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Chile

Legal framework

 

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Chile.

 

 

The General Law on Cooperatives, defining cooperatives in its first article, expressly contains some of the cooperative principles included in the declaration on cooperative identity adopted by the ICA in 1995.

That legal provision states that; "cooperative associations are those which, in accordance with the principle of mutual aid, are intended to improve the living conditions of their members and have the following fundamental characteristics: a) members have equal rights and obligations, a single vote per person and their entry and withdrawal is voluntary, b) they must proportionally distribute the surplus corresponding to operations with its partners, c) must maintain political and religious neutrality, develop cooperative education activities and seek to establish federation and inter-cooperative relationships among each other, d) should aim for inclusion, as well as value diversity and promote equal rights among their partners".

 

Cooperative Friendliness

For cooperatives, compliance with the national legislation that governs them is not difficult, since, that the regulations do not have a degree of complexity, their terms are commonly used and the audit body within its powers when necessary has interpreted the rules and has given the corresponding instructions.

 

Key recommendations for improvement

  • Avoid the unfair treatment that exists between cooperatives and corporations.
  • To incorporate and recognize in the Political Constitution of the Republic the social function fulfilled by cooperatives.
  • Provide greater swiftness to the dictation of norms complementary to the law.
  • Regulate partner-consumer disputes found in the Consumer Rights Protection Law.

 

Conclusions

It should be noted that the National Congress is discussing a reform of the national tax system at the time this report was being drafted, which will review all exemptions and privileges that certain business entities are entitled to. Likewise, the executive branch is currently considering the drafting of a new Political Constitution of the Republic, an opportunity in which the cooperative sector will request the incorporation of the social purpose of cooperatives.

 

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