askchapo

The process of legally converting a business to an employee-owned cooperative can vary significantly depending on what jurisdiction you're in. There's different criteria for creating one (some places might require more than 3 directors to create a Coop) and all sorts of statutory considerations unique to wherever you are.

If you're serious about doing this, I would sincerely recommend reaching out for legal advice first. This is your livelihood, and you do not want to make a mistake that creates difficulty down the line. Depending on where you live, there may be a public interest organization, or business law clinic, that can provide some legal information for free. You could look up "(where you live) non profit legal assistance" and see if anything shows up.

Please never take legal advice from random people on the internet. Something like this is too specific to local laws for anyone to give you meaningful advice unless they know all the details.

Find a local lawyer and call their office. Most will give you a free consultation to begin with.

Occasionally our son helps a little

Jk obviously it’s good to teach children skills

See if there is a national cooperative association in your country, I've received help from them in the past when starting a co-op.

There might be information in the orbit of Richard Wolf's work since he's so big on co op advocacy.

@CarsAndComrades@hexbear.net, any advice?

Our very own CarsandComrades has done a few podcasts with Zac from the Automotive Free Clinic. Been a while since I've listened to the few episodes and I can't remember how much they went into the "business incorporation" side of things. Unsure of the all specific differences between a for-profit worker coop and a non-profit. There will be some different accounting, book keeping and tax stuff for sure but I'm pretty ignorant of the owner/manager/board of directors (or its equivalent) differences. But it might not be a bad idea to call/email the Automotive Free Clinic and chat them up.

I think the below link is the first episode where they talk to Zac of the Automotive Free Clinic.

https://podcasts.apple.com/us/podcast/the-automotive-free-clinic-with-zac-the-mad-redneck-hyden/id1555784243?i=1000622128623

It wouldn't surprise me that, assuming its just going to be the three of you, it would be easier to modify the LLC to just have another owner. Then its probably going to be a matter of figuring out how to account for them "buying in" and getting their name updated on the official documents, planning ahead for if/when an owner wants to sell their shares of the business when they don't want to be a part of the LLC anymore.

It seems like coops tend to be required to have Boards of Directors and elections, it would make sense that the Directors can't be the workers, but if the local community is pretty tight knit and all cool with each other this probably won't cause problems though.

Reach out to that restaurant that's a worker coop probably is a good idea. Maybe go visit the place a few times when its not super busy and try to chat up the front of house workers to get a feel for the place before trying to contact the "business manager" side of things.

You should be able to contact local chamber of commerce or local government types to see if they can give you some direction in organizing the business as a coop. If there's a university nearby or a agricultural extension agency (may or may not be associated with the university) they might have some community outreach orgs/programs that can try to help guide you and assist in research. For the university, you're probably going to be looking for resources under the umbrella of "Business School" or "Business Law." If there's a local Farmer's Coop, you might be able to find somebody to talk about organizing a coop as well.

Calculate a wage high enough so the business operates at a break-even point

I've worked with the Cooperative Development Institute here in the Northeast to help a bunch of farmers start/legally form coops and had good experiences. Happy to chat if it's helpful.

https://cdi.coop/

This and this might be good places to start.

There's also a newer org that provides revolving funding and other assistance for workers' cooperatives, called Seed Commons.