Tennessee needs a cooperative corporation law | Opinion
During law school, I had an opportunity to work with the Sustainable Economies Law Center out in Oakland, California. They were a group of attorneys, attorneys in training, advocates and professionals working to provide legal services for cooperative corporations, with an aim to make the law accessible to folks without legal training. SELC did this by using ordinary language when possible, breaking concepts into bite-sized chunks and even illustrating cartoon explanations, all within legally binding contracts.
While I awaited my law license in Tennessee, I was putting together my own LLC. As I worked on it, I wondered how I wanted this “ship” to run. I remembered the language of economic democracy used at the SELC, and how many equitable possibilities there are through corporate bylaws and operating agreements.
See, I − like many − thought “the way things are” was set in stone. Turns out, there are rules you must follow when creating and running a company, but there are many more opportunities to empower workers and benefit communities through corporate structure.
How we “structure” a company dictates how the company makes decisions. Who has the say over what the business does, who receives profits and at what rate, who decides on which insurance plan, days off and other priorities and commitments − these things are all behaviors of the “structure.” We can build any structure we want.
I want my company to amplify my impact and my income in the world, and to do the same for others who work in the same boat. Not everyone has investment money, but everyone who sets sail runs the risk of falling overboard or sinking with the ship. I want us to decide where the boat is headed together, and even if it gets too big for everyone to take the helm, I want a representative on the bridge.
However, in Tennessee, there is no general cooperative corporation statute. There are exceptions for agricultural processing, purchasing and marketing, as well as electricity, but no general cooperative law. That means if you want to create a business that functions similar to a cooperative, you must make it through a really unique LLC or corporation, which requires significantly more attorney time.
There are important advocacy and education groups cultivating cooperative businesses in our state. There are also some legal clinics that can help companies form on a cooperative basis. However, the movement toward a cooperative economy is hindered by the lack of turn-key structures for start-ups and existing businesses. Because cooperative corporations promote sustainable communities, the state legislature should simplify the process by permitting cooperative corporations to form in Tennessee.
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If Tennessee had a cooperative corporate law, then any business could form as, or convert to, a worker- or consumer-owned cooperative. This would alleviate the symptoms of capital flight by giving capital more relationships and a place to call home. While relocation to Tennessee might be “in vogue” at the moment, these relocations also prove that belonging and place are subordinate to profits for companies that do not have a structural relationship with the communities they live in.
If Tennessee enacted a cooperative corporate law, advocacy, education and legal assistance efforts could be streamlined. Then the Volunteer State could promote impact investment in companies that not only foster sustainable economic growth, but tend to benefit the environment as well. Until the Tennessee General Assembly acts, I’ll keep doing what I can to support companies also committed to democracy in the market. See you out at sea.
Carlson Gray Swafford is the founder of Eco Demo Advisors, LLC.
This article originally appeared on Knoxville News Sentinel: Tennessee needs a cooperative corporation law
