Bylaws

Article I: Name and Purpose

Section 1.1 – Name:
This organization shall be known as 24 Karat Bakery Cooperative, hereafter referred to as “the Cooperative.”

Section 1.2 – Purpose:
The purpose of the Cooperative is to:

Provide meaningful employment and shared ownership for workers;
Provide high-quality, globally inspired baked goods to consumers;
Promote sustainable food practices and community engagement;
Operate under cooperative values and democratic governance;
Strengthen local economies through community participation;
Serve as a foundational unit of a future cooperative federation.

The Cooperative shall operate on cooperative principles including democratic member control, economic participation, autonomy, education, cooperation among cooperatives, and concern for community.

Article II: Membership

Section 2.1 – Classes of Membership:
The Cooperative shall have two member classes:

Worker-Members

Community-Members

Worker Members are the primary owners and governors of the Cooperative.

Community Members participate economically and socially but do not control daily operations.

Section 2.2 – Rights and Responsibilities:
All members shall:

Uphold cooperative values and participate in decision-making;
Receive access to co-op information, reports, and member benefits;
Be eligible for patronage allocations.

Section 2.3 – Termination of Membership:
Membership may end due to:

Voluntary withdrawal;
Violation of Cooperative policies;
Inactivity (consumer-members);
End of employment (worker-members).

Article III: Worker-Members

Section 3.1 – Eligibility

Any employee who:

has completed a probationary period of six (6) months, and
is approved by the Board and Worker Membership Assembly

may apply for Worker Membership.

Section 3.2 – Capital Contribution

Worker Members shall make a required capital contribution of $1000, which may be:

paid upfront, or
deducted from wages over time.

This contribution shall be credited to the Worker Member’s capital account.

Section 3.3 – Rights of Worker Members

Worker Members shall have:

one vote per member
eligibility to serve on the Board
patronage allocations
capital accounts
access to financial information

Section 3.4 – Duties of Worker Members

Worker Members shall:

participate in governance
uphold cooperative values
perform work duties in good faith

Article IV: Community Members

Section 4.1 – Eligibility

Any individual residing or working in the Cooperative’s service area may become a Community Member by purchasing Community Shares.

Section 4.2 – Community Shares

Each Community Share shall have a par value of $100.
A Community Member may own no more than twenty (20) shares.
Community Shares are non-transferable without Board approval.

Section 4.3 – Rights of Community Members

Community Members shall have:

limited voting rights as defined herein
participation in the Community Profit Pool
access to Cooperative events and benefits
non-binding advisory input on strategic issues

Community Members shall not vote on:

worker compensation
hiring or firing of management
daily operational decisions
labor policies

Section 4.4 No Speculative Purpose

Community Shares are issued solely to support the Cooperative’s mission and shall not be acquired for speculative or profit-maximizing purposes.

Article V: Member Benefits

Section 5.1 – Worker-Member Benefits:
Worker-members are entitled to:

A living wage and profit-sharing;
Participation in workplace decision-making and policy development;
Access to cooperative training and skill-building opportunities;
Discounts on bakery products;
Voting power in both daily operations and long-term strategic decisions.

Section 5.2 – Community-Member Benefits:
Community-members are entitled to:

Discounts or specials on selected bakery products;
Access to members-only events (e.g., baking workshops, tastings, seasonal previews);
Patronage refunds based on annual spending;
Voting rights on major cooperative decisions and consumer board elections;
Opportunities to participate in feedback forums and product development input.

Section 5.3 – Shared Benefits:
All members are:

Recognized as co-owners of 24 Karat Bakery;
Eligible to run for and vote in governance roles within their class;
Invited to co-op-wide celebrations and member appreciation events.

Article VI: Profits, Losses and Allocation

Section 6.1 – Definition of Net Surplus

Net Surplus is revenue minus operating expenses, taxes, reserves, and required contributions.

Section 6.2 – Use of Surplus:
Surplus funds shall be used in this order:

Reserve and operating expenses;
Reinvestment in 24 Karat Bakery;
Patronage disbursement based on retained contributions

Section 6.3 – Allocation of Net Surplus

Net Surplus shall be allocated as follows:

Worker Patronage Pool – 65%
Retained Earnings / Cooperative Reserves – 10%
Community Profit Pool – 15%
Community Project Fund – 5%
Federation / Expansion Contribution – 5%

Exact percentages may be adjusted by Board approval.

Article VII: Governance

Section 7.1 – Board of Directors:
The Board shall include representatives from both member classes:

Total Seats: 7
Worker-Member Seats: 4, minimum
Community-Member Seats: 3, maximum

Worker-members shall always represent a majority on the Board. At the time of Federation expansion, the Board may allow a regional member a seat on the Board.

Section 7.2 – Board Responsibilities:

Strategic planning and financial oversight;
Hiring and managing staff leadership (if any);
Upholding cooperative principles.

Section 7.3 – Elections & Terms:

Board members are elected by their member class.
Terms are staggered and last [2–3 years].

Article VIII: Member Meetings

Section 8.1 – Annual General Meeting (AGM):
Held once per year to:

Elect directors;
Review financials and reports;
Make major decisions.

Section 8.2 – Special Meetings:
May be called by the Board or 25% of worker-members.

Section 8.3 – Quorum:
A quorum requires 51% of the worker-member class to be present.

Article IV: Committees

The Cooperative may form committees as needed, such as but not limited to:

Finance
Product Innovation
Outreach & Education
Marketing

Article X: Future Federation Pathway

Section 10.1 – Federation Participation

The Cooperative may join or form a regional federation of worker cooperatives.

Section 10.2 – Contributions

The Cooperative may contribute a portion of surplus to a federation for shared services and expansion.

Section 10.3 – Preservation of Worker Control

No federation shall have authority to override Worker Member governance of any individual Cooperative.

Article XI: Multi-Location Structure

Section 1. Local Units

Each bakery location shall operate as a unit of the Cooperative with:

local management teams
worker participation structures
financial reporting obligations

Section 2. Cluster Model

The Cooperative may operate multiple bakery locations within a geographic cluster.

Community Members shall be entitled to benefits and participation across all locations within the cluster.

Section 3. Internal Autonomy

Each location shall maintain operational autonomy subject to Cooperative-wide policies.

Article XII: Retention of Patronage Allocations

Section 12.1 – General Rule of Retention

All patronage allocations to Community Members shall be retained by the Cooperative and credited to the Member’s individual Capital Account. No cash distribution shall be required.

The Cooperative shall issue a written notice of allocation to each Member reflecting the amount credited.

Section 12.2 – Worker-Owner Retention

The Board may determine the percentage of Worker-Owner allocations to be retained in Capital Accounts. The Board may establish a retention rate of up to one hundred percent (100%).

Section 12.3 – Nature of Retained Allocations

Retained patronage allocations:

Shall constitute equity capital of the Cooperative.
Shall not constitute a deposit, loan, or guaranteed return.
Shall not be withdrawable except as provided herein.
Shall not bear interest unless specifically authorized by Board resolution.

Section 12.4 – Capital Accounts

The Cooperative shall maintain an individual Capital Account for each Member reflecting:

Initial capital contributions
Retained patronage allocations
Adjustments for losses (if any)
Redemptions approved by the Board

Capital Accounts shall not confer additional voting rights beyond those provided by membership class.

Section 12.5 – Redemption of Capital

Redemption of retained capital shall occur only:

Upon termination of membership,
Upon death or disability,
At the discretion of the Board subject to liquidity safeguards,
Or pursuant to an approved Store Credit Redemption Program.

The Board may defer redemption if necessary to protect the financial stability of the Cooperative.

Section 12.6 – No Automatic Right of Withdrawal

No Member shall have the right to demand redemption of retained capital. All redemptions shall be subject to Board approval and Cooperative liquidity policy.

Article XIII: Capital Accounts

Section 13.1 – Worker Capital Accounts

Each Worker Member shall have an individual capital account reflecting:

capital contributions
retained patronage allocations
losses allocated

Section 13.2 – Community Capital Accounts

Community Shares shall be tracked separately and shall not constitute ownership of Cooperative assets beyond rights defined herein.

Section 13.3 – Redemption

Capital accounts and Community Shares shall be redeemable only at the discretion of the Board, subject to financial capacity of the Cooperative.

Section 13.4 – Share Caps

No Community Member may own more than twenty (20) Community Shares.

Section 13.5 – Transfer Restrictions

Community Shares and Worker Membership interests may not be transferred without Board approval.

Section 13.6 – Right of First Refusal

The Cooperative shall have the right to repurchase any shares proposed for transfer.

Article XIV: Community Projects

Section 14.1 – Purpose of Community Projects:
The Cooperative shall actively engage in community-based initiatives that align with its mission to support local development, cooperative education, and neighborhood well-being.

Section 14.2 – Eligible Project Areas:
Community projects may include, but are not limited to:

Youth engagement programs (e.g., baking apprenticeships, mentorships, or sports teams);
Food access and sustainability initiatives (e.g., community gardens, local sourcing networks);
Educational workshops on cooperative economics, entrepreneurship, or food sustainability;
Public art, cultural, or beautification projects that enrich the community;
Emergency or relief fund projects responding to local needs.

Section 14.3 – Funding:
A minimum of 5–10% of annual surplus shall be set aside for community projects after reserves and reinvestment are covered. Additional funds may be raised through grants, partnerships, or donations.

Section 14.4 – Oversight and Participation:

The Community Projects Committee shall oversee proposal collection, budgeting, and implementation.
All members, including consumers, may propose community initiatives.
Projects exceeding $5,000 shall require approval by the full membership.

Section 14.5 – Reporting:
An annual report of community project activities, expenses, and outcomes shall be presented at the Annual General Meeting and shared publicly to demonstrate community accountability.

Article XV: Fiscal Year

The fiscal year of 24 Karat Bakery Cooperative shall begin on January 1 and end on December 31 of the same year.

Article XVI: Amendments

Bylaws may be amended by:

A 2/3 vote of worker-members, and
Board approval
Proper notice must be given at least 14 days before voting.

Article XVII: Dissolution

Upon dissolution:

All debts shall be settled;
Remaining assets will be distributed in this order:
- Repayment of member capital;
- Donations to another cooperative or aligned community initiative.