# Cooperative Corporation

Quick notes and FAQ for forming a "Cooperative Corporation".

- It is possible to buy `*.coop` domains from [Identity COOP](https://identity.coop/).

### Profits

At the end of the day a **cooperative** can still be a **for profit** business entity, however the ownership of the corporation is given to the employees instead of the shareholders.

See the [NCBA article](https://ncbaclusa.coop/blog/differences-between-cooperatives-and-corporations/#:~:text=What%20sets%20a%20cooperative%20apart,Some%20cooperatives%20are%20employee%2Downed.) to understand other differences between a cooperative and a corporation.

> Any profits the cooperative earns are either re-invested in the company, similar to a nonprofit corporation, or distributed among its member-owners, as with a for-profit corporation.

Most cooperatives distribute profits evenly among the members (defined below).

### Members

Instead of "donations" which are a meaningful way nonprofits source income, a cooperative has a concept of "membership" which is typically paid annualy.

The exact details of membership, the benefits of being a member, and the services offered to members is arbitrary. We can write the governance however we chose.
For example we can say that members recieve the bare minimum in services, and are effectively paying for a vote (which is required by law).
The opposite example would be a rich set of tools, services, features, marketing material, etc that is awarded upon membership.
The point being that the "product" that the cooperative offers is up to the founders to decide.

We can "exchange" whatever we want for a membership.

### Member Classes

This is a relitvely unexplored concept in the tech industry, but could be useful.
There is legal precedent for [Multi-stakeholder Cooperatives](https://uwcc.wisc.edu/resources/multi-stakeholder-cooperatives/#:~:text=Multi%2Dstakeholder%20cooperatives%20are%20co,agencies%2C%20or%20even%20other%20cooperatives.) which define a concept called **Member Classes**.

This is a way to breakdown the services and expectations for different types of membership.

For example the [Fifth Season Cooperative](http://www.fifthseasoncoop.com/) is a regional food hub which has the following member classes:

- Producers – growers who sell produce, meat, or dairy
- Producer groups – agricultural businesses that aggregate and sell produce, meat, or dairy
- Processors – businesses that make value-added products
- Distributors – businesses that transport agricultural products
- Buyers – may include institutions or retail operations that purchase product from the cooperative
- Workers – employees of the cooperative may become members.

With the concept of **member classes** we could easily favor payouts for one member class.

For example if we created a **corporate sponsor** member class, the proceeds from the corporate class could be transferred to another **open source project** member class or similar.

### Taxes

Cooperatives pay taxes just like regular corporations, unless a "nonprofit cooperative" is formed which requires tax exemption at the state level.

See the [IRS Form 1120-c](https://www.irs.gov/forms-pubs/about-form-1120-c) for details on how Coops pay taxes at the federal level.

If we decided to go the tax-free route, we would need to identify which state we would like to file for tax exemption in based on the precedent in that state. Research would be required here.

See [Creating a Nonprofit Cooperative](https://www.wikihow.com/Create-a-Nonprofit-Cooperative#:~:text=The%20most%20common%20non%2Dprofit,credit%20unions%20and%20housing%20coops.).

See [How are nonprofits and co-ops different](https://cdi.coop/how-are-nonprofits-and-co-ops-different/).

### The 7 Principles

There is a lest of 7 principles that **most** coops (including Idenity COOP) will ask that we adhere to. (In my opinion we should adhere to all of these).

1. Voluntary, open membership: Anyone who wants to become a member of a cooperative and use its services is welcome to do so, no matter their gender identity, race, religion or social status. The only requirement for membership is that a person is willing to accept the responsibility of membership.
2. Democratic member control: Members of a co-op organize and control the group and decide who can lead the co-op. Members can also vote to determine the policies and practices of the co-op.
3. Member economic participation: Every member contributes to the capital of the co-op. Members also benefit from any profits earned by the co-op.
4. Independence and autonomy: If a cooperative and another organization enter into an agreement, they do so under the presumption that the cooperative will maintain its democratic member control and autonomy.
5. Information, education and training: Cooperatives educate their members so that their members can best help the co-op develop. Co-ops also work to educate the public, government officials and others about the nature and advantages of cooperatives.
6. Cooperation between cooperatives: Co-ops strive to work together for the good of their members and the community around them.
7. Concern for community: All of the policies put forward by a coop should reflect a concern for the community around it.

### Legal Resources

Membership is called out in the bylaws.

Each coop needs to file an articles of incorporation with the state.

Sample California coop bylawys here: https://www.co-oplaw.org/wp-content/uploads/2012/08/Sample-Bylaws-for-Coop1.docx

Sample Aritcles and Further reading here: https://www.co-oplaw.org/knowledge-base/cooperative-bylaws

### List of names to consider:

- Katerina
- Nivenly
-

### List of words to consider:

- Experiment
- Science
- Technology
- Open
- Source
- Infrastructure
- Entity
- Label
- Vision
- Hope
- Future
- Space
- Labs