Co-operative law: Cabinet approves comprehensive reform

On 15 July 2026, the Fede­ral Cabi­net appro­ved a draft bill to moder­ni­se co-ope­ra­ti­ve law. The reform is inten­ded to make the legal form of the co-ope­ra­ti­ve more attrac­ti­ve, redu­ce bureau­cra­tic hurd­les and, at the same time, pro­vi­de bet­ter pro­tec­tion against uns­cru­pu­lous pro­vi­ders. For small and medi­um-sized enter­pri­ses, as well as start-ups con­side­ring a coope­ra­ti­ve struc­tu­re, the draft intro­du­ces a num­ber of prac­ti­cal changes.

Digital meetings and written form instead of a signature

One of the key chan­ges con­cerns com­mu­ni­ca­ti­on within the co-ope­ra­ti­ve. Until now, many agree­ments requi­red what is known as ‘writ­ten form’ – that is, a hand-signed state­ment on paper. In future, a text-based form will suf­fice: a legi­ble state­ment wit­hout a signa­tu­re, for exam­p­le by email, will then be suf­fi­ci­ent. Mee­tings may be held online or in a hybrid for­mat, and mem­bers can be infor­med digi­tal­ly. This saves time and money, par­ti­cu­lar­ly for coope­ra­ti­ves with many mem­bers or tho­se that are orga­nis­ed on a decen­tra­li­sed basis.

Faster registration with the Companies Register

Anyo­ne wis­hing to set up a co-ope­ra­ti­ve is fami­li­ar with the pro­blem: regis­tra­ti­on with the regis­try court can drag on for weeks or months, with no sta­tu­to­ry time limit in place. That is set to chan­ge. Under the new draft legis­la­ti­on, the com­pe­tent court must regis­ter the co-ope­ra­ti­ve within 20 days of recei­ving the com­ple­te set of docu­ments. An impro­ved data­ba­se is also inten­ded to make it easier for foun­ders to find the rele­vant audi­ting body, which asses­ses the co-operative’s finan­cial soundness.

Protection against dubious constructs

In the past, coope­ra­ti­ves have some­ti­mes been used as a vehic­le for dubio­us invest­ment sche­mes. The draft bill addres­ses this by intro­du­cing clear rest­ric­tions: mere capi­tal invest­ment is no lon­ger to be con­side­red a per­mis­si­ble pur­po­se for a coope­ra­ti­ve. In addi­ti­on, an upper limit of 50 per cent is being intro­du­ced for so-cal­led ‘inves­t­ing mem­bers’ – that is, indi­vi­du­als who pro­vi­de capi­tal to the co-ope­ra­ti­ve but do not actively bene­fit from its objec­ti­ves. At the same time, audit asso­cia­ti­ons are being held to hig­her stan­dards and sta­te super­vi­si­on of the­se asso­cia­ti­ons is being extended.

Greater flexibility in the internal management structure

Until now, only small co-ope­ra­ti­ves with up to 20 mem­bers have been able to sti­pu­la­te in their artic­les of asso­cia­ti­on that the board of direc­tors is bound by the ins­truc­tions of the gene­ral mee­ting. This thres­hold is to be rai­sed to 150 mem­bers. This will give medi­um-sized co-ope­ra­ti­ves grea­ter scope to make their inter­nal decis­i­on-making struc­tures more democratic.

Background and subsequent developments

A draft bill with simi­lar con­tent, intro­du­ced by the pre­vious govern­ment, had alre­a­dy been appro­ved by the Cabi­net in Novem­ber 2024, but did not reach the voting stage due to the pre­ma­tu­re col­lap­se of the ‘traf­fic light’ coali­ti­on. The new fede­ral govern­ment, com­pri­sing the CDU/CSU and the SPD, has taken up this draft and revi­sed it in cer­tain are­as. The legis­la­ti­ve pro­cess is now under­way once again.

Cli­ents who are set­ting up, run­ning or sup­port­ing a co-ope­ra­ti­ve as mem­bers would be well advi­sed to take a clo­se look at the plan­ned chan­ges. Once the law has been pas­sed, pro­vi­si­ons in the artic­les of asso­cia­ti­on and inter­nal decis­i­on-making pro­ces­ses, in par­ti­cu­lar, can be amen­ded. It is advi­sa­ble to seek legal gui­dance at an ear­ly stage in order to make the most of the new scope for action.