PROVIDENCE, R.I. — Entrepreneurs who run worker cooperatives are supporting a Rhode Island proposal designed to make it easier to start an employee-owned business.
The state House of Representatives unanimously passed the bill Thursday, moving it to the Senate.
Worker-owned cooperatives are businesses owned and governed by their employees, who invest in the enterprise together and share in its profits.
The legislation would allow startup companies to elect to become a cooperative when they file a certificate of incorporation. Proponents say it’s based on a Massachusetts law enacted in 1982.
The Federation of Worker Cooperatives says there about 500 democratically run workplaces around the country employing 8,000 people, many of them concentrated in California, New York and Massachusetts. Cooperatives also exist in Rhode Island, but there’s no clear structure for them to incorporate.