In the article, we consider that this is a share contribution.
To achieve various economic, as well as social goals, people and organizations create whole associations that are based on membership. Within the market economy, they are the third force and are considered an alternative to the private and public sectors. The cooperative has a direct relationship with the economic and other interests of its members. In order to form such a union and achieve the set goals, they create a fund, which is formed by the share contributions of members of the cooperative. This is a kind of direct investment. This is, first of all, funds that are invested by shareholders at various stages in order to ensure the charter activities of cooperatives and in exchange for a share in the property. Next, we’ll talk in more detail about what a share is and what it gives to members of a cooperative.
The concept
The definition of this category is indicated in the law under the title “On Agricultural Cooperation”. Consonantly called a share in the property contribution to the fund, which is made by a member of the cooperative in cash. In civil law, it is presented as an opportunity to participate in the ownership of a cooperative, which is obtained after payment of contributions or by investing money.
Its value can have a direct impact in the framework of profit distribution between all participants. However, it does not affect the right to participate in the management: each member at the general meeting has exactly one vote. The occupation of certain posts in a cooperative does not depend at all on what size the participant made a contribution. This is an important feature that is reflected in the Civil Code.
The procedure for joining a person in a cooperative
Citizens or legal entities that have made a contribution are usually called shareholders. They can be, for example, when you create or as part of joining an already existing community. In the first case, members are its founders and shareholders become only after state registration of the company as a legal entity. In the second case, everyone who wants to join a cooperative initially receives an application that is considered within a month, after which a decision is made. If it is positive, then the following must be done:
- Transfer an entry fee, which will mainly cover the costs of entry.
- Pay a fee. Such property is credited to the fund. Size establishes the charter of the company.
- Get a shareholder’s book, that is, a document confirming membership in a cooperative.
In proportion to the contributions made, dividends shall be accrued, which shall be paid upon disposal or transferred to the unit heir. Shareholders also have the right to apply for work in a cooperative as a matter of priority. The maximum number of participants is not limited.
Property share contribution
The basis for the formation of property is a mutual fund, which is formed from the contributions of members of the cooperative. They may be required or optional. Mutual contributions of associate members have no such division. The cooperative has the right, when distributing profits, to direct some of its share to the increment of shares, increasing the size of the fund.
A share contribution is a category that is defined as a share of the property of a credit cooperative. It reflects the amount of participation of a member in the formation of property.
Voluntary contribution - what is it?
What can be a share contribution to a cooperative? In addition to mandatory contributions, members of the company make voluntary contributions in order to increase the share of their property participation in the cooperative. Due to this, accumulations are formed that include cooperative annual payments in proportion to the value and time of their circulation for each shareholder. Next, consider the existing types of contribution.
Kinds
One type of share contribution is a contribution to the GSK and ZhSK. In our country, housing and garage cooperatives are considered very common. Obligations to pay regular deposits fall on the shoulders of members of HBC and HSC. The exact size and established procedure for payment is determined by the charter. It also contains information on what competence the management bodies have and what specific violations await those who refuse to contribute funds.
For what purposes can a share contribution still be made? Another type of contribution is the development of infrastructure. The basis for such contributions is a special type of agreement where the parties are the developer with the local government. Thus, the first to pay money to the city budget is to ensure that the infrastructure in this village develops. The size along with the terms and responsibility is the main condition, which is mandatory prescribed in such documents.
The agreement between the cooperative and the shareholder
The main document that determines the procedure for payment of money or other property is the agreement of share contribution. It establishes all the main points that are associated with entry, and at the same time, with the participation of a citizen in a cooperative institution:
- The terms are shown along with the size of the payment of shares.
- Responsibilities with the rights of shareholders.
- Indication of the termination of this contract.
- The procedure for the return of funds in the event of withdrawal from the cooperative.
The paper may also prescribe the rules for holding a meeting of cooperative members, display the special rights of the shareholder, among other things, regulate the division of cooperative property in various cases. The contract also determines the form of contribution. Mandatory shares in production cooperatives are set at the same size for all. In the consumer version, this is done in proportion to the planned volume of citizen participation in the economic activities of the cooperative in question.
What are the risks of the contract
In the event that if you study which share contribution agreement has risks, then, first of all, it is necessary to indicate the following pitfalls:
- With a high probability, the value of the object may increase by the completion of construction.
- If the deadlines for any reason are not met, then HBC will not receive fines for this.
- There is a restriction on the resale of the unit.
- Developers may not have permission, and this will increase the risk of getting into an unscrupulous company.
It is these dangers that are the reason that people choose in favor of DDUs, which have much fewer shortcomings. Now we find out what are the advantages.
Benefits of Cooperatives and Mutual Fund
A fund formed through contributions from members of a cooperative is one of its greatest strengths. In our legislation, such amounts are not declared in any way and are not subject to taxation. This gives a certain share of freedom in the use and transfer of property constituting joint capital.
So, for example, not only cash, but also various buildings along with equipment, land, securities and other property, which has a monetary value, can become a voluntary share contribution to the fund. At the same time, the legal regime, taxation and other payments associated with its use will change. Under the agreement, even a computer can be made as a contribution, having negotiated its price only with the leaders of the cooperative.Against this background, a refund can be received in money without paying absolutely no taxes from these funds. In addition, shareholders can safely use the property, including money that is received on the security of contributions.
The property that makes up the fund is well protected from external interference in the activities of cooperatives on the basis of legislation in force in the country. Therefore, they are often called alternative categories to the private and public sectors of the economy.
We considered that this is a share contribution.