New capital instruments for mutual businesses – an update


Mutuo is working in a number of jurisdictions to help co-operative and mutual businesses to access new sources of capital.

The UK Parliament approved the Mutuals’ Deferred Shares Act in 2015 and we continue to work with Government and regulators to ensure these new powers are implemented in a way that is of maximum use to mutuals.

Recently Mutuo Managing Partner, Peter Hunt, set out how we worked to change UK law: The Capital Conundrum for Cooperatives (see Chapter 6.)

In many parts of the world co-operatives and mutuals face the same legislative impediments to capital raising as was the case in the UK.

We are working with colleagues from Australia’s Business Council for Co-operatives and Mutuals to influence similar changes in Australian law.  Last month the Australian Senate’s Economic References Committee recommended a series of reforms aimed at creating a better environment for co-operatives and mutuals.  Importantly the Committee recommended amending the Australian Corporations Act to permit co-operatives and mutuals to access a broader range of capital raising opportunities.  The Senate’s full report can be viewed here.

Mutuo will work with our Australian colleagues throughout this year to help build this case for legislative change.

If mutuals and co-operatives are to work in an environment where they can truly compete, then similar kinds of reforms will need to be considered by governments in other countries.