The bureaucracy is primarily responsible for the non-existent boom. Even the foundation of an eG involves a considerable amount of work, which still exceeds the founding expenses of a corporation.
First of all, you have to go through a start-up examination that lasts several weeks and can cost you more than 3.000 Euro. In addition, the eG must become a member of a cooperative audit association, which usually costs a basic contribution of several hundred euros per year.
Thereafter, the cooperative must undergo a legal review every two years, for which 4.000 may incur Euro or more. And it goes on with the duties:
The cooperative must register as a formal merchant, no matter how big, in the commercial register. This is associated with additional costs: The eG must become a member of the Chamber of Commerce and pay corporate tax. It is also required to account.
Commercial register and accounting required
In turn, the cooperative members need accounting skills, which in small Company often are absent. So you have to hire a tax consultant, which causes further costs. This considerable effort makes the cooperative in Germany unprofitable, especially for small companies that should actually benefit from the legal form.
And yet it is just small, ambitious companies with special niche products, which have recently come back to the legal form of the eG more often: "Most of our member cooperatives have been founded in the last five years," says Burchard Bösche from the Board of the Central Association German consumer cooperatives eV
For example, Bremer Energiehaus-Genossenschaft eG, 2006, was founded in order to supply its members with electricity and gas at low prices. In Aalen, 162 cineastes joined forces in the same year to show off-mainstream films in a program cinema - meanwhile, the program cinema Aalen eG has 520 members. And Missing Link Versandbuchhandlung eG is an import bookstore that specializes in getting English-language titles.
The list could be continued indefinitely: In Germany, there are some 7.000 cooperatives with around 20 million members, including names such as Edeka, Rewe, Coop, various housing cooperatives, Volksbanken and Raiffeisenbanken and the most diverse types of cooperatives in the service sector.
The eG stands and falls with the commitment of its members
Nevertheless, a cooperative has not only bureaucratic disadvantages: Although the cooperative is attractive, especially in economically uncertain times, because in the absence of financing by the banks, the deposits of the members, ie the shares and possibly raised entrance fees, a good alternative, the capital to provide for the company.
But this capital is correspondingly low if the cooperative has only a few members. But as the cooperative grows as more and more members join, the organizational effort grows. In other words, the eG's ability to act stands and falls with the commitment of its members, which is often provided on a voluntary basis.
Disadvantages of cooperatives
Another disadvantage of cooperative foundations is that they can hardly benefit from state subsidies. Because it leaves something to be desired. This makes a co-operative foundation unattractive for many entrepreneurs.
Grants are usually given to help entrepreneurs, people who run a business in person. These can be sole proprietorships, personally liable partnerships of partnerships or managing directors of a GmbH.
State support uninteresting
For cooperatives, this promotion is usually uninteresting, since the board members are not even involved with substantial capital in the financing of the company.
However, there is no special support for people who associate with common economic interests. The result: The enormous potential that lies in the cooperative idea remains unused.
Abroad in comparison
In other countries there are significant differences in direct comparison: in Italy, for example, where cooperatives are traditionally strongly represented, there are more than 70.000 cooperatives. Each year, new cooperatives are set up there via 2.000 - with an upward trend.
And even in small Switzerland, 13.000 Cooperatives have remained virtually constant for fifty years. The fact that the situation is so much better here is due to the fact that the future-oriented value of this legal form has long been recognized abroad. In Italy, for example, cooperatives can borrow cheaply from their members and deduct their profits tax-free.
Other countries promote more
Therefore, the Italian cooperatives have a much higher capital than their comrades in Germany. Spain and Portugal also enjoy such tax breaks. In Switzerland and many other countries, small cooperatives do not have to pay any or only small auditing costs.
And in Sweden, there are 25 publicly funded start-up agencies for new cooperatives.
Cooperative Law: simplification necessary!
This shows that cooperative law in Germany urgently needs to be simplified, so that this legal form will become attractive again, especially for small companies, so that they can adapt to economic changes.
As Burchard Bösche of the Central Association of German Consumer Cooperatives has already stated, there are already initial efforts to do so: "As the central association of German consumer cooperatives, we are currently intensifying our efforts to considerably simplify the cumbersome examination process, especially for smaller cooperatives."
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