The production cooperative (hartel) is a commercial organization in which individuals are merged to share productive and other economic activities for profit. In some cases, the statute may also provide for the participation of the lawrs (through their representative).

In Russia, the activities of production cooperatives are governed by the Act on Industrial Cooperatives of 08.05.1996 N 41-FZ. It establishes the legal framework for the establishment, operation and elimination of cooperatives and defines their rights and obligations.

The constituent instrument of such association is the statute approved by the general assembly. It is important to describe a name which should necessarily contain the words " producer cooperative " or " arthel " , the address of the enterprise, the amount of the premiums paid and the order for the removal of the Artels.

The number of cooperative members starts from five, the maximum number is not determined. It is important to bear in mind, however, that the number of members of the cooperative who do not take part in the work of the cooperative may not exceed 25 per cent of the members participating in the association.

Members ' contributions are the statutory capital, and their minimum amount is not fixed.

A cooperative can be registered directly in the tax inspection, through the IFC or online if all founders have qualified electronic signatures. Special service on the SME Digital Platform will help them.

Key features of production cooperatives:

Sharing possession. Members of the cooperative share the means of production, such as equipment, building, land, etc.
Joint administration. The members of the cooperative participate in decision-making, elect the board and the audit committee
Distribution of profits. The co-operative ' s profits are distributed proportionally to the amount of the premium or personal contribution
Solidarity. The members of the cooperative have a shared responsibility for the debts of the cooperative.

There are many activities that cooperatives can do. This may include the production, processing and implementation of agricultural products, industrial goods, furniture, food, domestic, transport, repair services, etc. By the way, it is agricultural cooperatives that combine farms that often operate as operators of the project of the Farmer Island ICP.

Production cooperatives are an alternative to individual entrepreneurship or GS. Unlike the GS, cooperative management is collegiate, and each member retains autonomy and may withdraw at any time.

There are a number of advantages that make this form of business organization attractive. Thus, profits are distributed proportionally to participants ' contributions to the common case. Members of the cooperative have equal rights and voices in governance, allowing for decisions that are inclusive. Sharing can effectively manage costs and optimize production. In the event of financial difficulties, cooperative members can support each other.

Production cooperatives also have their shortcomings. Collective decision-making may be lengthy and not always effective. The absence of a single leader may complicate operational decisions. In addition, members of the cooperative have shared responsibilities, the failure of some may result in costs for all.

We recall that the best organizational and legal form of business registration will be supported by a special service depending on its specificity.

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