Share contribution and its amount

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Pay as a concept is enshrined in law. This definition also corresponds to a share contribution. The law establishes it as a percentage of the contribution of own property by members of an agricultural production or consumer cooperative (ACC) for the further implementation of economic activities.

Is there a difference between the two?

Despite the fact that these two concepts are combined, they are different. The share is the property that already belongs to the cooperative and is divided among its participants, and the share contributions of the members of the cooperative are the property that each participant contributes upon founding the SEC.

The legislation on agricultural cooperation states that the share consists not only of the contributions of the participants, but also of the net assets of the agricultural production cooperative. However, its size is limited by the property that the member contributed when joining the cooperative.

What is a mutual fund?

All property of an agrarian cooperative is divided among its members and is expressed in cash. The exception is funds that are not divided among participants.

Associations of property shares and form a mutual fund. All these principles are enshrined in the charter of the cooperative. On the collected property, economic activity is launched. Depending on its contributed size, the activity of each participant in the process of the whole work depends.

Compulsory Contributions

They are also fixed by the charter of the cooperative, and after their receipt, the shareholders receive the right:

• votes;
• participation in activities;
• receiving benefits;
• using cooperative services;
• deserving earnings.

At the same time, making a share contribution and a share provide different opportunities for a member of the cooperative. More simply, it sounds like this: the larger the contribution, the more privileges there will be during business activities and the higher the income. If the contribution was small, then the size of the share will be small.

Additional contributions

This is a voluntary contribution that each member can pay on top of the share received as a result of making a mandatory contribution to enter the cooperative.

It is the amounts of both basic and additional contributions that indicate what payments each member will receive after the termination of the cooperative's activities or upon its voluntary withdrawal from it.

This happens because the property of the cooperative is common and each shareholder is subject to common rights and obligations. At the same time, property can be represented by both own funds and borrowed funds, which should notexceed 60% of all funds collected by the cooperative. The property of participants in the process includes:

• securities;
• things;
• property rights.

The amount of borrowed funds no more than 60% indicates the solvency of the organization and provides a guarantee to creditors for the repayment of debt obligations.

What is a mutual fund like?

Before the start of the cooperative, shareholders hold a meeting at which they adopt the charter and set the size of the share contribution, which is also fixed in the charter.

All issues in the field of creating a mutual fund and the development of project documentation on the activities of the cooperative are handled by the committee on organizational issues.

In the course of business activities, changes may be made to the charter on the issues of the amount of the contribution. Since this information concerns each employee of the organization, the law establishes a complex procedure for these actions, which begins with a meeting of shareholders and ends with the registration of these changes in the document governing the organization's operation.

The size of the mutual fund can increase in two cases:

1. If members contribute additional funds for the development of production through payments made by the cooperative.
2. As a result of the recruitment of new participants in the production process, the number of shares is growing.

Growth of a mutual fund occurs only when at a public meeting the majority of its members cast their votes for it.

What should be the down payment?

Each member of a production organization, prior to its registration, must pay at least ten percent (and for a consumer cooperative 25%) of the amount of the share contribution, which is recognized as mandatory.

The remaining 90% or 75%, respectively, he can periodically contribute to the total authorized capital, but only in the first year of production life. At the same time, the size of the share fund may change up or down after the meeting of the participants of the cooperative.

All changes to the set of organizational rules are registered in accordance with the rules established by law.

Indivisible Fund

It represents those funds of the cooperative participants that are not equated to shares and, accordingly, are not divided among the members of the SEC.

By majority vote, part of the shares can be transferred to an indivisible fund, as a result of which the size of the share for each participant will decrease in proportion to the funds transferred to it.

Within four weeks after the changes in shares are registered in the charter and come into force, it is necessary to inform the creditors of the cooperative. If they are not satisfied with the new data and within 24 weeks after the publication of the changes put forward their requirements, then they must be met.

What makes up income?

Surplus is the final profit that accountants determine in their accounting in the process of studying and evaluating the income received onyear-end balance.

The payments that participants in the production process will receive are fixed by law or in the charter of the organization.

Typically, the payment depends on how much participation each employee of the cooperative takes during the business.

All the nuances regarding the division of profits between the participants in the production are discussed and accepted by all shareholders together. These meetings are held within three months of the end of the financial year.

It must be remembered that payments are made after all mandatory payments to the pension and social insurance funds and the tax service.

How is the cooperative's income divided?

Income, which was determined at the end of the year, having studied the balance sheet, is divided among the participants as follows:

1. A certain part is sent to the reserve and other general funds of the cooperative, which are not divided and are fixed by the charter of the organization.
2. Based on the current legislative acts, part of the funds is directed to pay tax liabilities and other payments to the budgets of the required levels.
3. For the payment of dividends, but in the amount of not more than 30% of the total amount, to be divided among the participants of the cooperative.

The amount of cash disbursement depends on the balance sheet at the end of the year.

How are co-op payments divided?

Payments that serve as income for shareholders and the entire organization as a whole are divided:

1. For the issuance of wagesemployees of the cooperative who are not among the shareholders, in proportion to their participation in the activities of the organization.
2. After all non-members have received their income, all shareholders can gather and decide to use the remaining profit to increase their share contributions. However, this value should not exceed 80%.
3. The rest of the income goes to pay shareholders.

Using share increase payments

Institutional payments can be used as follows:

1. If business participants decide to increase the mutual fund using these funds, then the funds are sent there.
2. Funds can be directed by cooperatives to pay their members property share contributions that have not yet been paid, and the deadlines are already running out.

In this case, repayment can be either full or partial. This can be done if the cooperative has funds that exceed the amount of the share fund established by the charter. Including payments of the cooperative, which are directed to increase the share fund, are also taken into account. Until it is formed in full, funds for the repayment of contributions are not sent.

The exception is the repayment of share contributions of associated participants in the cooperative, that is, those individuals or legal entities who have contributed their property and receive dividends on it. However, they bear the risk of damage to the organization.

Is a cooperative liable to creditors?

Yes, it does! LegislationThe Russian Federation has property liability.

In case of failure to fulfill its promises to creditors, the organization loses all its property. In this case, you will have to give only your own funds, and not borrowed.

The cooperative is not liable for obligations for its individual members, unless, of course, this is enshrined in law.

What is vicarious liability?

This is the responsibility of the members of the cooperative for failure to fulfill their obligations.

It is regulated by law and represents an additional responsibility to the main responsibility of the organization, which appears when the cooperative is unable to fulfill all the requests of creditors. The law establishes the following features:

1. Participants in production are responsible in the amount of the fee, which is prescribed in the charter of the cooperative. At the same time, its value should not exceed 0.5% of the amount of the main contribution made.
2. The amount of the fee is accepted by a majority vote at the general meeting, but it should not exceed the legally established value.
3. The accepted value is approved by the charter of the cooperative.

In other words, we can say that shareholders cover accounts payable when the cooperative itself does not have money and property for this.

Cooperative losses

Losses look at the end of the year on the balance sheet. They are divided among the shareholders in accordance with their wages.

Losses are compensated primarily at the expense ofreserve funds or making additional cooperative shares.