General Law of Cooperative Associations


This Law, established in 1986 and modified in 2012, provides the guidelines for the establishment, operation and supervision of cooperatives in El Salvador. This includes provisions on liquidity requirements, auditing procedures, board member appointments, and corporate governance regulations. Cooperatives must fall under one of these categories: production cooperatives, housing cooperatives, or service cooperatives.

Chapters I and II discuss the general aims of the law and the classification of cooperative organizations under one of the three aforementioned labels. Chapter III refers to the constitution, and licensing operations given to cooperatives. Once the cooperative has been constituted, it must be officially recognized by the National Cooperative Registry (INSAFOCOOP).

Members must be at least sixteen years old by the time of incorporation. All federations of Cooperative Associations will be constituted through the General Assembly of all interested Cooperatives.

Title IV regulates the direction, administration and supervision of these cooperatives. They should all hold a General Assembly, an Administration Council, and a Supervisory Board. The Administration Council is the entity responsible for the administrative operation of the cooperative, and will be comprised by a President, Vice-President, a Secretary, a Treasurer, and other Members.  The Supervisory Board will supervise of all activities undergone by the cooperative, including the auditing of all administrative offices and employees.

Title V regulates the economic sustainability of cooperatives. It discloses that all entities must fund themselves through member fees, savings and deposits of associates, movable and non-movable property, loans and donations.

Lastly, Title VII and VIII refer to the protection regimes which all cooperatives must follow, as well as procedures regarding liquidation, suspension and cancelation of services.

Document Details

Title (Non-English): 
Ley General de Asociaciones Cooperativas
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Date of Document: 
Friday, April 20, 2012
Document Authors: 
Legislative Assembly of El Salvador
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