ABSTRACT
The word ‘mutual’ is used with a range of meanings. Strictly, it suggests that an organisation trades
only with its own members. In a wider sense, it is now commonly used as a term to encompass
those businesses which are controlled by their members on a basis other than the typical investor-
controlled company model which usually confers control in proportion to the shares held by the
investor members. This usage generally means that the members have one vote each, regardless of
their capital stake, and that their ownership relationship with the business is based on their use of
its services or provision of services to it. The major examples in the UK are building societies
registered under the Building Societies Act 1986, friendly societies registered under the Friendly
Societies Acts 1974 and 1992, and both co-operatives and benefit of the community societies
registered under the Industrial and Provident Societies Acts (IPSA) 1965 to 2002. It also extends to,
for example, mutual insurance companies, such as Equitable Life, registered under the Companies
Acts 1985 or with their own tailor-made structure as statutory or Chartered Corporations. The
mutual insurance companies, building societies and friendly societies are usually ‘mutual’ in the
strict sense of trading only with their members. Co-operatives may or may not also meet that
stricter definition. Benefit of the community societies will never meet that definition as it is a
condition of their registration under the Industrial and Provident Societies Acts that they serve
people other than their own members.
