A cooperative society is a unique business model where members join forces to meet their shared economic and social needs. This legal structure blends entrepreneurial spirit with democratic values, creating a sustainable and inclusive way of doing business.
If you want to learn about other business structures in Spain, check out our Complete guide to understanding the types of companies in Spain.
Summary
What is a cooperative society?
A cooperative society is a business formed by people who voluntarily come together to carry out activities for mutual benefit. Its main goal is to meet the economic and social aspirations of all members, with a democratic setup where everyone has an equal say.
Cooperatives operate according to core principles such as voluntary membership, democratic control, fair economic participation, and a commitment to the community. These principles set cooperatives apart from typical business structures.
Main features of cooperative societies
Democratic structure: every member has one vote, no matter their financial contribution. This ensures fairness in decisions and encourages active involvement across the membership.
Legal name: the official name must include “cooperative society” or an accepted abbreviation like “co-op” or “S.Coop.” The name must be unique and exclusive.
Variable share capital: the share capital consists of members’ contributions, which can be increased or reduced depending on the cooperative’s needs. The minimum capital is defined in the society’s rules.
Limited liability: members’ liability is limited to their investment, protecting their personal assets from the cooperative’s debts.
Interested in alternative models for collaboration and shared risk? Read about the Limited Partnership: how it works and when to choose one.
Types of cooperative societies
First-degree cooperatives
These are made up of individual members, requiring at least three people. Types include:
Second-degree cooperatives
Formed by a minimum of two first-degree cooperatives, these bodies aim to coordinate and promote common economic interests between member cooperatives.
Requirements to set up a cooperative society
First-degree cooperatives: must have at least three members
Second-degree cooperatives: must consist of at least two cooperatives
Share capital: fully paid up from the outset, with minimum amounts defined by the rules; contributions may be mandatory or voluntary
Collaborating members: rules may allow for collaborators who support the cooperative without actively participating in day-to-day activities. Their investment cannot exceed 45% of the total share capital.
Steps to establish a cooperative society
Name availability certificate
Request a certificate from the Cooperative Societies Registry confirming your chosen name is unique. The certificate usually remains valid for six months.
Draft the society’s rules
Your rules should cover:
Preliminary review (optional)
Submit the rules to the Registry for an optional legal assessment to verify compliance.
Public deed
Sign a notarial deed that includes:
Registration
Register the cooperative with the Cooperative Societies Registry within one month of executing the deed.
Taxation of cooperatives
Cooperatives benefit from a special tax regime in Spain, including:
Specially protected cooperatives:
Protected cooperatives:
Examples of successful cooperatives
Worker cooperative: a group of graphic designers join forces to share resources and offer comprehensive visual communication services.
Consumer cooperative: families in a neighbourhood form a co-op to buy organic produce directly from local farmers at better prices.
Agricultural cooperative: farmers band together to jointly market their products, gaining access to wider distribution and improved pricing.
For more on how Spanish business entities compare, discover our General partnership: what it is and how to set one up.
Advantages of cooperative societies
Bringing your cooperative project to life
Cooperative societies provide a solid, purpose-driven business option. Their democratic governance, fiscal advantages, and focus on community welfare make them ideal for entrepreneurs who want to build something meaningful together.
If you’re ready to create a business based on collaboration and shared success, a cooperative society could be the perfect fit. Talk to professionals to get personalised advice and start your cooperative journey today.
