Legally registering as a housing coop

2022-11-29T20:21:02Z

Rowan: fixed broken links

Registering as a co-operative, through the Mutuals department of the [https://www.fca.org.uk/ Financial Conduct Authority] (FCA), gives your group the legal status to collectively borrow money and purchase housing. This is also called incorporating and this process takes about eight weeks.

Registration involves choosing a name, registered office, the officers, beneficiaries and submitting your 'Rules' to the Financial Conduct Authority (FCA). The term 'Rules' is used interchangeably with 'Primary Rules', 'Rule Book' 'Constitution' or 'Articles of Association'.

Registration is easiest by using any of the Model Rules made by FCA approved “sponsoring bodies” - such as Radical Routes, [https://www.uk.coop/ Co-ops UK] or the [https://www.housing.org.uk/ National Housing Federation]. Though some of the advice on this wiki will apply to co-ops generally, it is aimed towards co-ops who have adopted the RR model rules.

You can use the Catalyst Collective Registration Pack for registering with [https://www.catalystcollective.org/home/housing-co-op-registration/rrfm14/ Radical Routes’ Fully Mutual 2014 (RRFM14) rules]. We believe these are the best rules for creating a fully mutual housing co-operative in common ownership and managed by General Meeting. Please note that these get regularly updated, so to get the most up-to-date registration pack, get in contact with [https://www.catalystcollective.org/ Catalyst Collective].

=== Primary Rules ===
The principle document of any registered co-operative society is known as the ‘Primary Rules’. These are like the Articles of Association for a company. They set out the parameters for the co-operative, including

* objects - the co-op’s goals
* powers - what the co-op is legally empowered to do
* who can be a member, and in some cases what is required of members
* governance – how members have control of the way the co-op is run
* dealing with disputes
* dissolution - what to do if the members decide not to be a co-op anymore

Primary rules are the most fundamental document for the co-operative and is essentially a contract between the members and the co-operative.

Various sets of 'model rules' are available from sponsoring organisations such as [https://www.radicalroutes.org.uk/ Radical Routes] or [https://www.uk.coop/ Co-operatives UK]. These have already been accepted by the FCA, so using these rules is cheaper, quicker and more straightforward than creating a set of rules from scratch. You can make changes to the model rules, though this is more expensive and some rules are required by law so cannot by changed.
{| class="wikitable"
|+Figures accurate as of August 2022. You can check on the [https://www.handbook.fca.org.uk/handbook/FEES/App/1/Annex1A.html FCA website]
!Application
!Fee
|-
|Using model rules with no changes
|£40
|-
|Using model rules with 1-6 changes
|£120
|-
|Using model rules with 7-10 changes
|£350
|-
|Using model rules with 11 or more changes, or a new set of rules
|£950
|}
Radical Routes created and recommends using the [[RRFM14 (Radical Routes Fully Mutual 2014)]] set of model rules. These support decision making by consensus, and restrict the ability of members to change specific rules without permission from Radical Routes. This prevents people from selling the co-op assets for personal benefit further down the line. To register using RRFM14 you can contact [https://www.catalystcollective.org/ Catalyst Collective], who administer the rules for Radical Routes.

If you find model rules do not suit your purpose, you could try finding an organisation with similar aims and ask to look at theirs, or perhaps use a version designed to be more generic such as those from [https://www.uk.coop/ Co-ops UK].

==== Officers ====
You need to name at least three people as “officers” to register as a co-operative. These must be named on the form as a secretary, treasurer, and one other role. Every year at the Annual General Meeting, these roles can change - more detail on this in the [[AGM section]]. These official “officer” roles are often just a legal formality, as you may choose to rotate who is doing the work of these roles.

==== Beneficiaries ====
If you’re using RRFM14 or certain other model rules, you may have to pick other organisations which would get the co-ops assets if your co-op dissolves. It makes sense to pick other common ownership co-ops with similar goals. You might pick another local housing co-op, another co-op you want to support, or maybe Radical Routes! With RRFM14 you can list more than one of these, and choose the order of preference. It’s a good idea to make sure at least one is a long term and stable co-op, as this part of the rules could be really important much further down the line.

==== Name ====
You will need to register rules in the name of the co-operative and you will need a name that is not already registered. A small change to a name currently in use can make your choice acceptable, though the FCA may insist you get written permission from an existing business with a similar name, for example, a company wishing to register a name including 'Sheffield' might have to ask permission from Sheffield Steel. Permission will usually be granted unless there is a genuine concern that there might be a confusion between you and the other company in which case you probably are better off having a more distinct name. Check whether the name you have in mind (or similar) is already in use at www.companieshouse.gov.uk. Agree a second name as an alternative in case the first is not accepted by the FCA.

It is good practice to name yourself ‘XXXX Housing Co-operative Ltd’ as this helps to clarify your status when dealing with officialdom.

When choosing your Co-op's name, think about all the situations you're going to need to use it in – will it appeal to future members or instil confidence in lenders?

It can be easier to come up with lots of names than to start trying to find the perfect name. Try making a huge list of possible names, even including ones that you don’t like, and then whittle it down after. Trying to find the perfect name from the start can make people not say their ideas for fear they aren’t “the perfect name”. Taking the pressure off so all suggestions are welcome makes it much easier to get a big list of ideas.

==== The Registered Office ====
The full name of the co-op should be displayed on a notice above the front door of the registered office. The register of members must be kept there, as should the latest balance sheet and auditors report (once these exist, which will not be until after the co-ops first year of operations).

=== Taking over an existing housing co-op ===
It is possible to take over an already registered, but defunct, co-op from a group that has become dormant. Be aware that co-ops which have become defunct are often not up to date with mandatory paperwork (FCA returns, corporation tax etc) and there may be fines for this, which can be more expensive than setting up a new co-op. If the co-op has any unrecorded debts such as an unpaid invoice, the co-op would still be liable for these. There can also be a lot of work bringing up to date the register of members, year end accounts, etc if these have not been well-maintained. '''We do NOT recommend taking over defunct housing co-ops''' as it can be near impossible to be know for sure if the co-op has unrecorded debts, they may have outstanding invoices that have been lost or filed poorly. If you do still decide you want to take over an existing co-op, and have found a dormant co-op that wants to be passed on, the existing members simply accept the new group as members through their usual membership process, and then resign themselves.

Forming a group

2022-11-22T17:12:11Z

Rowan: removed "Start up finance" as it is duplicated in its own section

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== What is important to you and your co-op? ==
A co-operative can be formed to cater for the needs and ideals of a particular group, or even a particular you!

Knowing what you want out of a housing situation helps you to get what you want. Here are some prompts to help you consider what is important to you in where and how you live.

Some of these may be very important to you, and others may not matter to you at all or can be more flexible. Starting out as a single person, you might only have one or two things that matter to you. As more people get involved you will start talking about what is key to the group as a whole. This will be an evolving discussion.

You should be clear if you do want to be specialised before you start recruiting. Once you have a large group of people who feel involved in a project it's very hard to exclude anyone for not fitting the bill unless that has been explicit from the beginning.

==Physical aspects==
Consider:
* General structure of the co-op and how the living spaces are laid out. Do you want to live in a single large shared house, or cohousing, where individuals have their own self-contained living quarters? Some co-ops have a mixture of both, though this is more work to set up.
* Location. Do you want to be in a specific city, a specific county? Central and close to amenities, or rural for cheaper land? Are there key things you or other members need to be close to (e.g. hospital, school, a train station, sports clubs or parks), how close do you need to be to those things?
* Do you need parking spaces, how many does the group need?
* Any other accessibility needs. Would you or other members struggle to manage stairs, or to walk up a steep hill or driveway? Some buildings can be retrofitted for accessibility. If self-building, consider accessibility in the build.

== Recruiting ==
You should be clear if you do want to be specialised before you start recruiting. Once you have a large group of people who feel involved in a project it's very hard to exclude anyone for not fitting the bill unless that has been explicit from the beginning.

You may already have a small group of people in mind, but you're likely to find that you need more people to fill up your future home.

Use the networks that already exist where you live to find people. Community noticeboards, social centres, and word of mouth are all ways of reaching out to people. You may want to host open days or meetings where people can drop in and find out about the project.

Depending on what brings your group together, you may already have an obvious network of people to draw on. If not, think about how you can get messages to people who are looking for what you're hoping to create.

Make clear in your adverts that this isn't like offering a room for rent in a house share. You need to find people willing to commit time and energy to setting up the co-op, running the co-op, and going through all the stress and strain of finding and buying a property. It's as much advertising a job or volunteer role as it is offering a place to live. You need someone who can see the benefits of that, [[Housing Co-ops - What and Why?#Why set up a Housing Co-op?|of which there are plenty.]]

You may find you already need to start thinking about [[membership procedures]]. Even before you have official membership, you need to think about how you will decide who can join the group.

You also need to be clear with people about what they are likely to get out of the project. Will you be able to house everybody? Will some people go on a waiting list? It's really important to make sure everyone supporting the project understands the plan.

If you want to live in a household of 6-8 people you need to actively recruit until your group reaches that size – it would be a disaster to buy the house and find you couldn't fill the rooms! You need to be very clear what you would do with more members – would you put them on a waiting list or would you change what kind of properties you are looking at? Can you afford (in money and energy) to recruit yet more people and search for a second property?

Clear and honest communication and making sure the whole group is behind the decision is key to avoid disappointment and bad feelings (see section on consensus decision-making.)

The goal is always the same, to get a stable group which sticks together and is made up of people who trust each other. There is no clear recipe for this though. Each group must find its own path.

=== Getting to know each other ===
Look out for opportunities to work and spend time together as a group. Attending work weekends at other co-ops as a group is good because you get to try out working together. You can have lots of informal discussion about what you would or wouldn't like to do the same as the co-op you are visiting and support another co-op all at the same time!

If you get the chance to live together before you buy a co-op property, take it. Even with all the meetings and activities in the world you can never quite know what it's going to be like to live with someone until you do. Before you move in together talk about how you imagine living together, what are your likes and dislikes, what level of tidyness, noise, guests, etc.

== Start up Admin ==
It can be useful to start discussing your [[secondary rules]] before you have your home. These rules decide a lot about how you live together, and could reduce conflict in the group. This gives you a chance to find out more about each other, and practice reaching consensus. It may help you figure out if you have different ideas about what the co-op should be like.

Think about how you will take minutes and record meeting decisions. This is only legally required once you have [[registered]] as a co-op, but it is good practise to do so from earlier, and you may find it useful to look back on these later to check decisions that were made early on.

Choose one place where meeting minutes can be kept that everyone can see. Whether that’s a shared google drive, dropbox, etc, it can be frustrating later if you realise you have taken minutes at every meeting, but have stored them all in different places making them hard to find.

2022-11-22T16:33:27Z