Your questions. The answers.

On the transfer itself

Is this mode of transfer a real sale?

  • Transferring a business into a worker cooperative is neither a donation nor a gift to the employees.
  • You sell your business as you do with the other legal options.
  • Obviously, there is a humanist or social dimension to your decision to transfer the business in to a worker cooperative; however, this is not a selfless act!

What about the price and the risk?

  • The transaction amount takes into account the same objective data as in the other types of sale.
  • In addition to this fair price, this is a reliable type of operation. There is little or no risk of the transaction being terminated for hidden? defects; those taking over the business know everything about it: its clientele, the production tool, the quality of the employees, the state of the finances, etc.

Will the employees have the means to buy the business?

It is a fact that the employees may not have huge sums of capital, but - there can be many of them and together, they can gather the required funds; - if the project is considered viable, a worker network cooperative can provide a decisive contribution in the form of financial support; - banks often view the worker cooperative solution as a healthy approach and a guarantee of business sustainability, and may grant additional loans more readily.

Will all the employees be on board?

  • Not all employees need to become members to convert your business into a worker cooperative.
  • It only takes a team that is eager to take the destiny of the business in their hands and who can unite behind a leader.
  • If the other employees do not wish to invest in the new business, they will be offered the possibility of becoming members. In fact, they become members under two conditions:
    • if they, themselves, wish to,
    • if it is agreed on by the worker-members during the general meetings.
About the future company as a worker cooperative

Very few people know about the worker cooperative model, who will help me?

  • It is a fact that business transfer experts, or even chartered accountant themselves know very little about worker cooperatives.
  • Le réseau des Scop qui accompagne déjà plus de 2 000 Scop dans toute la France saura vous accompagner et, si nécessaire, vous aiguiller vers les experts qualifiés.

Will the future managing director be the most competent person?

  • You know your employees very well. You are best placed to judge who will be able to take over the reins of your business.
  • The employees also know each other’s skills better than the external shareholders. They will know who to elect as managing director.
  • The future of their company and their jobs are in their hands; their decision will be carefully considered and, no doubt, they will quickly come to an agreement on who will take over the reins from you.

Will all the employees not want to become bosses?

  • The company democracy that prevails in a worker cooperative is neither self-governance nor constantly appealing to employees
  • Within the executive committee or the board of directors, the managing directors, take unilateral management decisions that they consider must be taken in the interest of the company, which now belongs to the employees
  • Only strategic decisions, starting with the election of the managing directors, are taken, based on the one worker-member, one vote principle, by all worker-members during general meetings
  • Management fully assumes its role on a day-to-day basis. The managing director’s teaching skills, their ability to listen, as well as staff involvement make decision-making easier.

Is a worker cooperative not designed for struggling businesses, to begin with?

  • In France, of the roughly 200 worker cooperatives created each year, only 5% are from struggling businesses seeking a fresh start.
  • The overwhelming majority of worker cooperatives created are new businesses or healthy businesses that have been converted into worker cooperatives following a sale by the founding managing director.
  • Admittedly, the media put a spotlight on many worker cooperative projects that are linked to failed business; however, these are not all viable!

Is it not easy to dismiss an elected managing director?

  • Managing directors are elected for a four-year term in a private limited company and six years in a public limited company in France. This way of nomination avoids abuse of power and sanctions poor management.
  • But, far from being fragile, their position is all the more legitimate as it is the employees themselves who choose their managing director.
  • Social relations between employees and managing directors are, by nature, more balanced in worker cooperatives.
  • In practice, French managing directors are rarely dismissed, and they hold office for around twenty years, on average. This is roughly the same as in a traditional company.
  • Also, in a worker cooperative, leadership is, first of all, a human factor.

Is a worker cooperative not more appropriate for the construction and public works or industry sector?

  • Even though these “historical” sectors are still very well represented in France, 55% of worker cooperatives now operate in the services sector.
  • This ratio has been increasing steadily for 10 years, and the gap tends to be closing with the ratio observed in the French economy.

Is profitability a real concern in a worker cooperative?

  • As in all industrial or commercial enterprise, profitability is a requirement in the public or private limited companies that are worker cooperatives.
  • Also, because profits are distributed fairly, this is not viewed as an abstract concept, reserved only for shareholders, but as compensation for sound managements and everyone’s labour.