Getting Started10 min read

Design Ownership

Configure member classes, set voting rights and profit-sharing rules, record member buy-ins, and define capital lockup and redemption terms.

Equity & Share Design on OwnFold

Cooperative business models differ from standard corporate structures by tying ownership, control, and surplus value directly to participation (labor, purchases, or supply volume) rather than capital investment size. The Ownership Designer lets you capture this model as member classes that feed your bylaws drafts, governance rules, and capital records.

1. Configuring Member Classes

You can create multiple member classes, each representing a distinct type of stakeholder, or start from the Worker, Consumer, or Platform co-op presets. Typical examples:

Class A (Worker-Members): Workers who provide labor. Typically one member, one vote, with profit sharing based on hours worked.
Class B (Producer or Consumer Members): Suppliers or customers whose patronage is tied to the volume they deliver or purchase.
Class C (Investor-Members): Non-voting, capital-providing stakeholders. Set an advisory voting setting and a capped preferred return (e.g., a target dividend with a cap such as 8%) instead of patronage.

Each class records a name, buy-in amount, voting rights, profit-sharing basis, optional preferred dividend target and cap, and its redemption lockup and payout period. Use "Sync to Bylaws" to write the current class table into your bylaws draft.

2. Voting Rights & Board Structure

Each class carries one of these voting settings:

One Member, One Vote (Standard): Every member of the class has exactly one vote on a proposal, regardless of paid-in equity.
Advisory / Non-Voting or None (Trial Class): Members can follow and comment on proposals, but the Governance module blocks them from casting binding votes and leaves them out of quorum counts.
Limited (Board Elections Only): Members can vote only on proposals in the Board Election category.

Board structure (at-large elections, class-based seats, or a direct collective with no board) is chosen in the Formation Studio and written into your bylaws draft. OwnFold does not run weighted or proportional voting.

3. Member Capital Buy-Ins

A buy-in capital contribution demonstrates financial commitment:

Class Buy-In Amount: The capital contribution required to join the class (e.g., $1,000).

Recording Payments: Record what a member has paid when you onboard them, then log later contributions from their Member Ledger profile. Each recorded payment updates the member's capital account and posts a balanced entry to the general ledger (Dr. Cash, Cr. Member Capital).

Probationary Candidates: Members added with a "Prospect" status appear as probationary candidates. When they are ready, "Activate & Post Buy-In" makes them active members and posts their class buy-in.

4. Exit Provisions & Lockup Rules

Unlike joint-stock companies where shares are sold to external buyers, cooperative shares are redeemed back to the cooperative upon a member's exit. Define safety criteria:

Mandatory Holding Period (Lockup): Lock capital for a number of years (e.g., 3 or 5) to stabilize the co-op's balance sheet. Redemption requests in Share Trades are blocked until a member's class lockup has passed.
Redemption Payout Period: Record how many years exit payouts are spread over (e.g., 5 annual payouts). This term is written into your bylaws draft; schedule the actual payments with your board.
Annual Redemption Cap & Board Approval: Share Trades limits total redemptions in a year to 5% of total member capital, and each redemption needs board approval.