Our Partner and Shareholder, Jacqueline Radebaugh and Senior of Counsel, Yev Muchnik recently wrote this Exclusive Report: Solving the Riddle of the DAO with Colorado’s Cooperative Laws for The Defiant in which they reflect their legal analysis and anecdotal experience with DAOs adopting the LCA cooperative legal framework in the United States; as with other …
Forming a business
Revised Ohio LLC Act – Important changes coming up
Last year, Ohio revised its Revised Code (“ORC”) to update many provisions concerning the Limited Liability Company Act (the “Act”). The Act replaces the Chapter 1705 of the ORC with Chapter 1706. The new provisions will apply to both new and old LLCs and it will govern domestic and foreign LLCs formed before and after …
DAO meets cooperative: Mensiversary of the Wyoming DAO law
In the next few weeks, my colleague Yev Muchnik and I will be posting some of our thoughts on legal aspects of DAOs. Yev has been in the blockchain world for a long time and is a renowned expert in the subject. Providing legal support to cooperatives and social enterprises adopting democratic governance is a …
Updated Section 1042 Tax Benefits
There is a section of the Internal Revenue Code (IRC) that provides some tax benefits for people who sell their companies to either an ESOP or to a worker cooperative. This blog will explain how 1042 provides tax advantages when selling to a cooperative. If you are thinking of becoming employee-owned or selling your business to …
Thoughts from a new economies’ attorney: distinguishing cooperative governing structure
In my previous posts, I discuss how traditional businesses and cooperatives diverge from a capital (and return on capital) point-of-view. Another common misconception is that cooperatives function like nonprofits, typically from the perspective of governance structure. They don’t. Cooperatives are businesses, and, as such, business principles and governance, and business governing structure apply to them. …
Thoughts from a new economies’ attorney: patterns that create different kinds of (business) ownership – cooperative capital
In my last post, I talked about how capital looks like in a traditional business. As a recap, traditionally, capital is invested in the business with a goal of extracting profits and controlling how the business is done – the more money an investor (owner or shareholder) puts in the business, (i) the more return …
Thoughts from a new economies’ attorney: patterns that create different kinds of (business) ownership – traditional capital investment
If you are reading this post, chances are you are an innovator, you are looking for guidance on alternative business forms, you run or are part of a mission-driven organization, you are considering adopting democratic governance models in your business or nonprofit, or some combination of those. I have to alert you that this is …
Mandatory Business Owner Reporting
The federal government has passed some new legislation that will require small businesses to report personal information about the business’s owners to a database controlled by the Securities Exchange Commission. The legislation is called the Corporate Transparency Act (the “Act”), adopted as Title LXIV (64) of the 2021 National Defense Authorization Act. The purpose of …
Voting Structures for Businesses
All corporations and cooperatives have some sort of democratic model for decision making. There are two major voting structures for all businesses. The first: “one share, one vote;” means that an investor gets one vote for each share of a company they own. The second: “one member, one vote;” means that each cooperative member or …
Use of the term “Cooperative”
Edited June 26th, 2020: An earlier version of this blog post implied that only organizations incorporated as cooperatives under Massachusetts law may use the word “cooperative.” This post has been edited to accurately reflect that other businesses may use the term if they distribute earnings consistent with cooperative law. Entity formation is often the first …
