FAQs

 

What is a worker owned cooperative?

A worker owned cooperative is a business that is owned and controlled by its workers. Workers participate in the operation and governance of the business and benefit from its financial success on the basis of the contribution of their labor. Worker-owners often manage the day-to-day operations through various management structures.

What business industries can be transitioned to worker owned?

Any business can be a worker-owned cooperative. Worker co-ops have been successful in many different sectors including:

  • Service - housecleaning, day labor, restaurants, taxis, childcare

  • Retail - grocery stores, bakeries, bookstores, bike shops

  • Health care - nursing, home health care, clinics, bodywork

  • Skilled trades - printing, painting, plumbing, contracting

  • Manufacturing and engineering - machine parts, fabricating, process improvements

  • Technology - web hosting, networking, voice and data systems

  • Education - charter schools, teacher/parent/student-run schools

  • Media and the arts - designers, galleries, performers, publishers, studio space

Is there a standard legal form that worker cooperatives take?

There is no uniform cooperative code in the United States, and definitions and incorporation guidelines vary state to state. In Michigan, businesses can incorporate as a C corporation, S corporation, B corporation, LLC or any other corporate form as long as the company meets the minimum requirements of operating as a worker cooperative.

What is the difference between a worker cooperative and an employee-owned (ESOP) company?

Although the term employee-owned can be used to describe many different business structures (including worker cooperatives), it is most commonly used to describe companies with an employee stock ownership plan (ESOP). An ESOP is a federally governed benefit plan (like a 401(k) or profit sharing plan) that can be used to share an ownership stake with employees. While an ESOP company can be 100% owned by its employees and operate according to worker cooperative principles, very few ESOP companies currently qualify as worker cooperatives. The National Center for Employee Ownership has extensive resources on ESOPs available on their website, http://www.nceo.org.