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Film Website: This Way Out

Thanks to Jai Jai for giving us permission to post the notes! The film is so jam-packed with information, hopefully these notes will help those who have seen it.

As of Oct 28 2012 I have taken notes through section 1.10. I intend to work through the rest of Disk 1 and 2 completely.

Table of Contents

  • 1 Disk 1 Track List
    • 1.1 01 - 0:00:00 - Disclaimer (0:23)
    • 1.2 02 - 0:00:23 - Preparation / ToDo List (0:42)
    • 1.3 03 - 0:01:05 - Intro Three Elements of a Coop (1:26)
    • 1.4 04 - 0:02:31 - International Cooperative Principles (6:46)
    • 1.5 05 - 0:09:17 - Subordination of Capital, Democracy, Patronage (3:17)
    • 1.6 06 - 0:12:34 - How They Met (3:55)
    • 1.7 07 - 0:16:29 - Importance of Meetings (4:34)
    • 1.8 08 - 0:21:03 - Choosing a Legal Entity (13:14)
    • 1.9 09 - 0:34:17 - Intro to By-Laws (5:40)
    • 1.10 10 - 0:39:57 - State Filings (2:30)
    • 1.11 11 - 0:42:27 - Permits, Business License, More (11:08)
    • 1.12 12 - 0:53:21 - A Word about Business Plans / Feasibility (2:25)
    • 1.13 13 - 0:55:46 - Funding Your Coop (30:09)
    • 1.14 14 - 1:25:55 - Hiring & Training (20:40)
    • 1.15 15 - 1:46:35 - Unions & Coops (2:31)
    • 1.16 16 - 1:49:06 - Resources (3:38)
    • 1.17 17 - 1:52:44 - Credits & Acknowledgement (1:15)
    • 1.18 18 - 1:53:59 - History: John Curl on Coops & The New Deal (6:44)
    • 1.19 19 - 2:00:43 - Mike Leung of Abolish Human Rentals (1:30)
    • 1.20 20 - 2:02:13 - Group Discussion Topics (3:41)
    • 1.21 END- 2:05:54
  • 2 Disk 2 Track List
    • 2.1 01 Disclaimer (0:23)
    • 2.2 02 Advice to Coop Start-Up's (18:56)
    • 2.3 03 Bookkeeping Crash Course (30:25)
    • 2.4 04 Subchapter T (2:12)
    • 2.5 05 Communication & Process (42:35)
    • 2.6 06 Meet & Greet (37:25)
    • 2.7 07 Credits & Thank You's (1:14)

1 Disk 1 Track List


1.1 01 - 0:00:00 - Disclaimer (0:23)


1.2 02 - 0:00:23 - Preparation / ToDo List (0:42)

1.3 03 - 0:01:05 - Intro Three Elements of a Coop (1:26)

  • Subordination of Capital
  • Democratic Control
  • Patronage Distribution

1.4 04 - 0:02:31 - International Cooperative Principles (6:46)

  • The Original 7 "Rochdale Principles" (28 Rochdale Pioneers)
    1. Open Membership
    2. Democratic control (1 worker = 1 vote)
    3. Distribution of surplus in proportion to trade
    4. Payment of limited interest on capital
    5. Political and religious neutrality
    6. Cash trading
    7. Promotion of education
  • Today's 7 Principles
    1. Voluntary & Open Membership
    2. Democratic control (1 worker = 1 vote)
    3. Economic Participation
    4. Autonomy & Independence
    5. Education, Training & Information
    6. Cooperation Among Cooperatives
    7. Concern for Community
  • Check out the book by John Curl, "For All the People"

1.5 05 - 0:09:17 - Subordination of Capital, Democracy, Patronage (3:17)

  • Surplus: Workers decide themselves
    • Pay themselves a bonus
    • Invest in Capital Improvement
    • Donate a Portion to Community Groups
  • Patronage: Each worker's contributed hours

1.6 06 - 0:12:34 - How They Met (3:55)

  • www.quilted.coop
  • BioFuelOasis (people independently making biodiesel contacted each other)
  • co-soap.com / Two Oaks (Walfre, Greg, Mike were originally friends)
  • How to meet people to start a coop
    • social networking
    • former co-workers
    • school mates
    • clubs
    • common interests & beliefs
    • at coop events
  • Highly Recommended Films as Introductions to Coops
  • Host a Movie Night - an excellent recruiting tool

1.7 07 - 0:16:29 - Importance of Meetings (4:34)

  • suggestions
    • weekly, talk about problems
    • formalize your consensus process (including facilitators)
    • strategy meetings
    • once a year board meetings
    • procedure meetings frequently (1x/wk - 1.5 hrs)
    • dept'l meetings more frequent, then whole shop less frequently
    • committees for tasks - finances, outreach, internal systems, technology
    • general assembly as "the board meeting"

1.8 08 - 0:21:03 - Choosing a Legal Entity (13:14)

  1. you need to do some state filing, so you don't default to being a general partner
    • because with general partnerships, everyone, each individual member is personably liable for actions of anyone
  2. 2 most frequently-chosen types of legal entities
    • Limited Liability Company (LLC)
      • simple to set up, portable, easily replicable across states
      • cannot use "coop" in the name
    • Worker Cooperative Corporation
  3. it is their governance documents which truly make the business a cooperative
  4. examples and interviews
    • Quilted.coop - they used an LLC so that they could replicate it in other states, and simplicity of setting it up
    • Design Action Collective (oakland) - chose incorporation to be consistent with other coops so that they could have secondary service providers which understood and used the same model as they did.
    • Electric Embers -
    • Box Dog Bikes
      • don't believe everything the SBA tells you
    • Cheese Board
      • they had to file forms with officers even though they don't have those
  5. Choose carefully and compare
    • "Legal Sourcebook for California Cooperatives" - Van Baldwin, author
    • to know which entity is the right one for your cooperative, you'll need to research and consider
      • the type of service that you are offering
      • where you plan to conduct the majority of your business
      • whether it is important to you to be able to include the word, "cooperative" in your business's name
        • this option is available for corporations but not LLC's
    • "Legal Entity Options for Worker Cooperatives" - Edward de Barbieri & Brian Glick
    • Comparison Quickview - LLC vs Worker Coop Corporation
      • Governance
        • LLC: Flexible operating agreement may separate voting rights from capital investment. Investors or incubating nonprofits may have voting rights. May or may not elect board of Directors
        • Corp: Each worker owner purchases one voting share. No voting shares to non-workers. Voting shares elect Board of Directors
      • Distribution of Income to worker-owners
        • LLC: Worker owners may receive wages and a share of earnings, or only a share of earnings, with weekly advances against projected earnings
        • Corp: Worker owners generally paid wages and a share of profits in proportion to hours worked or wages earned. Undistributed profit share kept in internal captial accounts
      • Taxes
        • LLC: No federal tax on company earning. Each worker owner liable for tax on her share of annual earnings, whether or not distributed
        • Corp: Pays federal corporate income tax except on qualified patronage dividends to worker-owners. Worker-owners taxed on dividends received.
  6. Take Governance seriously
    • have your board meetings, and membership meetings
    • Keep a certain amount of formality (meetings, records, etc.) for accountability, responsibility, legal protection, and mission focus
    • if you don't do this, your coop can lose direction
    • one way to attack a corp is to show that it's not acting like a corporation. so have your meetings and keep records. this will protect you in a legal battle to "pierce the corporate shield" of your coop.
    • keep consistent minutes and records

1.9 09 - 0:34:17 - Intro to By-Laws (5:40)

  1. interviews with Van P Baldwin, and Neil Helfman
  2. one member one vote
  3. whoever is currently running the board doesn't have the capability of selling the collective and retiring, because of the by-laws
  4. 3 most important sections of coop bylaws (van baldwin, atty/cpa)
    • dealing with the membership structure (qualifications for membership)
    • what kind of capital structure will be set up
      • shares? how much do members have to buy when joining?
    • how annual surplus will be allocated
  5. sample by-laws available online
  6. who is a member, the rights of officers, the scheduling and the rights relating to voting and distributions
  7. many of these provisions are pretty standard
  8. problems can happen when people want to redo their bylaws or use bylaws from elsewhere (a coop in another state, etc.)
  9. better to keep by-laws as simple as possible at first

1.10 10 - 0:39:57 - State Filings (2:30)

  • legal options vary from state to state
  • legislation can change
  • you need to keep up with latest. to do so you can look at
  • can also get other sample forms (see above)
  • articles of incorporation
  • Articles of Incorporation
    • file articles of incorporation and cover letter with your secretary of state's office
    • recommended that these be walked in
    • pay fee
    • you should receive your filed and stamped Articles of Inc back, if all was correct, or you be notified of needed revisions
  • Statement of Domestic Stock
    • also file a statement of domestic stock with the secretary of state
    • do not file the one for a non-profit
    • simple form, lists officers, etc. usually done on a bi-annual basis
    • in calif., your statement of domestic stock must be filled within 90 days of filing your articles of incorporation
  • forms and process for LLC's similar to Corporations
    • with LLC the form is called, "Articles of Organization"
    • template forms available on Secretary of State's website
    • "Operating Agreement" is the practical equivalent of the "Bylaws" of a corporation
      • this defines the democratic structure by which the business will be conducted, including issues related to patronage, membership, financial interest, accounts, and election of any officers

1.11 11 - 0:42:27 - Permits, Business License, More (11:08)


1.12 12 - 0:53:21 - A Word about Business Plans / Feasibility (2:25)


1.13 13 - 0:55:46 - Funding Your Coop (30:09)


1.14 14 - 1:25:55 - Hiring & Training (20:40)


1.15 15 - 1:46:35 - Unions & Coops (2:31)


1.16 16 - 1:49:06 - Resources (3:38)


1.17 17 - 1:52:44 - Credits & Acknowledgement (1:15)


1.18 18 - 1:53:59 - History: John Curl on Coops & The New Deal (6:44)


1.19 19 - 2:00:43 - Mike Leung of Abolish Human Rentals (1:30)


1.20 20 - 2:02:13 - Group Discussion Topics (3:41)


1.21 END- 2:05:54



2 Disk 2 Track List


2.1 01 Disclaimer (0:23)


2.2 02 Advice to Coop Start-Up's (18:56)


2.3 03 Bookkeeping Crash Course (30:25)


2.4 04 Subchapter T (2:12)


2.5 05 Communication & Process (42:35)


2.6 06 Meet & Greet (37:25)


2.7 07 Credits & Thank You's (1:14)


Author: Jeff Stern
Date: 2012-10-28 19:09:59 PDT
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