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Operating Agreement
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PORT=8536 | ||
ASPEN_CHANGES_RELOAD=true | ||
WWW_GRATIPAY_COM=../gratipay.com/ |
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nav_title = "Operating Agreement" | ||
nav_children = [] | ||
[---] | ||
[---] text/html via markdown | ||
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Gratipay, LLC is a worker-owned cooperative, organized under and subject to the | ||
laws of the Commonwealth of Pennsylvania in the United States of America. In | ||
this document, “Gratipay,” “the company,” and | ||
“the cooperative” refer to Gratipay, LLC. This is the operating | ||
agreement that defines how the members of Gratipay govern the cooperative, and | ||
it constitutes the entire agreement between Gratipay and its members. | ||
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## Basic Definitions | ||
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A cooperative is a democratically governed, for-profit company. Non-cooperative | ||
companies weight power by equity, one vote per share. Cooperatives distribute | ||
power according to the fundamental equality of all natural persons (also called | ||
“individuals” in this document), “one member, one | ||
vote.” Gratipay subscribes to the [principles and values of the | ||
cooperative movement](./values), and intends for this operating agreement to be | ||
consistent with those values. | ||
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An LLC is a Limited Liability Company, a flexible legal structure that protects | ||
its owners from legal liability, while avoiding the double-taxation that comes | ||
with other corporate structures. | ||
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Not all LLCs are cooperatives, and not all cooperatives are LLCs, but an LLC | ||
can be a good choice for structuring a cooperative. An LLC is an especially | ||
compelling choice for Gratipay because of the diverse international composition | ||
of our expected membership (which is easier handled with an LLC than with other | ||
structures), and because Gratipay was already structured as a single-member LLC | ||
before it evolved into a cooperative. | ||
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## Membership | ||
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Gratipay members are individuals. They share in both the work of the | ||
cooperative and its profits and loses (they are “active” members), | ||
as opposed to only sharing in the profits and losses without sharing in the | ||
work (they are not “passive” members). Gratipay is member-managed, | ||
not manager-managed. Gratipay members are owners, not employees. Members may | ||
bind the company. | ||
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Gratipay decides to invite new members through a vote of the existing | ||
membership. In general, the way to earn an invitation is to [collaborate in our | ||
work](./welcome) for a long time. Once invited, the individual must provide an | ||
[SSN or | ||
ITIN](https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin) | ||
and consent to this operating agreement in order to become a member of | ||
Gratipay. Gratipay does not require members to make a capital contribution. | ||
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Members may remove themselves from Gratipay for any reason at any time. | ||
Gratipay may remove a member against their will for any reason at any time, by | ||
a vote of the remaining membership. Gratipay automatically and immediately | ||
removes a member (no vote required) if they: | ||
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- abstain from seven votes in a row, | ||
- access a system without permission, | ||
- spend beyond their allowance, or | ||
- violate the [code of conduct](../howto/behave-well). | ||
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Gratipay may reinvite any individual at any time, but a proposal to reinvite | ||
someone must clearly indicate the circumstances of any and all previous | ||
removals. | ||
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Members may not sell or transfer their membership. | ||
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Gratipay maintains membership records [on | ||
Gratipay.com](https://gratipay.com/Gratipay/distributing/). | ||
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## Governance | ||
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Gratipay makes decisions in online [channels](../appendices/channels), | ||
primarily GitHub. Most decisions are by general consent. That is, a member | ||
announces an intention and waits for an amount of time proportional to the | ||
importance of the decision. If no-one objects then the matter is decided. If | ||
another member objects then the members involved work out a consensus. If they | ||
can't work it out then Gratipay votes. | ||
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Gratipay calls votes by general consent. By default, votes are open for 72 | ||
hours and require a majority to pass. The quorum is: | ||
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- a majority if there are fewer than seven members, | ||
- seven if there are at least 14 but fewer than 35 members, and | ||
- 20% (rounded down) if there are 35 or more members. | ||
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Members cast votes using comments and/or reactions on GitHub issues. Any member | ||
may count the vote and publish their count. Those members who publish a count | ||
within 24 hours after voting closes decide together on the final count. | ||
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The following decisions require a vote with a seven day voting period and a | ||
majority in favor to pass: | ||
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- removing a member against their will, | ||
- changing [the big picture](./), which includes this document, and | ||
- accepting outside financing, which includes loans from members. | ||
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The following decisions require a vote with a 14-day voting period and at least | ||
75% in favor to pass: | ||
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- adding a member, and | ||
- selling or dissolving Gratipay. | ||
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In the case of a vote to decide whether to call a vote, the period is 24 hours | ||
and a majority decides it. | ||
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Gratipay software is open source. In the case of irreconcilable conflict, | ||
members in the minority have the option to fork. | ||
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Gratipay maintains a record of it decisions in [GitHub | ||
issues](https://github.com/search?q=user%3Agratipay&type=Issues). | ||
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## Access | ||
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Gratipay restricts access in various ways to its various systems (e.g.: web | ||
hosting infrastructure, databases, and upstream payment processor dashboards | ||
and APIs). For each system, Gratipay invites members to have access to the | ||
system by a vote of 100% of the subset of members who already have access to | ||
the system. The usual quorum rules apply, scoped to this subset. | ||
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Any member with control over access to a subsystem may withdraw access from any | ||
other member at any time for any reason. | ||
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Gratipay maintains a record of each member's access in their [onboarding | ||
ticket](https://github.com/gratipay/inside.gratipay.com/issues?q=label%3AOnboarding). | ||
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## Money | ||
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Gratipay makes guaranteed payments to its members using a | ||
“take-what-you-want” (“twyw”) system integrated into | ||
the Gratipay.com website. Gratipay does not distribute profits apart from | ||
guaranteed payments. | ||
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Gratipay does not accept capital contributions from members. If any member | ||
wants to let Gratipay use their money, they may loan it to Gratipay on mutually | ||
agreeable terms. | ||
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Gratipay's fiscal year is January 1 through December 31. | ||
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Gratipay allocates profits and losses at the end of the year based on the | ||
amount of money each member otherwise takes in guaranteed payments during the | ||
year. For example, if there are two members, and during the year one takes | ||
$150,000 in guaranteed payments and the other $75,000, then if there is $36,000 | ||
in undistributed profit at the end of the year, Gratipay allocates $24,000 to | ||
the first and $8,000 to the second. | ||
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The United States' Internal Revenue Service (IRS) taxes Gratipay as a | ||
partnership. Each year, between January 1 and March 15, Gratipay files a [Form | ||
1065](https://www.irs.gov/pub/irs-pdf/f1065.pdf) with the IRS, and sends a | ||
[Schedule K-1](https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf) to each member | ||
showing their income through Gratipay for the year. Members are responsible for | ||
paying all taxes on their income through Gratipay, including any quarterly | ||
taxes. Member income through Gratipay includes both the distributions of | ||
guaranteed payments that members take for themselves, <i>and</i> the year-end | ||
profit/loss allocations that stay within Gratipay and are not distributed to | ||
members. For example, if a member takes $75,000 in guaranteed payments during | ||
the year, and is allocated $8,000 in profit at the end of the year, then their | ||
taxable income through Gratipay for the year is $83,000. | ||
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Members are entitled to a spending allowance of an equal share of the money in | ||
Gratipay's primary operating account, computed for each month based on the | ||
account balance and the number of members at the end of the previous month. | ||
Members have no allowance in their first month. For example, if at the end of | ||
April the account balance is $10,000 and the number of members is eight, then | ||
each member is authorized to spend up to $1,250 in May. Members are entitled to | ||
a debit card linked to Gratipay's primary operating account. | ||
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All expenses are authorized by one or more members, and authorized expenses go | ||
against each member's monthly allowance. By default, the member who makes the | ||
payment authorizes the expense. Even when a single member pays an expense, | ||
multiple members may co-authorize the expense, with the expense counting | ||
against each member's total monthly allowance in equal proportion by default. | ||
So, for example, if payment of an invoice for $150 is authorized by three | ||
members, the remaining monthly allowance for each decreases by $50. | ||
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Gratipay maintains financial records [on GitHub](/appendices/finances). |