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I don't think employees are investors in co-ops. They are like founders. A co-op can still get capital from investors. Can't they?
by koolkat 11y ago
I don't think employees are investors in co-ops. They are like founders. A co-op can still get capital from investors. Can't they?
- jessaustin 11y agoProbably this would be debt rather than equity.
- thedufer 11y agoThe problem with that is there are tax implications to giving someone a chunk of a company (it's technically income), even if it is completely illiquid. Tax implications the employee probably can't afford much better than a buy-in.
- mauricemir 11y agocoops normally have special status to get round some of these issues. And coop members can have direct or indirect ownership a full on worker coop normally has direct ownership and organizations like John Lewis have indirect ie shares held in trust.
- dredmorbius 11y agoMore typically a co-op will raise funds from members via shares. I'm a bit shaky on specifics, but those shares may be capable of being sold back (to the co-op as a whole). Voting righs often _don't_ accrue per share. Debt financing, as mentioned, is another alternative. Read with caution, I'm really sketchy on details.
- mauricemir 11y agoIt depends is some coops members do have to ante up the Spanish Mondragon coop is an example. And by definition the members of the coop must own the coop or own a controlling interest
- dragonwriter 11y ago> I don't think employees are investors in co-ops. Typically, they are; their ownership stake is usually, as I understand, purchased on credit and sold back on separation. > A co-op can still get capital from investors. Can't they? Well, yes, in the form of debt, and perhaps non-voting equity depending on the particular rules applicable to coops where the coop is organized.