Conversion

This presentation goes over the steps of the cooperative transition process and outlines benefits, challegnes, and key questions of a business transition.

Link: here

Before a cooperative transition process can get started, the selling owner needs to make some decisions about how to structure the process, specifically she needs to clearly define who has decision-making power in the process: herself, the transition committee, the likely coop members, and the whole group. This chart outlines who decides what.  

Gant chart outlining the phases a business goes through during transition to a cooperative. 

A presentation on how employees can buy-out a company and convert to a worker cooperative. 

A 2-page brochure with basic information about converting your business to a worker cooperaive. 

A sale to employees can provide an owner with significant tax breaks. Because of the IRC §1042 Capital Gains Rollover, business owners who sell at least 30% of the stock in their C-Corporation to an employee-owned cooperative can roll over the proceeds from the sale into qualified replacement securities and defer payment of any capital gains tax indefinitely.

This report provides a detailed examination of the benefits received by departing employees of a company converted to 100% employee ownership either as an ESOP or a Co-op over a 15 year period. It also studies the net cash retained by the ESOP or Co-op firm over the same time-span. It discusss the some theoretical and practical implications related to the two forms of employee ownership.

This case study disccuses the 1042 rollover of Select Machines and the employee purchase of the company from its retiring owners. It compares and contrasts the creation of ESOPs with that of cooperatives using the 1042 rollover provision and provides an overview of a co-op business succession model