BYLAWS OF DESTROYSAAS LIMITED COOPERATIVE ASSOCIATION

DRAFT — v0.1

A Colorado Limited Cooperative Association organized under the Colorado Uniform Limited Cooperative Association Act, C.R.S. Title 7, Article 58.

PREAMBLE

destroysaas exists to end the software rental economy. we believe that small businesses should collectively own the software they depend on — not rent it from vendors who can raise prices, change terms, or disappear without consequence.

these bylaws govern the internal affairs of destroysaas LCA ("the Association"). they are written in plain language because governance documents that no one reads serve no one.

cooperative principles

the Association operates in accordance with the International Cooperative Alliance's seven cooperative principles:

voluntary and open membership — anyone who can use the Association's services and accepts the responsibilities of membership may join, without discrimination
democratic member control — one member, one vote. members control the Association through democratic participation
member economic participation — members contribute equitably to the capital of the Association. surplus is allocated to benefit members in proportion to their patronage
autonomy and independence — the Association is controlled by its members. any agreements with external organizations preserve democratic control
education, training, and information — the Association provides education and training to members, elected representatives, managers, and employees
cooperation among cooperatives — the Association strengthens the cooperative movement by working with other cooperatives
concern for community — the Association works for the sustainable development of its community through policies approved by its members

mission

the Association's mission is to:

enable small businesses to collectively fund, own, and govern the software they need
ensure all software produced is open source and all data belongs to its owners
provide individual members access to the best tools the cooperative ecosystem produces
support the formation and operation of product cooperatives ("cells") that build and maintain software
operate with radical transparency — every dollar in, every dollar out, visible to every member

ARTICLE I — NAME AND PRINCIPAL OFFICE

Section 1.1 — Name. The name of this Association is destroysaas Limited Cooperative Association, or "destroysaas LCA."

Section 1.2 — Principal Office. The principal office of the Association shall be located at such place as the Board of Directors may determine. The Association shall maintain a registered agent and registered office in the State of Colorado as required by law.

Section 1.3 — Fiscal Year. The fiscal year of the Association shall be January 1 through December 31.

ARTICLE II — MEMBERSHIP AND AUTHORIZED CAPITAL

member classes

Section 2.1 — Classes of Membership. The Association shall have three classes of patron members:

(a) Class A — SMB Members. Businesses that pledge monthly contributions toward software development through Local Cooperative Associations (LCAs) or directly through the platform. SMB members are the primary patrons — they fund the software and receive dedicated instances with contractual SLAs.

Admission: Any business entity that maintains an active monthly pledge of at least $25/month toward one or more ideas on the platform
Patronage: Measured by total monthly contributions ($)
Authorized Units: unlimited
Unit Price: $0 (membership is established by active patronage, not capital contribution)

(b) Class B — Commons Members. Individuals who join the cooperative movement by paying annual or lifetime membership dues. Commons members receive access to foundation-hosted public instances of curated tools.

Admission: Any individual who pays the applicable membership fee
Patronage: Measured by membership tenure and platform participation
Authorized Units: unlimited
Unit Price: $25/year or $50 lifetime
Access: Public instances of curated tools, best-effort SLA

(c) Class C — Cell Members. Product cooperatives ("cells") approved by the Association to design, build, and operate software for SMB members. Cell members are the labor side of the cooperative — they build and maintain the tools.

Admission: Application and approval by the Board. Cells must demonstrate technical competence, agree to the Association's SLA standards, and commit to open-source development
Patronage: Measured by development labor delivered under SLA (milestones completed, hours worked, uptime maintained)
Authorized Units: unlimited
Unit Price: $0 (membership is established by approved status and active contract)

Section 2.2 — No Investor Members. The Association shall have no investor members. All members are patron members who conduct business with the Association.

Section 2.3 — One Member, One Vote. Except during the Genesis Period (Section 2.4), each member in good standing shall have one vote, regardless of class, patronage volume, or capital contribution.

Section 2.4 — Genesis Period. During the first eighteen (18) months following the Association's formation ("Genesis Period"), the founding organizer(s) shall retain sole voting authority on operational decisions to ensure stability during the bootstrapping phase. During this period:

Members may participate in discussions, provide feedback, and attend meetings
The Board shall publish monthly transparency reports on all decisions
At the conclusion of the Genesis Period, full democratic governance transfers to the membership automatically — no vote required, no Board action needed

Section 2.5 — Admission of Members. New members shall be admitted in accordance with the criteria set forth in Section 2.1 for each class. The Board may establish additional reasonable admission criteria by resolution, provided such criteria are published on the Association's website and do not discriminate on any basis prohibited by law.

Section 2.6 — Withdrawal. Any member may withdraw from the Association at any time by providing written notice (email is sufficient). Upon withdrawal:

Class A: Pledges cease. Existing contractual obligations continue through their term. No refunds on past contributions
Class B: Membership expires at end of paid period. No refunds
Class C: Active contracts continue through their term. Cell may not take on new contracts after withdrawal notice

Section 2.7 — Termination. The Board may terminate a membership for cause, including:

Material breach of these bylaws or the Association's terms of service
Fraud, misrepresentation, or conduct harmful to the Association
Failure to maintain minimum patronage requirements for 90 consecutive days (Class A and C)

Termination requires written notice, a 30-day cure period, and a two-thirds (2/3) vote of the Board. The terminated member may appeal to the full membership at the next regular meeting.

ARTICLE III — MEETINGS OF MEMBERS

Section 3.1 — Annual Meeting. The Association shall hold an annual meeting of all members, which may be conducted virtually. The annual meeting shall occur within four (4) months of the close of each fiscal year.

Section 3.2 — Special Meetings. Special meetings may be called by the Board, or by petition of twenty-five percent (25%) of the total membership.

Section 3.3 — Notice. Written notice (email is sufficient) of any meeting shall be given to all members at least fourteen (14) days prior to the meeting. The notice shall state the time, place (or virtual connection details), and purpose of the meeting.

Section 3.4 — Quorum. A quorum for any meeting of members shall be fifteen percent (15%) of total membership or thirty (30) members, whichever is less.

Section 3.5 — Voting. Each member in good standing shall have one vote. Voting may be conducted electronically. Proxy voting is permitted.

Section 3.6 — Action Without Meeting. Any action that may be taken at a meeting of members may be taken without a meeting if a written consent (electronic consent is sufficient) setting forth the action is signed by a majority of the members entitled to vote on the matter.

Section 3.7 — Matters Requiring Member Approval. The following matters require approval by a majority of the members voting:

Amendment of these bylaws
Election and removal of directors
Dissolution of the Association
Merger, conversion, or sale of substantially all assets
Changes to member class definitions or admission criteria
Any increase in membership fees

ARTICLE IV — BOARD OF DIRECTORS

Section 4.1 — Composition. The Board of Directors shall consist of seven (7) seats, allocated by member class:

Four (4) seats elected by Class A (SMB) members
One (1) seat elected by Class B (Commons) members
One (1) seat elected by Class C (Cell) members
One (1) seat elected by all members at-large

Until total membership exceeds fifty (50) members, the Board shall consist of three (3) seats: one per class, elected by each respective class.

Section 4.2 — Terms. Directors shall serve two-year terms, staggered so that approximately half the Board is elected each year. There are no term limits.

Section 4.3 — Meetings. The Board shall meet at least quarterly. Meetings may be conducted virtually. A majority of directors constitutes a quorum.

Section 4.4 — Decisions. The Board shall make decisions by simple majority vote of directors present at a duly called meeting, except where these bylaws require a supermajority.

Section 4.5 — Officers. The Board shall elect from among its members a President, Secretary, and Treasurer. The same person may hold multiple offices except that the President and Secretary shall be different persons.

Section 4.6 — Removal. Any director may be removed by a two-thirds (2/3) vote of the members of the class that elected that director, or by a two-thirds (2/3) vote of the full membership.

Section 4.7 — Vacancies. Vacancies on the Board may be filled by majority vote of the remaining directors. A director appointed to fill a vacancy serves until the next annual meeting, at which time the seat is filled by regular election.

Section 4.8 — Compensation. Directors shall not receive compensation for their service as directors. The Board may authorize reimbursement of reasonable expenses incurred in connection with Board duties.

ARTICLE V — MANAGEMENT AND OPERATIONS

Section 5.1 — Executive Director. The Board may appoint an Executive Director responsible for day-to-day operations of the Association. The Executive Director serves at the pleasure of the Board.

Section 5.2 — Platform Operations. The Association shall maintain and operate the destroysaas platform, including:

The ideas board and pledge system
Cell application, review, and approval processes
Proposal and sponsor voting systems
Commons membership and public instance hosting
Financial transparency reporting

Section 5.3 — Cell Oversight. The Board, or its delegate, shall:

Review and approve cell applications
Monitor cell SLA compliance
Trigger cell formation when ideas reach funding threshold
Mediate disputes between cells and sponsors

Section 5.4 — Open Source Commitment. All software produced by cells under contract to the Association shall be released under an OSI-approved open-source license. This commitment may not be amended except by a three-fourths (3/4) vote of the full membership.

Section 5.5 — Data Ownership. Member data belongs to the members. The Association shall maintain data portability — any member may export their data at any time in a standard, machine-readable format. This commitment may not be amended.

ARTICLE VI — CAPITAL AND PATRONAGE ALLOCATION

Section 6.1 — Sources of Capital. The Association's capital shall come from:

Platform fees on cell treasury contributions (percentage set by the Board, published publicly)
Commons membership fees
Cell formation fees (if any)
Grants, donations, and other contributions

Section 6.2 — Allocation of Net Income. After payment of all expenses and setting aside reasonable reserves, the Association's net income shall be allocated to patron members in proportion to their patronage, as follows:

Class A Pool (50%): Allocated to SMB members in proportion to each member's total contributions relative to all Class A contributions for the fiscal year
Class B Pool (10%): Allocated to Commons members in proportion to membership tenure and participation
Class C Pool (20%): Allocated to Cell members in proportion to development labor delivered
Reserve Fund (20%): Retained by the Association for infrastructure, cooperative development, and operating reserves. The Board may adjust the reserve percentage between 10% and 30% by resolution

Section 6.3 — Patronage Distributions. Patronage distributions may be made in cash, capital credits, or a combination thereof. The Board shall determine the form and timing of distributions annually. At least twenty percent (20%) of patronage allocations shall be distributed in cash (or applied to reduce future membership fees) within ninety (90) days of the fiscal year close.

Section 6.4 — Capital Accounts. The Association shall maintain an individual capital account for each member, reflecting contributions, allocations, and distributions.

Section 6.5 — Redemption on Withdrawal. Upon a member's withdrawal, their capital account balance shall be paid out within twelve (12) months, less any amounts owed to the Association. The Board may establish a longer redemption schedule if immediate payment would impair the Association's financial stability, but in no case longer than three (3) years.

ARTICLE VII — TRANSPARENCY AND REPORTING

Section 7.1 — Financial Transparency. The Association shall publish quarterly financial reports, including:

Total revenue by source (platform fees, membership fees, other)
Total expenses by category
Cell payments and SLA compliance
Reserve fund balance
Patronage allocation calculations

All financial reports shall be available to every member on the Association's website.

Section 7.2 — Decision Transparency. All Board decisions shall be published within seven (7) days of the meeting at which they were made, including the vote count and any dissenting opinions.

Section 7.3 — Annual Report. The Board shall prepare and distribute an annual report to all members within ninety (90) days of the fiscal year close, including audited financial statements (or reviewed statements if the Association's annual revenue is below $500,000).

Section 7.4 — Open Source. The Association's own platform code shall remain open source. This commitment may not be amended.

ARTICLE VIII — DISPUTE RESOLUTION

Section 8.1 — Good Faith Resolution. Members shall first attempt to resolve disputes informally through direct communication.

Section 8.2 — Mediation. If informal resolution fails, either party may request mediation. The Association shall maintain a list of approved mediators. Mediation costs shall be shared equally.

Section 8.3 — Arbitration. If mediation fails, disputes shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association, conducted in the State of Colorado. Each party shall bear its own costs.

Section 8.4 — Governing Law. These bylaws and all matters relating to the Association shall be governed by the laws of the State of Colorado.

ARTICLE IX — DISSOLUTION

Section 9.1 — Vote Required. The Association may be dissolved by a two-thirds (2/3) vote of all members.

Section 9.2 — Distribution on Dissolution. Upon dissolution, the Association's assets shall be distributed in the following order of priority:

Payment of all debts and obligations
Return of capital account balances to members
Fifty percent (50%) of remaining assets distributed to members in proportion to cumulative patronage
Fifty percent (50%) of remaining assets donated to one or more organizations that advance the cooperative movement, as determined by the Board

Section 9.3 — Code Survives. All open-source code produced under the Association's auspices shall remain freely available under its existing license regardless of dissolution. The Association's dissolution shall not affect the rights of any person under any open-source license previously granted.

ARTICLE X — AMENDMENTS

Section 10.1 — Proposal. Amendments to these bylaws may be proposed by the Board or by petition of twenty-five percent (25%) of the membership.

Section 10.2 — Approval. Amendments require approval by a majority of the members voting at a duly called meeting (or by written consent), provided that:

Amendments to the open-source commitment (Section 5.4) require a three-fourths (3/4) vote
Amendments to the data ownership commitment (Section 5.5) require a three-fourths (3/4) vote
Amendments to the dissolution provisions (Article IX) require a two-thirds (2/3) vote

Section 10.3 — Notice. Proposed amendments shall be distributed to all members at least thirty (30) days prior to the vote.

ARTICLE XI — MISCELLANEOUS

Section 11.1 — Indemnification. The Association shall indemnify its directors, officers, and agents to the fullest extent permitted by the Colorado Uniform Limited Cooperative Association Act.

Section 11.2 — No Personal Liability. No member shall be personally liable for the debts, obligations, or liabilities of the Association solely by reason of being a member.

Section 11.3 — Electronic Communications. Any notice, consent, or communication required under these bylaws may be made electronically. Email to a member's registered email address constitutes valid notice.

Section 11.4 — Severability. If any provision of these bylaws is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

Section 11.5 — Inspiration and Gratitude. These bylaws were inspired by the governance documents of dojo4 LCA, a Boulder, Colorado cooperative that open-sourced its corporate governance under a Creative Commons license. We are grateful for their leadership and commitment to the cooperative movement.

These draft bylaws were prepared in connection with the formation of destroysaas Limited Cooperative Association. They have not yet been adopted by the membership and are subject to revision.

Last updated: March 2, 2026