According to Article 1 paragraph 1 of the Cooperatives Law, a cooperative is a business entity consisting of persons or cooperative legal entities that bases its activities on cooperative principles and as a people’s economic movement based on family principles.

Cooperatives can take the form of:

1. Primary cooperative, formed by at least 9 people; or
2. Secondary cooperative, formed by at least 3 cooperatives.

Cooperative members, as owners and users of cooperative services, actively participate in cooperative activities. However, as long as it does not interfere with their interests, cooperatives can provide services to people who are not members in accordance with their business activities. This can be done to attract new members.

In addition, any Indonesian citizen who can take legal action or a cooperative that meets the requirements set out in the Articles of Association (AD) can become a member of the cooperative. Each member is registered in the member register book.

Article 18 paragraph (1) of the Cooperatives Law, those who can become members of primary cooperatives are those who can take legal action and fulfill the requirements set by the cooperative concerned. This is intended as a consequence of cooperatives being legal entities. However, students, students, or other people deemed incapable of performing legal acts can form a cooperative. However, the cooperative does not have the status of a legal entity and is only registered.

Cooperative capital consists of:

1. Own capital, which is capital that bears risk or is called equity capital, can come from:
2. Principal savings
3. Compulsory savings
4. Reserve fund
5. Loan capital, for business development, which can come from:
6. Members, including eligible prospective members;
7. Other cooperatives and/or their members;
8. Banks and other financial institutions;
9. Issuance of bonds and other debt securities;
10. Other legitimate sources are loans from non-members that are not made through a public offering.

In addition to the capital mentioned above, cooperatives can also raise capital from equity capital provided by the government and the community to improve cooperative business activities, especially those related to investment. However, the owner of the equity capital may participate in the management and supervision of the cooperative.

Based on these provisions, cooperative members can make financial contributions to the cooperative through principal savings, mandatory savings, and loans from members.

Cooperatives can be dissolved for two reasons, namely based on a decision of the members’ meeting or a government decision. Dissolution of a cooperative based on a government decision can be done if:

1. There is evidence that the cooperative concerned does not fulfill the provisions of the Cooperatives Law;
2. Its activities are contrary to public order and/or decency;
3. Its survival can no longer be expected.

According to Article 47 paragraph (1) of the Cooperatives Law, the decision on the dissolution of a cooperative is due to various reasons, including that the cooperative is declared bankrupt. Article 3 paragraph (1) letter c of GR 17/1994 states that the Minister of Cooperatives and SMEs has the right to dissolve cooperatives in cases where the cooperative is declared bankrupt by a court decision that has definite legal force. This dissolution cannot be done by the minister.

Article 1 paragraph 1 of the Bankruptcy and PKPU Law, bankruptcy is a general confiscation of all assets of a bankrupt debtor conducted by a curator under the supervision of a supervisory judge. A debtor cooperative can be declared bankrupt that has 2 or more creditors and is unable to pay at least 1 debt that is due and collectible can be declared bankrupt in this context. This bankruptcy declaration must be filed with the Commercial Court (within the scope of the general court), either at the request of the cooperative itself or at the request of 1 or more of its creditors.

A debtor cooperative can be declared bankrupt that has 2 or more creditors and is unable to pay at least 1 debt that is due and collectible can be declared bankrupt in this context. This bankruptcy declaration must be filed with the Commercial Court (within the scope of the general court), either at the request of the cooperative itself or at the request of 1 or more of its creditors.

According to Article 3 (1) letter c of GR 17/1994, the government, or the Minister of Cooperatives and SMEs, is responsible for dissolving cooperatives that have been declared bankrupt based on a court decision that has the full force of law. This dissolution cannot be done by the minister.

Article 55 of the Cooperatives Law, in the event of dissolution of the cooperative, the members-only bear losses to the extent of their principal savings, mandatory savings, and participation capital. The provision is an affirmation that members only bear losses limited to their principal and mandatory savings and participation capital. Meanwhile, the cooperative’s loan capital from members is not included in the provision.

In addition, against the plan to dissolve the cooperative based on the grounds of bankruptcy, no objection can be filed by the management or members of the cooperative, because the dissolution of the court’s decision has definite legal force.

Legal Basis:

1. Law number 25 of 1992 concerning Cooperatives;
2. Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations;
3. Government Regulation instead of Law Number 2 of 2022 concerning Job Creation;
4. Law Number 6 of 2023 Concerning the Stipulation of Government Regulation instead of Law Number 2 of 2022 on Job Creation into Law;
5. Government Regulation Number 17 of 1994 on the Dissolution of Cooperatives by the Government.

Reference:

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