Netherlands

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for the Netherlands. Prior to the completion of the research on key figures, the statistics available above are sourced from The Power of Cooperation – Cooperatives Europe Key Figures (2015).

The primary source of legislation for all cooperatives is the Second Book of the Netherlands Civil Code on Legal Persons (hereinafter: NCC). However, there is no section in the NCC containing all the provisions on cooperatives as the Second Book of the NCC contains provisions on legal persons in general. Several sections of this part of the NCC are relevant to cooperatives. Apart from mutual insurance companies and B2B credit cooperatives (kredietunies), there are no specific regimes for different types of cooperatives in the Netherlands.

The Constitution of the Netherlands does not mention cooperatives and the ICA Principles on Cooperative Identity are neither explicitly nor implicitly referred to in the law.  

Cooperative friendliness

The national expert considers the degree of “cooperative friendliness” of the Netherlands’ legislation to be only limited so. In the Netherlands, the national expert regards best practices of cooperative legislation to be its flexibility and the statutory rules on membership withdrawal which protect members against too restrictive rules in the articles of association. However, according to the law of the Netherlands, cooperatives are under no obligation to adhere to additional social or civil society principles or recruit potential new members unless the articles of association stipulate otherwise. The legislator also does not actively promote the ICA Principles. In this respect, Netherlands’ cooperative law lacks a normative aspect educating potential users of the cooperative while setting-up a cooperative according to ICA Principles.

Key recommendations for improvement 

The cooperative identity and its specific nature and the awareness thereof could benefit from one integrated Cooperative Act. Cooperative legislation should also consider introducing incentives for small cooperatives that adhere to the ICA Principles and allow the objective of the cooperative to be broadened to social and general interests of other stakeholders. Among other recommendations, the national expert supports specific rules for worker cooperatives and an adequate legal framework for financing and raising equity in the law supplementing the existing regime of members liability in case of liquidation. Finally, the protection of the cooperative identity vis-à-vis other business forms needs to be addressed too, since Article 2:63 NCC is in practice not enforced.

Conclusions

The cooperative identity and its specific nature and the awareness thereof could benefit from one integrated Cooperative Act. Cooperative legislation should also consider introducing incentives for small cooperatives that adhere to the ICA Principles and allow the objective of the cooperative to be broadened to social and general interests of other stakeholders. Among other recommendations, the national expert supports specific rules for worker cooperatives and an adequate legal framework for financing and raising equity in the law supplementing the existing regime of members liability in case of liquidation. Finally, the protection of the cooperative identity vis-à-vis other business forms needs to be addressed too, since Article 2:63 NCC is in practice not enforced.

_{The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA.}