Resources

Questions to Ask Before Preparing Legal Documents

Answer these questions and the ones in the group-based business structure assessment before you consult with an attorney to help you design your legal documents.

Nickel City Housing Cooperative in Buffalo, NY.

• Identity
• 1. Who are your members?
• 2. What is the purpose of the cooperative?
• 3. Who will serve as the start-up board of directors, overseeing the development activities?


• Membership
• 4. Who is eligible for membership?
• 5. What equity will members contribute?
• 6. Will members each have one vote? or will there be weighted voting?
• 7. Are there financial obligations for voting?
• 8. Are all members treated the same? or are there classes of members?
• 9. How can a member terminate his/her membership? How can the co-op terminate a member's membership?


• Board
• 10. Who is eligible to serve on the board?
• 11. What are their duties?
• 12. How many seats should there be?
• 13. Will you have board members from outside the organization?
• 14. How long will a board member serve?
• 15. How are board members elected? removed?
• 16. Are they paid? Are expenses reimbursed?
• 17. How will vacancies be filled?
• 18. How often will the board meet? What quorum is required? What meeting notice is required?
• 19. Will there be standing committees of the board? If yes, what are they and what are their functions?
• 20. Will there be officers? If yes, what offices, terms duties, selection process?


• Capital Structure
• 21. What will your capital structure be? (Will you issue shares of stock? Membership/Common? Preferred? How many? At what value?)
• 22. What are the rights and responsibilities of each stockholder?
• 23. Will shares earn dividends?
• 24. What will the redemption procedure be?


• Patronage Dividends
• 25. What is the basis for distributing patronage dividends to members?


• Membership Meetings
• 26. How often will members meet? Who can call a special meeting? What notice is required? What quorum is required?
• 27. What issues will members decide?
• 28. How can members vote? by proxy, by mail, electronically?
• 29. How will the by-laws be amended?


• Membership Agreements
• 30. What will members receive?
• 31. What will members agree to give?
• 32. How will money change hands?
• 33. How will quality be evaluated?
• 34. How will the agreement be enforced?
• 35. How will the agreement be terminated/renewed?