These are all terms used in the cooperative business community and sometimes their meanings are unclear or jumbled. This blog will discuss the definitions of these terms with examples of how they are used by different types of cooperatives. A patron patronizes a cooperative and receives a patronage dividend at the end of the year. …
Cooperative
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 …
Thoughts from a new economies’ attorney: patterns that create different kinds of (business) ownership – cooperative capital
In my last post, I talked about how capital looks like in a traditional business. As a recap, traditionally, capital is invested in the business with a goal of extracting profits and controlling how the business is done – the more money an investor (owner or shareholder) puts in the business, (i) the more return …
Cooperative Equity Capital, Income and Patronage: How They Work Together
Cooperatives have three areas of accounting that need to be understood by their members as the cooperatives are formed and as they are operated. Cooperatives obtain and track equity capital, usually through the members. As a business entity, the cooperative generates income through the products its sells or the services it provides to clients and …
Use of the term “Cooperative”
Edited June 26th, 2020: An earlier version of this blog post implied that only organizations incorporated as cooperatives under Massachusetts law may use the word “cooperative.” This post has been edited to accurately reflect that other businesses may use the term if they distribute earnings consistent with cooperative law. Entity formation is often the first …
COVID-19: Collectivism in the Face of Crisis
I won’t soon forget the events of the past week. I watched the world around me completely change in the span of four days as the novel corona virus took hold in the U.S. We are now on track to follow the same path as Italy and it’s hard to grasp and process how much …
Cuba and Cooperatives (Part 2): Cooperatives in Cuba, a Love Story (of sorts)
Much of the primary information comes from a lecture by Dr. Jesus Cruz Reyes, on January 13, 2020 in Havana, Cuba. Dr. Cruz Reyes is Cuba’s foremost cooperative economist and is on the faculty of economics at the University of Havana. The Cuban “State Enterprise” is undoubtedly the single largest economic consumer and producer in …
Cuba and Cooperatives (Series): Opening Invitation
Cuba is a study of contrast and contradiction. How does a 950-mile long island of 10M people, situated only 90 miles from the U.S., sustain its people, culture and autonomy while living under the proverbial boot of the most powerful country on earth? And, while promoting a deeply connected civil society that puts racial, sex, …
Gallun Snow becomes employee owned with assistance from RMEOC and attorneys Linda Phillips and Tonya Price
Member Spotlight: Gallun Snow Interior Design Gallun Snow Becomes Employee Owned! Gallun Snow Interior Design became employee owned on October 1st. The company began in 1988 and is now a nationally recognized Healthcare Interior Design firm. They have an amazing team and are excited to be able to maintain what they have built over the …
Employee-Owned Firms Should be Eligible for Minority Certification by Tonya Price and Lydia Edwards
Our associate, Tonya Price and of Counsel, Lydia Edwards recently wrote Employee-Owned Firms Should be Eligible for Minority Certification for Fifty by Fifty in which they propose solutions for businesses with fears of losing their minority-owned business certification.
