Does a Cooperative Group Terminate When Its Purpose Is Achieved?

Quick answer: Yes. A cooperative group terminates when its cooperation purpose has been achieved (unless the members agree to continue). Upon termination, common assets are handled according to the agreement in the cooperation contract; absent an agreement, they are divided in proportion to each member’s contributions — after all common debts have been paid.

Legal Basis

• Articles 505–517 of the Civil Code 2015 — cooperation contracts, cooperative groups.

Cases of Cooperative Group Termination

• Expiry of the term agreed in the cooperation contract;
• The cooperation purpose has been achieved;
• The members agree to terminate;
• Other cases under the agreement or the law.

Handling Common Assets upon Termination

1. Pay the cooperative group’s common debts first;
2. Remaining common assets are divided according to the agreement in the cooperation contract;
3. Absent an agreement: divided in proportion to each member’s contributions (assets, labor);
4. Members are jointly liable for common debts within the scope of their contributions, unless otherwise agreed.

Notes When Drafting a Cooperation Contract

• Clearly state the purpose of cooperation and criteria for determining “purpose achieved” to avoid disputes;
• Agree in advance on the mechanism for dividing common assets upon termination;
• Clearly define authority to represent and manage common assets during cooperation;
• A cooperative group has no legal person status — members must be fully aware of joint liability.

If you need to determine the appropriate approach for your specific situation, you should consult a lawyer first to have your dossier reviewed and receive advice on handling options.

For prompt consultation, please contact our lawyers at 0966.475.966.

Related Articles

• Cooperation Contracts Under the Civil Code
• Can an Organization Without Legal Person Status Join a Cooperative?
• Can Labor Be Contributed as Capital?