Artist Cooperatives: Structure - Bylaws Conclusion

4) The cooperative’s bylaws also must detail the distribution of financial proceeds.  As mentioned earlier, most cooperatives charge a commission fee for all works commissioned and/or sold through its services.  Most cooperatives credit the equity member’s account for sales, and this account is then used for monthly fees paid to the cooperative or withdrawn by the artist for personal use.

At the end of the year and after a financial analysis, all unused funds (unless the board has established a Reserve Account) are distributed equally among the equity members, if the cooperative is established as a nonprofit.

5) The other details to be presented in the bylaws are governance meetings (quantity, times, notification), duties and election of board members, duties and election of officers, definition and appointment to standing committees, and various administrative decisions, such as insurance, indemnification, fiscal year of operations, fiscal review responsibilities, and procedures for handling amendments to the bylaws.

Remember, regardless of the structure chosen, if the artists’ decision is to create a legal entity for their cooperative, all of the elements above must be discussed by the start-up equity members upon advice of professionals.



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