[Editor's note: while the Oak Street Cooperative's membership is limited to Vermont residents, the basic model is one that cooperators in other states may want to emulate.]
We’re aiming to raise that equity by selling member shares in the co-op to Vermont residents! The minimum investment is $1,000, and folks are encouraged to invest more (up to a maximum of $25,000), with the caveat that no member may own more than 10% of the total shares. A few key things to understand about co-op membership include:
Voting: All co-op members are entitled to one vote, regardless of how many shares they hold. Members are entitled to both run and vote in annual board elections, and on certain other major decisions defined in the bylaws.
Dividends: Each year the co-op board will vote to declare a dividend, which is legally allowed to be up to 6%, and it must declare a dividend of 6% before any profit is returned to renter-members as a patronage refund. The board may, in response to financial and/or strategic circumstances, declare a 6% dividend, and defer to a subsequent year the cash payment of part or all of that dividend. In years in which there are outstanding deferred dividends, their payment will be prioritized over current year dividends until the co-op is fully caught up.
Exit: Members may request the repurchase of their shares by the co-op at face value, and the redemption of those shares will be at the discretion of the board, which could pay for their redemption with new equity, retained earnings, the proceeds of a mortgage refinance, or other sources. We expect not to be in a position to redeem shares in at least the first three to five years, so community supporters should consider this to be a long-term, illiquid investment.