Group-based businesses can operate as unincorporated groups, cooperatives, LLCs, associations, partnerships, for-profit corporations or non-profits. There are advantages and disadvantages to each legal structure and the best structure depends on a detailed assessment of your needs and goals. The following questions will help with this assessment.

Sources of Equity (Choose all that apply):

Group-based Equity will come from . . .
___  Investors (corporation)
___  Members (co-op)
___  Supporters and Grants (non-profit)
___  Owners (corporation, LLC, partnership)
___  Profits (Choose all that apply):

Profits will . . .
___  Stay in the business and not be distributed (non-profit)
___  Be distributed to investors based on their investment (corporation)
___  Be distributed to members based on their patronage of the business (co-op)
___  Be distributed to owners of the business (partnership, co-op or LLC)

Tax Status (choose one):
 
The business will . . .
___  Be tax exempt and keep all profits within the business (non-profit)
___  Be taxed on corporate profit and investors/members will also be taxed on their share of the profits (corporation)
___  Distribute all income to members to pay taxes on their own income (partnership or LLC)
___  Be taxed EITHER on corporate profit OR investors/members will be taxed on their share of the profits (cooperative)

Ownership/Control (Check all that apply):

The Board of Directors will be appointed/elected by…
___  Board members (non-profits)
___  Investors (corporations)
___  Members (co-op)
___  Other organizations/businesses (LLC, co-op)
___  Owners (partnership, LLC, co-op, corporation)
___  Other

Types of Revenue (Check all that apply):

Revenue will come from . . .
___  Sale of Products and Services - $/year
___  Program Fees - $/year
___  Rental Fees - $/year
___  Individual Contributions - $/year
___  Foundation Grants - $/year
___  Dues/Membership Fees - $/year
___  Interest Income - $/year
___  Other - $/year
___  TOTAL: $/year

Talk with a lawyer about which option is best suited for your business. Click here for a list of questions to address before you consult with an attorney to help you design your legal documents.