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I don't know about American coop laws, but in Denmark there are diary companies owned by farmers (nearly 10.000 farmers own Arla) and Coop Amba, which owns many

I don't know about American coop laws, but in Denmark there are diary companies owned by farmers (nearly 10.000 farmers own Arla) and Coop Amba, which owns many super market chains have over 2 million members, that each have a voting right in the company. You can totally scale this type of ownership.

danpalmer 2y ago
I'm not an expert by any means, but my understanding is that partnerships are very different legal entities to a typical US LLC. I believe a partnership is typically in many ways closer to what I suggested may be the case with Nebula – where the company has bylaws and contracts in place internally to make this work. On the other hand for an LLC, LTD, or other similar types of company, being a shareholder is a more public position, and might require reporting, or updating documents registered with the local government every time it changes. That's fine for tens of shareholders in a private company, but not for thousands or millions.
- singleshot_ 2y ago
  I would be very surprised if there were reporting rules about being a shareholder in an LLC.
SamWhited 2y ago
In the U.S. it really depends what state you're in. Some states have co-ops as a specific business vehicle and in many of them the co-op model is very different. There are big farm co-ops, EMCs, etc. in the U.S. (Land-o-Lakes and Florida Natural Oranges come to mind, I believe they're both fully farmer owned), but I'm not super familiar with them or how their model works, but in Georgia where I am at least co-ops tend to work in one of two ways: For smaller co-ops that don't bring in members very often or who are just getting started they often create an LLC and put in the articles of incorporation that all future members will receive an equal share and equal voting rights. This does require filing paperwork for every new member, but keeps taxes easy. For co-ops that expect to have lots of members rapidly (consumer co-ops that sell shares in their store to whomever wants one, for example) they normally form a corporation and allocate a certain number of shares up front and indicate that any member has equal voting rights, etc. this makes the taxes harder, but is a lot less paperwork since you have to file stuff about the number of shares sold at the end of the quarter (or whenever, I forget the exact reporting details, been a while since I've done this) but not every single time you add a member. Georgia (and a lot of other states) also have specific laws for EMCs and other specific types of co-ops, so it's really fragmented. Take this with a grain of salt, it's just two examples of how a lot of smaller co-ops do things.

danpalmer 2y ago

I'm not an expert by any means, but my understanding is that partnerships are very different legal entities to a typical US LLC. I believe a partnership is typically in many ways closer to what I suggested may be the case with Nebula – where the company has bylaws and contracts in place internally to make this work. On the other hand for an LLC, LTD, or other similar types of company, being a shareholder is a more public position, and might require reporting, or updating documents registered with the local government every time it changes. That's fine for tens of shareholders in a private company, but not for thousands or millions.

singleshot_ 2y ago
I would be very surprised if there were reporting rules about being a shareholder in an LLC.

SamWhited 2y ago

In the U.S. it really depends what state you're in. Some states have co-ops as a specific business vehicle and in many of them the co-op model is very different. There are big farm co-ops, EMCs, etc. in the U.S. (Land-o-Lakes and Florida Natural Oranges come to mind, I believe they're both fully farmer owned), but I'm not super familiar with them or how their model works, but in Georgia where I am at least co-ops tend to work in one of two ways: For smaller co-ops that don't bring in members very often or who are just getting started they often create an LLC and put in the articles of incorporation that all future members will receive an equal share and equal voting rights. This does require filing paperwork for every new member, but keeps taxes easy. For co-ops that expect to have lots of members rapidly (consumer co-ops that sell shares in their store to whomever wants one, for example) they normally form a corporation and allocate a certain number of shares up front and indicate that any member has equal voting rights, etc. this makes the taxes harder, but is a lot less paperwork since you have to file stuff about the number of shares sold at the end of the quarter (or whenever, I forget the exact reporting details, been a while since I've done this) but not every single time you add a member. Georgia (and a lot of other states) also have specific laws for EMCs and other specific types of co-ops, so it's really fragmented. Take this with a grain of salt, it's just two examples of how a lot of smaller co-ops do things.