Federal Government Intends to Modernise Cooperative Law
The Federal Government has presented a bill to strengthen the cooperative as a legal form. The Bundeskabinett (Federal Cabinet) approved the draft on 15 July 2026; responsibility lies with the Bundesministerium der Justiz und für Verbraucherschutz (Federal Ministry of Justice and Consumer Protection) under Federal Minister of Justice Stefanie Hubig. The government draft was forwarded to the Bundesrat (Federal Council) on 14 August 2026 as Bundesratsdrucksache 459/26 and is available to the Bundestag (Federal Parliament) as Drucksache 21/8410.
The initiative is intended to build on legislative work from the 20th legislative period. Its starting point is the coalition agreement for the 21st legislative period, which provides for a modernisation of cooperative law. According to the Bundesministerium der Justiz und für Verbraucherschutz, the law is to be adopted at the beginning of 2027 and enter into force shortly thereafter.
The Bundestag debated the draft in its first reading on 14 October 2026. At the same time, motions were pending concerning, among other things, a citizens’ housing cooperative and the statutory enshrinement of an employee participation cooperative for company successions by the workforce.
Objectives of the Bill
The draft pursues several regulatory objectives. The focus is on further digitalisation of cooperative processes, increasing the attractiveness of the legal form and targeted measures against abusive structures.
According to the explanatory memorandum to the bill, particular account is to be taken of the fact that digitalisation in business and private-law transactions continues to advance. In addition, cooperative practice has pointed to a need for statutory regulation and clarification. This also includes criticism that the formation of a cooperative sometimes takes significantly longer than the formation of a corporation.
The draft is also connected with the sustainability goals of the United Nations 2030 Agenda. In particular, Goals 8 and 12 are mentioned, i.e. sustained, inclusive and sustainable economic growth as well as sustainable consumption and production patterns.
Digitalisation in Cooperative Law
Text Form to Be Further Embedded
The bill provides for text form to be embedded in further areas of cooperative law beyond existing simplifications. This is intended to simplify processes without abandoning the information and protective functions provided for by law.
Planned provisions include rules on text form for notifications in connection with the list of members, for communications concerning rejected admissions, and for powers of attorney to submit declarations of accession or participation. Evidence of the appointment of the management board and supervisory board is also to be possible in text form.
For the minutes of the general meeting, text form is generally to be sufficient. However, the articles of association may continue to provide for written form. According to the draft, the audit report of the auditing association will remain subject to written form or electronic form.
Digital Meetings and Resolutions
The draft contains provisions under which meetings of the management board and supervisory board, including joint meetings, may also be held as in-person meetings, virtual meetings, hybrid meetings or by extended procedure. Resolutions are also to be capable of being adopted by circular procedure or in text form.
It is also clarified for the founding meeting that digital or hybrid formats as well as an extended procedure are to be possible. This is intended to remove existing legal uncertainty because, prior to formation, there is not yet any management board or supervisory board that could decide on the format of the meeting.
For hybrid general meetings, uniform electronic voting is to be facilitated. With the consent of the supervisory board, the management board may resolve that members participating in person also vote electronically, provided the articles of association do not expressly exclude this.
Accelerating the Formation of Cooperatives
Database of Auditing Associations
Before the registration of a cooperative, the involvement of a cooperative auditing association is required. The draft provides for expanding the information in the database on cooperative auditing associations and auditing bodies of the savings bank and giro associations. This is intended to make it easier to find a suitable auditing association.
Most of the amendments concern the Genossenschaftsgesetz (GenG, German Cooperative Societies Act) and the Genossenschaftsregisterverordnung (Regulation on the Register of Cooperatives). In addition, provisions in other laws are also to be amended, including the Gesetz über das Verfahren in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit (Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction), the Umwandlungsgesetz (UmwG, German Transformation Act), the SCE-Ausführungsgesetz (Act Implementing the SCE Regulation) and the Wirtschaftsprüferordnung (German Public Accountants Act).
Standardisation of Formation Opinions
The expert opinion of the auditing association is a key basis for the review by the register court. The draft provides for an authorisation to issue regulations in order to define minimum information for this expert opinion in greater detail.
According to the explanatory memorandum to the draft, formation opinions in practice are structured differently. Some are brief and vague, while others are very extensive and confusing. Standardisation is intended to accelerate the register review.
According to the draft, quality control in the assessment of formations is to be limited to whether work instructions exist for carrying out the assessment and identifying impermissible promotional purposes, and whether compliance with them is monitored by the auditing association.
Standard Time Limit for Register Entries
A standard time limit for registration is to be created in the Genossenschaftsregisterverordnung. Accordingly, the formation of a cooperative or European Cooperative Society is generally to be registered within 20 working days after receipt of the complete application.
If there is a remediable impediment to registration, the period is generally to run after it has been remedied. If registration is not completed within the deadline, the register court is to inform the applicants of the reasons for the delay.
In addition, notarial preliminary review is to be extended to matters relating to the register of cooperatives. This is intended to reduce incomplete or inadequate applications and relieve the register courts.
Permissible Promotional Purpose and Distinction from Capital Investment
Indirect Promotion to Suffice
According to the draft, § 1 GenG (German Cooperative Societies Act) is to clarify that the promotion of members may take place directly or indirectly. This clarification is intended to be significant, among other things, for energy cooperatives, holding cooperatives and certain workforce models.
However, indirect promotion remains tied to the joint business operation. The draft does not proceed on the basis that any arbitrary economic benefit is sufficient. The decisive factor remains a permissible promotional purpose within the meaning of cooperative law.
Mere Joint Asset Investment Is Not Sufficient
A new express provision is also planned, according to which mere joint asset investment does not constitute a permissible promotional purpose. In doing so, the draft takes up a demand made by the Bundesrat in earlier deliberations.
It is likewise to be clarified that the shelf formation of a cooperative is not permissible. According to the draft, at least three members capable of and willing to be promoted must already be present at the time of formation.
These clarifications are directed in particular against structures in which the legal form of the cooperative is to be used for purely investment purposes. According to the explanatory memorandum to the draft, it is also to be taken into account that only individual disreputable cooperatives exist, while the vast majority of cooperatives operate reputably.
Investor Members in Focus
Maximum Limit and Restrictions on Voting Rights
The draft contains several new rules on investor members. The articles of association must ensure that investor members cannot outvote the other members under any circumstances. In addition, they must not be able to block resolutions that require a majority of at least three quarters of the votes cast.
As a rule, the number of investor members is not to exceed 50 per cent of the members. The articles of association may specify a lower percentage cap. Exceptions are provided, among other things, for employees of the cooperative and certain changes to investor membership provided for in the articles of association.
The draft also clarifies that no one may be both a member and an investor member of the same cooperative at the same time. A change to investor membership is to be possible in text form under certain conditions; the articles of association may also provide for a change upon the occurrence of a condition specified therein.
Criticism from Practice
The planned limitation of investor members to 50 per cent is not without controversy. The Deutsche Raiffeisenverband has criticised this limitation. The draft justifies the limit on the grounds that the cooperative promotional purpose could be called into question if more than half of the members are not eligible to use or produce the goods or to use or provide the services of the cooperative.
In the case of housing cooperatives, an investor member is not to be permitted to use a cooperative apartment for residential purposes, not even within the framework of non-member business. If an investor member nevertheless uses such an apartment, that person is to be deemed a member of the cooperative from the date of the use agreement.
Management Board, Supervisory Board and General Meeting
Suspension of Management Board Activity
The bill provides that a member of a multi-member management board may, under certain conditions, obtain a suspension of their management board activity. The cases covered are maternity protection, parental leave, care of a family member or illness.
In these cases, the management board member may request the general meeting to revoke their appointment. Depending on the case, the general meeting is to resolve on reappointment subject to a suspensive time limit. Under certain conditions, the supervisory board may act instead of the general meeting.
In the event of the death of a management board member, the number of management board members required by law or by the articles of association may be undercut for a maximum of six months.
Management Board Bound by Instructions
For cooperatives with no more than 150 members, the government draft is to allow the articles of association to provide that the management board is bound by instructions from the general meeting or from a decision-making body formed from among it. In the ministerial draft, the proposed threshold was still 1,500 members.
In its statement of 25 September 2026, the Bundesrat demanded that this threshold be lowered to 50 members. In support of this, it points out that an expansion to 150 members would constitute a far-reaching intervention in established cooperative structures and would shift the balance between democratic participation and delegation of competence to the management board beyond a justified extent. The Federal Government has announced that it will examine this proposal.
List of Members, Assembly of Representatives and Information Rights
Inspection of the List of Members
Inspection of the list of members is to be restructured. Members retain a right of inspection. Stricter requirements are to apply to third parties because the list contains personal data.
Members are to be able, under certain conditions, to obtain contact details of other members if they need them to exercise statutory minority rights. One requirement is, among other things, an assurance in text form that the data will be stored and used only for the relevant purpose and subsequently deleted.
Digital Elections of Representatives and Transparency
Digital elections of representatives are to be expressly permitted. The articles of association or electoral rules may provide for electronic voting or allow the management board, with the consent of the supervisory board, to resolve on electronic implementation.
As a transitional measure, the management board, with the consent of the supervisory board, is also to be able to resolve on electronic elections of representatives even if the articles of association or electoral rules provide for voting in writing or personal voting at a polling station. This does not apply if the articles of association expressly exclude such a possibility of resolution.
According to the draft, assemblies of representatives may be made accessible to all members by audio and video transmission. If no transmission takes place, members are to be allowed, upon request, to participate as guests without the right to speak, submit motions, receive information or vote, provided sufficient space or technical capacity is available and no significant effort or substantial costs stand in the way.
Audit, State Supervision and Measures Against Abuse
Expanded Duties of Auditing Associations
The rights and duties of cooperative auditing associations are to be expanded. In the expert opinion on formation, auditing associations are to expressly set out which promotional purpose the cooperative intends to pursue and whether it is permissible.
In addition, an auditing association is to be able to convene an extraordinary general meeting under certain conditions. This may be considered, for example, if deficiencies identified in the course of the audit give rise to concern about a substantial risk to the interests of the members or if the cooperative pursues an impermissible promotional purpose.
In addition to or instead of an extraordinary general meeting, the auditing association is to be able to inform the members directly in text form about identified deficiencies. Upon request, the management board must provide the association with a current list of members containing names and addresses or email addresses for this purpose.
Information Rights vis-à-vis Supervisory Authorities
Under certain conditions, auditing associations are to be permitted or required to pass information to the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority). This concerns in particular indications that an audited cooperative does not pursue a permissible promotional purpose but invests its assets according to a defined investment strategy, so that an investment fund within the meaning of the Kapitalanlagegesetzbuch (KAGB, German Capital Investment Code) could be considered.
If the interests of the members of the audited cooperative are at risk, the association is to be required to inform the Bundesanstalt für Finanzdienstleistungsaufsicht. In addition, notifications to the competent supreme state authority are to be possible if there are indications of the absence of a permissible promotional purpose.
State Supervision of Auditing Associations
State supervision of cooperative auditing associations is to be strengthened. Among other things, the reliability of the members of the management board of an auditing association and of special representatives is to be examined. For this purpose, a certificate of good conduct and information from the Gewerbezentralregister (Central Trade Register) are to be submitted.
The Bundesrat demands that this reliability assessment also be extended to management board members and special representatives of existing auditing associations. The Federal Government has announced that it will examine this proposal but points to possible aspects of avoiding bureaucracy.
In addition, the supervisory authority is to be able to require regular reports from the auditing association. Breaches of reporting and notification duties are to be structured as administrative offences.
Housing Cooperatives and Insolvency Protection
The government draft provides for an amendment to § 67c GenG (German Cooperative Societies Act). Accordingly, the maximum amount for protected business credit in housing cooperatives is to be increased from the current EUR 2,000 to EUR 3,000.
The background is the protection of members of a housing cooperative against loss of housing in the event of personal insolvency. The draft assumes that the previous amount is no longer sufficient to remove average business credit at customary market levels from access by the insolvency administrator.
The Bundesrat is calling for more far-reaching improvements. According to its statement, the rules excluding termination under § 67c GenG do not apply in all cases. It proposes that mandatory shares that are a prerequisite for the use of the apartment be more comprehensively exempted from the insolvency administrator’s right of termination.
In this respect, the Federal Government sees no need to amend the draft. It points out that dispensing with an upper limit could excessively privilege insolvency debtors who are members of a housing cooperative compared with other insolvency debtors and could unreasonably disadvantage insolvency creditors.
Changes in Transformation Law and for European Cooperative Societies
The Umwandlungsgesetz is also to be amended. Documents that must be made available to members of a cooperative before a transformation resolution is adopted are to be capable of being transmitted electronically. Members participating virtually are to be able to access the documents electronically.
For certain applications, audit opinions are no longer to have to be attached in original form or as officially certified copies, but may be attached as copies. In addition, a rejection pursuant to § 91 para. 1 UmwG (German Transformation Act) is in future to be capable of being declared in text form.
For European Cooperative Societies, the draft provides for consequential amendments to the SCE-Ausführungsgesetz. §§ 53 to 64d GenG are to apply mutatis mutandis to their audit.
Economic Impact of the Draft
According to the bill, citizens will not incur any compliance costs. For businesses, annual relief of around EUR 536,000 is stated. This relief relates entirely to bureaucracy costs arising from information obligations and is to count as an “out” within the meaning of the Federal Government’s “one in, one out” rule.
According to the draft, the Wirtschaftsprüferkammer (Chamber of Public Accountants) will incur minor ongoing compliance costs due to the expansion of the database on cooperative auditing associations. Minor ongoing relief is expected for the Länder, including through the standardisation of formation opinions, the elimination of certain certificates and notarial preliminary review in matters relating to the register of cooperatives.
No further costs are identified in the draft. There are to be no effects on the federal budget or on the budgets of the Länder and municipalities.
Statements and Further Course
The Bundesrat issued its statement at its 1068th session on 25 September 2026. In addition to lowering the member threshold for the right to issue instructions and providing more extensive protection for housing cooperatives, it calls for supervision of the peak associations by the Bundeswirtschaftsministerium (Federal Ministry for Economic Affairs), requests an examination of whether the rules on peak associations should be deleted, and demands that the reliability assessment be extended to management board members and special representatives of existing auditing associations.
The Federal Government has responded to the statement in a differentiated manner. It intends to examine some points. It rejects other proposals, in particular regarding federal supervision of peak associations and the more extensive amendment of § 67c GenG.
The Deutsche Genossenschafts- und Raiffeisenverband generally welcomes the planned amendments but emphasises that the solidity of the cooperative legal form must not be impaired. Nationwide, more than 7,000 cooperatives with around 22 million members are affected.
Significance for Companies, Investors and Cooperatives
The bill contains numerous targeted amendments that may become relevant for the formation, organisation, membership structure, audit and supervision of cooperatives. The planned rules on digital procedures, formation opinions, investor members, review of the promotional purpose and the role of auditing associations are particularly significant.
For companies, investors and high-net-worth private individuals who use, establish or participate in cooperative structures, the planned amendments may have implications for governance, financing, membership rights and register procedures. MTR Legal Rechtsanwälte advises clients on corporate law matters in connection with cooperatives and other corporate forms. Further information can be found under Legal advice in corporate law.
