Constitution of Legal Reserves
Posted: Mon Jan 06, 2025 6:53 am
The legal regulation affecting cooperatives establishes that they must establish a mandatory legal reserve, and that they may also establish other reserves:
Mandatory Legal Reserve (FRO) (20%-50%): This is a guarantee fund for the development of the cooperative's activity and will have a determined percentage between 20% and 50% depending on the company.
Legal Refund or Update Reserve (FR): Intended to update and regularize the social contributions of outgoing members of the cooperative, charged to the available profit or social reserves.
Voluntary or Guarantee Legal Reserve (FV): Serves as a guarantee in anticipation of the viability of the company's economic activity.
All of them with their specific percentages and legally delimited purposes, in addition to which they must make a mandatory provision to Provisions:
Education, Training and Promotion Fund (FEFYP) (5%): Intended for the development of training activities aimed at the cooperative community in general, and the promotion of cooperativism, social and professional progress at a local level in particular.
The accounting record of reserves and namibia phone data provisions is included in the annual accounts in accordance with the legally agreed amounts.
Knowing and applying Accounting for Cooperatives is essential to record all the operations of your particular economic reality, being especially important to know exactly the accounting and tax obligations that must be respected.
Learn about the preparation of annual accounts in cooperative societies
Do you know how provisions and mandatory reserves work in cooperative societies?
Would you like to expand your knowledge about the preparation of the balance sheet in these companies and how it can affect decision-making in the company?
Do you want to know what tax obligations and benefits you have to face as the administrator of a cooperative?
If you want to learn more about the concept of these Social Economy entities and gain more in-depth knowledge about them, you can take one of our free courses.
Mandatory Legal Reserve (FRO) (20%-50%): This is a guarantee fund for the development of the cooperative's activity and will have a determined percentage between 20% and 50% depending on the company.
Legal Refund or Update Reserve (FR): Intended to update and regularize the social contributions of outgoing members of the cooperative, charged to the available profit or social reserves.
Voluntary or Guarantee Legal Reserve (FV): Serves as a guarantee in anticipation of the viability of the company's economic activity.
All of them with their specific percentages and legally delimited purposes, in addition to which they must make a mandatory provision to Provisions:
Education, Training and Promotion Fund (FEFYP) (5%): Intended for the development of training activities aimed at the cooperative community in general, and the promotion of cooperativism, social and professional progress at a local level in particular.
The accounting record of reserves and namibia phone data provisions is included in the annual accounts in accordance with the legally agreed amounts.
Knowing and applying Accounting for Cooperatives is essential to record all the operations of your particular economic reality, being especially important to know exactly the accounting and tax obligations that must be respected.
Learn about the preparation of annual accounts in cooperative societies
Do you know how provisions and mandatory reserves work in cooperative societies?
Would you like to expand your knowledge about the preparation of the balance sheet in these companies and how it can affect decision-making in the company?
Do you want to know what tax obligations and benefits you have to face as the administrator of a cooperative?
If you want to learn more about the concept of these Social Economy entities and gain more in-depth knowledge about them, you can take one of our free courses.