Description

Editable social enterprise model rules for companies in England and Wales who wish to implement co-operative governance and/or community or employee-ownership. The rules prevent investors acquiring over 50% of voting rights.

Notes to describe these rules in plain English have now been added to the document.

This model is an evolution of the democratic business rules developed by Guy Major and Gavin Boby (Democratic Business Ltd, 2000) implemented by some cooperatives about 10 years ago. Following his PhD thesis on corporate governance, the model rules were further revised by Rory Ridley-Duff in May 2007, then again in January and October 2009 to update voting procedures in organisations with mixed investor and labour shareholders, and accommodate changes introduced in the Companies Act 2006.

The rules were first published in 2007 as part of the Social Enterprise Organisational Structures Bank, hosted by the Common Cause Foundation, a trust specialising in "development of enterprise that involves employees and other local stakeholders in ownership and control...and helps end exploitation and injustice in enterprise and trade generally." (www.commoncausefoundation.org)

The rules provide for Labour shareholders and Investor shareholders. Labour shareholders acquire shares in proportion to their labour contribution. Investor shareholders acquire shares in proportion to their financial contribution. Labour shareholders can acquire investor shares (either through the issue of free shares, or upon payment to the co-operative).