The Social Economy is a subject whose gradual rise has led to the need to address an increasingly exhaustive regulatory array.
The first law on Cooperatives was drafted in 1931, although nowadays legislation in this area covers Cooperative Societies, Labour Societies, Associations, Foundations, Special Employment Centres, Employment Companies and other social economy formulas, which have consolidated Spain as an ecosystem favourable to strengthening legislation in the area of the social economy.
What is the social economy?
The social economy encompasses the set of economic and business activities that are carried out by entities that pursue either the collective interest of their members or the general economic or social interest, or both.
Where is it regulated?
The Law 5/2011, of 29 March, on the Social Economy was passed in 2011 in order to establish a legal framework that complements the regulations already in force for the entities that make up the sector and, at the same time, provides recognition and better visibility for the social economy, providing a higher degree of legal certainty and establishing the principles by which all the social economy entities must abide by.
The Law consists of 13 articles, 7 Additional Provisions, 2 Transitory Provisions, and 4 Final Provisions. They provide the necessary legal framework for the development of this new economic paradigm.
What are cooperative societies?
A co-operative is a society constituted by persons who associate, under a free membership and voluntary withdrawal regime, for the performance of business activities, aimed at satisfying their economic and social needs and aspirations, with a democratic structure and functioning, in accordance with the principles formulated by the international co-operative alliance, under the terms resulting from the present Law on Cooperatives.
Where are they regulated?
Co-operative societies are currently regulated by the Law 27/1999, of 16 July, on Cooperatives. This law consists of a total of 120 articles, with 13 Additional Provisions, 4 Transitional Provisions, 3 Repealing Provisions and 6 Final Provisions.
What is the aim of the law?
There was a need for a Cooperative Law which, by reinforcing the basic principles of the spirit of cooperativism, would be a useful legal instrument to face the great economic and business challenges posed by the entry into the European Monetary Union. This law takes into account the contribution made by the General Law on Cooperatives 3/1987 of 2 April 1987, which adapted the legal regime of cooperative societies and their possibilities of association to the requirements of the State of the Autonomous Regions.
This law regulates the concept of a Co-operative Society, the principles that govern its actions and operation, the requirements for setting it up, the requirements for its members, the social bodies, its economic regime, social and accounting documentation, as well as its dissolution and liquidation. The law also regulates the types of cooperative societies according to their composition (first or second degree), and the types of cooperative according to their purpose (worker cooperatives, educational cooperatives, health cooperatives, consumer and user cooperatives, etc.).
The Law offers a framework of flexibility, where co-operatives themselves can engage in self-regulation, and establishes the principles which, in general, must be applied in their actions.
A priority objective is to strengthen the business consolidation of the cooperative, which has required making its economic and corporate regime more flexible and introducing innovations in the area of business financing.
Tax-sheltered Cooperative Societies shall be classified into two groups:
With regard to Second Degree Cooperatives, the provisions of the law shall apply.
Where is it regulated?
The tax regime for Cooperatives is regulated in the Law 20/1990 of 19 December 1990, on the Tax Regime for Cooperatives.
What is the aim of the law?
Its purpose is to regulate the tax regime for Co-operative Societies in consideration of their social function, activities and characteristics, without prejudice to the tax regimes in force in the Historical Territories of the Basque Country and Navarre.
The Regulations of the Register of Co-operative Societies are developed by virtue of the first final provision of the Cooperatives Act 27/1999however, the constitutive nature of the register entry is enshrined in Article 7 of the aforementioned law. This Regulation therefore regulates registration matters relating to cooperative societies, thus ensuring legal certainty in this area while at the same time guaranteeing the publicity and legality of the formation of cooperative societies.
The Regulation specifies the provisions contained in Law 27/1999, on Cooperatives and governs its organisation and operation.
The Regulation consists of four chapters, 44 articles and a single transitional provision.
What are credit unions?
Credit unions are formed for the purpose of satisfying the credit and savings needs of their members. They fulfil the same functions as a bank, being linked to a social function or locality, offering loans for rural interest, thus having a greater presence in rural areas.
Where are they regulated?
Credit co-operatives are specifically regulated in the Law 13/1989 of 26 May 1989 on Credit Co-operativeswhich complies with Article 129.2 of the Constitution with regard to the promotion of co-operative societies.
Although State legislation on cooperatives is supplementary to that of the Autonomous Communities, which have full legislative powers in the field of cooperatives, this general rule is qualified in the case of credit cooperatives. By virtue of Royal Legislative Decree 1298/1986 of 28 June 1986, which adapts the legal rules on credit institutions to the legal order of the European Economic Community, credit cooperatives registered in the special register of the Banco de España are granted the status of credit institutions. This is derived from the fact that Article 149.1 of the Constitution, in its eleventh section, establishes that the State has exclusive competence to establish the bases for the Organisation of Credit and Banking.
Consequently, this law lays the foundations for the legal regime of these institutions and consists of 12 articles, one additional provision, two transitional provisions, two final provisions and one repealing provision. It establishes, among other things, the general principles, the legal regime, its form of constitution and operation, the requirements to be met by the members of these entities, as well as the disciplinary regime.
What are they?
Employees Owned Companies are those public limited companies or limited liability companies that meet the following requirements:
Where are they regulated?
Regulation for this type of society is in Law 44/2015, of 14 October, on Worker Owned and Participated Companies. This law has a total of 20 articles, 6 Additional Provisions, 2 Transitional Provisions, 1 Repealing Provision and 6 Final Provisions.
What is the aim of the law?
Employee owned companies are capital companies due to their form and therefore the rules relating to public limited companies and limited liability companies are applicable to them. Since the adoption of the Labour Companies Act of 1997, numerous legislative reforms have affected this sector. This situation makes it necessary to adapt the aforementioned law to the new regulatory framework and to systematise its rules more in line with those established in the Capital Companies Act.
This new regulation updates and modernises the content of the previous one, improving its legal regime with the aim of encouraging the participation of workers in companies, facilitating their access to the status of partner and participating in decision-making.
It aims to strengthen its entrepreneurial side and consolidate the stable, non-temporary nature of this business model. It prepares its content for the changes that take place around the single electronic document and restructures the articles by eliminating superfluous precepts and incorporating others that are necessary.
What are they?
Law 4/1997 of 24 March 1997 on worker-owned companies stipulated that the former Ministry of Labour and Social Affairs (now the Ministry of Labour and Social Economy) was responsible for granting classification as a "worker-owned company", as well as for monitoring compliance with the requirements set out in the said law. For this reason, a Register of Worker Owned Companies has been created in the aforementioned Ministry, in which the acts determined in the aforementioned law and its implementing regulations must be recorded.
Where is it regulated?
This administrative register is regulated by Royal Decree 2114/1998, of 2 October, on the Administrative Register of Worker Owned Companies.
What is the aim of the law?
The aim of the law is to create regulations governing the competence of the register, the classification of companies, as well as the acts performed by them that are to be registered. It also establishes the reporting obligations of companies, their disqualification and the challenge of resolutions.
What are they?
For the purposes of this law, disability is considered to be the situation resulting from the interaction between persons with foreseeable permanent impairments and any kind of barriers that limit or prevent their full and effective participation in society, on an equal basis with others.
On the other hand, social inclusion is the principle whereby society promotes shared values aimed at the common good and social cohesion, enabling all people with disabilities to have the opportunities and resources necessary to participate fully in political, economic, social, educational, occupational and cultural life, and to enjoy living conditions on an equal basis with others.
Where is it regulated?
Find the regulation in the Royal Legislative Decree 1/2013, of 29 November, approving the Consolidated Text of the General Law on the Rights of Persons with Disabilities and their Social Inclusion.
What is the aim of the law?
It has as its main aims:
What are insertion companies?
Insertion companies are mercantile, labour or cooperative companies, which, duly qualified, carry out any economic activity of goods or provision of services, with the primary purpose of their social object being the integration and socio-labour training of people in a situation of social exclusion.
Where are they regulated?
Employment companies are regulated by Law 44/2007, of 13 December, for the regulation of the system of insertion companies. The Law on employment companies came into force in 2008 and is structured in 6 Chapters, with 18 articles, 5 Additional Provisions, 3 Transitional Provisions, 1 Repealing Provision and 6 Final Provisions. It contains: the object and purpose of employment companies, the requirements they must fulfil, the actions of the Public Administrations, the labour relations of workers in insertion companies, promotion measures, as well as infringements and sanctions.
What are its inspiring principles? To whom are they addressed?
The Insertion Companies Act finds its inspiring principle in section 2 of Article 9 of the Spanish Constitution, motivating the legislator to establish suitable channels to facilitate the participation in political, economic, cultural and social life of those people who find themselves in situations of difficulty and social exclusion.
This, together with economic and digital transformations, makes it necessary for public authorities to promote public measures and policies to combat social exclusion and promote their employability. Furthermore, at EU level it is important to note that one of the three overarching objectives of the European Employment Strategy was to strengthen social inclusion, prevent exclusion from the labour market and support the integration into employment of the most disadvantaged people.
All this favours the development of the Insertion Companies Act, understood as a new model of action in the fight against social exclusion. These companies are configured as an instrument for the socio-labour insertion of people at risk of social exclusion through an employment benefit in the insertion company that allows the transition of the person to ordinary employment.
What are special employment centres?
Special Employment Centres are companies whose main purpose is to carry out a productive activity of goods or services, participating regularly in market operations, and whose aim is to provide disabled workers with productive and remunerated work, appropriate to their personal characteristics, while at the same time facilitating the inclusion of these people in the ordinary employment system.
Where are they regulated?
The Special Employment Centres are regulated in the Royal Decree 2273/1985, of 4 December 1985, which approves the Regulation of Special Employment Centres defined in Article 42 of Law 13/1982 of 7 April 1982 on the Social Integration of the Disabled. This Royal Decree has as its inspiring principle the integration of people with disabilities in society in general, and in the world of work in particular. It regulates the characteristics of these Centres, their structure, nature, objectives, requirements and funding, establishing a code of action between them and the Public Administrations. The aim of all this is to facilitate and promote the creation of as many centres as necessary to attend to and facilitate the social and labour inclusion of people with disabilities.
This Royal Decree consists of 8 chapters, 13 articles, a transitional provision, a derogatory provision and a final provision.
Law to promote the start-up ecosystem
What are they?
This law shall apply to start-up companies, whereby a start-up company, for the purposes of this law, is understood to be any legal person that simultaneously meets the following conditions:
Where are they regulated?
They are regulated by Law 28/2022 of 21 December 2002 on the promotion of the start-up ecosystem.
What is the aim of the law?
The aim of the law is to establish a specific regulatory framework to support the creation and growth of start-ups in Spain, taking into account the distribution of powers in this area between the State and the Autonomous Communities. It also establishes a system for monitoring and evaluating its results on the Spanish start-up ecosystem.
Public Sector Contracts Act
What are they?
Onerous contracts, whatever their legal nature, entered into by public sector entities are public sector contracts and, consequently, are subject to this Law in the manner and under the terms provided herein.
A contract is considered to be for pecuniary interest in cases where the contractor obtains some kind of economic benefit, either directly or indirectly.
Where are they regulated?
They are regulated in the Law 9/2017, of 8 November, on Public Sector Contractswhich transposes into Spanish law the Directives of the European Parliament and of the Council 2014/23/EU and 2014/24/EU of 26 February 2014.
What is the aim of the law?
The objectives inspiring the regulation contained in the aforementioned Law are, firstly, to achieve greater transparency in public procurement, and secondly, to achieve better value for money. It also meets the need for simplification of procedures and thus less bureaucracy for bidders and better access for SMEs.
It aims to regulate public sector procurement in order to ensure that it complies with the principles of freedom of access to tenders, publicity and transparency of procedures, and non-discrimination and equal treatment of tenderers. It also aims to ensure the efficient use of funds for works, procurement of goods and services.
