Cooperative Delegate Assembly: Rules from 500 Members

Section 27(3) GenG provides a specific organisational option for larger cooperatives. Their cooperative agreement may provide for the general assembly to consist of delegates while the cooperative has at least 500 members.

The agreement must identify the member groups from which delegates come. Delegates are elected or authorised from among the cooperative's members. Their term may not exceed five years, and the agreement must also regulate the election procedure.

This article explains the conditions and contract questions under section 27(1) to (3) GenG. Convening, quorum and virtual or hybrid participation raise separate questions and are outside its scope.

When the membership count permits a delegate assembly

Section 27(1) GenG places the exercise of members' rights in the general assembly. Section 27(3) permits a different composition if the cooperative agreement provides for an assembly of delegates and membership is at least 500.

The number alone does not change the cooperative's structure. The agreement must establish a delegate assembly. Because the statute ties this form to a minimum membership count, checking the current count belongs both to preparation and to any later use of the clause.

If membership falls below 500, the statutory condition in section 27(3) for this form is no longer met. The provision alone does not determine the adjustment required in a particular case. The agreement, membership count and proposed meeting should be reviewed together.

Specify member groups and delegates in the agreement

The cooperative agreement must identify the member groups from which delegates are selected. A general reference to groups to be chosen freely at a later date does not set out that requirement. The groups should be described so it remains clear which members take part in the selection.

Delegates are elected or authorised from among the cooperative's members. The statutory wording provides both routes. A person outside the membership does not meet this condition as a delegate.

For a clear agreement, the group definition, the members who make the selection and eligibility to serve as a delegate should fit together. The provision sets no minimum group size and no allocation ratio. Those figures should not be presented as statutory requirements.

Limit the delegates' term to five years

A delegate's term may not exceed five years. The cooperative agreement may set a shorter term and should state when the specific term begins and ends. Section 27(3) gives no further detail on these points.

If a further term is possible, the agreement can state when and on what conditions a new selection takes place.

If a delegate leaves early, a replacement rule can preserve representation of the member group. The agreement can state whether a replacement is selected and how long the remaining term lasts, subject to the statutory maximum.

Coordinate voting rights with the delegate model

Section 27(2) GenG provides one vote for each cooperative member unless the cooperative agreement states otherwise. That rule should be read alongside a proposed delegate assembly.

Section 27(3) contains no formula for weighting votes by member group. If the members intend to depart from the statutory baseline or structure voting within a delegate model, the agreement should state the arrangement clearly. A particular distribution between groups cannot be derived from section 27(3) alone.

The agreement should describe the composition of the assembly consistently with its voting provisions. This makes clear how member groups take part in selection and which rules are intended to govern resolutions.

Regulate the election procedure for each member group

Section 27(3) requires the cooperative agreement to regulate the election procedure. The statute leaves its detailed design to the cooperative and does not prescribe one voting method.

The agreement may address nomination rights, casting votes, determining the result and keeping a record. These points can make the procedure workable; they are not each separate statutory minimum requirements.

The procedure should clearly apply to each specified member group. A record of its steps makes it easier to check later whether the contractual process was followed.

Review the agreement and membership count before use

Review the current membership count together with the full cooperative agreement. Check whether membership is at least 500, whether the agreement provides for a delegate assembly, which groups it specifies, who may serve as a delegate and whether it regulates terms and the election procedure.

Then read the voting clause alongside section 27(2) GenG and check whether the remaining contract provisions fit the proposed assembly. Convening, quorum and participation through electronic communications require their own review.

For a GmbH with a growing shareholder group, Reviewing articles as the shareholder group grows addresses a different contract question. For a consolidated update, read Restating articles instead of collecting separate amendments. Receive new articles and legal updates from the firm through BRANDAKTUELLE legal updates.

Frequently asked questions about delegate assemblies