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How to Set up a Workers' Co-Op How to set up a Workers’ Co-op Fourth edition - Summer 2015 www.RadicalRoutes.org.uk How to set up a Workers’ Co-op First edition written by Catalyst Collective Ltd in 1994 and updated by Radical Routes Ltd in 2003. Third edition written by Footprint Workers' Co-operative Ltd and Seeds for Change Lancaster Co-operative Ltd in 2012. This fourth edition written by Footprint Workers’ Co-ooperative Ltd and Seeds for Change Lancaster Co-ooperative Ltd. in 2015 Published by Radical Routes Ltd. 16 Sholebroke Avenue, Chapeltown, Leeds, LS7 3HB www.radicalroutes.org.uk This work is anti-copyright. Feel free to copy, adapt and distribute it as long as the final work remains anti-copyright. (Credit to the authors / publishers would be appreciated) Design by Shtiggy shtiggy.wordpress.com Download a PDF of this booklet for free from: Illustrations by Carrie MacKinnon unless otherwise stated www.seedsforchange.org.uk Typeset in Open Sans or www.radicalroutes.org.uk (an open-source font) Printed by Footprint Workers Co-ooperative Ltd, 16 Sholebroke Avenue, Chapeltown, Leeds LS7 3HB Tel: 0113 262 4408 www.footprinters.co.uk Printed on 100% post-consumer waste paper ISBN 978-1-899212-04-0 Acknowledgements 2 How to set up a Workers’ Co-op There are also other types of co- 1. Introduction operatives covering other aspects of life. Housing co-operatives provide Taking control of our own lives is an secure, affordable housing; consumer important step in the fight against the co-operatives help people buy stuff or massive injustices and ecological services in bulk; and social centres devastation facing the world. Big provide space for meetings, events and companies and unaccountable socialising. This book focuses on setting governments may rule the planet, but it up a small scale grassroots workers’ co- doesn’t have to be this way. Workers’ co- op in the UK. If you are interested in ops give us a chance to change a small other types of co-ops look at our but significant part of how things are. handbooks on how to set up housing They’re one way to take back an co-ops and social centres or see important part of our lives and gain materials published by Co-operatives control over how we work, not to UK. mention the impact our work has on others and our environment. About this book With this handbook, we want to inspire In this book you’ll find lots of you to work co-operatively, to take information you need to set up your control over your work life and change workers’ co-op. Roughly speaking, it’s our society for the written in the order you’ll be doing better, here and now. things if you set up Workers’ co-operatives your workers’ co-op are a great way of from scratch, although doing that – they are some sections, like businesses run Chapter 12 – ‘Working democratically by the together’, may be workers to provide useful throughout the themselves with process. meaningful We’ll cover ways of employment and to making decisions, provide a service to the business planning (with community, rather than info on tax, insurance creating profit for a and other details), boss or unconnected organising your shareholders. Any kind The co-op hands logo, created by workplace and of workplace or service Calverts, a print & design co-op, choosing the right legal can be run as a is for use by all workers' co-ops. form. At the end there’s workers’ co-op, from a list of where to get care agencies, printing presses, farms, help, complete with contact details and accounting firms and bike workshops to useful appendices, including a glossary shops, pubs and post offices. for any technical jargon we couldn’t avoid. www.RadicalRoutes.org.uk 3 Chapter 1. Introduction Contents 1. Introduction 3 About this book 3 About the authors 7 2. What is a workers’ co-op? 9 2.1 Who can be a member? Who’s the boss? 10 2.2 Creating meaningful employment and building a fairer society 11 2.3 A rich history 12 2.4 Building a co-operative world 13 2.5 Co-operatives are more stable and less likely to fail as a business 15 2.6 Common difficulties for co-ops 15 3. Your co-op idea 18 3.1 What are your aims? 18 3.2 A workers’ co-op – the right choice for you? 19 4. Getting your co-op together 22 4.1 Finding the right people 22 4.2 Working out how to make decisions 25 4.3 Sharing out roles and responsibilities 27 4.4 Having good meetings 29 5. Your business plan – part 1 32 5.1 Market research 34 5.2 Choosing a name 35 5.3 Choosing your premises 35 5.4 Getting equipment 38 5.5 Converting an existing business to a workers’ co-op 38 5.6 Policies – assessing environmental and social impact 39 6. Your business plan – part 2: finances 42 6.1 Preparing a financial plan 42 6.2 Paying yourself in the set-up period 46 Contents 4 How to set up a Workers’ Co-op 7. Raising the money 47 7.1 Mainstream finance 47 7.2 Money from friends and allies 50 7.3 Money you don’t have to pay back 58 7.4 Other ways of raising funds 59 8. Choosing your legal form 60 8.1 Things to consider 61 8.2 Explanation of the various legal forms 66 8.3 Your constitution 71 8.4 Legal forms comparison table 76 9. Registering your workers’ co-op 80 9.1 Things to sort out before registration 80 9.2 Registration 81 9.3 How to register a Co-operative Society 82 9.4 How to register a Company 83 9.5 How to register Limited Liability Partnerships 85 9.6 Converting an existing business into a workers’ co-op 86 10. Starting to trade 87 10.1 Bank accounts 87 10.2 Taxes 88 10.3 Insurance 89 11. Running the business 90 11.1 Being an employer 90 11.2 Finances 96 11.3 General Responsibilities 100 12. Working together – day to day 101 12.1 Communication issues 101 12.2 Democratic decision-making 104 12.3 Pay, distribution of workload and sustainability 104 12.4 Informal hierarchies 106 12.5 New people joining 108 12.6 Staff development and reviews 110 12.7 Non-member employees, casual workers & volunteers 110 12.8 Conflict between members 111 12.9 Misconduct and dismissal 115 www.RadicalRoutes.org.uk 5 Contents Appendix I. Radical Routes 118 Appendix II. Where to get help – useful addresses and resources 120 A. Co-op support organisations 120 B. Co-operative development bodies 122 C. Regulators and government bodies 123 D. Funding and banking 124 E. Accountants 125 F. Insurance 126 G. Phone and internet services 126 H. Resources 127 Appendix III. Model Articles of Association for a Workers' 128 Co-operative Company Limited by Guarantee A. About these articles 128 B. Explanations of the articles 131 Articles of Association of ______ Ltd 135 Annexe A (being a part of the Articles of Association of ______ Ltd) 150 Secondary Rules of ______ Ltd 152 Consensus decision-making flowchart 154 Appendix IV. Sample employment contract 155 Appendix V. Sample Grievance and Disciplinary Procedures 158 Appendix VI. Sample accounts for Companies’ House 164 (for limited companies) Appendix VII. Sample accounts for HMRC 166 (for limited companies) Appendix VIII. Glossary 168 Contents 6 How to set up a Workers’ Co-op About the authors This book shares decades of collective experience in setting up and running grassroots workers’ co-ops. It is a collaborative effort of people involved in Radical Routes – a network of co- ops working for positive social change. www.radicalroutes.org.uk The first version was put together back in the mists of time by Catalyst Collective, and subsequently revised by Footprint Workers’ Co-op, a printing business. The last edition was extensively updated with new model articles for workers co-ops, by Footprint and by Seeds for Change Lancaster, a workers' co-op providing training and set-up advice for co-ops. All of the above co-ops are members or associates of Radical Routes, which publishes this book – you can find out more about them in Appendix I. www.footprinters.co.uk This edition has been further updated, with considerable input and support from Ian Snaith, editor of the Handbook of Co-operative and Community Benefit Society Law, who was most enthusiastic and a joy to work with. We’d also like to thank everyone else who has contributed to this guide – you are far too numerous to mention, but we really appreciate all your suggestions, ideas, help with checking stuff, editing and reading! If you’ve got any questions or comments, we’d like to hear from you: Email: [email protected] Tel: 0845 330 4510. www.seedsforchange.org.uk With love from Seeds for Change Lancaster Co-operative Ltd Footprint Workers’ Co-operative Ltd and Radical Routes Summer 2015 www.RadicalRoutes.org.uk 7 About the authors Some notes about Don’t worry if all this talk of IPSs and changes in the law stuff doesn’t make sense – the different types of legal forms for co-ops are This handbook was updated in June explained in Chapter 8.2. 2015 and obviously things like bureaucracy, the law and other The Co-operative regulatory stuff will keep changing. Societies Registrar We’ve tried hard to make sure that the information in this Technically there is no book is correct at the Regulator of societies, time of editing, but only a Registrar.
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