Procedure for obtaining Class B shares

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This has been agreed among those involved by unanimous consent on 20060708.
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Contact WikiSysop to make small corrections (spelling, grammar, etc.) or add an agenda item to re-visit this agreement at an appropriate meeting.

Amended on 20061104 with "Right of refusal, right of return"

EcoReality's coop rules includes a form of investment shares that can be issued in exchange for tangible capital goods or labor on capital projects.

When a member has tangible goods that will be used by the entire community much of the time, that member may seek to exchange ownership of those goods to the coop in exchange for Class B investment shares. The procedure for doing so is:

  1. Determine that the goods are truly for communal use. For example, an artisan's tools for their trade would probably not qualify; but shared garden tools or shared kitchen cutlery would.
  2. Publish a list of those goods as items for Class B shares. Each item listed should include:
    • donating member's name,
    • item description
    • desired value
      "value" should be typical market value for used goods, as one might see in a thrift store or on eBay
      "value" may be actual price paid for goods that are in essentially new condition, including full warranty, if applicable
  3. Add an agenda item to a meeting to propose the ownership transfer.
    • At this meeting, those present:
      • agree whether or not to accept the donation,
      • agree on the value of items donated, and
      • agree that one member present will be the steward for each of the items.
  4. If agreed,
    • each item will be given a unique identifier that will be indelibly marked on the item and recorded in the coop's list of assets,
    • a suitable number of Class B investment shares will be issued and logged by the Finance steward in the donating member's account,
    • the agreed steward will be recorded as responsible for that item's care.
    • The coop then owns the item, and is responsible for its maintenance, insurance, liability, and collection actions against those who may reduce the usefulness of the item beyond normal wear and tear.
  5. If not agreed,
    • the member proposing the transfer of ownership should withdraw the goods from communal use. The member agrees to accept responsibility for Items that are not withdrawn from communal use; maintenance, breakage, theft, and other casualty are the responsibilty of the member, not the coop.

Right of refusal, right of return

  1. If EcoReality chooses or is forced to liquidate capital assets received in exchange for Class B shares, the person who received Class B shares has first right of refusal, and may exchange the Class B shares currently attributable to those capital assets and receive those capital assets back.
    This means that someone who "donates" something to the coop for Class B shares can get that thing back if the coop ever decides to get rid of it. For example:
    "Joe" gives a nice '86 Mercedes 300D to the coop, and receives 3,000 Class B shares in exchange. At the end of the year, the coop declares a reverse split of 95% to cover depreciation, so "Joe" now has 2,850 Class B shares attributable to this car. It sits around for a year while the coop is paying insurance on it without anyone using it much, so the coop decides to get rid of it. The coop asks "Joe" if he wants it back for 2,850 Class B shares. "Joe" can either take the car back, or keep the shares and let the coop sell the car to get money to use on other capital projects.
  2. If EcoReality chooses or is forced to liquidate Class B shares, it may at its sole discretion, exercise right of return, returning capital assets in good condition to the person who received Class B shares for those assets, and receiving back the Class B shares currently attributable to those capital assets.
    This means that in the case of liquidation, the coop can choose to return things it gave Class B shares for, rather than pay out those shares and then have to dispose of the property backing those shares. For example:
    In the case above, at the end of the year, a meteor struck the coop property while everyone was away, destroying everything. The distraught members and investors vote to dissolve the coop according to The Cooperative Association Act and our coop rules, thus forcing an orderly liquidation of all shares. Although it took a direct hit, miraculously, the old Merc was in good driving condition, and the coop elected to return it to "Joe" for 2,850 Class B shares, rather than have to come up with $2,850.

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