Compulsory stipulations to be included in the rules

Trade name and registered office

(Cooperatives Act, Chapter 2, Section 3; Trade Names Act, Section 7, Paragraph 1, Point 5)

The trade name of a cooperative must be unique, distinctive from other registered trade names, and not to be confused with them. According to the Trade Names Act, the Finnish trade name of a cooperative must contain the word “osuuskunta” or the compound element “osuus” or the abbreviation “osk”. The trade name must not contain any person’s name or any reference to the members’ obligation to pay extraordinary payments.

The trade name must not be misleading, including references to other legal forms or activities not determined in its rules. If the cooperative intends to use its trade name in two or more languages, every version must be included in the rules. The foreign language versions must be translations of the Finnish trade name. The cooperative can have other trade names in other languages.

Detailed instructions concerning the trade name are available on the Finnish Trade Register website (https://www.prh.fi/fi/kaupparekisteri/yritystennimet.html )

The rules must always contain the cooperative’s trade name and the municipality in Finland where the seat (registered office) of the cooperative is located. The location is of primary importance because, in principle, the cooperative’s general meeting has to take place there if no other place has been stipulated in the rules. The court of the tribunal having jurisdiction is also determined according to the registered office, which must always be a municipality in Finnish territory but not necessarily associated with the cooperative activities. The address registered by the cooperative does not have to be in the same municipality as the registered office, although this is the usual case.

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Trade name and registered office

The trade name of the cooperative is X osuuskunta
and its registered office is in Kittilä

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Purpose and line of activities of the cooperative

(Cooperatives Act, Chapter 1, Section 5)

Purpose of the cooperative:

According to the Cooperatives Act, the purpose of a cooperative is to pursue an economic activity to support the economy or the business of its members, allowing its members to take advantage of the services offered by the cooperative or provided by its subsidiary or by other means. The rules of a cooperative can regulate its purpose differently. The purpose of a cooperative can be,. e.g., ideological, or its purpose can be generating profit for its members based on the latter’s capital.

If the cooperative’s purpose is as in the Cooperatives Act, it is not compulsory to state it in the rules, but it would emphasize the fundamental difference between a limited company and a cooperative. However, if it is something else than pursuing an economic activity to support the housekeeping or the business of its members, the purpose must be mentioned.

Line of activities of the cooperative:

The rule governing its line of activities determines the economic industries in which the cooperative is or will be active. The line of activity must be true and accurate. It can be limited or complex, and it can contain various lines of activities. It should comprehend all lines of activities pursued now or in the future.

The lines of business can be defined generally as “any legal activity”, but this is not recommended because it does not clarify which are the real activities exercised by the cooperative. Besides, the registration of the cooperative can cause problems.

The division of tasks between the cooperative and its members means that the cooperative provides services and its members use them. The services provided by the cooperative can vary and be related to marketing or acquiring money, goods, or services. A cooperative of self-employed professionals can offer a place of business and the equipment to exercise a profession (medical center), a point of sale for products, marketing services (taxi-center), bookkeeping, and other administrative services for the self-employed. A cooperative can be active on various lines of business at the same time.

The one governing its line of activities belongs to the most important rules of the cooperative also because it defines the functioning of the cooperative and the powers of its statutory bodies. Such a rule limits the board members’ powers and the manager director (Chapter 6, Section 28.2).  Exceeding these powers can lead to the board members’ or the managing director’s liability if the cooperative or a contracting partner suffer any loss.