What is a co-op?
A cooperative (co-op) is a business that is owned by its customers. Its goal is to be financially self-sufficient entity that is run to meet the consumer and social goals of its owner-community. Co-ops are not dependent on donations or grants.
How can I become an owner?
Shares cost $65. This is a one-time equity purchase — you are not paying a fee or a due, but are actually buying an interest in the Art Theater’s business. Buying a single share for $65 makes you an owner, gives you all the associated privileges, and allows you a single vote in board elections and other ballots. The by-laws allow you to buy up to eight additional shares, and while extra shares won’t give you additional benefits or votes – – a key distinction between a co-op and an investor-owned business — by buying multiple shares you will help us reach our equity goal and know that you are playing a lead role in ensuring the future of the Art Theater Co-op. If you have the means, you are encouraged to buy multiple shares.
What are the liability risks for co-op owners?
Owners who are not directors have no liability risk. The Illinois compiled statutes (805 ILCS 107.85) states: ’The members of a corporation shall not be personally liable for any debt or obligation of the corporation.’ Directors, unlike members, have oversight responsibilities, make policies, and decide operational issues. (The statutory limitations on liability of directors apply only to a tax-exempt organization, which the co-op is not.) Potential liabilities of directors relate directly to their own negligent and wrongful conduct. The behaviors to avoid potential liabilities are described in the standards of conduct set out in the bylaws, which are taken from the governing statute. As long as directors comply with these standards of conduct, their risk of being liable is minimized.
What is the business plan of the Art Theater Co-op?
This is the short answer. There’s a 30-page version of the business plan at the Theater. The co-op is leasing the theater: this is not about purchasing the building. The theater began operations with $20,000 in cash and $115,000 in debt. The debt reflects the equipment that is in place now, which the co-op purchased from Sanford’s corporation. The equipment includes pretty much everything in the theater (35mm projectors, the screen, sound system, concessions equipment, computers, printers, etc…) but not the seats or marquee letters, which are part of the building.
The co-op will pay off its debt over a six-year term with the money raised from new owners joining and with cash from operating profits. At the end of six years, the co-op is projected to be debt-free and operating at a profit. At that point, the co-op can consider different long-term options.
Who runs the co-op?
The owners elect a board of directors from its ranks. This board has the ultimate responsibility for setting direction for the business and reviewing its operations. Its primary employee is the general manager, who hires staff and runs the day-to-day operation of the theater.
The general manager operates the business so that it is sustainable. Any profits that are generated will either be used for community work that relates to our mission, held for future expansion or unexpected expenses, or given back to the owners in the form of patronage dividends.
Are non-owners able to watch movies at the co-op?
Yes! The Art operates as a normal movie theater.
What are the benefits of ownership?
Owners are able to run for seats at the board of directors and get involved in the governance of the theater.
For more information, see the Art Theater Co-op Bylaws