Co-op Law
Resources for Worker Cooperatives
Co-op Law
Resources for Worker Cooperatives

Why Form a Cooperative

Forming a cooperative provides a unique avenue for individuals to address their collective needs collaboratively, fostering a sense of community and shared success. Cooperatives, known for creating stable, fair-paying jobs, adopting environmentally sustainable practices, and reinvesting in local communities, prioritize holistic measures of success beyond mere profit.

Wheel with three sections: our money, our power, our community.

Co-ops benefit society as a whole

Local Ownership

Typical large corporations are owned by shareholders who do not live in the communities in which the business operates or from where it sources its products. These shareholders are usually less concerned about maintaining healthy workplaces and making sure the business does not harm its community than the worker-owners of a local cooperative business.

Environmental Responsibility

The people who own and run worker cooperatives also tend to live, work, and play in the neighborhood where the business is located. Because worker cooperatives are deeply rooted in the local community, they are less inclined to engage in environmentally destructive business practices than companies controlled by outside investors. Using toxic chemicals, squandering natural resources, or damaging open spaces would have a negative impact on the very people in control of the business, as well as on their families, friends, and neighbors.

Contribution to Community

Worker cooperatives help build community wealth through local ownership. Workers who own their jobs have a direct stake in the local environment, and the power to decide to do business in a way that creates community benefit. Worker cooperatives are likely to form relationships with other local businesses, hire local workers, and reinvest their profits back into the neighborhood.

Co-ops benefit individual workers

When efficiently organized and managed, worker cooperatives convey the following benefits to the people who work there.

Economic Independence

Employment, and the ability to generate income. A worker cooperative gives groups of people an opportunity to become economically independent in a mutually-beneficial way.

Worker Health and Happiness

Co-ops offer workers control over the way their work is organized, performed, and managed. Worker cooperatives provide an opportunity to balance workers’ needs and concerns with the need for profits and efficiency. Worker cooperatives also emphasize the training and development of the worker members. 

Job Security

In economic downturns job security is prioritized, most corporations are narrowly focused on maintaining value for their shareholders, rather than maintaining employment for their workers. By contrast, because worker-owners call the shots in their cooperative, they value preserving jobs foremost, rather than maintaining shareholder value. 

Ownership Stake

Co-ops offer workers a financial ownership stake in the enterprise in which they work. Worker–members contribute directly to building the enterprise and sharing in its success.

Democratic Workplace

Worker members participate directly in decisions that affect them in their workplace as well as those that determine the growth and success of the business.

Related Articles

Resilience of Cooperatives

Cooperatives have been found to be more resilient than conventional businesses, on average, according to a growing body of evidence from studies conducted in the United States and elsewhere. These models go beyond just collective ownership of property and aim to foster community self-reliance, community-led development, and the redistribution of power from exploitative systems. Survival

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Are We Ready to Form a Cooperative?

If you’re reading this section, you’ve likely reviewed the basics about how a co-op functions, the type of cooperative that might best-fit your vision, the seven cooperative principles, and the type of legal entity that will best support the needs of your future cooperative. And now you’re almost ready to start your co-op! In America, 

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Choosing Your Approach to Cooperative Conversion

Your approach to converting an existing business depends largely on the type of business you’re converting. Forming a Steering Committee can be helpful for navigating this process. The Steering Committee must then assess a few key aspects of the business they are attempting to convert. Depending on how the existing entity is organized, the Steering

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