A Dive into the Legal Framework of Cooperative Societies in Liechtenstein

Josef Bergt
2023

The cooperative society under Liechtenstein law as defined by Articles 428 to 495 of the Liechtenstein Persons and Companies Act (“PGR”), is a corporation that consists of an open number of persons or commercial companies. The primary purpose of a cooperative society is to promote or safeguard certain economic interests of its members through mutual self-support. It is obligatory for a cooperative society to be registered in the Commercial Register, except for small cooperative societies such as alpine cooperative societies.

The establishment of a cooperative society requires at least two natural persons or legal entities or commercial companies. The process necessitates written articles, the appointment of managing bodies, and if all founders' signatures are not available on the articles, the acceptance of the articles by the constituting general meeting. The cooperative society acquires legal personality once it has been entered in the Commercial Register.

The organizational structure of a cooperative society is threefold. 

The general meeting is the supreme managing body, which passes resolutions for the best possible achievement of the purpose of the cooperative society, monitors the cooperative society operations, and the overall management. The general meeting has several powers, including the election of the board of directors and, if necessary, the appointment of the audit authority, acceptance of the annual report and of the consolidated annual report, amending the articles, establishing the guiding principles for the management and for the terms and conditions of employment for auxiliary staff, and passing of resolutions concerning dissolution.

The management or board of directors is responsible for the management and representation of the cooperative society. If the management consists of several individuals, the majority of these must be members of the cooperative society. The management may also be entrusted to one or more administrators or managers appointed by the administration or the general meeting, who need not be members of the cooperative society.

The nominal capital may not be stipulated in advance. The capital of a cooperative society is not fixed and can be increased or decreased by a resolution of the general meeting. In terms of liability and responsibility, the cooperative society is liable for its obligations with its entire assets. The members are not personally liable.

An auditor must in general be appointed for the cooperative society, insofar as exemptions are not applicable. The auditor shall be elected by the general meeting. If a cooperative society engages in activities of a commercial nature or if its articles permit the conduct of such a business, an auditor must be appointed, unless a review is waived.

In addition, a representative must also be appointed, insofar as no domestic service address is designated. The representative is authorized to receive declarations, communications, and notifications and to represent the legal entity in dealings with public authorities.

Source: Factsheet AJU/ h70.006e.03

Executive Summary:

• A cooperative society in Liechtenstein is a corporation that consists of an open number of persons or commercial companies, with the primary purpose of promoting or safeguarding certain economic interests of its members through mutual self-support.
• The establishment of a cooperative society requires at least two natural persons or legal entities or commercial companies, written articles, the appointment of managing bodies, and the acceptance of the articles by the constituting general meeting.
• The organizational structure of a cooperative society includes the general meeting, the management or board of directors, and an audit authority.
• A representative must also be appointed, insofar as no domestic service address is designated. The representative is authorized to receive declarations, communications, and notifications and to represent the legal entity in dealings with public authorities.
• The capital of a cooperative society is not fixed and can be increased or decreased by a resolution of the general meeting.