Cooperative Model

Ownership
Cooperatives are owned a category of members. Member description and eligibility is defined in cooperative bylaws. Members each have an equal share of voting equity in their co-op, and this entitles them to an equal vote in co-op referenda and elections.

Ownership equity can be set at whatever level the Board of Directors finds appropriate. If a member wishes to withdraw their membership, a co-op is obliged to repurchase their equity share if it has the financial ability to do so without jeopardizing the co-op itself.

Cooperatives are governed by a Board of Directors elected by the membership, with one vote per member. Board composition is defined in the cooperative bylaws and can take many forms. Most cooperatives have a simple 9-person Board. Some cooperatives (especially worker cooperatives) make all full members of their co-ops Directors.

Legal Construction
Cooperatives in Texas can be chartered under Article 251 of the Texas Business Organizations Code. Only organizations so chartered can legally use the word "cooperative" or "co-op" in their names.

NOTE: This code was developed to help and encourage people wishing to form cooperative businesses in Texas. It is of course possible to form organizations that have the characteristics of cooperatives but are not formally chartered in this way.