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Worker Cooperative

Category: State Incentives, Grants & Loans


DESCRIPTION: A legal structure for employee ownership of a business.
ELIGIBLE USE:
• A worker cooperative will credit members with a portion of net earnings and use the funds as tax-free money to finance growth.
PROGRAM/LOAN STRUCTURE:
• Maximum Program Benefits:
• Net earnings are shared with workers based on a percentage, usually equal to the number of hours an employee worked; and
• Worker cooperatives are accorded special tax status based on the fact that they are not designed to make a profit.
QUALIFICATION CRITERIA/COMMENTS:
• Worker cooperatives are democratically managed:
• Only workers can be members; and
• Each member has one vote.
• Members pay membership fees that entitle them to join the cooperative and purchase a share of stock:
• Share values can be set at any level; and
• Members can hold their shares individually or put them in an account.
• Members can receive the funds allocated to an account when they leave the worker cooperative.
 


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Greater Gallup Economic Development Corporation | 102 W. Hill Avenue, PO Box 1795 | Gallup, NM  87301
Phone (505) 722-2980 | Fax (505) 722-2987