Demutualisation refers to...

• A. A process that merges mutual organisations with other mutuals
• B. A process that converts mutuals into protective trusts
• C. A process in the 1980s allowing building societies to become companies
• D. A process of demotion of mutuals to limited partnerships

Answer: (C)

Demutualisation is the process by which a mutual organization, owned by its members, converts into a company owned by shareholders. In the UK, during the 1980s this specifically applied to building societies, which could demutualise and become a plc (a company) to raise capital and compete more directly with banks. This is what the option describing a 1980s process that allowed building societies to become companies is getting at. It isn’t about merging mutuals, turning into trusts, or moving to partnerships, which are different concepts.