Co-operatives - a practical path to become an entrepreneur!

Being ambitious following your professional aims in every aspects of life, might lead to starting your own business and becoming an entrepreneur. Especially in Finland, where the culture of having your own business is gradually spreading and people tend to create their own jobs. But as we know, this is not an easy decision and it needs a lot of investigation. The first step is to know about different types of companies and their benefits and limitations. With this information we will be able to analyze our business plan and see which one is the most suitable for us.

One of the most practical options is establishing a co-operative company. Do you not know how this type of company works? To find out more we interviewed Mirja Taipale, the specialist of co-operatives, who works for the city of Tampere.

Mirja Taipale is the co-operative specialist working for the city of Tampere

What are the main characteristics of a co-operative company?
Mirja: First of all, a co-operative can be defined as a common interest group exercising economic activities. In other words, an enterprise which helps its members to make their living. It can also be an open voluntary organization.

The most prominent feature of a co-operative is performing real work by the members. In other words, it is formed by harmonically collective attempts of the people. The dominant culture of a co-operative is democratic. It means everyone has one vote and no one with more money can have more than one vote.

The beauty of a co-operative lies in its flexibility: you can start just yourself and then you can add other members. Members can leave or join whenever they want. However, there is a board of directors which is voted by all members. The board is responsible for all the decisions made.

Do we have to have certain amount of money in order to establish a cooperative?
Mirja: No, apart from the registration fee of 380€, there is no limitation for the amount of money to start a co-operative, contrary to other types of companies such as limited partnership, which requires at least for 2500€ as an initial investment. The amount of money to start a co-operative for each member can be from 1€to thousands. This amount can be agreed on based on the expenses of the company such as having a website, rent of the office, etc.

Wwhat kind of business plans are most suitable for it?
Mirja: Any business plan can be used for establishing a co-operative. In the past, it was for agricultural or handicrafts producers but nowadays it can be used for any type of business. But the important point is that people who are going to work together should know each other very well. Working in a co-operative means reaching compromises for every decision, thus it requires strong group working skills.

How is the making profit and paying tax regulations in a co-operative?
Mirja: A co-operative pays salaries to the members working, and of the salary is paid personal income taxes. If the cooperative itself makes profit it pays corporate tax (20 %) as a limited company pays. The surplus can then be divided to members or used to investments.

Who can be a member of a co-operative?
Mirja: Members can be individuals, enterprises or other institutions. It is important to note that a member does not carry a personal liability of the responsibility and debts of the co-operative and a co-operative is established based on a written agreement signed by the members. Each member has to take just one share and pay share payment.

Is a co-operative suitable for students and other international talents?
Mirja: My advice to internationals who want to establish a co-operative is to consult with TE-office about their type of residence permit in first place. International students have limited amount of time to work during one week which is around 25 hours. Other international talents, whose residence permit is limited on having a job in certain fields such as IT, can work in a co-operative as IT manager, otherwise they should ask for a general type of residence permit. Please note that regulations are different for EU and non-EU citizens and before making any decision, do consult with TE office and also Ensimetri.

Could you explain more about Ensimetri?
Ensimetri is a public organization, providing free business consulting for everyone. If you have any business idea, it is better to talk to a professional consultant in Ensimetri for the first step. It is easy, just go to their website and book a time!

Any last advice?
All in all, we advise enthusiastic people who want to start a co-operative company to agree on all the details with their group members. Investigate everything, before starting in order to prevent any surprises later. Be courageous and pursue your dreams with help of public organizations in Tampere.

At the end, we should say that Tampere is an innovation hub and is a future smart city, find your professional path and be part of this process.

Important links
Enterprise Finland 
Finnish Immigration Service MIGRI http://www.migri.fi/working_in_finland
ENSIMETRI http://www.ensimetri.fi/en/frontpage