.103

Management duties 3

If your co‑operative or community benefit society has appointed auditors for the financial year, you must keep proper accounting records and a satisfactory system of control, and you must give auditors full access to those records, books, deeds and any other documents they need. You also need to answer their requests for information and let them attend and speak at general meetings.

Director/Officer s.87 When the society has appointed auditors for a financial year

If you run a registered co‑operative or community benefit society, you must make sure the society’s rules contain all of the items listed in section 14 – things like the name, objects, membership terms, audit provisions and how profits are applied. This applies when you first register the society and whenever you amend the rules.

Director/Officer s.14 When establishing or amending the society’s rules

If you run a registered co‑operative or community benefit society you must keep accurate books that record every transaction, asset and liability and show a true and fair view of the society’s affairs. You also need to have procedures in place to control those books, cash on hand and all receipts and payments.

Trader/Business s.75

Notifications 2

If a court decides that the dissolution of your co‑operative or community benefit society is to be cancelled, you must let the FCA (and the PRA if the society is PRA‑authorised) know about that order. The notice has to be sent within seven days of the court’s decision.

Any Person s.122 A court order sets aside the society’s dissolution

If your co‑operative or community benefit society decides to dissolve using an instrument of dissolution, you must send that instrument together with a statutory declaration to the FCA (and the PRA if the society is PRA‑authorised). You also need to send a copy of the special resolution signed by the chair and secretary within 14 days of the second meeting. The FCA will only register the dissolution once your final annual return has been filed.

Director/Officer s.121 When the society chooses to dissolve by instrument of dissolution under s.119(1)

Other requirements 4

If the FCA refuses to register an amendment to your society’s rules, you can take the matter to court. The court that hears the case depends on whether your society’s registered office is in Scotland (Court of Session) or elsewhere (High Court). If the court overturns the FCA’s decision, it must then register the amended rules. In practice this means you should keep a copy of any FCA refusal notice and be prepared to file an appeal quickly if you disagree with it.

Any Person s.17 FCA refuses to register an amendment to the society’s rules

If the FCA refuses to register your co‑operative or community benefit society, cancels its registration, or extends a suspension beyond three months, you can challenge the decision by appealing to the appropriate court. The appeal must be lodged before the notice period for cancellation ends (and in any case within the time allowed for a refusal).

Director/Officer s.9 FCA refuses to register, cancels registration, or renews a suspension beyond 3 …

Your society must keep a copy of its most recent balance sheet on public view at its registered office at all times. Whenever a new balance sheet is prepared, replace the old one so that anyone visiting the registered office can see the current financial position.

Director/Officer s.81

If you are an officer of a registered co‑op or community benefit society who receives or controls money, and the society’s rules say you must, you need to give a financial security (a bond, guarantee or similar) before you start the role. This security must cover accurate accounting and payment of any sums you owe the society.

Director/Officer s.41 When the society’s rules require an officer handling money to give security …

Payments and fees 2

If your society hires a qualified auditor to audit your accounts or to prepare a statutory report, you must only pay them up to the maximum fee the Treasury may set by regulation. You cannot agree to, ask for, or accept a higher charge. This means you need to check the regulated fee levels before agreeing a fee and keep evidence of the amount you pay.

Trader/Business s.97 When engaging a qualified auditor for a statutory audit or required report

When a member of your registered society dies and has left a nomination under s.37, you must, after receiving satisfactory proof of death, either transfer the nominated property (including shares) to the nominated person or pay them its full value. If the share transfer would push the nominee’s shareholding above the society’s maximum capital limit, only transfer up to that limit and pay the balance. For nominees under 16, you may pay a parent, guardian or a fit‑and‑proper adult who will hold it on trust.

Director/Officer s.39 Member dies, has made a nomination under s.37, and the society receives …

Offences and prohibitions 12

If your registered society has withdrawable share capital and you conduct banking activities – for example taking deposits larger than the limited exemption or paying out withdrawable capital while any deposit is still due – you breach this provision. The offence is tried in the magistrates’ court and carries a maximum fine of £200. No imprisonment is provided for this offence.

Any Person s.67

If your co‑operative or community benefit society commits an offence and the breach carries on, every week it continues is treated as a separate new offence. This means you can be prosecuted repeatedly – once for each week the problem persists – leading to multiple fines or other penalties.

Any Person s.129

If the FCA gives a registered society a direction to wind up its affairs (for example, after a notice of proposed cancellation) and you do not follow that direction, you commit a criminal offence. On summary conviction you face a fine of up to £1,000, and in Scotland you could also be sentenced to up to three months in prison.

Any Person s.7

If a co‑operative or community benefit society (or any of its officers, members or any other person) does not do something the Act requires – for example, filing a return, providing information, allowing an act, or it provides false or insufficient information – the person commits a criminal offence. The offence is dealt with in the magistrates’ court and can result in a fine of up to £1,000.

Director/Officer s.127

If your charitable registered society does not include the word “charity” or “charitable” in its name, you must clearly state that it is a charity on all notices, ads, business letters, financial documents, land documents and websites. An officer or anyone acting for the society who issues, signs, executes or publishes a non‑compliant document commits an offence.

Director/Officer s.12

If an officer or anyone acting for your co‑operative or community benefit society issues, signs or authorises a document, notice, advertisement, website or other material that does not show the society’s registered name as required, you are committing a criminal offence. On conviction in the magistrates’ court you face a fine of up to £1,000. No prison term is provided for this breach.

Director/Officer s.11

If your registered society carries on banking and does not put the statutory banking statement (as set out in section 70) in a prominent place at its registered office and any other banking premises, you commit a criminal offence. On conviction in the magistrates' court you face a fine of up to £200.

Any Person s.69

If you are a member of a registered society’s committee and you do not take all reasonable steps to make sure the society’s revenue accounts and balance sheet are accurate and give a true and fair view, you commit a criminal offence. On conviction you face a fine – unlimited in England and Wales and up to level 5 on the standard scale in Scotland – but no prison term.

Any Person s.80

If you, or anyone acting for you, deliberately make a false entry, delete or omit information, or order such changes to a society’s balance sheet, contribution book or any return required by the Act, you commit a criminal offence. Conviction brings a fine of up to £1,000 on summary conviction; no custodial sentence is provided.

Any Person s.131

If you provide someone with a copy of rules that are not the officially registered rules of a co‑operative or community benefit society – or you claim they are the society’s rules when they are not – and you do so with the intent to mislead or defraud, you commit an offence. The offence is tried in the magistrates’ court and the maximum penalty is a fine of up to £200. No imprisonment is provided for this breach.

Any Person s.19

If anyone obtains a registered society’s property by lying or deception, or holds that property and with fraudulent intent withholds it or uses it for purposes not authorised by the society’s rules, they commit a criminal offence. On conviction in the magistrates' court they can be fined up to £500, ordered to return the property or repay any money, and may be jailed for up to three months if they fail to comply.

Any Person s.130

If your co‑operative or community benefit society decides to have a common seal, the seal must display the society’s registered name in clear, legible characters. Any officer or person acting for the society who uses, or authorises the use of, a seal that does not bear the name commits a criminal offence. On conviction in the magistrates' court the offence attracts a fine of up to £1,000.

Director/Officer s.50

Record keeping 2

Your society must maintain a record of its financial transactions. You can use traditional bound ledgers or any other method, but if you don’t use bound books you must put in place safeguards so the records can’t be forged and can be readily found when needed.

Trader/Business s.76

Your society must keep an up‑to‑date register of every member and officer at its registered office, recording details such as names, addresses, shareholdings and dates of membership. You also need a duplicate register (or a format that hides share/property details) and must keep the register secure and available for inspection by FCA‑authorised inspectors.

Director/Officer s.30

Registration and licensing 1

If you are winding up a co‑operative or community benefit society, you cannot dissolve the society or cancel its registration until you have a certificate confirming that every asset has been transferred to the rightful owners. The certificate must be signed by the liquidator or an approved officer and filed with the FCA before the dissolution can proceed.

Director/Officer s.126 When the society is being dissolved or its engagements are being transferred …

Reporting and filing 5

Each year you must prepare and send your society’s annual return to the FCA within 7 months of the accounting year‑end. This includes a summary of the year’s accounts, all balance sheets made during the year and any auditor’s report required.

Director/Officer s.89 After each accounting year

If your registered co‑operative or community benefit society owns other societies (subsidiaries), you must produce a set of consolidated group accounts each financial year. These accounts need to be audited by the same auditors who audit your own accounts and then sent to the FCA together with your annual return.

Director/Officer s.98 When your registered society has one or more subsidiaries at the end …

Each year your registered co‑operative or community benefit society must produce a revenue account. This can be a single set of accounts covering the whole society, or separate accounts for each distinct business activity it runs. The accounts are the basic financial record you need to keep and may be required for filing with the regulator.

Trader/Business s.79 Every financial year of the society

If you are an officer or employee of a registered co‑operative or community benefit society who handles money, you must give the society a full account of those funds whenever it asks, and you must hand over any cash or assets in your possession to the person the society appoints. If you refuse or neglect this duty, the society can take court action against you.

Any Person s.42 When you receive or are in charge of money or property belonging …

If you are appointed as a receiver or manager of a registered co‑operative or community benefit society’s assets, you must tell the FCA within a month and then send them regular accounts of all money you receive and pay out. When you stop acting, you must also send a final account. If the society is regulated by the PRA, you must copy the PRA on those reports.

Any Person s.66 When you are appointed as a receiver or manager of a registered …

Penalty applies

s.129 Penalises: Continue to breach a co‑operative society offence

Practical guidance

Our guides explain how to comply with the requirements above.

Social enterprise structures

Compare legal structures for trading with social purpose - CICs, charities, co-operatives, and community benefit societies.

Sections and provisions

162 classified provisions from this legislation.

22 Duties 15 Offences and penalties 28 Powers 20 Definitions 17 Exemptions

Duties 22

s.8 Suspension of registration of conditions C
s.9 Appeal against refusal to register or cancellation or suspension of registration
s.14 Content of a society's rules which
s.17 Appeal against refusal to register amendment of rules
s.30 Register of members and officers
s.39 Section 37: procedure on death
s.41 Security to be given by certain officers
s.42 Duty of certain officers and employees to account
s.46 No duty to enquire as to capacity of society or authority of committee
s.66 Duty to account etc of receiver or manager of a society's property
s.75 Duty to keep books of account etc A registered society
s.76 Form of books of account
s.79 Duty to prepare revenue accounts A registered society
s.81 Duty to display latest balance sheet at registered office
s.87 Auditors: content of report and powers matter
s.89 Annual returns
s.97 Remuneration of qualified auditors
s.98 Group accounts The society
s.103 Power of members etc to inspect own account and society's register regulations as
s.121 Instruments of dissolution: notification to FCA etc alterations
... and 2 more duties

Offences and penalties 15

s.7 Cancellation of registration: additional procedure in cases involving condition D
s.11 Registered name to be displayed and used
s.12 Charitable status to appear on documents etc
s.19 Provision of rules with intent to mislead or defraud
s.20 Creation of offences by a society's rules
s.50 Common seal
s.67 Registered society with withdrawable share capital not to carry on banking etc
s.69 Society carrying on banking must display statement
s.80 Accounts and balance sheets to give a true and fair view
s.127 General offences
s.128 Offences by societies to be also offences by officers etc
s.129 Continuing offences
s.130 Misappropriation of a society's property etc
s.131 Falsification of a society's records etc
s.135 Power to apply company law provisions on investigations, names and dissolution etc

Powers 28

s.18 Duty to provide copy of rules on demand
s.21 Rules as to fund for purchase of government securities
s.22 Rules of agricultural, horticultural or forestry society may provide for loans without security
s.23 Supplementary provisions as to rules
s.25 Power to amend limit in section 24
s.26 Power to hold land etc
s.27 Power to invest
s.28 Proxy voting by societies
s.32 Bodies corporate may be members
s.34 Advances to members
s.37 Nomination by member of entitlement to property in society on member's death
s.40 Death of member: distribution of property not exceeding £5,000
s.51 Power of society to have official seal for use abroad
s.52 Authorisation of use of official seal
s.60 Section 59: power to extend time for making application or to rectify errors
s.61 Notification of transactions relating to charges recorded under section 59
s.64 Notification of charges etc: Scotland
s.68 Power to amend figures in section 67(2)
s.88 Persons appointed under section 82 or 85: powers etc
s.95 Resolutions relating to auditors: auditors' representations
... and 8 more powers

Definitions 20

Schedule 5 Transitionals and savings
s.36 Payments in respect of persons lacking capacity
s.44 Special resolutions under section 43 eligible member
s.49 Section 48: definitions
s.53 Methods for execution of documents: England and Wales
s.65 English and Welsh societies: restriction on appointment of administrative receiver relevant society holder of a qualifying floating charge in respect of the property of a relevant society
s.73 Discharge of securities: other property in Scotland deed
s.77 Year of account: societies registered on or after 8 January 2012
s.91 Meaning of “qualified auditor” qualified auditor
s.93 Re-appointment and removal of qualified auditors
s.101 Meaning of society being a “subsidiary” of another society
s.102 Interpretation of Part 7 qualified auditor small society subsidiary
s.111 Special resolutions under section 109 or 110 eligible member
s.113 Special resolutions under section 112 eligible member
s.118 Power to apply provisions about company arrangements and administration etc Company arrangement or administration provision
s.120 Special resolutions under section 119 eligible member
s.136 Section 135: power to make consequential amendments
s.143 Form of documents etc
s.148 Meaning of “electronic form”, “by electronic means” etc
s.149 Interpretation of Act the appropriate authority charitable registered society the Companies Acts

Exemptions 17

s.4 Registration etc : special cases
s.6 Cancellation of registration: procedure and effect
s.16 Amendment of rules
s.24 Maximum interest in a society's withdrawable shares
s.31 Members under 18
s.54 Method for execution of contracts under seal: England and Wales
s.59 Charges on assets of English and Welsh societies
s.62 Floating charges created by Scottish societies
s.78 Year of account: societies registered on or before 7 January 2012
s.82 Restrictions on publication of accounts and balance sheets
s.84 Power of certain societies to disapply section 83
s.85 Duty to obtain report in certain cases where section 83 is disapplied
s.86 Power to require accounts etc for past years to be audited by qualified auditor
s.90 Duty to provide copy of annual return on demand
s.99 Section 98: exceptions
s.100 Meaning of company being a “subsidiary” of a society
s.104 Power of society to make rules authorising inspection of books

🧪 Business Context Testing

What this means for your business

What you must do

Inspections 1

Allow members to inspect accounts and register

Management duties 3

Cooperate with auditors and keep proper books of account

Include required matters in your society’s rules

Maintain proper accounting records and internal controls

Notifications 2

Notify FCA (and PRA) of court order setting aside dissolution

Notify FCA (and PRA) when dissolving your society

Other requirements 4

Appeal FCA refusal to register rule changes

Appeal to court against FCA refusal, cancellation or suspension

Display latest balance sheet at your registered office

Provide a bond or guarantee before handling society funds

Payments and fees 2

Pay auditors no more than the rates set by Treasury regulations

Transfer or pay nominated assets on a member’s death

Offences and prohibitions 12

Carry on banking when you have withdrawable share capital

Continue to breach a co‑operative society offence

Fail to comply with FCA winding‑up direction

Fail to comply with statutory duties of a registered society

Fail to display charitable status on required documents

Fail to display registered name on documents or website

Fail to display required banking statement

Fail to ensure accounts give a true and fair view

Falsify a society's records or documents

Give false or misleading society rules

Misappropriate a society’s property

Use a common seal without the society’s name engraved

Record keeping 2

Keep proper books of account and protect them from falsification

Maintain a member and officer register at your society’s registered office