Reflection

June 13, 2017

1

 Business Structures

 The Co-op Model

 Types of Co-ops

 Co-op Organizational Chart

 Roles and relations

 Legal Matters

 The Co-op Act

 Maintaining records

 Financing & Sources of Capital

 Board of Directors

 Treasurer, Secretary, General Manager

 Training Requirements

 Articles of Incorporation

 Shares in the Co-op

 By-laws & Membership

 Social Co-ops

2

Business Models  Sole Proprietorships: business belongs to one person

 Owner provides funds (capital) and takes on risk

 Decisions can be made quickly

 Business income (minus expenses) is personal income

 All owner’s assets are risked if business fails

 Partnerships are a structure that is similar

 Limited partnerships have limited risk

 Corporations: legal entity – “persons” under the law  Structure defined by law

 Multiple shareholders

 Decisions based on by-laws

 Corporate assets are separated from personal assets

 Can be private/public; can be not-for-profit

3

The Co-operative Model  1 member = 1 vote

 Share profit and loss

 Concern for the community

 Being a boss of your own business

 Get services that you would like

 Produce a product that you would like

 Maximize transparency through reporting to workers, producers

4

Co-op Model  Owned by members

 Can be for profit or not for profit

 Clear set of values and principles

 Rooted in a common need

 Open membership or closed bond (hog producers)

 Incorporated with share offering: members purchase share; or with membership fee

5

Types of Co-ops

 Financial: Credit Union, Caisse Populaire, co-op insurance companies

 Marketing/Producer: organized to sell a product; pork producers, Granny’s

Poultry, artists co-ops

 Consumer: Federated Co-ops, Mountain Equipment, Red River Co-op

 Community Service: provide a service at the lowest possible cost – day

cares, housing, Peg City Car Co-op, health care co-ops

 Worker: set up by employees or purchased from an owner; provides

employment to owners, members provide financial capital

 Social or Solidarity Co-ops: include more than one stakeholder and are

effective in providing relation-based services

 Housing co-op, is a legal entity, which owns real estate consisting of one or

more residential buildings; a distinctive form of home ownership where

members have shares and participate in governance

6

Members

Board of Directors

Management

Employees

Elect

Hire

&

Supe

r-

vise

Hire

&

Supe

r-

vise

President

Vice-President

Secretary

Treasurer

Other Officers

Elect

Appoint

Appoint Committees

Committees

Committees

Co-op Organization

7

Legal Matters: Co-op Act  Three or more individuals or two or more corporate

entities can incorporate a co-op

 Registrar approves name of co-op

 Articles of Incorporation prepared

 By-laws prepared

 List of Directors; List of Members

 Minutes of meetings

 Accounting Records

8

Financing &

Sources of Capital $  Co-ops file annual returns

 Sources of Capital: membership fees, membership

common shares, investment shares, special investment

shares, securities (bonds and debentures), debt capital

(loans, mortgages, lines of credit, loans from

members); surpluses

 Membership or Common Shares – issued by the co-op;

membership may require purchase of shares

9

Board of Directors  Elected by members to manage and provide

leadership

 Formulate strategic direction

 Review annual plan and budget

 Manage business

 Establish policies, procedures

 Preform functions under by-laws

 Chair of Board sets agenda & presides over meetings

10

Other Positions  Treasurer: deposit all cash collections, has custody

over funds, assets, expenditures; monitors finances

 Secretary: keep registry of members, records minutes, communicates Board decisions to manager for implementation; prepare share certificates, serve notice of meetings

 General Manager: oversee day to day operations according to directions as set forth by Board; formulate development plans for Board Approval; implement plans, submit reports to Board, represent co-op in business dealings, ensure compliance with regulations

11

Training Requirements for

Officers of Co-op  These are Requirements

 Basic Co-op Course on:

 Articles of cooperation and by-laws

 Co-op vision, Mission, Strategic Plan

 Fundamentals of Co-ops

 Policies and Programs of Co-ops

 Co-op Code of 2008

 Implementing Rules and Regulations of RA 9520

 Co-op Management and Governance

 Conflict Management

 Labour Laws

12

Training Requirements in your

Co-op’s sector  Training requirements differ depending on the sector

and it may be formal and informal

 Catering co-ops require members to have hospitality

training

 Aboriginal Designers Co-op has members with degrees

in Design and members who have lifetime experience

13

Articles of Incorporation  name of cooperative & location of cooperative’s

registered office in Manitoba

 whether the cooperative will be incorporated with or without membership share capital

 whether or not the cooperative will issue investment share

 number & minimum and maximum number of directors

 any restrictions placed on the business that the cooperative may carry on

14

Articles cont’d  any restrictions on or qualifications for membership in the

cooperative

 statement on the maximum rate or return payable on membership shares, member loans, and patronage loans

 provisions for the distribution of the cooperative’s property upon dissolution (ie to another co-op? or to members?)

 Restrictions on powers of directors to manage the business articles of incorporation must be signed by the incorporators.

 Registrar will issue certificate of incorporation

15

Shares in the Co-op  There’s a difference between a share & number of shares required

to become co-op member

 At start up, co-op defines minimum amount each member has to invest

 This may be one share or several shares

 For consumer co-operative, it might be only one $10 share

 For producer or worker co-op, where start-up costs are higher, it might be one hundred $10 shares (i.e. $1000 in total)

 Some members may decide to invest more but that does not give them greater rights in the co-operative

 The rule of one person, one vote is a requirement

 Shares may be bought through payroll deduction of % salary (for example 5%) in a worker co-operative

16

By-laws & Membership By-laws

 Create systems for the operations of the co-op

 Members by resolution pass by-laws of the co-operative to comply with the Cooperatives Act

 Directors can enact and also amend by-laws

 Members may propose to enact or amend

Membership/Meetings

 Ensure a healthy, strong, vibrant organization

 Each member is entitled to vote at meetings

17

The Italian Federations  professional associations defend the economic

interests of the co-ops, safeguard the needs of the

sector, make arrangements with other organizations

and promote the establishment of consortia.

 Co-ops and their associations are part of the “Third

Sector” of the Economy in Europe. (First Sector is

Private Businesses; Second Sector is Gov’t /Public)

18

Associations: provide co-op services

 Promote co-op values and culture

 Attention to areas that have few co-ops

 Promote entrepreneurial development

 Ensure achievement of social and economic objectives: equity, integrating immigrant people, taking care of safety issues etc

 Promote relationships among co-ops

 Promote international co-op system

 Guard the co-op model

 Train at all levels

 Improve solidarity and social organization

 Improve entrepreneurial knowledge of small business

 Deliver services in the co-op sector

 Provide data collection and statistics on co-op system

 Promote image of co- operatives

19

What is a Social Co-op?

 Social co-ops = more than one stakeholder:

worker, consumer/client, supporter

 uniquely suited to the provision of social

care because they can transform people

from being merely the passive recipients of

care, to being active agents in the design

and delivery of their care.

20

Italy’s Law 381(1991) estab. Social Co-ops

 New innovative form of enterprise with explicit social aim

 New democratic form of management (multi-stakeholder)

 Type-A (undertaking delivery of services) and Type-B (for work integration of disadvantaged)

 BOTH entrepreneurial in nature

 Equal wages paid to offenders & non-offenders

 BOTH mandated to pursue the general interest of the community and social integration of citizens (contrast to traditional co-ops devoted members)

 Social co-ops cannot demutualise nor adopt a different co-op form

 30% of members of work force in Type-B co-op must be disadvantaged according to a European Commission definition

 Financial advantages to social co-ops include exemption from payroll taxes on disadvantaged workers; disadvantaged workers exempt from social security taxes

21

Social Co-ops in Canada?  In Canada, the social co-op model can help

address the following issues:

 A means of mobilizing civil society around issues of social care

 An alternative to state delivery on the one hand, and privatization on the other

 A model for increasing control over social care to caregivers and care recipients

 A model for containing costs while improving the quality and responsiveness of social care

22

La Giotto, Padua

Prison members of the catering, bicycle and luggage manufacturing,

telephone surveying co-ops in La Giotto – same pay as outside

workers 23

Co-op Bakery for PWD

24

Co-op for Seniors Care

25

Le Coste, Trento

Le Coste is a laundry co-operative for people transitioning from prison

26

Social Co-ops: Welfare State to

Caring Society

 A new role for the social economy - the creation of a

caring society

 The co-operative Economy is a realignment of sectors

 public

 private

 social

 The maturation of the social economy

27

Include in Co-op

Design & Zine  Name, Individuals involved and their

roles in the co-op

 How is this a co-operative: address

each of the co-op principles? (7)

 Who will be members (details)

 How is your product unique/set

apart from others who may be

competitors?

 What are potential competitive

disadvantages of product or

service?

 What geographical area do you

serve?

 What is your business address – benefits and challenges of location?

 List equipment, costs, when it will be needed (start up, year 1)

 How will you fund start up: Credit Union loan, assistance from MCA, memberships, supporters

 Are there potential partnerships you could establish with other co- ops? Any in our class?

 How do you show concern for community?

 What are education and training needs?

 Do you have issues that you wish to organize around?

28

29