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Title: Converting an LLC into a co-operative part 2 : background and analysis
Authors: Baldacchino, Peter J.
Borg, Joanne
Keywords: Private companies
Cooperative societies
Audit committees
Issue Date: 2016
Publisher: MBR Publications Limited
Citation: Baldacchino, P. J., & Borg, J. (2016). Converting an LLC into a co-operative part 2: background and analysis.The Accountant, Winter issue, 1-2.
Abstract: With the two-tier structure being optional under the Co-operative Societies Act (CSA), many co-operatives are disregarding such alternative and opting towards the one-tier system. Upon affecting mutualisation, limited liability companies (LLCs) need not necessarily change their corporate governance structure to that of a two-tier one with a specific supervisory board. As an alternative and as illustrated in Figure 1, co-operative entities, especially larger ones, may make up their statutory Committee of Management (COM) of non-executives, with the day-to-day decisions being left over to an executive management committee, formed by the higher level managers of the co-operative. In such a corporate governance structure, it is imperative that the appropriate liaison is maintained between the two committees. Furthermore, in larger co-operatives, an Audit Committee may operate as a sub-committee of the COM on the lines of those established by LLC’s.
Description: For detailed references, please refer to authors or, for most quoted sources, to the University of Malta MAccty dissertation “The Conversion of the LLC into a Cooperative and its Implications: A Maltese Analysis” May 2014 available at the University of Malta library.
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