Co-ops and Capital

A few weeks ago, I presented to the Colorado Employee Ownership Commission about co-ops and capital formation strategies and options. Here is the presentation. If you’d like to learn more about the subject, or design your own cooperative’s capital strategy, you can book a bespoke consulting session with me, HERE.

Read more

How patronage is really paid out to cooperative members: qualified and nonqualified written notice of allocations (2/2)

Patronage dividends represent a unique opportunity for cooperatives to avoid taxation on some of the cooperative’s earnings.[1] Early this month I highlighted the concept of patronage dividends. Generally, when members receive taxable distributions of earnings from a cooperative, such as patronage dividends, they are included in the patrons’ gross income along with other income the …

Read more

How patronage is really paid out to cooperative members: qualified and nonqualified written notice of allocations (1/2)

Recently, I had a few clients asking about the distinction between qualified and nonqualified written notice of allocation. Tax season being right around the corner, it feels like a good opportunity to talk about those. The USDA has some wonderful material[1] explaining the definition and use of both notices of allocation, this post and the …

Read more

Thoughts from a new economies’ attorney: distinguishing cooperative governing structure

In my previous posts, I discuss how traditional businesses and cooperatives diverge from a capital (and return on capital) point-of-view. Another common misconception is that cooperatives function like nonprofits, typically from the perspective of governance structure. They don’t. Cooperatives are businesses, and, as such, business principles and governance, and business governing structure apply to them. …

Read more

Thoughts from a new economies’ attorney: patterns that create different kinds of (business) ownership – traditional capital investment

If you are reading this post, chances are you are an innovator, you are looking for guidance on alternative business forms, you run or are part of a mission-driven organization, you are considering adopting democratic governance models in your business or nonprofit, or some combination of those. I have to alert you that this is …

Read more

Mandatory Business Owner Reporting

The federal government has passed some new legislation that will require small businesses to report personal information about the business’s owners to a database controlled by the Securities Exchange Commission.  The legislation is called the Corporate Transparency Act (the “Act”), adopted as Title LXIV (64) of the 2021 National Defense Authorization Act.  The purpose of …

Read more