Cooperatives are regulated by a special law in Finland, namely the Law on Cooperatives. The Law on Cooperative Banks and Other Credit Institutions in the Form of Cooperatives, pertains to some organisational features specific to these financial institutions. They concern mainly prudential mechanisms. In addition, there is a special Law on housing stock companies. These companies are to a certain extent comparable to housing cooperatives in other countries. The following laws are those relevant to cooperatives:
Main laws relevant to cooperatives in Finland
Law on Cooperatives - Osuuskuntalaki, 14.6.2013/421
Law on Cooperative Banks and Other Credit Institutions in the Form of Cooperatives - Laki osuuspankeista ja muista osuuskuntamuotoisista luottolaitoksista, 28.12.2001/1504
Law on housing stock companies - Asunto-osakeythiölaki, 22.12.2009/1599
Law on European Cooperatives - Eurooppaosuuskuntalaki, 19.10.2006/906
There is no specific, explicit or implicit, reference as such in the Act to the ICA principles (cooperative principles), as laid down in the 1995 ICA Statement on the cooperative identity (ICA Statement).
From the perspective of ICA member organisations, the cooperative friendliness of the national legislation can be considered to be significantly so, with the Act providing sufficient opportunities for the development of cooperatives. On the basis of its flexibility and comprehensiveness, in the opinion of the contributing member organisations, Finnish national legislation could serve as an example of legislation regulating cooperatives in other countries.
Key recommendations for improvement
The research identified four main points of improvement. Firstly, further consideration as to whether it is adequate to allow for the formation of one-person cooperatives. Secondly, it could be beneficial to evaluate the impact of the financing possibilities, for example financial instruments which are typical of stock companies, on the cooperative principles, as a basis for further legislative action. Thirdly, in Finland, the understanding of what cooperatives are, the lack of which is commonly shared in many countries, might not be facilitated by using language which belongs to the world of capital-centered companies, but rather might be facilitated by using terminology which expresses the cooperative difference. Finally, unrestricted divisibility of the reserve fund is also questionable, in light of the third principle of the International Cooperative Alliance, Member Economic Participation.
Cooperative law in Finland may be considered to have a sufficient framework, and it can be stated that legislative changes are not presently needed. A more complete picture of the Finnish cooperative law requires further work on bylaw autonomy, as well as exploring other areas such as competition law or labour law, or accounting standards. The case of Finland, with its wide bylaw autonomy under the Act, has taken the 4th ICA cooperative principle of autonomy to its maximum. This demonstrates how important it would be to conduct further research into the way the cooperatives put the cooperative principles into legally recognised practice through their bylaws, in order to see how cooperatives might translate these principles into practice.