Application for approval and inclusion in the Scop list

This request shall be sent by registered letter with acknowledgement of receipt to the Ministry of Labor, which shall forward it to the General Confederation of the Scop for its opinion.

To make the request, you must provide the following documents :

• Statutes of the business
• List of members of the governing bodies and nature of the activity
• Nominative list of auditors or name of the body responsible for the cooperative review
• Fact sheet with the following:
  
  • Name and exact shape of the business
  • Address of its head office and, possibly, of its various secondary establishments
  • Company identification number (Siren number)
  • Amount of share capital
  • Number of shares and nominal value
  • Number of associates employed in the business and the total number of their shares
  • Number of shares and the identity of the partner holding the most shares
  • List of non-employed partners, their identification, their number of shares and votes
  • List and amount of holdings in cooperative production businesses or in the capital of other companies, whether cooperative or not
  • Arrangements for distributing the profit
• Balance sheet, income statementand the Statutory Auditors’ reports concerning the last accounting year or cooperative review. Where the date of the creation of the business does not allow for the provision of such documents, it is possible to provide a commitment to produce them within 6 months of the end of the first financial year.

This application for approval allows to obtain registration on the list of Scoppublished annually by the ministry responsible for labor in the Official journal of the French Republic.

Obligation to provide information and documents to the Ministry of Labor

Scop shall transmit to the Ministry of Labor each year, within 6 months following the end of the financial year, the following documents:

• Accounting Documents
• Updated information sheet containing information on the name and exact shape of the business, the address of the registered office, the registration number Siret and the APE code, the amount of the share capital, the number of shares and their nominal value, etc.

It shall also transmit the following documents if the operations have taken place:

• Reporting of lease-management transactions
• Declaration of contributions in business
• Declaration of disposal of fixed assets to non-cooperative businesses
• Amendments to the statutes
• Changes in the composition of the governing bodies

Cooperative Review Control

All Scop must undertake a cooperative review every 5 years. The statutes may, however, provide for a shorter period.

When Scop is organized as SARL and SAS, they are not required to have an External Auditor (ACC). They are then subject to cooperative review control annual.

This check is carried out by a reviewer approved by the Ministry of Labor who checks the conformity of the organization and functioning of Scop.

The approved reviewer shall draw up a written report including the following:

• Characteristics of the cooperative business audited, including its legal form, size, organization, statutes and nature of its activities, as well as the specific rules applicable to it
• Possible reservations on the operation of the cooperative
• Proposals for corrective measures
• Where appropriate, formal notice to comply with the principles and rules of cooperation.

Governing bodies

The directors are appointed by the shareholders' meeting. Depending on the type of business, the steering members are different. It may be a management, a senior management, a board of directors, a management board or a supervisory board.

Any partner may be appointed to fill in steering functions everything in remaining employed of the Scop. Non-salaried members may also carry out management tasks but may hold no more than one third of the mandates.

The terms of office of the directors shall be limited to the following periods:

• 4 years for the SARL manager or SAS executive (they may be re-elected)
• 6 years for the SA leader (he can be re-elected)

The functions of a member of the Board of Directors or of the Supervisory Board shall not be not remunerated but they perceive compensatory allowances for the time devoted to the administration of Scop. On the other hand, professional expenses are reimbursed.

Decision-making

Each shareholder has an equal right to vote, regardless of the capital held on the principle: one person = one vote.

There are 2 types of associates in a Scop:

• Employee partners : they must possess together at least 51% of Scop's share capital and 65% voting rights on the board of directors. The renunciation of the status of partner leads to the termination of the employment contract and, conversely, the termination of the employment contract (except retirement, economic dismissal and invalidity) leads to the loss of the status of partner. They participate in the company's strategic choices (major investors, allocation of earnings, etc.) during the the general assembly
• External partners "investors"also called non-cooperative partners : they do not work in the company and remain in the minority. They may not hold more than 35% voting rights. In certain cases, the articles of association may provide that non-cooperative members have voting rights proportional to the capital they hold.

The conditions of quorum and a majority of shareholders' meetings depend on the legal status of Scop (SARL, SAS or SA)

For more information on voting procedures, please refer to the following forms:

• Decision-making in an SARL
• Decision-making in an SAS
• Decision-making in a public limited company

Specific distribution of profit (or net operating surplus)

Profit (or net operating surplus) is divided into 3 parts:

• Company share : 15%at least profits shall be used for the establishment of the legal reserve, with at least 1% is allocated to the reserve a statutory so-called development fund. In general, the company share is 40%or 45% profits. Part of the reserves can be converted into an investment provision (PPI) when Scop commits to invest in equipment within 4 years.
• Employee share : it is awarded to employees, whether they are partners or not, in addition to their remuneration. These employees must have 3 months of presence during the accounting year or 6 months of seniority. The employee share must be at least equal to 25% profits. In general, it amounts to 40%or 45% profits.
• Associated share called interest on shares: it is paid to members only if the articles of association so provide. It corresponds to 10%or 15% profits. It must be lower than the employee share and the company share.

Taxation of the Scop

Scop is subject to thebusiness tax (IS) at the normal rate of 25% on the entire tax result.

Scop may deduct from its taxable income:

• The share of net profits that is distributed to employees
• The portion of the profits put into the special participation reserve when a participation agreement has been deposited and signed

Scop enjoys the exemption of company property tax (CFE).