Interested in forming a Co-op?

We love Co-ops! Let’s talk.

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Cooperative businesses operate according to the seven cooperative principles:

1) Voluntary & open membership

2) Democratic member control

3) Members’ economic participation

4) Autonomy & independence

5) Education, training and information

6) Cooperation among cooperatives

7) Concern for community

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Different Types of Cooperatives:

1) Worker cooperatives

2) Producer cooperatives

3) Consumer cooperatives

4) Housing cooperatives

5) Purchasing cooperatives

6) Multiple stakeholder/Hybrid cooperatives

Cooperative businesses are different:

A co-op should be intentionally structured to implement cooperative principles.

Co-ops face specific legal issues regarding:

  1. Business planning

  2. Entity selection and formation

  3. Capitalization, finance and tax

  4. Agreements and contracts

  5. Regulations and licenses

  6. Intellectual property

  7. Managing risk

 

Worker cooperatives in Massachusetts

Massachusetts has a law specifically for worker co-ops: The Employee Cooperative Corporations Act, Mass. Gen. Laws ch. 157A.

This law applies the concept of democracy to the corporate structure, permits the distribution of surplus earnings based on the contribution of labor (instead of on contribution of capital), and provides for an internal accounting system and capital structure consistent with these principles, and with subchapter T of the Internal Revenue Code.

Specifically, 157A requires that the members of the cooperative must be employees, that the company can use the word “Cooperative” in its name, that each member gets one vote and only members get a vote, non-voting stock may be issued, that the co-op can allocate earnings and losses in accordance with patronage, that the co-op can establish internal capital accounts, and prohibits mergers with non-cooperatives.