Here, one can find the answers
to some of the most common doubts/questions that have
arisen among the members of popular cooperatives and
visitors to the Popular Cooperativism Portal.
1. How much does it cost to legally register a cooperative?
2. Are there any funds/ institutions that will finance
the official registration of cooperatives?
3.
What are the funds set up by a cooperative and what
are they for?
4.
Does a cooperative pay taxes? Which ones?
5.
Can a cooperative offer any kind of service?
6.
Do the cooperative members have labor rights? Which
ones?
7.
What are the Internal Regulations of a cooperative?
8.
Is it obligatory for a cooperative to have Internal
Regulations?
9.
Can the functions of the Ethics Committee be performed
by the Audit Committee?
1. How
much does it cost to legally register a cooperative?
A: The cost varies, according to the town or city, depending
on the amount of taxes and fees one has to pay. In municipalities
where there are public policies aimed at strengthening
popular enterprises, the costs tend to be lower. In Rio
de Janeiro, to register a cooperative, it costs around
R$ 1,500 (R$ 1 ˜ US$ 0.44), which covers the following:
a) Civil Registry of Legal Entities fee: around R$
300 (three hundred reais), varying according to the
number of pages comprising the Articles of Incorporation
and By-laws.
b) Attestation Certificates for the executive board
members (Notary Public: 1st, 2nd, 3rd and 4th distributors):
around R$ 300 (three hundred reais), for 3 (three) directors,
given that each certificate costs about R$ 25 (twenty-five
reais).
c) License fee: R$ 447.57 (four hundred and forty-seven
reais and fifty-seven centavos).
d) There are no fees charged for inclusion in the National
Register of Legal Entities (CNPJ). However, all the
documentation that accompanies the process has to be
authenticated at a notary’s office, at a cost
of about R$ 80 (eighty reais), given that each page
of the by-laws must be authenticated.
e) State Registration fee: R$ 90.70 (ninety reais and
seventy centavos), with the exception of cooperatives
that are solely service providers.
f) Cost of Accounting Records, respective fees, other
authentications of documents and printing of Invoices:
R$ 300 (three hundred reais).
One should bear in mind that, although these expenses
do not have to be paid all in one go, the cooperative
will need to have at least 50% of the total amount available
in order to begin the official registration process,
since the costs noted under items “a” and
“b” are incurred right at the start. The
remainder may be spread out over the course of the process.
2. Are
there any funds/ institutions that will finance the
official registration of cooperatives?
A: This can vary considerably for one municipality to
another and from one state to another. In those municipalities
and states where there are public policies to stimulate
the generation of jobs and income, it is possible to
obtain government support, either directly or through
local entities, to set up self-governing enterprises.
Frequently, these support programs are discontinued
when there is a change of government.
To get more information on the subject, we suggest you
visit the websites of the government departments in
your state and/or municipality, especially those related
to labor.
3. What
are the funds set up by a cooperative and what are they
for?
A: A cooperative’s funds are collective cash savings,
established with the contributions of all its members,
for the benefit of the cooperative and these same members.
They can set up as many funds as they consider necessary,
as long as these are provided for and regulated (manner
of collecting, purpose and method of utilizing the money)
by the cooperative’s by-laws.
The setting up of cooperative funds is a valuable tool
for improving the quality of life of the members, enabling
collective purchases (baskets of basic necessities), the
conceding of loans and credit, and paid leave for the
members, among other benefits. Under the law, two kinds
of fund are obligatory: a reserve fund and the Fund for
Technical, Educational and Social Assistance - FATES (article
28 of Law no 5,764/71).
1) The Reserve Fund is to cover potential losses and
underpin the activities of the cooperative. It is established
using 10 % (ten percent) of the cooperative’s
net surplus – what remains after deducting everything
that the cooperative pays (debits) from the sum of everything
that the cooperative receives (credits) – in any
given financial year (the accounting period used for
calculating the annual financial results: income less
expenses).
2) The Fund for Technical, Educational and Social Assistance
- FATES is to provide financial assistance - investment
in training and upgrading technical skills, holding
courses - to the members, their families and the employees
of the cooperative. It is funded using 5 % (five percent)
of the surplus in any given financial year.
Some cooperatives have what is called a Social Fund,
which allows the members to take paid leave and receive
regular bonuses, baskets of basic necessities, transport
assistance, pregnancy assistance, and other benefits.
4. Does a cooperative
pay taxes? Which ones?
A: Yes, in Brazil they do. In some municipalities, the
ISS (Tax on Services) is lower for cooperatives. Although
the Brazilian constitution makes allowance for affording
different tax treatment to cooperative ventures, cooperatives
are presently treated like any other type of business.
However, cooperatives do not enjoy the tax breaks afforded
to micro and small enterprises, despite their identical
economic and financial situation.
It should be noted that there are pending judicial claims
questioning the legality of levying the full amount of
taxes from cooperatives.
The taxes levied from cooperatives are:
A) Federal taxes:
PIS - Social Integration Program Tax
The law states that PIS should be levied on the cooperative’s
total turnover, at the rate of 0.65%. Moreover, in the
case of cooperatives that have hired staff, PIS payroll
tax should be levied on the amount paid to each employee,
at the rate of 1%; but this is rare amongst popular
cooperatives.
COFINS - Social Security Tax
COFINS is levied each month on the cooperative’s
gross turnover, at the rate of 3%. Both the PIS and
the COFINS are earmarked under the constitution (article
194 of the Federal Constitution/ 88) for social security
(health, pensions and social welfare).
IRRF - Income Tax Withheld at Source
When engaging the services of a cooperative, a company
must deduct 1.5% of the invoice value in income tax.
Only cooperatives that render services have corporate
income tax deducted at source. As for the cooperative
members, if their individual earnings fall within the
categories of the official Income Tax table for private
individuals, the tax will also be deducted at source.
Presently, people whose monthly earnings are R$ 1,164
or less are exempt from income tax, as shown in the
following table:
|
CALCULATION BASE (R$ |
RATE % |
DEDUCTION FROM THE TOTAL (R$) |
|
Up to 1.164,00 |
- |
- |
|
1.164,01 to 2.326,00 |
15 |
174,60 |
|
Over 2.326,00 |
27,5 |
465,35 |
Deduction for each dependent: R$ 117 (one hundred and
seventeen reais)
INSS – CNational Institute of Social Security Contribution
The cooperative must deduct 11% of the remuneration
of its members, to be passed on to the government. If,
by any chance, the cooperative renders services to philanthropic
or charity organizations, which do not pay social security
contributions, then the deduction from the remuneration
is 20%.
FGTS – Length of Service Indemnity Fund
A cooperative should only pay FGTS if it has hired an
employee or employees. Hence, the chances of being liable
for FGTS are remote, given that popular cooperatives
rarely hire staff.
B) State taxes:
1- ICMS - Value Added Tax on Sales and Services
The ICMS, a tax on transactions involving the sale of
goods or the rendering of interstate or intermunicipal
transport or communications services, comes under the
jurisdiction of the states and the federal district.
In the case of labor cooperatives, this tax is not levied,
but production, agricultural and consumption related
cooperatives pay this tax, at rates that vary according
to different criteria. In the state of Rio de Janeiro,
for example, they vary from product to product. The
average rate levied is 18% of the difference between
the cost and the sale price. There is a scheme for paying
the tax according to an estimate based on the level
of turnover. Before choosing this option, however, a
study should be made in order to assess the advantages
and disadvantages presented by the scheme.
C) Municipal taxes:
1- ISS – Tax on Services
ISS is levied on the value of services, of any kind,
rendered by the cooperative and is calculated based
on the value of the invoice, at a rate that varies from
municipality to municipality. In most places, however,
the rate is 5% (five percent).
5. Can a cooperative
offer any kind of service?
A: Yes, a cooperative may carry out any form of activity,
as long as, like any business, its members possess the
necessary technical qualifications to perform the task.
6. Do the cooperative
members have labor rights? Which ones?
A: The cooperative members enjoy the business rights pertaining
to the cooperative, but not labor rights, which pertain
to the employer-employee relationship. The rights of the
members arise from their status as partners in a cooperative.
The way this right is regulated is defined in the by-laws,
as are the benefits.
7. What are the Internal
Regulations of a cooperative?
A: The Internal Regulations, as the name suggests, comprise
one of the instruments for regulating the internal activities
of the cooperative, and should always be in close harmony
with its by-laws.
8. Is it obligatory for
a cooperative to have Internal Regulations?
Não,
não é obrigatório, mas é uma forma de facilitar a gestão e
melhorar o funcionamento da cooperativa.
9. Can the
functions of the Ethics Committee be performed by the
Audit Committee?
A: Yes, seeing as there is no legal impediment and one
can perceive that there are similarities between the
responsibilities of the two bodies. However, this recourse
should only be adopted when the number of cooperative
members is small.
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