let’s build a cooperative, step 8: convene your first cooperative owners’ meeting

Hurry up and get ready, because it's time for another installment of let's build a cooperative! Here's what we've done so far: Step 1 was where we gathered potential co-op members. For Step 2 we talked about what we'd go into business for together. Step 3 was where we decided what to focus on and how to sell our future cooperative. Step 4 led us to a process for making decisions. Step 5 stress-tested our plans before we launched. Step 6 is where we made our business plan. And last time in Step 7, we started assigning roles and tasks to our members. Step 8 is where we launch! This week we're holding an annual meeting with the founding members.

The table of contents:

• start the future: launching a cooperative
• start the future: building a cooperative

Building a cooperative: step by step guide

1. Collect information, clarify needs, and assemble your founding members.
2. Discuss needs and vision; coordinate organizing and business research.
3. Consolidate a clear vision.
4. Design your decision-making process.
5. Conduct a feasibility study.
6. Create a business plan.
7. Define roles.
8. Convene your first cooperative owners meeting.
9. Convene your first board meeting.
10. Begin operations!

Since I started this series I went to law school, graduated, and passed the bar. This is 100% legal advice (on the advice of me I must say that I am joking). This is not legal advice. If you do start a cooperative using this guide, however, I will gladly accept the status of an honorary member-owner.

the first meeting

I relied on the California Center for Cooperative Development (CCCD) guide for most of this post. They recommend an annual meeting to discuss financials and plan for the coming year. These are also the meetings where co-op members can make or vote on major decisions for the year ahead.

The first annual, or charter, meeting of a new cooperative is full of paperwork and planning. Here, the members approve the co-op's articles of incorporation. They also approve (or agree to draft) the co-op's bylaws. For some co-ops, this might be the meeting where they choose to hire a manager to run the day-to-day of the new business. Some cooperatives hire someone if the members don't want to divide the work of a manager and can afford to do that.

Finally, the cooperative must elect a board of directors. In small cooperatives with few members, the members may name themselves as directors. But a co-op could also elect specific member-owners or add other folks to the board.

what are the articles of incorporation?

Every business must file articles of incorporation with the state. For a cooperative, this document will outline our structure and means of governance. The CCCD says,

"The articles should set forth the cooperative's name, address, duration, and purpose; how membership works; what capital is required of members; what happens to the cooperative's assets upon dissolution; and other information required by state regulations."

For our cooperative, we can draft these ahead of time so they're easy to approve at the charter meeting. As an establishing document, the articles should be as general as you can make them. Changing the articles means filing an amendment with the state. The document that contains more details (but not too much) is the bylaws.

what are the bylaws?

Bylaws cover the logistics of how we'll fill in the framework of the articles. It'll outline our governance structure and how we make decisions together. The bylaws detail how people become members and the expectations that we have for each other. The Center for Cooperatives at UW-Madison (UWCC) has a great outline of what the bylaws document could look like.

For our group, I would want us to document how people become members, or how they could leave the cooperative. UWCC also recommends documenting important dates, how we'll distribute profits, and how we handle losses. We should also get into details about the responsibilities to the co-op that each type of member has. I'd guess we'd want a smaller group to draft this document before the charter meeting. There's a lot of detail in this document that we may want to hash out in meetings before the "first" meeting. I found many templates for a document like this. My case study today used funding from a group called Cooperatives for a Better World. They offer courses and workshops for groups that want to build a business from scratch. I'd love to use a similar program for our future co-op.

case study: Artisans Cooperative Group

Artisans Cooperative launched in 2023 as an online marketplace for handcrafted items. Many of their members started by selling their wares on sites like etsy. After etsy's sales began to boom, the company ramped up the fees that they charge their makers. Etsy also relaxed the definition of what is "handmade" – flooding the site with cheap imports. After the #EtsyStrike of 2022, Artisans Cooperative made plans to take a different approach.

Artisans Cooperative got started with seed money from start.coop and help from a lawyer. They divided their bylaws into these 10 categories:

1. Offices: the location of their headquarters and where they keep their records
2. Members: types of memberships and how to manage them
3. Apportionment and Distribution: how they will distribute profits and losses
4. Member Meetings: when and how their meetings take place
5. Board of Directors: how they structure the board, handle conflicts of interest, and pay their directors
6. Committees of the Board: how their board handles subcommittees and when those meet
7. Officers: who will lead the board, their job functions, and terms
8. Bank Accounts and Loans: who holds the keys to the accounts, and how to take out a loan or sign a contract
9. Indemnification: how they handle board and staff liability in the event of a lawsuit
10. Miscellaneous Provisions: how they share the bylaws and amend them

I love that Artisans Cooperative pays their board of directors and committee members. The thankless work of serving on a board like this often falls to people who can't afford to do it for free. I also liked how they describe their bylaws as having "not too much jargon" and not being too long. Their current set of bylaws are a mere 14 pages long including the signature page.

The co-op also writes about the seemingly simple issue of making decisions. A principle of most co-ops is "one worker, one vote." But in a scenario like this cooperative, there are far more artists (owners) than staff (also owners). They also have a supporter tier of membership that could easily grow larger than the other two tiers. Here's another wrinkle: most of their artists have their own businesses. Their memberships are tied to their LLC or tax ID number. But their membership also includes mutual aid societies and collectives that don't have a tax ID. The co-op worked out a way to ensure that everyone has fair representation on decisions. They use the bylaws to document this structure in a durable way.

a successful launch

We've spent 7 steps before this one making plans and documenting them. With this first member meeting, we're now taking steps to launch our cooperative. Every cooperative I've studied so far in this series received help to get where they wanted to go. The launch, of course, is just the beginning. Now that we're in orbit, we have to settle in to the day-to-day business of running a co-op. That starts in Step 9, when our new board of directors convenes for the first time...