Bylaws for Ethical Yarn Community
Article I. Organization
Section 1.1 – Name
The name of the cooperative is Ethical Yarn Community, referred to in these bylaws as “the Co-op.” The Co-op may also conduct business and cooperative actions under the names “Ethical Yarn Co” and “Ethical Yarn Co-op.”
Section 1.2 – Purposes
The Co-op is formed for the following purposes: to market for its members and other producers fiber-related products or any products derived therefrom; to engage in any activity in connection with the caring of fiber animals and plants, shearing, cleaning, processing, dyeing, transporting, storing, financing, advertising, selling, marketing, or distributing of any such products or any products derived therefrom; to purchase for its members and others fiber supplies and equipment; to manufacture, process, sell, rent, store, handle, ship, distribute, furnish, supply, and procure any and all such fiber supplies and equipment; and to exercise all such powers in any capacity and on any cooperative basis that may be agreed upon. All this will be engaged for the mutual benefit of Co-op members, partner animals, and local communities.
The Co-op’s mission statement is as follows: Ethical Yarn Community is a member-owned cooperative that centers environmental and transformative justice in the alchemy of fiber processing, plant/animal care, yarn production, and object creation by providing community access to equipment, education, and supplies while offering methods to sell, trade, and locally distribute finished products.
Section 1.3 – Principal Office
The principal office of the Co-op shall be located in Oregon.
Article II. Directors and Officers
Section 2.1 – Number and Qualifications of Directors
The business of the Co-op shall be controlled by a board of directors, each of whom shall be a member of this Co-op. Business member entities of the Co-op may not serve on the board. Principals of business member entities may serve on the board of directors if they themselves are individual members of the Co-op. The board shall consist of no fewer than three (3) directors and no more than twelve (12) directors. The only exception to this would be in the event that the Co-op only has two members, in which case both members would serve as directors.
Any conflict of interest the directors have should be stated in writing before doing business with any director-affiliated organizations, and those directors must refrain from votes as they relate to such organizations. Any undisclosed conflicts of interest may result in removal as director as dictated by a consensus vote of other directors.
Directors shall be elected at each annual meeting of members. Candidates for director positions may be nominated by the current board of directors or by petition signed by no fewer than two (2) members of the Co-op. The petition shall be submitted to the board of directors no fewer than seven (7) days prior to the commencement of the proposed election.
In an election of directors, each member will have an unlimited number of votes up to one (1) per nominee. Any vote will demonstrate approval from a member. The nominee receiving the greatest number of votes shall be elected to the first open director seat, the nominee receiving the second-greatest number of votes shall be elected to the next open director seat, and so on until each open seat has been filled.
Section 2.2 – Staggered Terms for Directors
Each director shall be elected and serve a term between one (1) and three (3) years, to be determined in collaboration with the elected director and the needs of the directors as a whole. Directors shall serve staggered terms such that, whenever possible, no more than one-half of the directors’ terms expire at any annual election. To manage the staggered terms of directors, the board may designate a shorter term for any director position open for election.
Directors may serve unlimited consecutive terms provided that they submit themselves as a nominee in the election process at the end of their term and abstain from voting for their own open director seat.
Section 2.3 – Termination of Directors
Directors may be removed if all members vote accordingly at a duly called and noticed (at least thirty [30] days) member meeting. Written reason for the removal of the director must be included in the notice of the meeting, and the director whose removal is sought has an opportunity to answer the reasons at the meeting.
Directors may resign their positions by writing to the rest of the directors. A one-month courtesy notice is recommended in this case but not required.
Section 2.4 – Vacancies
Whenever a vacancy occurs on the board of directors, other than from expiration of a term of office, the remaining directors may appoint a member to fill the vacancy. If a vacancy would result in a board composed of fewer than three directors, the board shall appoint a member to fill the vacancy. Appointed directors shall serve until the next annual meeting, at which time they may stand for election by the members.
Section 2.5 – Regular Board Meetings
Regular meetings of the board of directors shall be held monthly or at other times determined by the board.
Section 2.6 – Special Board Meetings
A special meeting of the board of directors shall be held whenever called by a majority or half of directors. Any and all business may be transacted at a special meeting. Each call for a special meeting shall be in writing.
Section 2.7 – Notice of Board Meetings
Regular meetings of directors shall require no notice. Special meetings of directors shall require written notice. Written notice shall be emailed to each director at least seven (7) days prior to the meeting.
Section 2.8 – Action without a Meeting
Any action required or permitted to be taken at a meeting of the board may be taken without a meeting if each director gives written consent to the acting without a meeting. Both the written consents and the votes cast, if any, shall be recorded in the minutes of the next meeting of the board.
Section 2.9 – Compensation
The compensation, if any, of members of the board of directors shall be determined by members of the Co-op at any annual or special meeting of the Co-op.
Section 2.10 – Quorum of Board Members
A majority of the board of directors shall constitute a quorum at any meeting of the board. However, any missing directors must still have the opportunity to vote in any proceedings of the board via email for the following two weeks after a meeting.
Article III. Duties of Directors
Section 3.1 – Management of Business
The board of directors shall be responsible for the legal, financial, and administrative affairs of the Co-op. The board shall propose rules and regulations not inconsistent with law or with these bylaws for the management of business and guidance of the members and agents of the Co-op. The board shall have in place an accounting system adequate for the requirements of the business of the Co-op, and it shall be the duty of the board to require proper records be kept of all business transactions.
Section 3.2 – Employment of Manager
The board of directors shall have the power to employ or to authorize employment of a store manager (“Manager”) and any other employees as may be deemed necessary, and to fix their compensation. The Manager shall have charge of the business of the Co-op under the direction of the board of directors.
Section 3.3 – Bonds and Insurance
The board of directors shall provide for adequate insurance of the property of the Co-op, and property which may be in the possession of the Co-op, or stored by it, and not otherwise adequately insured. The board shall provide adequate insurance covering liability for accidents to the public, members, and all employees of the Co-op. Any members working at the Co-op who are not covered by the liability insurance must sign a waiver of liability.
Section 3.4 – Examination of Co-op Books
Any member of the Co-op, upon written notice to the board stating the purposes thereof, maybe request to examine any books or records pertinent to the purpose specified in the notice and may make extracts therefrom for dissemination or use by any member of any information therein contained.
Section 3.5 – Agreements with Members
The board of directors shall have the power to carry out all agreements of the Co-op with its members in every way advantageous to the cooperative representing members collectively.
Section 3.6 – Depository
The board of directors shall have the power to select one or more banks or credit unions to act as depositories of funds of the cooperative and to determine the manner of receiving, depositing, and disbursing funds of the cooperative and the form of checks and the person or persons by whom they shall be signed, with the power to change the banks and the person or persons signing the checks and the form at will.
Article IV. Offices of Directors
Section 4.1 – Duties
The board will distribute among themselves the following duties:
Presiding over meetings of the cooperative and the board of directors;
Calling special meetings of the board of directors;
Keeping a complete record of all meetings of the Co-op and the board of directors
Signing papers pertaining to the Co-op
Serving notices required by law and by these bylaws
Making full reports of all matters and business pertaining to the members at the annual meeting
Keeping correct and complete record of accounts
Keeping minutes of the proceedings of its members, board, and executive committee
Keeping record of the names and addresses of all members
Keeping and disbursing all monies of the Co-op
Keeping accurate books of accounts of all transactions
Upon the election of successors, the officers shall turn over all monies, documents, records, books, and other property belonging to the Co-op.
Section 4.2 – Time Commitment
The expectation is that each director will attend the monthly meeting and put in at least two hours of additional administrative work into furthering the mission of the Co-op.
Article V. Executive Committees
Section 5.1 – Powers and Duties
The board of directors may appoint an executive committee of one (1) or more directors and one (1) or more members (with a minimum of two [2] people) at its discretion. The executive committee shall have and may exercise all the authority of the board in the management powers and duties as may, from time to time, be prescribed by the board of directors, except that the executive committee may not exercise authority over the following:
apportionment or distribution of net proceeds, savings, or losses
selection of directors
filling of vacancies in the board or executive committee
Copies of minutes of any meeting of the executive committee shall be distributed to all directors within seven (7) days following the meeting. Meeting minute approval will occur at monthly meetings.
Article VI. Members
Section 6.1 – Types of Membership
The Co-op shall offer two (2) tiers of membership, hereafter referred to as “Member-producers” and “Community Members.”
Section 6.2 – Member-producers
Member-producers are members of the co-op who contribute time and effort toward manufacturing products and materials for Co-op use. New potential Member-producers shall be selected by the board or an executive committee after an interview process, at which point the potential Member-producer enters an apprentice period to last for at least twenty-four (24) working hours. Once the apprentice period is complete, all the current Member-producers of the Co-op will vote on whether to make the apprentice a Member-producer, at least on a quarterly basis for any potential Member-producers who have completed training. Until that point, the apprentice shall not receive any payouts from the Co-op.
Member-producers are required to put in a minimum of nine (9) working hours on site at the Co-op or at home per month with a three-month (3-month) grace period during which the Member-producer will still receive Co-op payouts. If the Member-producer remains inactive (e.g., is not putting in at least nine hours per month) after this grace period, they will cease to be a Member-producer and no longer receive payouts. They must also return all Co-op property within 30 days after notice of a lapse in membership. Directors will send out a notice to a Member-producer after two (2) months of inactivity, and a Member-producer has the following month to become active again before losing their Member-producer status. If a terminated Member-producer wants to become a Member-producer again, they will need to be voted in at the next quarterly vote by the existing Member-producers.
Member-producers receive a payout from the Co-op as a percentage of the Co-op profits less Co-op costs. This percentage will be determined by the board of directors and voted on by current Member-producers. Payouts will occur no less often than every six (6) months using a payment method to be determined by the Co-op directors.
Member-producers maintain the following rights in the Co-op:
Voting on matters directly pertaining to Member-producers, such as a change in the percentage of income Member-producers receive and change in the Member-producer agreements
Invitations to all director meetings
Discounts on Co-op products, classes, and rentals
Each member of the board of directors may choose to become a Member-producer but must still go through the apprentice period and voting process.
Section 6.3 – Community Members
Community members of the Co-op shall have the following rights:
Discounts on Co-op products, classes, and rentals
Voting on issues that directly affect the Community Members, such as cost of membership
Ability to attend annual meetings of the Co-op
Membership shall recur on a yearly basis, at which point the membership fee is again due. The initial membership fee shall be set by the board of directors, and any future change in membership dues shall be voted on by current Community Members.
Section 6.4 – Qualification
Any natural person may apply for membership in the Co-op, either as a Community Member or as a Member-producer. Legal persons such as business entities and nonprofit organizations or associations may only apply for membership to become Community Members. Such legal person members shall designate in writing to the board a non-member natural person authorized to cast votes for the entity. An applicant may become a member of this Co-op by completing a board-approved membership application. The board may reject a membership application for any reason consistent with these bylaws or Oregon law.
Section 6.5 – Membership Certificate
The Co-op shall issue a certificate of membership to each member which shall be in the form prescribed by the board of directors. Certificates of membership shall not be transferable except by board approval.
Section 6.6 – Member Information
The board of directors shall keep a complete list of the names and email addresses of all members as given by the members. Until the secretary receives notice of a change of information from a member, the Co-op may treat the name and email addresses appearing on the Co-op’s list as correct for purposes of giving notices and for all other purposes.
Section 6.7 – Member Voting Rights
Each member shall be entitled to only one vote at any meeting of the members. Legal person members, that is business entities or nonprofit organizations and associations, may cast votes only when they have designated in writing to the board a natural person authorized to cast votes on their behalf.
Section 6.8 – Suspension and Termination of Membership
The board of directors may, by majority vote of the directors, suspend the membership of any member who fails to make annual membership payments or who fails to fulfill the hour requirement of Member-producers. The board shall give a member written notice of the suspension. Suspended members lose the privileges and benefits of membership in the Co-op until the reasons for the suspension have been cured and the board has reinstated the membership. If suspended members do not cure the suspension within thirty (30) days of the suspension notice or give the board notice that they do not intend to cure the suspension, the board may, by majority vote of the directors, terminate the member’s membership at any time.
Section 6.9 – Expulsion of Member
A member may be expelled from the Co-op for breach of contract, for failure to abide by these bylaws, or for acts injurious to the Co-op. The board shall notify the accused member, in writing, of the charge at least fifteen (15) days before the date of a proposed hearing when the charges shall be considered by the board. Upon the affirmative consensus vote, the directors present and constituting a quorum, the person accused shall be denied further benefit of membership privileges except to conclude unfinished transactions.
Whenever a member is expelled from membership or the member’s agreement is cancelled, all membership rights and privileges shall automatically terminate, though the terminated Member-producer is still entitled to payouts from the Co-op for three months after their last active session at the Co-op.
Section 6.10 – Withdrawal of Member
Any member may withdraw from the Co-op by giving ten (10) days’ written notice to the board of directors at any time. Upon expiration of the ten (10) days from the delivery of notice, membership of the member withdrawing shall cease and all membership rights and privileges shall automatically terminate. The member will receive payouts from the Co-op for three months after their last active session at the Co-op.
Section 6.11 – Member Complaint
If any member has any complaint to make of the goods or services of the Co-op or the conduct of any of the employees or members of the Co-op, they shall appeal to the board of directors. The board of directors shall investigate the complaint, decide upon it, and enter its decision in the minutes at the monthly meeting. If the member is still not satisfied, they may appeal to a general or special meeting of the members.
Article VII. Invested Parties
Section 7.1 – Definition of Invested Parties
Invested Parties are individuals or entities who have invested funds indefinitely such that the Co-op can function. This does not include entities such as banks or other contractual loan agreements but only applies to those with personal, private capital invested in the Co-op. This section does not nullify any other financial contractual agreements made with the Co-op.
Section 7.2 – Procedure of Payments against Co-op Debts
While the Co-op intends to pay back all debts and loans, there is a recognition that, while the Co-op is getting started, it may not be able to pay back funds in a timely manner. The Co-op will keep record of all debts incurred with the intention of repayment in the future.
Any expenses the Co-op incurs will be voted on by the board of directors before the expense is logged. Invested Parties who are also directors and/or Member-producers may make purchases on behalf of the Co-op without board approval assuming that they know and accept that not all expenses will be approved by the board of directors. If an expense is not approved, the Invested Party maintains ownership and/or responsibility of the product and/or service purchased.
Once an expense is approved, the Co-op will record the debt incurred and make payments quarterly on that debt in an amount proportional to current Co-op income to be determined by the Co-op directors.
Payments may be accelerated only by a consensus vote by a quorum of the Co-op’s directors.
Article VIII. Meetings
Section 8.1 – Annual Meeting of the Members
The annual meeting of members of this Co-op shall be held in Oregon or online at a location and on a date that the board of directors shall fix.
Section 8.2 – Special Meeting of Members
Special meetings of members of the Co-op may be called at any time by the board of directors or at any time by written request from at least ten percent (10%) of members. The request shall state the time, place, and business of the meeting.
Section 8.3 – Notice of Meetings
Written or printed notice of every annual and special meeting of members shall be prepared and emailed to the last-known address of each member not less than seven (7) days before that meeting. The notice shall state the purpose, time, and place of meeting.
Section 8.4 – Absentee Voting
Voting by proxy shall not be permitted, but absent members may vote on specific questions by ballots transmitted to the board of directors by mail or electronic means. These ballots shall be counted only in the meeting at the time in which the vote is taken, provided that all members have been notified in writing, pursuant to action by the board of directors, of the exact wording of the motion or resolution upon which the vote is taken, and a copy is forwarded with and attached to the vote of the member voting.
Section 8.5 – Quorum of Members
Those members present at any annual or special member meeting shall constitute a quorum for the transaction of business of the Co-op except for business transactions concerning which a different quorum is specifically provided by law or these bylaws. Any missing members must be given an opportunity to vote electronically before decisions are put into action.
Section 8.6 – Order of Business
The order of business at the annual meeting shall be determined by the board. Members of the Co-op may submit agenda items for the annual meeting via written communication at least one (1) day before the meeting.
Article IX. Indemnification
Section 9.1 – Standards of Conduct
A director shall discharge the duties of a director, including the duties as a member of a committee, in a manner the director reasonably believes to be in the best interests of the Co-op.
In discharging the duties of a director, a director is entitled to rely on information, opinions, reports, and/or statements, including financial statements and other financial data, if presented by one or more of the following:
one or more officers or employees of the cooperative whom the director reasonably believes to be reliable and competent in the matters presented
legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person’s professional or expert competence
a committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence
A director is not acting in good faith if the director has knowledge concerning the matter in question that makes such reliance unwarranted.
A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the director’s office in compliance with this section.
Section 9.2 – Authority to Indemnify
Except as provided in this section, the Co-op shall indemnify an individual against liability incurred in a proceeding to which the individual was made a party because the individual is or was a director if all of the following are true:
the conduct of the individual was in good faith
the individual reasonably believed that the individual’s conduct was in the best interests of the Co-op or at least was not opposed to the Co-op’s best interests
in the case of a criminal proceeding, the individual did not have reasonable cause to believe the conduct of the individual was unlawful
The Co-op may not indemnify a director under this section in connection with one or more of the following:
a proceeding by or in the right of the Co-op in which the director was adjudged liable to the Co-op
a proceeding that charged the director with and adjudged the director liable for improperly receiving a personal benefit
The Co-op may not amend the Articles of Incorporation or these Bylaws so as to eliminate or impair a director’s right to indemnification after an act or omission occurs that subjects the director to a proceeding or to liability.
Section 9.3 – Mandatory Indemnification
Unless limited by the Articles of Incorporation and these Bylaws, the Co-op shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of any proceeding to which the director was a party because of being a director of the Co-op, against reasonable expenses incurred by the director in connection with the proceeding.
Section 9.4 – Advance for Expense
The Co-op shall pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if the director does both of the following:
furnishes the Co-op with a written affirmation of the director’s good faith belief that the director has met the standard of conduct described above
furnishes the Co-op with a written undertaking, executed personally or on the director’s behalf, to repay the advance if the director is ultimately determined not to have met the standard of conduct
The undertaking required by this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
An authorization of payments under this section may be made by resolution of the board of directors or by contract.
The Co-op may not amend or rescind the Articles of Incorporations, these Bylaws, or the resolution that authorizes the payments so as to eliminate or impair a director’s right to payments after an act or omission occurs that subjects the director to a proceeding for which the director seeks payment.
Section 9.5 – Indemnification of Officers, Employees, and Agents
Unless the Articles of Incorporation and these Bylaws provide otherwise, an officer, employee, member, or agent of the Co-op is entitled to mandatory indemnification under the above sections the same extent as a director, and the Co-op may indemnify and advance expenses under this section to any officer, employee, member, or agent of the Co-op to the same extent as a director.
Section 9.6 – Non-exclusivity of Rights
The indemnification and provisions for advancement of expenses provided in this section will not be deemed exclusive of any other rights to which directors, officers, employees, or agents may be entitled under the Articles of Incorporation or these Bylaws, any agreement, general, or the specific action of the board of directors, vote of members or otherwise, and will continue as to a person who has ceased to be a director, officer, employee, or agent and will inure to the benefit of the heirs, executors, and administrators of such a person.
Article X. Miscellaneous Provisions
Section 10.1 – Fiscal Year
For accounting purposes, this Co-op shall follow the calendar year.
Section 10.2 – Writing and Notice
Any reference in these Bylaws to written communication or notice shall mean any writing in electronic or paper form. Written communication or notice may be given in electronic or paper form, that is, by email, text message, postal mail, or any other electronic or paper form, and written notice may be given by electronic notification, that is, by the provision of the electronic link to a writing.
Section 10.3 – Bylaws Posted
After adoption, these Bylaws shall be posted on the Co-op’s website and be available for viewing.
Section 10.4 – Dissolution of the Co-op
Upon the dissolution of the Co-op in any manner, the assets of the Co-op shall be liquidated with priority to any co-op directors, officers, employees, or members who would like to purchase assets. The resulting funds will be distributed in the following order:
To pay the costs of dissolution;
To pay any debts and liabilities (including all promissory notes) to entities external to the Co-op, specifically excluding Invested Parties;
To pay any debts to Invested Parties, noting that, if there are not enough funds to pay the debts of all Invested Parties, the funds will be split proportionally to Invested Parties according to amount owed;
Any remaining assets shall be distributed among the active Member-producers in good standing.
Section 10.5 – Severability
In the event that any provision of these Bylaws is determined to be invalid or unenforceable under any statute or rule of law, such provision shall be deemed inoperative to such extent and shall be deemed modified to conform with such statute or rule of law without affecting the validity or enforceability of any other provision of these Bylaws.
Section 10.6 – Disputes
The Co-op and its current and former members agree to submit to a dispute resolution process administered by an unbiased, neutral mediator in the event that a director, officer, member, or agent of the Co-op requests such a process as the result of a dispute, controversy, difference, claim, or demand arising out of the patronage of or membership in the Co-op. The board of directors shall have the authority to hire a mediator to resolve such disputes. No party shall have recourse to litigation (in court or before a private arbitrator) until after the mediation process has concluded.
Article XI. Amendments
Section 11.1 – Amendments of Bylaws
These Bylaws may be amended at any special or annual meeting of members upon the affirmative consensus vote of the members present and constituting a quorum, provided that the proposed alteration or amendment is fully described in the notice of the meeting.