Things we need to agree on in order to complete the multi-stakeholder rules template and form a new co-operative: Community Co-operative Rules Community Finance Rules Wessex Rules Somerset Rules Statutory matters Details A. Name The name of the society. United Diversity B. Objects The objects of the society. * purpose of an enterprise and the scope of its operations. * ensure that they are broad and flexible enough to enable the enterprise to fully engage in trade. * all rules adopt a broad brush approach to the rules on objects, * in addition, the Somerset Rules * invite applicants to state the mission of the society * commits the organisation to the ICA Statement on Co-operative Identity. Community Finance Rules 3. Long section granting wide-ranging powers to the society to provide welfare, engage in trade, business and partnerships. Somerset Rules 1.3. Invites applicant to state the mission of the society, and make a general commitment to co-operative principles. Q: Does Somerset Rules leaving out section granting powers mean it can do anything legal? i.e. is it actually even more wide-ranging than the Community Finance Rules in this regard? Similarly are "broad but not vague" objects not listed in order to maximise flexibility in the future? * to register as a co-operative society, it is an FSA requirement that the society should be carrying on “an industry, business or trade, whether retail or wholesale” * seem to exclude co-operatives which are set up just as investment vehicles in order to invest in the activities of other societies or companies. * reinforced by another requirement that “a society may not be a bona fide co-operative if it carries on business with the object of making profits mainly for paying interest, dividends or bonuses on money invested with or lent to it, or to any other person”. * All models, with the exception of the Somerset Rules, contain additional rules setting out the powers of the society. C. Address The registered office of the society to which all and notices to the society may be addressed. D. Admission of Members The terms of admission of the members, including any members society or company investing funds in the society under the provision of the 1965 Act. Community Finance Rules 5-8. Any person who supports the objects of the society, and has paid the annual subscription fee (if any). Wessex Rules 6. No qualifying criteria for becoming a member other than the purchase of one share. 11. Allows for joint ownership of shares by groups of up to four people. 16A. Allows the board to approve up to five nominees at any time. The approved nominees have proxy votes for all members they represent at general meetings. The block votes of a nominee are restricted to 5% of the total votes cast. Somerset Rules 1.5. Allows the society to determine more than one category of member, based on a distinction between users and non-users. An individual is only allowed to belong to one class of membership. 1.6. Allows the board to establish an application procedure and probationary period for some membership classes. Allows the board the right to refuse membership where there is a good reason. Q: could something like 16A in Wessex Rules that provide board to approve nominees to have proxy votes be used to enable liquid democracy? Or is this better handled using Secondary Rules/ Standing Orders? * determine who can (and cannot) be a member. * Traditionally Co-operatives tended to restrict membership to a single user group such as customers, suppliers or workers * Until recently, membership was not offered to people whose only relationship with the co-operative was that of investor. * In 2006 the FSA published a policy note which supported the introduction of ‘non-user’ investor-members to co-operatives. * community benefit societies rules tend not to qualify the basis of membership. * No distinction is made between users and non-users * membership is aimed at people who support the objects of the society. * Traditionally, community benefit societies did not practice open membership * this is now changing with the growth in community investment, which relies on open membership. * This is reflected in both the Community Finance Rules and the Wessex Rules. * Community Finance Rules offer membership to anyone who supports the objects of the society, * Wessex Rules state no qualifying criteria for membership other than the purchase of a share. * Community Co-operative Rules restrict membership to people “living, working or active within the community” * rules do not define community * open to interpretation as to whether the community is geographic, or a community of interest. * Community Co-operative Rules currently make no provision for paying members a dividend based on transactions * this rule is likely to be amended in the near future. * Somerset Rules propose a multistakeholder approach to membership, providing applicants with the scope to define multiple categories of membership, distinguishing between stakeholder roles, especially the difference between ‘user’ and ‘non-user’ roles. * Users are beneficiaries and include customers, workers, suppliers and producers: essentially anyone who has a transactional relationship with the enterprise. * Non-users are those whose role is primarily that of investor. * categorisation of membership enables two things to happen * provides a basis for restricting the voting powers of non-user investor members * permits different dividend rates to be paid to user members. * Feature unique to the Community Finance Rules is the provision to introduce an annual subscription fee as a condition of membership * useful way of covering the cost of providing membership services The Wessex Rules contain additional rules that allow for nominee shareholdings. They allow the board to approve up to five nominees, who can hold shares on behalf of their clients, and exercise proxy votes at general meetings, subject to restrictions. Nominees will normally be independent financial advisers or the managers of investment funds. While such arrangements may make it possible to attract more investment from wider sources, they could weaken the community-building aspects of community shares. An amendment enabling nominee shareholdings is available for the Somerset Rules. E. Conduct of meetings The mode of holding meetings, the scale and right of voting, and the mode of making, altering or rescinding rules. Community Co-operative Rules definition of quorum (10% of members) 33. Requires three-quarters majority to amend, rescind or add rules. Community Finance Rules 30. Requires two-thirds majority to amend, rescind or add rules. definition of quorum (10% of members) Wessex Rules 31. Requires three-quarters majority to amend, rescind or add rules. Certain rule changes can be blocked by 10% of members voting against the change. Somerset Rules 2.2. Provision to create a Commonwealth Council to provide oversight on the affairs of the society. 2.6. Provision for general meetings, including AGMs, to be called by the board, or the Commonwealth Council, or by 20% of all members, or 30% of the members of one class. Allows members to consent to electronic communications. 2.7. Allows resolutions on specified matters to be passed by a one-third in favour vote at general meetings. Also provides formula for weighting the votes of different classes of membership, limiting non-user members to a maximum of 25% of the total vote. 2.9. Quorum for meetings is at least three user-members plus 10% of members of each other class of membership. 4.2. Non-user members may not vote on resolutions to convert the society into a company. Q: is "2.6. Provision for general meetings, including AGMs, to be called by the board, or the Commonwealth Council, or by 20% of all members, or 30% of the members of one class" used in favour of stipulating rigid rules about quarterly, annual, special meetings etc? Q: do we want secret ballots? F. Board members The appointment and removal of a Committee of Management, and of managers or other officers, and their respective powers and remuneration. Community Co-operative Rules Community Finance Rules Wessex Rules Somerset Rules 2.5 The board will appoint a treasurer and secretary, unless an appointment has been made by a general meeting. 2.8. Minimum three, maximum 12 board members. If the number of user members is less than ten, then all will be directors. All directors must be members. Either all, half or a third of directors must stand down at AGMs. Board members can be paid. 2.9. Sets quorum of three members for board meetings. 4.5. The board can co-opt members, as long as there is always a minimum of 75% of user-members represented on the board. Board members must complete a register of interests which may conflict with those of the society. Q: is short section outlining powers and duties of the board not included again mean they can do anything legal? G. Shareholdings The maximum amount of interest in the shares of the society which may be held by any member otherwise than by virtue of the relevant legislation. H. Loans and deposits Whether the society may contract loans or receive money on deposit subject to the provisions of the said Act from members or others; and, if so, under what conditions, under what security, and to what limits of amount. I. Terms and conditions Whether the shares or any of them shall be transferable, the for share capital form of transfer and registration of the shares, and the consent of the committee thereto; whether the shares or any of them shall be withdrawable, and the mode of withdrawal, and the payment of the balance due thereon on withdrawing from the society. J. Audits and auditors The audit of accounts by one or more auditors appointed by the society in accordance with the requirements of the Co-operative and Community Benefit Societies and Credit Unions Act 1968. (Also covers audit exemption provisions.) K. Terminating Whether and, if so, how members may withdraw from the membership society, and provision for the claims of the representatives of deceased members or the trustees of the property of bankrupt members, or, in Scotland, members whose estate has been sequestrated, and for the payment of nominees. L. Use of profits The mode of application of profits. M. Official documents If the society is to have a common seal, provision for its custody and use. N. Investments Whether and, if so, by what authority, and in what manner, any part of the society's funds may be invested. * Mission statement Asset based community development. Raise Quality of Life. Reduce Ecological Footprint. Build Capacity and Resilience. * (optional) specific aims relating to co-op principles From Wesses Community Shares Reinvestment rules: 2.1.1 Maintain or improve the physical, social and economic infrastructure within [definition of Area]; - YES 2.1.2 Advance education (particularly concerning asset based community development and enterprises with a community or environmental focus); and - YES 2.1.3 Provide an opportunity for public-spirited people and organisations to contribute financially to the community, with the expectation of a social dividend, rather than personal financial reward. - WELL WE'D LIKE THE OPTION OF FINANCIAL REWARD TOO (but this could just be worded like this to satify regulators and still actually allow for interest to be paid, right? Is it to do with whether or not you can pay dividends to members?) 2.2 Examples of the ways in which the society may carry out its objects may include: 2.2.1 Providing housing for those in need and help to improve housing standards; - YES 2.2.2 Creating training and employment opportunities by the provision of workspace, buildings or land; - YES 2.2.3 Developing new or existing services to the local community that contribute to the local economy. - YES 2.3 Those objects are carried on for the benefit of the community. - YES? I think so, but what are the benefits of fully mutual? From CDS CLT Rules: The Society is formed for the benefit of the community. Its objects shall be to carry on for the benefit of the community of [definition of Area] the business of acquiring, holding, developing and leasing land and property for permanently affordable housing and asset based community development and the business of securing the maintenance, improvement and creation of amenities for the community; and -YES the wellbeing of those who live and work in the community and, - YES to enable people to build thriving, inclusive communities through the democratic ownership and stewardship of land and other assets. - YES The Society shall seek in the delivery of its objects to acquire and retain interests in land and property within the area of the community and to actively manage such ownership to retain asset value for the benefit of the community, maximise asset value for the benefit of the community, and recycle any gains made in dealing with the assets for the benefit of the community. A3 The Society shall not trade for profit. A4 Nothing shall be paid or transferred by way of profit nor by distribution of assets to members of the Society. * identify who the users and non-user stakeholders of the co-operative are the relative voting strength of the different classes users 1. Users of assets, e.g. land, property, utility - 37.5 2. Member of local community 37.5 non-user stakeholders (max 25% total) 3. Bioregional community 4. Investors 5. Supporters Users Project members 1 - people who already run community land and infrastructure projects, especially those that have already done a successful community share issue (Forhall Farm, Radical Routes, H2ope, Energt4All, Eco Land Co-op etc.) 2 - people who want to set-up a cooperative or community benefit societies and raise investment in order to replicate the success stories Workers - earn dividends by participating 3 - people (e.g. expert advisers) who want to help people to set-up community owned enterprises. 4 - people who want to help raise their profile by sharing their stories (bloggers, film makers, musicians, poets, actors playwrights etc. our "Transition Sessions" project as an example). Non-users Investors 5 - people who want to help fund community land and infrastructure projects * set an upper limit, if you wish, on the number of shares any one individual can hold? * set a limit to the number of shares that can be issued to investors and general supporters of the project? no. * describe the type of share issued to each class – shares may have rights of withdrawal and transfer. withdrawable. * specify a maximum number of committee members 5? 7? 12? * specify the percentage of profits that should either be a) retained as common wealth b) distributed as a co-operative dividend or c) distributed to investors. (c) cannot exceed 80% a) 50% b) 25% c) 25% * Mission statement A brief statement of the social, environmental and economic purpose of your organisation for now and in the future. It should relate not just to the existing membership but also to potential future members and other stakeholders. It could be as simple as 'provide benefits to its members honestly, equitably and responsibly' or as detailed as you wish. Bear in mind that it will be the benchmark against which future achievements must be measured. * (optional) specific aims relating to the seven co-operative principles 1st Principle: Voluntary and Open Membership 2nd Principle: Democratic Member Control 3rd Principle: Member Economic Participation 4th Principle: Autonomy and Independence 5th Principle: Education, Training and Information 6th Principle: Co-operation among Co-operatives 7th Principle: Concern for Community An aim should provide direction towards well defined and unambiguous outcome, but allowing a great deal of flexibility in the route. The outcome may never be fully achievable; if it is, it may go out of date too quickly. It may be achieved directly or indirectly by the co-operative. * identify who the users of the co-operative are. Each class should be an identifiable stakeholder group – for example, workers, tenants, residents of Somerset, volunteers working more than two hours a week. People and organisations belonging to these groups will (subject to approval by the committee, and any probationary period you may have in force) be able to join the co-operative. Some details may be added optionally in order to exclude those with little or no stake in the co-operative – for instance, a customer that spends less than £10 per year with the co-operative). * identify non-user stakeholders (together have max 25% of vote). They may play a significant role in the organisation, but they will always be limited to 25% of voting strength. The definition of classes may be specific or can be unrestricted – for example anyone can choose to be an 'investor' or 'supporter'. When deciding which stakeholder groups should be eligible for membership, consider the following questions: who is the co-operative meant to benefit? Who has most to contribute to the success of the business? Who has the most frequent and significant interactions with the co-operative? Whose interests are most closely aligned with the mission of the co-operative? * set an upper limit, if you wish, on the number of shares any one individual can hold? * set a limit to the number of shares that can be issued to investors and general supporters of the project? This is to prevent dilution, and may be required by some prospective investors. If you do not intend to issue non-user shares you may delete this. * describe the type of share issued to each class – shares may have rights of withdrawal and transfer. Be aware that the issue of transferable securities is governed by the Financial Services Marketing Act and other regulations. * the relative voting strength of the different classes * specify a maximum number of committee members * specify the percentage of profits that should either be a) retained as common wealth b) distributed as a co-operative dividend or c) distributed to investors. (c) cannot exceed 80% *