Reach out to friends or family members who might be interested in forming a coop. You could also contact charities. Sometimes, charities decide to form non-profits in order to advance their goals in the community. Charity members might be interested in helping to form the non-profit cooperative.
What are your goals and strategy? To form a credit union that can bring economic opportunity to a depressed economic area? To sell locally produced goods? To create independent media?[2] X Research source Will the business grow out of an existing one, or will it be built up from the ground? Does the organizing committee have all of the expertise necessary to run the coop? What other expertise is necessary? How will decisions be made? You should consider whether decisions will be made unanimously, by majority, or by supermajority (more than 50% but less than 100%). How will you hire new people? Since the cooperative structure is so different from traditional work environments, you might want to give people a trial period to see if they like it. If the employee is a poor fit, then you can end the work relationship.
You can get the money from members. Each founding member contributes money. You could get a loan. Identify a bank (or a credit union) that has given loans to cooperatives before. A grant from a cooperative incubator.
To find an incubator, search the Internet. Type “cooperative incubator” and your state into your favorite search engine. You have to apply for the incubator program and meet any program requirements that it has established. You may also need to pay an initial fee as well as monthly fees to continue to receive help.
To find an experienced business attorney, you should contact your local or state bar association and ask for a referral. Alternately, you could ask another cooperative if they would recommend their lawyer. Once you have the name of the lawyer, schedule a consultation. You will have to pay for legal advice. Even if the lawyer agrees to a free initial consultation, he or she is unlikely to give out legal advice for free. Typically, the consultation is simply a “meet and greet” affair. However, if you are looking for legal advice, then say so when you call to schedule the consultation. The lawyer can quote you a price for a half hour or hour of legal advice.
The most common non-profit cooperatives are credit unions and housing coops. Nonprofit cooperatives were also created as a response to the national healthcare legislation passed in 2010. [4] X Research source
In order to operate as a non-profit, you also need to fill out applications for federal and state tax exemptions. [6] X Research source This is how you apply for non-profit status. If you are denied non-profit status, then your coop will be for profit.
In the future, you may need a lawyer’s advice to help you with hiring or firing employees, defending yourself in a lawsuit, or dealing with the IRS.
membership requirements member duties the responsibilities of coop members
the applicant’s name a summary of member rights and benefits signature from the board of directors
Remember that you must follow your state’s laws on record keeping, which includes taking minutes of your meetings. You should talk with your lawyer about precise requirements in your state.
To find what you need, you can visit the Small Business Administration’s website, which provides links to the office in each state that issues permits. [11] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source Be sure to get all necessary permits and licenses before beginning your business. It is illegal to run a business without your state’s approval.
