this post was submitted on 27 Jun 2024
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How do I make my business legally worker-owned? (hexbear.net)
submitted 6 months ago by the_itsb@hexbear.net to c/askchapo@hexbear.net
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My husband and I have an LLC for our work doing small engine repair. Occasionally our son helps a little, but otherwise it's just us.

My husband has a close friend and former co-worker who is losing their job, and we are very busy and could use help, but we are deeply morally opposed to profiting from someone else's labor. I was thinking that perhaps we could subcontract stuff to her for a little bit, and if things are working out, then we figure out how to restructure the business.*

There is a restaurant in a nearby town that is worker-owned, but I haven't asked there for advice partly because their structure is byzantine, and idk if that comparison is apples-to-oranges because of the wildly different industries.

*I understand that sharing ownership means sharing control. I would have qualms about that with pretty much every person I know because most people aren't as obsessed with details and informed decision-making etc as I am; I am not concerned about that with this friend, because she has the same flavor of AuDHD as I do. I was undiagnosed when we met her, and our striking similarities in personalities and behaviors were a huge part of the reasons for seeking diagnosis.

Also, it's a rural area, everybody knows everybody, and she is someone with deep roots who is pretty universally loved and respected. There are few people I would trust to try to step into my life and fill in for me if I were seriously injured, but I know she would give everything as much or more care than I do. She is the best.

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[–] Tankiedesantski@hexbear.net 34 points 6 months ago (2 children)

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.

[–] 420blazeit69@hexbear.net 9 points 6 months ago

Most will give you a free consultation to begin with.

A lot of state bar associations (professional org for lawyers) will have a list of attorneys who will give you free/cheap 30 minute consultations. Googling "[my state] bar association lawyer referral" will usually get you in the right place. Here's an example from Texas, where you can get a 30 minute consultation for no more than $20.

Some policy questions I would work out beforehand (talking to that restaurant is a good idea, and a lawyer may have ideas, too):

  • How will the business be managed? Do you need 100% consensus for every decision, no matter how small? Do you elect a manager each year who has all decision making power for that year? Something in between?
  • How do you bring new workers into the fold? Say you and your husband have worked at this business for 10 years. Does the new worker get a full one-third split on Day 1? Does their share increase over time? If you get a fourth worker, who you might be less sure will work out fine, how do they get from not working there at all to an equal share?
  • How do you handle part-time workers or contractors? Or workers who contribute different amounts?
  • What happens to a worker's share of the business if they leave? What if they pass away?
  • What happens if someone stops contributing, or contributes a lot less? This is a common problem in partnerships.
  • How do you fire someone?
  • How do you measure work and performance in general? Think of all the administrative and business development labor needed, not just the core product/service you're offering.

It's a lot to mull over, but doing that work now could save you a blowup down the line.

[–] the_itsb@hexbear.net 4 points 6 months ago

I'm not looking for legal advice from strangers, I'm looking for a better understanding of the jargon so I am more able to do research on my own. But thank you for your concern 😊