ICOS, the representative body for co-operatives in Ireland, has urged entrepreneurs, innovators, people and communities to consider setting up co-operatives as part of the renewal and recovery of businesses and the economy.
Minister Troy, Minister of State for Trade Promotion, Digital and Company Regulation, the ICOS president Jerry Long, and ICOS vice president and Chairman of the ICOS Rural Business Committee James O’Donnell launched a handy new Guide to Starting a Co-operative.
The guide is now online at www.icos.ie
It provides an easy to follow roadmap on how to approach setting up a co-operative business, including planning, commercial feasibility, membership enlistment and investment, and registering as a co-op, together with a commitment from ICOS to provide advice and guidance along the way.
A co-operative is a business organisation that is set-up, owned and run jointly by its members.
They share in the profits and operational benefits of the business which is designed to best meet their needs and the needs of their consumers and the market in general.
Co-operatives run businesses that are very similar to companies limited by guarantee, including limited liability, unlimited membership and the same treatment in terms of taxation.
However there are some differences including co-operatives being able to raise funds by way of share capital and also having specific legislative recognition of voting rights for individual members (i.e. democratic control).
“I am fully aware of the continuing importance of the co-operative movement throughout Ireland, particularly to local and rural communities,” said Minister Troy. “This is particularly important in these current challenging times and I look forward to the co-operative movement playing its part in the ongoing recovery from the Covid-19 situation.
“I welcome this initiative by ICOS where their member organisations can already point to industries that originally started small but now currently provide a €14bn contribution to the Irish economy, most notably in the dairy and agrifood sector but also other sectors across 130 co-operative enterprises in Ireland.
“These in turn are owned and relied on by over 150,000 individual members, with employment provided for 12,000 people.
“Of course, that kind of scale is not established overnight but what we are principally highlighting today are the many benefits and returns that can be achieved by groups of like-minded people coming together in a mutually established enterprise, for their collective benefit, as they set about providing a new offer to the market.
“My Department has been undertaking a complete overhaul of the existing legislation relating to this sector. This very substantial piece of work is well advanced and I intend to bring proposals to Government in the coming months which will provide for a modernised and effective legislative framework for co-operatives.”
While the co-operative model has gained the most traction in the agri-business and rural environment, including the Irish dairy processors and livestock marts, ICOS strongly believes that the model has significant potential across the whole Irish economy both rural and urban.
James O’Donnell, vice president of ICOS and chairman of the ICOS Rural Business Committee said the establishment of co-operative businesses, where members work together to back and support a mutually owned enterprise, is a successful and proven approach particularly during times of market failure.
“Possibilities exist in digital services, e-commerce, renewable energy, tourism, housing, sports clubs, media ownership, restaurant services including delivery, social care provision including homecare and nursing home provision, and solutions for the increased number of remote workers who will require adequate facilities to work as effectively as if they were in the office.
“New businesses could set up as a co-operative or existing businesses could collaborate with a number of similar enterprises to create economies of scale, provide a wider range of services in a more reliable, efficient and cost effective manner and, as a result, retain customers and stay in business.”
ICOS President, Jerry Long said businesses face severe challenges including loss of demand, difficulty in meeting overheads and more worryingly, their business model may have been fundamentally undermined in terms of its viability.
“Co-operative businesses can provide a more equitable economic model while also supporting growth and development, locally, regionally and nationally.
“A unique aspect of the COVID-19 crisis is that businesses may close, making workers unemployed despite there still being demand for the services they provided through their former employer. In such situations and with some support and guidance, these workers could form a co-operative and get back to work, providing important services in a structure that will allow them to generate sustainable revenues, assist economic recovery and prevent further erosion of the vibrancy of our cities, towns, villages and rural communities.
“The more existing businesses we can save and the more new businesses we can create, the greater the level of return there will be to the Exchequer. The stimulation of indigenous enterprise has never been more important. We would like to see a strong and meaningful commitment to the promotion and development of the co-operative model, as a means to reboot the Irish economy, including completion of the ongoing legal review and modernisation of legislation surrounding co-operatives.
“The co-operative model presents the most practical means to achieve together what, in many cases, individuals might fail to achieve if they acted alone. ICOS is committed to following on this tradition of self-help and looking at providing solutions to issues being faced by people and businesses as a result of the COVID-19 Emergency. The practical and economic benefits of co-operative entrepreneurship and enterprise are widely to be seen and can be realised even further. We will work with Government, communities and all interested parties to promote co-operative enterprise as a means for the renewal and recovery of society and the economy,” Mr Long concluded.