Starting a worker co-op

The decisions you have to make before you write anything down — then the small set of documents that follow from them, and what registering one actually costs.

A worker co-op is not a template you download. It is a set of answers about power and money, reached by the people who will do the work. If you write the rules first, you will spend the first year arguing about what you accidentally agreed. Get the answers, then write them down, then register — in that order.

1. Who the members are

This is the question everything else depends on, and the one most groups answer by accident. Decide which of these you are:

• Workers only. If you work here, you are a member; if you do not, you are not. The cleanest model, and the easiest to explain.
• Workers plus others — customers, supporters, the community you serve, a funder. Legitimate, but you must then be explicit about whether those members have the same voting rights as workers. Usually they should not, and saying so up front avoids a fight later.
• Everyone who joins gets membership. Fine, but then you have written no rule about who is let in, and the people who built the thing can be outvoted by the people who arrived after them.

Write down: who can be a member, whether membership is compulsory for workers (and what happens if someone declines), whether members can be workers without being members, and who decides on a new member.

2. One member, one vote — and where the line is

One member, one vote is the defining feature of a co-op and the thing that separates it from a company. But "one member one vote" only answers the question of how votes count. You still have to decide what gets voted on:

The practical point: a co-op that votes on everything meets constantly and gets nothing done. Decide which decisions need the whole membership and delegate the rest — then write the delegation down, so it can be taken back.

3. How surplus is shared

Not "profit" — surplus, the money left after everything is paid, including wages. Every co-op has to answer four questions about it:

1. Does it get shared out at all, or does it stay in the business as reserves? Both are valid; a young co-op that distributes everything has no money to survive a bad quarter.
2. If it is shared, on what basis? Equally between members; in proportion to hours worked; in proportion to pay; or in proportion to what each member put in. Each choice says something about what the co-op believes.
3. What about the people who leave? Whether a departing member gets their share of the reserves back — and how it is valued — decides whether members stay.
4. What about new members? If membership requires buying in, that is a barrier; if it requires nothing, a new member shares in reserves built by others. Pick a position.

4. How someone joins and leaves

• Joining. Is there a trial period? Who decides — the whole membership, or a group within it? Is there a buy-in, and can it be paid in instalments or worked off?
• Leaving voluntarily. How much notice? What happens to their share, their unpaid hours and their access to the co-op's systems and customers?
• Leaving under pressure. This is the hard one. A co-op that cannot remove someone who is damaging it will lose everyone else instead. Write a fair process: a stated concern, a chance to answer it, a decision by the membership, and a right of appeal.
• Coping with a falling-out. Two members who cannot work together is a normal event, not a failure. Decide in advance whether the co-op resolves it, or helps one of them leave well.

5. Who decides pay

• Equal pay for all? Simple, powerful, and hard to keep if the co-op needs a skill it cannot get at that rate.
• Pay bands, or a ratio — the highest-paid member earns no more than a stated multiple of the lowest? Fix the multiple now, because it is easier to hold than to introduce.
• Market rates, decided by the membership? Workable, but be honest that this imports the pay inequality you were trying to escape.
• Who sets the number? The whole membership, on a stated cycle, with the figures visible to all members. Pay secrecy and member ownership do not survive together long.

6. The documents that follow

Once those five decisions are made, the paperwork is short. Four documents:

1. The rules or bylaws. How the co-op is governed: membership, voting, the decision list, the rules for changing the rules, and what happens on winding up. This is the only document a registrar looks at, so it has to match the law where you are. Everything below is internal.
2. The membership agreement. What a member signs: their buy-in, their hours and obligations, the trial period, what they get, and how they leave with a share. This is the document that prevents most disputes.
3. Role descriptions. One page each for the roles that matter: the co-ordinator or manager, the treasurer or bookkeeper, and whoever does the rotas. What the role decides alone, what it must bring to the membership, and what it must report.
4. A disputes process. Short and written into one of the above: how a complaint is raised, who hears it, the time limits, and the right of appeal. A co-op with a disputes process can have disagreements without losing members.

Also keep a members' register — who is a member, from when, and what they have paid in. It sounds like a formality until the first argument about who is entitled to vote.

7. Registering in Ireland

This section is Ireland-specific. Elsewhere, the names of the legal forms and the fees differ; the questions above do not.

There is no standalone "co-operative" registration in Ireland. To be legally a co-op you register as an industrial and provident society under the Industrial and Provident Societies Acts 1893–2021, with co-operative principles in your rules. (Registrar of Friendly Societies)

Route one: the co-operative (RFS / IPS)

(Source: RFS, IPS fees) (archived copy)

• Minimum seven founding members — section 5 of the 1893 Act, still in force. (1893 Act) (ICOS)
• The rules must cover the Second Schedule of the 1893 Act. Practically everyone uses the ICOS model rules, and using Registrar-approved model rules halves the registration fee. (RFS)
• A mandatory annual audit, plus the annual return. ICOS lists both as the compliance burden of a co-op. (ICOS) Audit exemption for small co-operatives is proposed but not yet law, so budget for the audit every year.

Route two: a company limited by guarantee (CRO / CLG)

If what you need is simply a legal person that can hold a lease, employ people and carry liability — and the co-operative identity is not essential to you — a CLG is the cheaper route.

(CRO, company fees) (CRO, registering a company)

• As few as one member, but two directors and a secretary are required — one director may also be the secretary. (registration under the Companies Act 2014)
• No share capital, profits cannot be distributed to members, and members' liability is limited to a nominal guarantee, often €1. (CRO, guarantee company requirements, via the archived copy — cro.ie sits behind a bot filter)
• Audit exemption is normally available. The CRO's current small-company test is a balance sheet of no more than €7.5 million, turnover of no more than €15 million and 50 or fewer employees — far above a new co-op. A member can object to the exemption. (CRO) (CRO, guarantee companies)

What is about to change

A Co-operative Societies Bill is at an advanced stage of drafting but had not been published when this page was written. It is proposed to cut the founding-member minimum from seven to three, let companies be founding members, and introduce audit exemptions for smaller co-operatives. The Minister expected to bring it to Government "in the Autumn" of 2026. (Dáil question, 7 July 2026)

Not confirmed: what ICOS charges for registration support and its model rules package is not published — ask ICOS directly. Registration fees and thresholds change; check the RFS and CRO pages above before you file.

8. What to do first

1. Answer the five questions together, in one room. Write the answers on one page, dated, and have everyone sign it. That page is worth more than any template.
2. Write the membership agreement next, because it is the document that prevents most disputes, and it costs nothing.
3. Only then decide the entity — and only if you need one: a lease, employees, liability, or money that will only pay a company.
4. Count your founding members honestly. Seven genuine member-owners is a different thing from seven signatures gathered to get over the line.
5. Budget for the ongoing obligation, not the setup fee. The annual audit or the annual return is the cost that keeps arriving.

Related: what it costs to register a co-op or a company has the full fee tables and the annual obligations side by side, and Who owns the farm business? covers the difference between a co-op, a members' buying scheme and a farm partnership.

Not legal advice. The decisions here are general; the registration section is about Ireland and the rules there change. Take your draft rules and membership agreement to a solicitor or a co-operative development adviser before you register anything, and check every fee on the RFS or CRO page it came from.

Free to copy, adapt and pass on.