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Cooperative Principles

The Benefits Of Indivisible Reserves And Their Connection To Communities

The International Cooperative Alliance (ICA) issued a restatement of cooperative principles in 1995 that included the idea of indivisible reserves in its third principle as a discretionary option for cooperatives. When cooperatives build financial reserves, they may specify a certain share or all of it as indivisible, in other words, not transferrable to members. For cooperatives with indivisible reserves, closures of these businesses or acquisitions by private investors, would result in transfers of these designated capital funds to other cooperatives or to organizations supporting their communities. The ICA’s inclusion of indivisible reserves has an implicit connection to its seventh principle, Concern for Community.
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