Mar 31, 2017
From the desk of Darius Kazemi
A Document to Help You Start a Tech Cooperative
If you're interested in starting a worker-owned cooperative, this letter is for you.
Feel Train is a worker-owned creative technology coop. The United States is not a terribly friendly place to start a worker-owned coop. What I mean by this is: you can search "incorporate in [state]" and you can get a million resources on how to start a traditional company. There are websites where you can pay a little money, fill out a form, and they'll spit out all your incorporation documents for you.
This doesn't exist for worker-owned coops. Certainly not in the creative sector.
As such, when drafting up our legal documents about how Feel Train would work, we relied heavily on the help of others. Mostly this help was provided by the Tech Co-op Network in the form of their Technology Freelancer's Guide to Starting a Worker Cooperative. It's a fantastic overview of the different models that exist in the US. It's absolutely worth reading cover-to-cover and the stories from people at different coops really highlight the pros and cons of their specific models.
One thing that the document doesn't provide is any legal or tax advice. Of course it's not meant to do that, but what you're supposed to do is go find a lawyer and an accountant who understand those ramifications in your state and can help you. The problem here is that most lawyers and accountants fundamentally do not understand the concept of worker ownership, or—worse—are openly hostile to the idea. One accountant called us "insane" for believing in a one person, one vote system of equal ownership between people.
Anyway, it can be difficult to find legal/tax help and to find legal documents to start with. It took us a year to draft up our final docs, and we don't want it to take you a year to do so. We were helped immensely by other coops that made their documents publicly available, but we wanted to go one step further and offer up annotated documents so you can understand some context around why we made the decisions we did when drafting the paperwork.
The Easy Part: Articles of Organization
Feel Train is organized as a limited liability company (LLC) in Oregon. We had the option to organize as an LLC or as an Oregon cooperative corporation. In the end we went with the LLC as our basic organizing principle because it allows us much more flexibility in how we organize things than an official Oregon coop would. Plus the Oregon coop is more organized around the idea of a traditional farming or retail coop, rather than a tech consulting coop, so it just doesn't fit our needs in certain ways.
This part was easy because forming the basic LLC is like forming any other LLC. You search "start an LLC" and then click around and pay some money and you're pretty much done. Eventually you end up with Articles of Organization, which can be filled out online and are basically just a simple form, like registering for a driver's license. These are a matter of public record. You can see ours here (PDF) if you like.
However, unlike most LLCs, we are an LLC organized under cooperative principles. Those cooperative principles are laid out in what is called the Operating Agreement.
The Hard Part: Operating Agreement
The Operating Agreement is the document it took us a year to draft. This is the annotated document we're explicitly sharing with you all in hopes of saving you some time when setting up your own worker-owned tech coop. It's an agreement that every worker-owner of Feel Train has to sign before becoming a full worker-owner (AKA before having a vote).
The document lays out:
- the requirements for being a worker-owner
- how we make collective decisions
- what we do with our money
and some other stuff too.
We've explained parts in detail in the annotated document so please, go take a look.