The Legal Nature of Cooperative Membership

Membership is one of the core structural characteristics of the cooperative form. It distinguishes cooperatives from other business forms, especially companies. Cooperative membership is often regulated in national laws; however, the question of how membership should be translated into legal rules, has been largely unexplored. This is quite unfortunate, since to fully understand the complex relation between the cooperative and its members – and the mutual purpose of the cooperative – one must study the legal nature of cooperative membership. The purpose of this article is to investigate the legal dimensions of cooperative membership and how cooperatives differ from mainstream companies. The analysis is structured so that first the distinctive normative features of cooperative membership are assessed on a general level. Next, the focus shifts to the members’ rights and obligations with the aim to provide a systematic overview regarding their justification and structure. Finally, the question of how cooperative membership should be regulated de lege ferenda, is briefly discussed. The findings of this article suggest that when translating membership into legal rules, special attention should be paid to the cooperative identity. It is particularly important to distinguish membership from shareholdership and to understand the central role of the members as user-owners of the enterprise. The purpose of the cooperative is based on member participation and without such interaction, cooperatives would ultimately lose their true identity. This article also points out several membership-related issues, which require further attention, and such studies are necessary to determine how cooperative law should be developed in the future.