Ministry of Environmental Protection and Agriculture of Georgia Ministry of Environmental Protection and Agriculture of Georgia

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Amendments made to the Law on Agricultural Cooperative

The Parliament of Georgia approved the amendments to the Law on Agricultural Cooperative during the third hearing, aiming to regulate organizational-legal issues related to the activities of agricultural cooperatives.

According to the new edition, to obtain the status of an agricultural cooperative, a private legal entity established -as a cooperative will apply to the Agricultural and Rural Development Agency instead of the LEPL Agricultural Cooperatives Development Agency.

The list of documents for obtaining the status of agricultural cooperative has changed. The submission of documents on certifying the contribution (share), as well as an agreement on mutual obligations and rights signed between shareholders and an Agricultural Cooperative is required, moreover, the relation between the cooperative and its shareholders should be clearly defined by the time when entity is granted with the status of a cooperative.

Moreover, new rules for granting the status of agricultural cooperative are applied; If documents submitted by the cooperative are in line with the laws, the Agricultural and Rural Development Agency will apply to the Ministry for relevant decision, which will be made by the Minister, if agricultural status is granted, the data will be entered into the electronic register and ultimately, a certificate will be issued.

The law states, that the charter made it mandatory for an associate member to be admitted, which would allow interested individuals to know the mechanism of associate membership, as well as its rights and obligations in advance.
The additional contributions of shareholders, as well as total amount of dividends to be issued on the basis of associate members contributions were specified, which should not exceed 50% of the agricultural cooperative's net profit instead of 30%, the changes made to the law will further encourage additional contributions and increase interest of associate members.

The new edition redefines the term "Share", which represents an annual contribution made by a shareholder for economic participation in the share fund. Areas of activity were also defined; Under the new version, the cooperative is allowed to carry out other activities as defined by the law apart from agricultural activities.
by January 1, 2020, the Ministry of Environmental Protection and Agriculture of Georgia should ensure the reorganization of the Agricultural Cooperatives Development Agency as a legal entity of public law –National Sustainable Land Management and Land Use Monitoring Agency.

The number of members of the agricultural cooperative changed as well; According to the new version, the minimum number of users in the low land has been increased to 9 members, instead of 5.