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.
Source: Haufe: Property
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
