Summary
3.The Act introduces certain reforms of the law of industrial and provident societies.
4.Industrial and provident societies are mutual societies. The main statute on industrial and provident societies is the Industrial and Provident Societies Act 1965 (the “1965 Act”). Other relevant Acts are the Industrial and Provident Societies Acts 1967, 1975, 1978 and 2002, the Friendly and Industrial and Provident Societies Act 1968, and the Co-operatives and Community Benefit Societies Act 2003 (together with the 1965 Act, the “Industrial and Provident Societies Acts”).
5.The reforms introduced by the Act are:
to require new industrial and provident societies (other than credit unions) to be registered as co-operative or community benefit societies;
to re-name the 1965 Act, the “Industrial and Provident Societies Acts;
to apply the Company Directors Disqualification Act 1986 to industrial and provident societies;
to give the Treasury powers to apply to industrial and provident societies, with appropriate modifications, company law on investigations, company names and dissolution and restoration to the register; and
to give the Treasury powers to make provision for credit unions corresponding to any enactment applying to building societies.
6.A number of these reforms were consulted upon in a public consultation “Review of the GB cooperative and credit union legislation”, carried out by the Government from 21 June to 12 September 2007. The proposals received the support of the sector. The consultation, together with a summary of responses and the Government’s response, are published on HM Treasury’s website (www.hm-treasury.gov.uk).
7.The Act makes changes that will lead to the replacement of the expression “industrial and provident society” with the expression “co-operative or community benefit society”. The reason for this change is that the expression “industrial and provident society” is now widely perceived as old-fashioned. The Act amends the 1965 Act so that new societies (other than credit unions) will be required to register as either a co-operative society or a community benefit society.
8.To reflect the new requirement to register as co-operative or community benefit societies, the Act will change the name of the 1965 Act, the “Industrial and Provident Societies Acts. The terms “co-operative and community benefit societies”, and where appropriate “credit unions”, will appear in the short titles of those Acts.
9.The Act amends the Company Directors Disqualification Act 1986 to apply it to industrial and provident societies. The 1986 Act provides for the disqualification of officers of companies and certain other bodies. Disqualification means that a person is prohibited for a period of time from being a director or otherwise being involved in the management of a company or other body or from acting as an insolvency practitioner. These provisions do not currently apply to industrial and provident societies, although they apply to certain other mutuals such as building societies and friendly societies.
10.The Act gives the Treasury power to apply Parts 14 and 15 of the Companies Act 1985 and Parts 5 and 31 of the Companies Act 2006 to industrial and provident societies, with appropriate modifications. These provisions relates to investigations, company names and dissolution and restoration to the register.
11.The Act also gives the Treasury power to apply to credit unions any enactment applying to building societies. A number of provisions of the Building Societies Act 1986 deal with matters that could also be relevant to credit unions, which are similarly institutions that accept deposits.
