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Why they exist. A cooperative company, or "co-op," is a tool for people to unite and realize their common economic, social, and/or cultural aspirations through business activities.
Examples of consumer-owned co-ops like User Co-op: REI / State Farm / electric utility co-ops.
What they are. A co-op is a regular business that’s owned and democratically governed by its members. Profits are either reinvested or returned to members in proportion to their individual transactions with, or use of, the co-op.
How they start. A co-op begins with a purpose, plan of action, and proposal for people to unite as co-op members. Members initially fund their co-ops through membership fees or something similar.
User Co-op members get:
(a) The power to elect the board of directors. User Co-op's board of directors manages everything User Co-op does. And each member gets one (1) vote in electing each board member, except for the CEO (currently the founder), who's a board member by virtue of the office.
(b) The power to propose and decide on any matter of business. Each member gets one (1) vote on each User Co-op business item voted on by members and the power to propose any such item.
(c) Exclusive access to User Co-op's consumer services. User Co-op's consumer services, like a web browser and a search engine, are only for members. And each member gets automatic access to User Co-op's consumer services as they go online.
(a) No expiration date. A membership only expires if a member doesn't use any of User Co-op's consumer services for three (3) years.
(d) User Co-op's profits. User Co-op pays out its profits to members in proportion to their individual use of User Co-op's consumer services. For more, see Items 3, 9, and 10 below.
Other key features of membership:
(b) Non-transferable. A membership can't be sold, traded, or transferred.
(c) One per person. Membership is limited to one (1) membership per natural person.
(d) Liability shield. No member is, or will be, personally liable for any debt, obligation, or any other liability of User Co-op.
User Co-op documents that contain membership terms: Articles of Incorporation / Bylaws
Note: User Co-op defers granting governance rights to members until it meets the conditions of the "early hostile takeover protection" described in Item 11 below.
Member dividends. User Co-op pays out its profits to its members in the form of patronage dividends. They can be in cash, in kind, or both, depending on the circumstances at the time of each dividend.
Calculation of a member's dividend. Each member's patronage dividend is equal to User Co-op's profit multiplied by the ratio of their individual use to all members' use:
Note: See Items 9 and 10 below for more info.
Member's patronage dividend = profit x (member’s use ÷ all members’ use)
Procedures. When User Co-op meets the conditions of the "early hostile takeover protection" described in Item 11 below, members democratically govern User Co-op according to the procedures in its Articles of Incorporation and Bylaws.
User Co-op makes governance easy for members. For every governance matter that concerns members, User Co-op will email each member well in advance all of the necessary information and materials so that they can participate with ease.
Members vote for themselves. User Co-op doesn't allow voting proxies or designees, so members must vote for themselves.
User Co-op is for everyone.
Note: Member contributions are important, and User Co-op encourages each member to contribute what they can when they can.
Any amount, anytime. Members can contribute any amount they want by completing the membership form when they become a member or anytime after that. Item 7 below explains how to do this.
Note: Each member has the same power and privileges with User Co-op, as described in Item 2 above, no matter how much they contribute.
User Co-op's membership form can be used to:
(a) Become a member, no contribution. Complete and submit the form with the "Contribution (optional)" field empty.
(b) Become a member, make a contribution. Complete and submit the form with any US dollar amount in the "Contribution (optional)" field. Then, follow the prompts to make a payment.
Note: The form doesn't automatically limit membership registrations to one (1) per natural person, explained in Item 2 above. This will change. For now, User Co-op manually maintains this limit.
(c) Make a contribution at any time after becoming a member. Complete and submit the form using the first name, last name, and email used to become a member and include any US dollar amount in the "Contribution (optional)" field. Then, follow the prompts to make a payment.
To update a first name, last name, and/or email address, a member must submit the Email Form and make sure to:
(a) Select "Update member info" in the "Subject" field.
(b) Include in the "message" field both (i) the current first name, last name, and email address and (ii) the updated first name, last name, and email address.
Note: User Co-op will reply to the current email address to verify the update. This is a manual process and it will change soon.
"Profit" includes:
(a) Earnings minus reserves. This is User Co-op's calendar-year earnings minus the cash reserves that User Co-op retains for business purposes. For this purpose, calendar-year earnings exclude member contributions.
(b) Purchase price in an acquisition. This is the net consideration paid for User Co-op if it gets acquired.
(c) Leftover money if User Co-op fails. This is any money that remains in a dissolution or liquidation after User Co-op has paid its obligations.
Note: Profit isn't guaranteed, and it depends on how much User Co-op's members engage in, for example, building the membership community, governing User Co-op, and using its consumer services as they come online.
"Use" (noun) refers to a member's use of User Co-op's consumer services, and it's quantified as both:
(a) Outgoing service calls. This is the sum of unique member-to-service calls, like a member’s clicks, taps, and swipes on an app or website.
(b) Incoming service calls. This is the sum of unique service-to-member calls, like automatic pings to a member’s mobile device to retrieve GPS data for a navigation app.
To help prevent a hostile takeover of User Co-op in its earliest stage, User Co-op defers granting governance rights to members until User Co-op:
(a) Reaches, for the first time, ten thousand (10,000) members and
(b) Collects in cash one million dollars ($1,000,000) of cumulative gross revenue, which includes, but isn't limited to, member contributions.
Until the conditions above are met, User Co-op's founder is the only governing member.
User Co-op will email each member to let them know when the conditions above are met.
Questions?