Starting a Cooperative in Finland

Leading role and minimum equity participation


In a cooperative, the members’ discretionary power is exercised by the general meeting of the cooperative. Each member of the cooperative has equal rights according to the principle “one member, one vote”. This means that every member of a cooperative is in a leading position, as stipulated in the Unemployment Security Act.

The mere leading position in a cooperative does not mean that a member is a self-employed person. As was discussed above, the member must simultaneously own at least 15 % of the corporation.

Hence, if the cooperative has six members or fewer, each member’s share exceeds 15 %. In this case, the members are considered self-employed. If there are seven members or more, each one’s share is less than 15 %, and the self-employed status of the Unemployment Security Act is not created. Please note: the mere share of less than 15 % in the cooperative is not enough to entitle the salaried person or wage earner for the unemployment security status; when deciding whether to grant the adjusted daily allowance for unemployment or not, the so-called general characteristics of an employment relationship are often taken into consideration. Please read more on page “The Cooperative as an Employer”.

If an institutional member of a cooperative has personal members, these are not counted as members of the first cooperative. For example, the cooperative has four individual members (natural persons) and one institutional member. According to the Unemployment Security Act, Chapter 1, Section 6, the members are self-employed persons (each with a share exceeding 15 %). If one wishes to avoid self-employed persons’ status, it is important not to let the number of members drop under seven.