We built a co-operative web agency in France (
http://www.joro.fr).
I don't know how it works in other countries, but I can give some more detailed info about the requirements in France, if anyone's interested :
- A partner can own 50% max. of the company.
- Whether you own 1% or 50%, every partner has the same voting power.
- You can have a maximum of 1/3 non-employed partners, and the combined non-employed partners cannot own a majority of shares (49% max). This assures that the "power" stays within the people that actually work in the company.
- This also means that 2/3 of the partners must be employed with a contract and a salary. This can be quite difficult when you build the company as you must, technically, start paying yourself and your partner (since you must be 2 partners minimum) on day 1.
- You need a minimum of 2 partners, but can also have as many employees as you want. This means you can technically be a co-op even if your company has 2 partners and 1000 employees.
- There are rules as to how you distribute your benefits : a maximum of 33% can be distributed as dividends to the partners, a minimum of 16% must be kept in the company for investment (reserves), and a minimum of 33% has to be distributed amongst all employees (following a calculation the employees can decide upon, like according to time worked, salaries, how long one's been in the company, or a custom calculation...). This tends to lead to high employee motivation and better ensure long-term health.
- Co-operatives have a few tax deductions that other companies don't. If you don't distribute any dividends and distribute it all to your employees + keep some for investments, and follow a certain number of other rules, you can practically be exempted of taxes on the company's benefits.
- On the other hand, you must go through a bunch of red tape to prove every year that you follow the rules of a co-operative, which costs time and a bit of money.
We built the company 2 years ago, and right now we're only 3 partner/employees so our day-to-day life is basically the same as any other similar-sized company, but we liked the philosophy, and it has actually been an interesting marketing feature.
I don't know how it works in other countries, but I can give some more detailed info about the requirements in France, if anyone's interested :
- A partner can own 50% max. of the company.
- Whether you own 1% or 50%, every partner has the same voting power.
- You can have a maximum of 1/3 non-employed partners, and the combined non-employed partners cannot own a majority of shares (49% max). This assures that the "power" stays within the people that actually work in the company.
- This also means that 2/3 of the partners must be employed with a contract and a salary. This can be quite difficult when you build the company as you must, technically, start paying yourself and your partner (since you must be 2 partners minimum) on day 1.
- You need a minimum of 2 partners, but can also have as many employees as you want. This means you can technically be a co-op even if your company has 2 partners and 1000 employees.
- There are rules as to how you distribute your benefits : a maximum of 33% can be distributed as dividends to the partners, a minimum of 16% must be kept in the company for investment (reserves), and a minimum of 33% has to be distributed amongst all employees (following a calculation the employees can decide upon, like according to time worked, salaries, how long one's been in the company, or a custom calculation...). This tends to lead to high employee motivation and better ensure long-term health.
- Co-operatives have a few tax deductions that other companies don't. If you don't distribute any dividends and distribute it all to your employees + keep some for investments, and follow a certain number of other rules, you can practically be exempted of taxes on the company's benefits.
- On the other hand, you must go through a bunch of red tape to prove every year that you follow the rules of a co-operative, which costs time and a bit of money.
We built the company 2 years ago, and right now we're only 3 partner/employees so our day-to-day life is basically the same as any other similar-sized company, but we liked the philosophy, and it has actually been an interesting marketing feature.