How to Set up a Co-operative
A cooperative or “co-op” refers to an incorporated business organization owned by members sharing common needs or goals. Incorporation presents a number of advantages to its members, namely the co-op’s separate legal existence, limited liability for the members, and general agreement to basic principles on how the organization will operate.
You may choose to set up your organization as either a federal co-op under the federal Co-operatives Act or a provincial co-op under Ontario’s Co-operative Corporations Act depending on the needs of your members and your organization’s operations.
Federally incorporating your co-op requires your co-op to operate and have a fixed office in two or more provinces. Federal incorporation also requires at least three members (people over the age of 18 or corporations). To apply for federal incorporation, have a lawyer draft or review the required documents under the Co-operatives Act: forms setting out the co-op’s articles of incorporation, the address of your office and the contact information of your directors, a NUANS report confirming that your business name is available, a signed declaration that the incorporators will act as a co-op, and the $250 fee.
Provincial incorporation in Ontario only requires your co-op to have its head office and central operations in Ontario. Ontario generally mandates a minimum of five members (people over the age of 18 or corporations) to incorporate a cooperative, though worker cooperatives are only required to have 3 members. To apply for provincial incorporation, have a lawyer draft or review the required documents under the Co-operative Corporations Act: forms setting out your co-op’s articles of incorporation, a NUANS report confirming that your business name is available, and the appropriate fees ($170 for non-profit co-operatives or $350 for other co-operatives).
Nick Wright is a Toronto lawyer experienced with Co-operative corporations. Contact him now at nick[at]wrightbusinesslaw.ca to arrange a time to discuss setting up your co-operative.
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