Loomio
November 21st, 2019 07:28

Incorporation as ...? (Cross post from workers coop loomio)

MN
Matt Nicholson Public Seen by 160

Hi all, I posted this on the worker cooperatives loomio, but here is more apt. Thanks for the add.

I’m a Cooperator with York Courier Collective (YCC), a member of the CoopCycle federation, we’re currently unincorporated. We currently offer scheduled delivery of goods and, now that the platform is maturing, in the early stages of on-demand food delivery. We’re aware of the precarious nature of this work, so in looking to create a more sustainable business we’re got underway with establishing a York Library of Things, the idea of which is to offer an on-demand delivery loaned item, tools, things, etc.

In summary, so far we’ve got:

York Collective - York Courier – Scheduled delivery

York Collective - Scoff – On-demand Food Delivery

York Collective - York Library of Things - On-demand Thing Delivery

In our minds, in an attempt to future proof, it makes sense to run everything under an umbrella, York Collective, to allow the cooperative’s branches to grow around the logistics, and e-commerce platform. This, hopefully, would allow anybody which wanted to start a cooperative, which integrated with our services, a way to avoid the immediate cost of incorporation, hassle of opening a bank account and so forth (basically the problems we’re facing now with a lack of funds.); much the same as Open Collective offers on a global scale, but under York Collective.

So, so far a workers’ cooperative seems to be the way to go, however we’re keen to involve user members in some capacity, so we’re considering multi-stakeholder cooperatives. The Library of Things should be driven by user demand, similarly offering restaurants membership has been discussed.

We’re open to thoughts and suggestions about our best way to incorporate, whether it’s something we’ve researched or completely different. Thanks in advance for any feedback.

Graham

Graham November 21st, 2019 08:27

Many thannks for posting @Matt Nicholson - this is inspiring stuff! In terms of governance arrangements, some sort of multi-stakeholder approach sounds sensible for the future. Reading your post I thought about the multi-purpose cooperative organisations that seem quite common in places like the Phillippines, and also the multiplex co-op concept that I worked on some years back, which is probably worth me revisiting.

Mark Simmonds  (Co-op Culture & Platform 6)

Mark Simmonds (Co-op Culture & Platform 6) November 21st, 2019 09:59

Legal Form, I would either set up as a company limited by guarantee or a co-operative society. Both legal forms are suitable for worker or multi-stakeholder models and the Co-operatives UK models have options for both.

Type of co-operative. You can do either, but don't set up a multi-stakeholder co-op without being confident that all stakeholder member groups will engage with the governance. You don't want customers joining to get the benefits of membership and then not coming to meetings - would be better to just be a worker co-op.

One advantage of the multi-stakeholder model is that there may be people in the supporter/customer category with more resources to get things off the ground. My experience to date working with couriers is that their resources (particularly time) to set things up is limited by their precarious livelihood.

If money is the issue there are options for supporters to finance worker co-op start-up/growth using loanstock, which doesn't need them to be members of the co-op (eg Unicorn Grocery).

I cover this in more detail in the Do-ocracy Handbook.

You would be able to get assistance with your incorporation through the Hive programme.

Re your separate business ideas, you could either:

  1. run them as different trading activities in one co-operative; or

  2. run them as separate businesses which are themselves members of an umbrella secondary "consortium" co-operative; or

  3. a mixture of the two options above - spinning out new trading activities into new autonomous co-ops as and when appropriate, those new co-ops now being part of the secondary co-operative.

Happy to get involved in this BTW.

Austen Cordasco

Austen Cordasco November 21st, 2019 11:31

Hi Matt, great to hear of this excellent initiative. I would suggest that if the workers are to be directly employed by the co-op then a workers' co-op would be most appropriate. If it is to be a co-op of self-employed workers then a consortium model would be appropriate, unless the members want 3 distinct categories of membership with rules to balance their voting rights, in which case use a multi-stakeholder model. In all cases you have a choice between a Registered Co-operative Society (preferable) or a Co. Ltd. by Guarantee, or 'Somerset Rules' for a multi-stakeholder co-op. But, having said that, what is more important than the legal form at this stage is to have a business plan that demonstrates sustainability and that everybody can believe in. The Hive exists to provide support to proto-co-ops like this so follow the links in Mark's post.

Cliff Mills

Cliff Mills November 21st, 2019 18:23

Hi Matt, this sounds really interesting and you've got some good guidance above. I think that my addition to this would be in relation to thinking through quite carefully the involvement of both workers and users in membership and governance.

Your businesses are centred around people who rely on the co-op for their livelihood, and therefore it is really important that they feel that they have an appropriate level of control to protect that livelihood. I certainly wouldn't discourage users from being involved, but you have to think about those for whom the co-op = income (i.e. workers), sharing power with those for whom the co-op = a means to get access to certain things from time to time (i.e. users). In other words the comparative importance of the co-op to your different constituencies of interest.

I'm a big supporter of multi-constituency co-ops - but where the ownership and governance arrangements take into account this issue, and provide a way to address the tension between workers who (generally) want to be paid more, and users who (generally) want to pay less. That tension exists in every business. Capturing the tension within the co-operative and enabling it to be managed is very forward-thinking and fruitful thing to do; but it needs approaching with care!