Based on the Designing Ownership guide, here is a tailored summary and recommendation for ReLeaf:
1. Choose an Appropriate Legal Entity
ReLeaf’s first step should be to select a suitable legal entity. As a cooperative startup, your options might include:
- Limited Cooperative Association
- General Cooperative Corporation
- Worker Cooperative Corporation
- Conventional Corporation with cooperative bylaws
When making this decision, consider key factors such as:
- Capital structure
- Member characteristics
- Business activities
- Growth goals
- Profitability
- State of incorporation
2. Draft Clear Bylaws
ReLeaf should draft a transparent set of bylaws, addressing key points like:
- Membership qualifications
- Member benefits and responsibilities
- Governance and voting rights
- Financial rights
- Board structure
These bylaws should also integrate ReLeaf’s unique "Life Story" metadata system, which would play a vital role in both governance and financial rights.
The cooperative’s primary members would likely be workers and business customers, with potential to create distinct membership classes for these groups. Benefits for members would center around shared profits and participation in the cooperative’s sustainability initiatives, especially through the "Life Story" system.
Governance should be democratic, giving members a voice in key decisions such as strategic direction, partnerships, and system evolution. The patronage formula could be based on each member’s contribution, as tracked through the "Life Story" system.
The board of directors should represent each membership class, with possible inclusion of external directors. Strategic decisions should be entrusted to the board, while certain actions may require a higher voting threshold.
3. Define a Capital Structure for Growth
ReLeaf’s capital structure must support its growth ambitions. While member-owner contributions could be part of the funding, external sources like grants, investments, and partnerships should also be considered. If external investors are involved, it’s important to limit their voting rights.
4. Establish a Membership Agreement
A membership agreement should clearly outline:
- ReLeaf’s mission
- Member expectations and responsibilities
- Patronage calculations
- Membership termination procedures
Once these aspects are defined, it is highly recommended to seek legal advice to formalize the cooperative structure and ensure compliance with relevant laws and regulations.