1. Entity
- Name: Craft Coop LLC
- Jurisdiction: Virginia
- Structure: LLC operating under cooperative governance principles
2. Purpose
The Company exists to:
- operate a platform for artisan and craft commerce
- support cooperatives and collective organizations
3. Existential Provision
3.1 Core Rule
The platform is restricted to goods that satisfy all of the following:
- The seller is the producer of the good;
- The good is materially created by human effort;
- The seller exercises direct control over production.
The following are prohibited:
- Goods not produced by the seller;
- Goods fulfilled or supplied by third parties not controlled by the seller;
- Mass-produced goods not created by the seller;
- AI-generated goods or content where generative systems materially replace human authorship.
3.2 Operational Criteria
A listing shall be considered non-compliant if any of the following apply:
- The seller cannot demonstrate production capability;
- The seller cannot provide evidence of authorship or production process;
- Fulfillment originates from an external supplier not controlled by the seller;
- The good is substantially identical to widely distributed mass-produced items;
- The good or its representation relies on generative automation in place of human creation.
3.3 Burden of Proof
If compliance cannot be clearly demonstrated, the listing or seller is treated as non-compliant.
3.4 No Expansion of Permitted Categories
No policy, guideline, interpretation, or operational rule may introduce new categories of permitted goods or behaviors that would otherwise be prohibited under this provision.
3.5 Amendment
Section 3 is an Existential Provision and may only be amended by:
- ≥90% member approval; and
- unanimous board approval; and
- two votes separated by ≥90 days.
Amendment may not be used to introduce previously prohibited categories.
4. Membership
4.1 Sellers
- Open signup permitted;
- Non-member sellers may operate individual storefronts;
- Shared marketplace access restricted to members.
4.2 Governance Members
Eligibility requires all of the following:
- verified artisan status;
- ≥6 months active participation;
- at least 5 active listings;
- at least 12 bona fide sales to independent buyers within the previous 12 months;
- compliance with platform policies.
Active listings must be materially distinct and offered in good faith.
Voting rights activate immediately upon eligibility.
4.3 Membership Fee
- Small fixed fee (to be determined).
5. Verification & Enforcement
5.1 Verification Model
Hybrid system:
- automated signals;
- reporting system;
- committee investigation.
Only negative findings affect status.
5.2 Committee
The compliance committee is responsible for evaluating whether sellers and listings meet defined compliance criteria.
The committee does not have authority to define, reinterpret, or expand platform rules.
5.2.1 Appointment
- The initial committee shall be appointed by the Founder.
- After transition to member governance, committee members shall be appointed by majority vote of the Board.
5.2.2 Eligibility
Committee members must:
- be eligible governance members;
- be in good standing;
- not be subject to active enforcement actions;
- not hold the Operator role.
5.2.3 Composition
- The committee shall consist of 3–5 members.
- The Board shall ensure reasonable diversity of experience among members.
5.2.4 Terms
- Committee members serve fixed terms of 1 year.
- Terms shall be staggered to prevent full turnover at once.
5.2.5 Removal
Committee members may be removed by the Board only for cause, including:
- violation of platform policies;
- demonstrated conflict of interest;
- failure to perform duties.
5.2.6 Replacement
Vacancies shall be filled by Board appointment for the remainder of the term.
5.3 Enforcement
- Operator performs primary enforcement actions;
- Committee reviews enforcement outcomes upon appeal.
5.4 Appeals Scope
Appeals are limited to procedural and evidentiary review.
Appeals may determine:
- whether defined criteria were correctly applied;
- whether evidence supports the enforcement decision.
Appeals may not:
- reinterpret or redefine prohibited categories;
- introduce exceptions;
- expand permitted activity.
6. Governance Structure
6.1 Model
Members → Board → Operator
6.2 Transition to Member Governance
Occurs automatically at the earliest of:
- 40 qualified governance members;
- 1 year from formation.
6.3 Founding Cohort
- First up to 40 active verified artisans within the first 6 months.
6.4 Board
- 5 members;
- Elected by governance members.
7. Governance Scope
Members control:
- board elections;
- major policy changes;
- mission-level changes.
Board controls:
- fee ranges;
- membership criteria;
- distribution policy;
- strategic constraints.
Operator controls:
- product;
- moderation;
- execution;
- pricing within board-defined bounds.
Governance Limitation
Governance bodies do not have authority to reinterpret or override the Existential Provision outside of the defined amendment process.
8. Economic Model
8.1 Revenue Model
- Transaction-based fees.
8.2 Operator Compensation
- 25%–40% of gross revenue;
- Board may adjust within this range;
- Adjustment outside this range requires supermajority approval.
8.3 Scheduled Adjustment
- Default operator compensation becomes 30% after year 2;
- Board may adjust within 25%–40%.
8.4 Minimum Draw
- $130,000 annually;
- Activated when annualized gross revenue ≥ $400,000;
Annualized revenue is defined as trailing 3-month gross revenue × 4.
Measured monthly; activation occurs the following month after threshold is met.
8.5 Surplus Allocation
After operating expenses:
- 50% → founder capital repayment;
- 50% → patronage pool.
8.6 Post-Repayment Allocation
After founder capital is fully repaid:
- 50% → retained earnings;
- 50% → patronage.
8.7 Retained Earnings
- Managed by Board;
- Used for growth, reserves, and platform investment.
8.8 Sustainability Override
If reserves fall below defined thresholds, the Board may temporarily adjust retention and operator compensation within predefined bounds.
9. Founder Capital (FSV)
9.1 Founder Service Value
- Base: $160,000 annually;
- Accrual: 50% ($80,000 annually), prorated monthly;
- Adjusted annually by cost-of-living adjustments until accrual cutoff.
9.2 Return
- 6% simple annual return on unrepaid capital.
9.3 Accrual Cutoff
Accrual ceases at the earliest of:
- 2 years from formation;
- 12 consecutive months of positive net income.
9.4 Definition of Net Income
Revenue minus all operating expenses, including operator compensation.
9.5 Earned Compensation
Earned compensation includes:
- accrued founder capital (FSV);
- unpaid but earned operator compensation.
Cessation of work does not forfeit earned compensation.
Future compensation is contingent solely on future work performed.
10. Intellectual Property
10.1 Pre-Sustainability
All platform code authored by the Founder for the purpose of operating, maintaining, or developing the Company’s platform, and deployed to production systems, remains owned by the Founder.
The Company is granted a perpetual, irrevocable, royalty-free license to use, operate, and modify such code.
10.2 Post-Sustainability
After activation of minimum draw:
All platform code authored by the Founder for the purpose of operating, maintaining, or developing the Company’s platform, and deployed to production systems, is owned by the Company.
10.3 License Invariant
The Company’s license to platform code is perpetual, irrevocable, and royalty-free.
10.4 Ownership
- Founder retains ownership of pre-sustainability code;
- Company owns post-sustainability platform code;
- Company owns trademarks, brand assets, and platform data.
11. Operator Protections
11.1 Removal
Operator may be removed without cause.
11.2 Consequences of Removal Without Cause
- Immediate repayment of outstanding founder capital;
- Payment equal to 12 months of operator compensation.
11.3 Compensation Protection
Operator compensation remains within defined bounds unless modified by supermajority approval.
12. Anti-Capture Mechanisms
- Membership eligibility rules require supermajority to change;
- Voting eligibility changes are time-buffered;
- Multi-layer approval required for major structural changes;
- Governance membership separated from general users.
13. Non-Compulsion Principle
No individual, including the Founder or any member, shall be obligated to provide labor, services, or ongoing contributions to the Company.
All participation in work, including development, operations, or governance, is voluntary and may be discontinued at any time without penalty beyond the loss of associated ongoing compensation or role.
14. Items for Future Consideration
- Indirect compulsion protections;
- Operator disengagement refinements;
- Governance constraints on labor expectations.
End of Document