Lots of useful links. TYVM
Shouldn’t the “of” be an “or”?
I’m still looking at legal structures, but a registered Co-operative Society was the way i was planning on going.
A lot of the legislation has changed since the last time i researched this.
For Housing Co-op’s, i think that this is because they included the legal capacity to enter into a mortgage contract as one of the regulated activities during the last change in legislation.
While this page talks about Insurance, it doesn’t mention whether Public Liability Insurance is included.
I’ll start to do more research. TY
While you can make it difficult through the use of Minimum Valid Quorum for making changes to the Articles & Memoranda of Limited Companies, those Minimum Valid Quorum rules have to be codified themselves in the Articles & Memoranda, so the Minimum Valid Quorum rules may be vulnerable to a 51% share attack, which would lead to those defences being neutralised.
I’ve seen Limited Companies that succumbed to this form of attack, and be looted by 51% of the shareholders to the detriment of the minority shareholders.
I also got burnt back in '99 by one of these, hence my caution.
This is also one of my main reasons for choosing the Co-operative Model of doing business.
I want to make it as difficult as possible for any sub-group to screw over everyone else.
Trying to make it legally watertight before i start, is all.
One method i thought of last night was to set a Minimum Valid Quorum for changes to the Constitution of a Co-op to be 101% of the voting members.
As it would be impossible to achieve 101% of voting members, then no changes could ever take place.
I’m not sure that this would be legally valid, though if it is legally valid, then it would be one of the simplest ways of blocking these avenues of attack. Hence the request for some informal legal advice over a beer.
Another method that occurred to me last night was the method used by the Zaibatsu in Japan after 1945. They used interlocking webs of company ownership for PLC’s, where 45% of each company’s shares were traded on the public stock exchanges, but the other 55% was cross-owned by the other companies in the network, and was never traded.
This meant that they were able to get the utility of being listed on the stock market, but they were able to use the Mutual Defence systems to block any hostile takeover bids.
This method could apply to Co-ops as well, by cross-membership, where each co-op was a voting member of every other co-op in the network.
Again the main reason is to block any unwanted constitutional changes, that would neutralise those defences.
This could also be automated as a Mutual Defence Pact Co-operative, that is a purely legal entity, that is a legally-valid voting member of every Co-op, that is owned by all of the Co-op’s that use it, including itself.
The functionality of the MDP Co-op is that it will only vote on Specific Constitutional changes, and will always vote “No!”.
Add in Constitutional Clauses that require a Minimum Valid Quorum of 100% of voting members, as well as a Clause that says that the MDP Co-op has to be included in every vote on Changes to the original Constitution. If the MDP Co-op doesn;t vote, then it’s not a legally valid change, so doesn’t happen.
While this would be an effective defence, it would also be a constriction to doing business in future, changed circumstances.
This is solved by adding in a Clause to say that while the Constitutional changes required a large Minimum Valid Quorum to make them, the Operational Details were run as specified in the Policies & Procedures Manual.
Changes to the Policies & Procedures Manual required a smaller number of minimum Yes votes, but the Manual only covered the lower-level Operational parts of the Co-op.
So they had the Defences of the Constitution, but also the Flexibility of the Policies & Procedures Manual.
I find these Systems Design puzzles fascinating. The fact that i can use these structures to give better legal defences for myself is a bonus.