Illinois Co-op Act Now Includes Service Businesses!

This is a legal update that I’m excited to share! HB5898 was signed into law on July 29, 2016. This video explains the change: I’m excited to spread the word that the Illinois Cooperative Act has been updated to include any kind of business. Previously, the purpose section of the Act allowed purchasing co-ops and … Continued

Legal Entity Choice for Cooperatives

  I made this video to give start-up cooperatives a preview of the conversation about choosing a legal entity. This is general information–if you are actually choosing a legal entity, it would be a great idea to hire a lawyer, especially if you feel you need help applying legal information to your situation. I want to … Continued

What makes a business a cooperative?

Transcript: Let’s say you’re starting a business, or adding owners to an existing business, and you like the idea of the business being a cooperative.  When you’re at this stage, I think it’s useful to get clear on the basics: what is it, that defines a cooperative? I’m Sarah Kaplan.  I’m a lawyer for cooperative … Continued

HB5898: Big Improvement to Illinois Cooperative Act

A bill is in the Illinois legislature that would open up the Co-operative Act to any kind of cooperative business.   The existing law allows only co-ops of producers, or co-ops that provide merchandise to consumer members. Perfect for a food cooperative. But it does not allow for a co-op that provides a service, or … Continued

Investment Crowdfunding Coming to Illinois

  Illinois’ new state crowdfunding law took effect on January 1, 2016.  This amendment to the state’s securities law will allow businesses to raise capital by selling investments (securities) to the public. Most crowdfunding today is donation-based.  If you’re accepting donations, you don’t need to worry about securities law.  But it’s important for entrepreneurs to … Continued

National Investment Crowdfunding Finally Legal!

The SEC finally adopted those rules we were waiting for!  The Crowdfunding section of the JOBS Act is now in effect!  You can find more details on what you can do with this law right here:  

Why Self-Directed IRAs are both Risky and Important

Self-Directed IRAs can be risky.  The danger is that you, the investor, are not a tax professional, and you might make a mistake that could cost you taxes and penalties.  If you make a “prohibited transaction,” your IRA could lose its tax-deferred status, meaning the entire account would be considered your taxable income, resulting in … Continued

What Does a Crowdfunding Lawyer Do?

One of my goals is to serve small businesses raising money through crowdfunding. So I’ve been thinking hard about what a business doing crowdfunding would hire a lawyer for. Value added: I will protect the client from breaking securities laws and from potential lawsuits by investors. I will help them get past paperwork barriers and … Continued

Can You Spend the Co-op’s Money in an Emergency?

In a housing co-op, normally you agree before spending an amount of money that you consider significant.  Then an emergency comes up, and the person dealing with it needs to figure out what to do, who to hire, and how much to spend … and also whether all that is OK with everyone else.  And … Continued

Tenant in Common Seeking a Loan?

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A client asked me whether he could take out a home equity loan on just his portion of shared property.  He’s a tenant in common, meaning he owns property with others, and each owner has an undivided interest in the whole property, the property is not divided into condos.  What he’s seeking is called “fractional … Continued