What are Capital Credits and How do they work?
As a cooperative, the Laban Johnson Group is here to provide services, not to make a profit or margin. There is no stock to be purchased or sold; our members are the owners of the company. One of the cooperative principles is the allocation of any margins earned by the co-op to its members. Any revenue collected by the co-op that is not needed to cover the cost of providing service is accounted for and allocated back to the members based on the amount of business they did with the cooperative during the year. In Cooperatives, revenues earned above operating expenses are called margins (in a commercial business, these funds are called net income, or profits). The end of each fiscal year, the co-op allocates a percentage of the margins to each patron on a pro-rated basis, according to the total amount paid or produced from business activities. These allocations to patrons are known as capital credits. Upon approval of the board of directors, these allocations are refunded to co-op patron
