The Law of Ukraine

On Agricultural Cooperation

Date of Entry into Force:
August 13, 1997

The Law defines legal, organizational, economic and social conditions of activity of agricultural cooperatives and their unions.

By their goals, tasks and activity the cooperatives are divided into:
  • production cooperatives, which carry out economic activity on the principles of entrepreneurship in order to obtain profit. Only natural persons may be members of the production cooperative;
  • service cooperatives, which deal with service of agricultural and other production of participants of cooperation. Depending on type of activity they are divided into processing, purchase and sale, supply, service and other. Natural persons, as well as legal entities may be members of the service cooperative.

Multifunctional cooperatives are created in case of combining some types of activity. Cooperatives and their unions have the right to found different enterprises, to have representative offices in other regions of Ukraine and abroad. Cooperative shall independently carry out foreign economic activity in compliance with the legislation of Ukraine.

Decision about establishment of cooperative shall be adopted by the constituent assembly. Cooperative shall be created by its founders (not less than three) on a voluntary basis. Founders of the cooperative may be citizens of Ukraine (over 16 years old) and legal entities that are registered in Ukraine. Labor relations of cooperative (union) members shall be regulated by this Law, labor legislation, statute and rules of internal regulations of cooperative. Cooperative shall define independently forms and system of labor remuneration of its members and hired employees.

State registration of cooperative shall be conducted under the procedure provided for state registration of subjects of entrepreneurial activity. Cooperative shall be deemed established and shall gain rights of legal entity starting from the day of its state registration. Cooperative has independent balance, current and deposit accounts in banks and seal with its name. Basic legal document which regulates activity of cooperative shall be its statute.

The Law defines rights and duties of cooperative members, as well as reasons for withdrawal from cooperative.

The highest management body of cooperative is general meeting. The administration is the management body of cooperative. If required, cooperative shall hire executive director and create supervisory board. The head of cooperative shall chair the administration and shall be elected by the general meeting of cooperative or its administration for the term not exceeding three years. Functions of the head, as well as the procedure for his election (recall) shall be defined by the statute of the cooperative.

Cooperative is the owner of buildings, constructions, money, property fees of its members, manufactured products, incomes obtained from their sale and other activity envisaged by the its statute, as well as other property obtained on the grounds which are not prohibited by law. In compliance with its statute the cooperative shall define independently basic directions of economic activity, plan and implement it. Cooperative shall be responsible under its liabilities by all owned property. Cooperative members shall be responsible under liabilities of the cooperative only within the limits of owned property share.

Cooperative may be reorganized into enterprises of other economic forms upon decision of the general meeting. Cooperative shall stop its activity starting from the moment of reorganization. In the event of reorganization all rights and duties of cooperative shall be transferred to its legal successors.

Cooperative may be liquidated upon decision of the general meeting of cooperative members or upon court decision. Property of cooperative, which remained after settlements with budget, banks and other creditors, shall be distributed between the cooperative members in proportion to their shares.
Warning! The information is outdated due to the fact that this section is temporarily not updated!


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