Original scientific paper
Published in: Holistic Approach Environ. 5(2015) 4, pp. 152 – 164
Paper reference number: HAE-97
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Dinko Wasserbauer*

* External associate in ITAS Prvomajska d.d. Ivanec, Croatia



This paper is about the nature, legal and financial structure of democratic firm in David Ellerman’s view. Democratic firm is a company „owned“ and controlled by all people working in it. It’s ownership structure rests on principle that people have natural and inalienable right to the fruits of their labour. In addition, it’s governance structure rests on principle that people have a natural and inalienable right to economic self-determination. In democratic firm voting rights and rights to the net income are restructured as personal rights assigned to the functional role of working in the firm. Net asset rights remain property rights and they are registered on the internal capital accounts and they are quite separated from membership rights. Most popular examples of democratic firms are workers cooperatives and ESOP companies. This companies are analysed through restructuring or lack of restructuring conventional bundle of property rights. However, there are many questions about economic democracy that are left opened.

Keywords: democratic firm, economic democracy, membership rights, internal capital accounts, workers cooperatives, ESOP companies