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Module Guides10 min read

Ownership Designer

Operational guide to designing member classes, setting buy-in amounts and voting rights, configuring preferred investor classes, and defining lockup and exit payout terms.

The Ownership Designer Module

The Ownership Designer is the administrative control panel for the structural foundation of your cooperative. It lets you define member classes, buy-in amounts, voting rights, profit-sharing rules, and lockup and withdrawal terms, then carry them into your bylaws drafts.

1. Equity & Share Class Architectures

Unlike standard corporations that issue a single class of common stock, cooperatives utilize specific equity structures:

  • Membership Shares: Typically, a cooperative issues exactly one voting membership share per active member (Class A). This share has a nominal, fixed par value (e.g., $10 or $100) and cannot appreciate in value. It holds the democratic voting right.
  • Preferred Shares: Used to raise investment capital from members or external community supporters (Class B/C). These shares do not grant voting power but yield a fixed annual dividend (capped by cooperative law to prioritize operational service over capital returns). In OwnFold, set a class's voting rights to Advisory and give it a target dividend and cap.

Start from the Worker, Consumer, or Platform co-op preset, or build classes from scratch. Each class records its buy-in amount, voting rights (One Member One Vote, Advisory, Board Elections Only, or None), and profit-sharing basis (hours worked, a hybrid of capital and hours, a capped return, or not eligible). Assign members to classes from the class directory.

2. Buy-In Amounts & Payment Records

Setting up member capital contributions is critical for early financing:

  1. Class Buy-In: Set the capital contribution each class requires.
  2. Recorded Payments: Record amounts paid at onboarding and log later contributions in the Member Ledger. Each entry updates the member's capital account and posts to the general ledger.
  3. Probationary Activation: When a candidate member is activated, their class buy-in is posted to their capital account in one step.

The Member Ledger shows each member's buy-in paid alongside their class requirement, so the board can follow up on outstanding balances. OwnFold does not set up payroll deductions or automatic installment billing.

3. Lockup Regulations & Exit Cash Flows

Redeeming capital accounts upon member exit presents a cash-flow risk. The Ownership Designer works with Share Trades to stabilize this process:

Lockups: Configure a holding period (e.g. 3 years) per class. Redemption requests in Share Trades are blocked until the member's lockup has passed, and total redemptions are capped at 5% of member capital per year.
Exit Payout Period: Record how many years a member's capital is repaid over (for example, 5 annual installments). Click "Sync to Bylaws" to write each class's lockup and payout terms into your bylaws draft; the payments themselves are scheduled and recorded by your board.