DEFINITION AND OBJECTIVES OF COOPERATIVES

INTRODUCTION

The comments that follow focus on the definition and objectives of cooperatives under Portuguese Law.

We will refer to these issues primarily from the standpoint of the Portuguese Cooperative Code (the PCC –‘C ó digo Cooperativo Portugu ê s’) – which also forms the basis for our study – and consider the legal texts governing each of the twelve types of cooperative. According to article 4 of the PCC, there are twelve types of cooperative in Portugal today: consumer, trade, agricultural, credit, housing and building, worker, craft s, fishery, cultural, services, education, and social solidarity.

It is explicitly permitted for one cooperative to operate in areas covered by more than one type: article 4.2 of the PCC distinguishes multi-purpose cooperatives (those covering more than one area of activity) from multisector cooperatives (those that carry out activities that are a feature of various types of cooperative within their sector).

It should be noted that cooperatives are granted separate legal status under Portuguese Law by the Constitution of the Portuguese Republic (‘Constitui ç ã o da Rep ú blica Portuguesa’– CRP), which dedicates more than a dozen articles to them scattered throughout the constitutional text but nevertheless appropriately developed by means of a set of structuring principles, such as the principle of coexistence of the three sectors: the public sector, the private sector, and the cooperative and social sector (art. 82); the principle of freedom of cooperative initiatives (art. 61); the principle of protection of the social and cooperative sector (art. 80); the principle of the obligation of the State to encourage and support the creation of cooperatives (art. 85); and the principle of compliance with the ICA cooperative principles (art. 61.2 in fine).

Company law must also be taken into account, particularly the provisions regarding joint stock companies, considering that article 9 of the PCC on the subsidiary law applicable to situations that are not foreseen in the PCC deals with‘the Commercial Companies Code (‘C ó digo das Sociedades Comerciais’– CSC), as long as cooperative principles are respected, particularly those sections that regulate joint-stock companies‘.