THE POSIBILITY OF ALLOCATING LOSSES TO CO-OPERATOR MEMBERS IN A PUBLIC INTEREST COOPERATIVE

Abstract

Based on the analysis of external and internal liability of the co-operator members in the public interest cooperatives (‘régies cooperativas’), this paper focuses on the legal regime of the losses in member cooperative transactions. The ratio of
this regime stems from the mutualistic scope of the cooperative, in consequence of which the co-operator members assume the obligation to participate in the cooperative activity. When the economic result of cooperative transactions with
members is negative (losses), it may be covered, by decision of the General Meeting, by the co-operator members in proportion to their participation in cooperative transactions, if the reserves are insufficient to cover such losses. This loss allocation system should be considered possible in the public interest cooperatives (‘régies cooperativas’), for all members, whether public or private entities.