Loss of tax-sheltered cooperative status
Regulation: Article 13 Law 20/1990
The status of a fiscally protected cooperative will be lost if any of the following circumstances occur:
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Failure to make allocations to the mandatory reserve fund and to the education and promotion fund.
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Distribute among the partners the non-distributable reserve funds during the life of the company and the surplus assets in its liquidation.
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Misapplying the education and promotion fund.
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Failure to comply with the purpose of the result of the regularization of the cooperative's balance sheet or the updating of the partners' contributions to the capital.
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Reward the contributions of partners or associates to the capital with interest higher than authorized.
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Credit returns in a proportion different to the deliveries, activities or services of the partners.
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Not properly allocating losses for the year.
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Making contributions to capital exceeding legal limits.
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Participating, without authorization, in the capital of non-cooperative entities in an amount greater than 10 percent, or 40 percent, in the case of entities that carry out activities complementary to those of the cooperative. These shares may not exceed 50 percent of the cooperative's own resources.
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Carrying out cooperative operations that are not permitted with non-member third parties, not accounting for them separately and not allocating the results obtained from them to the mandatory reserve fund.
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Employ salaried workers in numbers greater than than authorized in the event that such a limitation exists.
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Existence of a number of partners lower than expected without being restored within 6 months.
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Reduce capital to an amount less than the minimum established by statute without it being restored within 6 months.
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The paralysis of cooperative activity or the inactivity of the social bodies for 2 years without justified cause.
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The conclusion of the company that constitutes its object or the impossibility of developing the cooperative activity.
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The lack of external audit in the cases indicated in the legal regulations.