#2014-856Law No. 2014-856 on Social and Solidarity Economy
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The law n° 2014-856 of July 31, 2014, relates to social and solidarity economy in France. It establishes a framework for the operation of enterprises that prioritize social utility over profit. The law defines the criteria for what constitutes social and solidarity economy enterprises, sets guidelines for democratic governance, and emphasizes the importance of reinvesting profits to further social objectives. It also creates structures like the Higher Council for Social and Solidarity Economy to oversee the implementation and evolution of these practices, support local economies, and promote integration and equality.
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Key Changes
- Establishment of criteria for businesses to be recognized as social and solidarity economy enterprises.
- Creation of the Higher Council for Social and Solidarity Economy to oversee activities and promote good practices.
- Increased support for employee initiatives to acquire businesses and ensure their conversion to cooperative models.
Obligations
What this law requires
Establish and maintain democratic governance structures as defined in bylaws, ensuring information and participation of associates, employees, and stakeholders in enterprise decisions independent of capital contribution or financial amount
Allocate at least 20% of annual profits to a mandatory statutory reserve called 'fonds de développement' (development fund) for commercial societies, until reserves reach a threshold set by ministerial order
Allocate at least 50% of annual profits to retained earnings and mandatory reserves for commercial societies
Ensure mandatory reserves are inalienable and cannot be distributed; limit incorporation of reserves into capital to a maximum of 50% of available reserves for first incorporation and 50% of reserve increases for subsequent incorporations
Upon liquidation or dissolution, transfer all liquidation surplus to another social and solidarity economy enterprise or in accordance with special legislative and regulatory provisions governing the legal entity category