Cooperatives Generally

Illinois has 3 legal entities for cooperatives: the general cooperative corporation, the agricultural cooperative corporation, and the limited cooperative association.

The Co-operative Act (805 ILCS 310) was adopted in 1915 and describes a corporation that was first intended for buying clubs, but later expanded to include any business operated by the shareholders.  Food cooperatives typically organize under this statute.

The Agricultural Co-Operative Act (805 ILCS 315) was adopted in 1931 and describes a corporation for producers of agricultural products. There are 103 agricultural cooperatives formed under the Illinois Agricultural Co-Operative Act.1

The Limited Worker Cooperative Association Act  took effect on January 1, 2020 and describes an association (not a corporation), primarily intended for worker cooperatives and multi-stakeholder cooperatives that include worker-owners. The statute does allow other kinds of cooperatives to form as limited cooperative associations. Before this law took effect, worker cooperatives generally formed as limited liability companies (LLCs), and the LLC may still be an option that new worker cooperatives should consider. See the more detailed discussion of worker cooperatives below.

Housing and pre-school cooperatives cooperatives in Illinois are generally formed as not-for-profit corporations under the General Not For Profit Corporation Act of 1986 (805 ILCS 105) .

Illinois law allows the word “cooperative” to be used in a legal or business name ONLY for a cooperative corporation organized under  the Co-operative Act, an agricultural cooperative organized under the Agricultural Co-Operative Act, a not for profit corporation, a business corporation organized for the purpose of ownership or administration of residential property on a cooperative basis, or a limited worker cooperative association. This means that a worker cooperative organized as a limited liability company may not have a legal or business name with the word “cooperative” in it.  Note, however, that the Illinois attorney ethics hotline has said that submitting a formation filing for an LLC with the word “cooperative” in the name would not be an ethics violation. The Illinois Secretary of State has accepted at least 47 LLC filings with the word “cooperative” in the legal name as of this writing.


Consumer Cooperatives

In general, consumer cooperatives in Illinois form under The Co-operative Act (805 ILCS 310). This law provides for formation of a corporation that has stock and that shares net income on the basis of patronage, and can also give dividends on stock.

The biggest reason a consumer cooperative would choose this legal entity is that the co-op will have hundreds or even thousands of members, so the legal structure must make it easy for members to enter and leave the cooperative. Corporations have shares of stock, and it is easy for a cooperative corporation to sell a share of stock to a new member or buy back a share of stock from a departing member. In contrast, a non-corporate association may need significant accounting work every time a member joins or leaves.

Organization: An Illinois cooperative corporation formed under the Co-operative Act (805 ILCS 310) must have 5 initial owners in order to sign the articles of incorporation.

Directors and officers: Cooperative corporations must have at least 5 directors on the board. The officers must be a president, one or more vice presidents, a secretary, and a treasurer. The secretary and the treasurer may be the same person (which implies that other combinations of offices cannot be held by the same person). The statute also requires a cooperative corporation to have a Manager who is an officer but not a director and who is “under the control of the directors at all times.”  805 ILCS 310/7.

Stock: The Co-operative Act provides that no one may own more than 10 shares in a cooperative corporation. The shares can be sold only at their “par value,” which is the share price designated in the articles of incorporation, and this par value must be at least $5 and no more than $1,000.   See 805 ILCS 310/2. This means that each member can invest up to and no more than $10,000 in their cooperative’s equity. This is generally OK for consumer cooperatives. A cooperative corporation is not a good choice if the cooperative needs members to invest more than $10,000 in the cooperative’s equity (for example, a worker cooperative where the worker-owners are self-financing start-up costs).

Payment plans for stock: Allowing a new member to pay for a share of stock in a cooperative corporation with a payment plan is OK as long as the full price of the share is paid within one year of the purchase date.  If not, the share is forfeited to the co-op. 805 ILCS 310/18.

Stock and Dividends: Profits of a cooperative corporation are shared among the shareholders as provided by the bylaws. The statute requires the bylaws to say that profits are allocated on the basis of patronage, or that profits will be used for dividends on stock and then for patronage-based allocations.  See 805 ILCS 310/19. No maximum dividend on stock is specified. This means that a cooperative corporation could pay a high rate of dividends on stock consistent with Illinois law, but that high dividend on stock could disqualify the cooperative from deducting patronage dividends from its taxable income under Subchapter T of the tax code. Also, an Illinois cooperative corporation planning to rely on Subchapter T of the tax code can give dividends on stock up to the limit allowed by Subchapter T.

Illinois cooperative corporations can have multiple classes of stock.  See 805 ILCS 310/1(f). This means that a consumer co-op can have one class of stock to represent basic membership, and another class of dividend-bearing stock members can buy to invest more into the co-op.

Securities Law – Certain Illinois Cooperatives Can Offer Unregistered Stock to the Public.

In general, securities laws say that organizations cannot offer their stock to the public unless the stock offering is registered or the offering complies with an exemption to the registration requirement. Illinois has an exemption that allows cooperatives to sell their stock to the public, but this only applies to cooperatives that are “organized exclusively for agricultural, producer, marketing, purchasing, or consumer purposes.” 815 ILCS 5/4(K). The exemption also requires that no commission be paid to the person selling the co-op’s stock (but it’s fine for a paid staff person to sell co-op stock during work time), and that no one person may own more than 5% of the total outstanding shares of the co-op. 815 ILCS 5/4(K).

It is clear that this means that a cooperative organized for the purposes mentioned above can sell dividend-bearing stock to its own members. There is ambiguity in the statutory language around whether a cooperative can raise capital by selling stock to people who do not plan to patronize the cooperative. Nothing in is legal advice, and securities law is an area to be especially careful and get advice from a lawyer.

Consumer Co-ops as Not-For-Profit Corporations:

A consumer cooperative may organize as a not-for-profit corporation under the General Not For Profit Corporation Act of 1986 . The General Not for Profit Corporation Act of 1986 lists many purposes for which a corporation may organize under that law.  These include “Administration and operation of an organization on a cooperative basis producing or furnishing goods, services, or facilities primarily for the benefit of its members who are consumers of those goods, services, or facilities.”  (There are other cooperative purposes for not for profit corporations, see Nonprofit Cooperatives, below, for more detail.)

In general, not-for-profit corporations cannot distribute their net income to owners. Not-for-profit corporations can have members, but they do not have stock, and they are not owned by anyone. Not-for-profit corporations are prohibited from distributing net income to anyone because of their “ownership” or membership.  However, the law allows not-for-profit corporations to return members’ payments, as follows:

  • A not for profit corporation may distribute its funds “to any person or organization who or which has made payments to the corporation for goods or services, as a fractional repayment of such payments, provided all such persons or organizations in any category are repaid on an equal pro rata basis[.]” 805 ILCS 105/109.10(1). This means a not-for-profit consumer cooperative may make patronage dividends, which are a return of the portion of net income from member purchases that the co-op does not need for its reserve.
  • A not for profit corporation may distribute its funds “[t]o any person or organization as a repayment of [their] or its contribution of an amount not to exceed the amount of the contribution, provided that any assets held for any charitable, religious, eleemosynary, benevolent, educational or similar purpose or held upon a condition requiring return, shall continue to be so restricted.” 805 ILCS 105/109.10(2). This means that a not-for-profit consumer cooperative could return the membership fee to a departing member.

So how would a cooperative choose between a cooperative corporation (805 ILCS 310) and a not for profit corporation (805 ILCS 105)? A cooperative corporation can have different shares of stock, and stock can be dividend-bearing.  A cooperative corporation can raise money by selling stock with the promise of sharing in the cooperative’s profits.  A not for profit corporation cannot do that, but it can have a charitable or educational mission and become a charity that can receive tax-deductible donations.

Worker Cooperatives

Worker cooperatives seeking to organize under Illinois law have at least four choices: the Limited Worker Cooperative Association (805 ILCS 317) , the limited liability company (LLC), the cooperative corporation, or the general business corporation. A legal entity for a worker cooperative must do two things: it must allow members who each have one vote, and it must allow profits to be paid out to members in proportion to each member’s work (their “patronage”). The limited worker cooperative association, the limited liability company, the cooperative corporation, and the general business corporation can all do these basic things. Below are descriptions of how each legal entity can work for a worker cooperative, and some pros and cons.

The Illinois Limited Worker Cooperative Association

The Limited Worker Cooperative Association Act  was passed in 2019 and became effective 1/1/2020, and is intended to provide a legal entity specifically for worker cooperatives.  This legal entity is called a “limited cooperative association” (“LCA” in this article). A worker cooperative, or “limited worker cooperative association” is a type of LCA. An LCA is an association, not a corporation.

An LCA’s bylaws define the types (“classes”) of members the LCA will have and the different rights or restrictions of each class, and the bylaws define how profits and losses will be shared among members. The LCA law only allows members to vote in a way that is consistent with cooperative principles–one member one vote, voting in proportion to number of members if the member itself is a cooperative, or voting on the basis of patronage–voting power cannot be based on capital or amount invested. The Limited Worker Cooperative Association Act provides that “at least 51% of workers [in a worker cooperative] shall be worker-members or candidates,” where “candidates” are workers who are being considered for membership.  805 ILCS 317/10, definition of “Worker Cooperative.”

An LCA can have equity investors who are not patrons, and it can split profits with those equity investors. As of this writing (December 30, 2019), the Limited Worker Cooperative Association Act does not require that profits be allocated to members based on patronage. The law does define worker-members: members whose patronage is their contribution of labor or services.

There are two other major benefits of the LCA for worker cooperatives. The law states that worker-members are not presumed to be employees. This helps make it clear that employment law requirements will not apply to worker members. Also, this law added a broad exemption for limited worker cooperative associations under the  Illinois Securities Law of 1953 (See 815 ILCS 5/3(R)) . An LCA that is a worker cooperative may offer and sell any security (investment vehicle) to residents of Illinois without the need to register the offering or find another exemption. Other exemptions are available but are more restrictive.

LCA Pros and Cons

Pros: Use of this legal entity means that cooperative governance is required. In a general business entity like an LLC or corporation, the formation documents can create a one-member-one-vote system, but those internal documents can be changed more easily than the choice of legal entity. The law states clearly that worker-owners are not presumed to be employees. The securities law exemption for LCAs is very broad; the cost of asking people to invest in an LCA will be less than the same process for most other legal entities.

Cons: This is a new, untested legal entity. The statute currently in place is not drawn from a uniform statute, and it does contain some ambiguity. Some additional effort is needed to create anything that is not standard, such as a new LCA.

Limited Liability Company

A worker cooperative can organize as a limited liability company (“LLC”) under the Limited Liability Company Act, 805 ILCS 180 . LLCs are normally formed by business partners who plan to split profits based on their percent ownership of the company (without regard to how much each of them works). An LLC can be used by a worker cooperative–all that’s needed is for the operating agreement to say that each worker member has one vote, and that income is allocated on the basis of “patronage,” which must be defined by the operating agreement. A cooperative organized as an LLC could even elect to be taxed as a corporation and issue “patronage dividends”  under Subchapter T of the internal revenue code.

LLC Pros and Cons

For a worker cooperative, the difference between an LLC and an LCA is that the LLC allows but does not require the company to be a cooperative, so it would be easier for LLC members to discard their cooperative operating agreement, adopt a standard one, and hire employees who are not members.  An LCA would have to reorganize to become an LLC to have the same result.

Pros: the LLC is a standard business entity with which banks, agencies, and society in general are familiar. A worker cooperative LLC may need legal and accounting advice that is co-op specific, but for many purposes it will follow established pathways for LLCs.

Cons: The legal entity itself does not require operating on a cooperative basis; we rely on internal documents to put cooperative systems in place. If a worker cooperative has many members, then the accounting work caused by members coming and going can be a significant burden, so that organizing as a corporation would be a better choice.

Cooperative Corporation

A cooperative corporation formed under the Co-operative Act can be a worker cooperative.  One of the purposes for which a cooperative corporation may be formed is “the operating of a business” by the shareholders. 805 ILCS 310/1. More simply, shareholders in a cooperative corporation may operate any kind of business together. In general, a cooperative corporation is treated as the standard legal entity for worker cooperatives. This is a good choice for worker cooperatives that have many members and that treat workers as employees for tax purposes.

Cooperative Corporation Pros and Cons:

Pros: This is a corporation that requires sharing profits on the basis of patronage. If your worker cooperative is better served by being a corporation rather than an LLC, this legal entity may be the right choice if no shareholder needs to invest more than $10,000 in the cooperative’s stock.

Cons: Can the cooperative pay at least minimum wage for all hours worked by worker-owners? Can the cooperative afford any workers’ compensation that may be required if all worker-owners are classified as employees? Are there any worker-owners who are not U.S. citizens and are not authorized to be employed in the U.S.? If the answer to any of these questions is no, then the best practice is to organize as an association (LLC or LCA) rather than a corporation. This is because owners of an LLC or LCA are not presumed to be employees , but there is a greater chance that a worker will be considered an employee for employment law and immigration law purposes if the person is treated as an employee for tax purposes (is on payroll). This is why many start-up worker cooperatives in Illinois find it simpler and less costly to start out as an LLC (and possibly in 2020 and onward as an LCA).

The other limitation is that a cooperative corporation cannot sell more than $10,000 of its equity to any one person.  If a cooperative needs to raise equity investments of more than $10,000 from any one person, then the cooperative cannot choose this legal entity. For example, if a workers are starting a worker cooperative using their own savings, and if any worker will put in more than $10,000, and if they want this to be reflected as equity rather than debt, then the cooperative corporation is probably not the best fit.

General Business Corporation

The general business corporation is not a natural fit for a cooperative, but it can be customized to work for a cooperative. In general, each share of a corporation’s stock has a vote, and each share of stock has a right to a dividend.  So in general, the more stock a person buys, the more voting power the person has, and the more dividends the person expects. In Illinois, a corporation’s articles of incorporation can state a formula by which dividends will be calculated, and this formula can specify a fact to be used in the calculation. See 805 ILCS 5/6.05(f).

The way we turn a corporation into a worker cooperative is to draft articles of incorporation that a) specify that common stock can only be held by workers, and that no one may own more than one share of common stock, and b) the dividend on common stock is calculated based on the work done by the shareholder. The formula in articles of incorporation needs to be specific, so we say that dividends will be in proportion to something that is easy to ascertain, like hours worked, or W-2 wages. This author believes that although these dividends are dividends on stock, they can also be “patronage dividends” for tax purposes because they can meet all of the requirements of patronage dividends under Subchapter T.

General Corporation Pros and Cons:

Pros: Customizing an Illinois general business cooperative to be a worker cooperative makes sense in a conversion, when an existing corporation is converting to worker-ownership. It also makes sense when a cooperative will have a large number of worker-owners and when any shareholder will hold more than $10,000 of the cooperative’s equity.

Cons: See above–W-2 workers in a corporation may be classified as employees for other purposes as well, and this can be a problem, especially for start-ups. Also, the general business corporation does not require operating as a cooperative. It allows, but does not require, democratic governance, ownership by most workers, and splitting profits on the basis of patronage. Therefore it is easier to move away from cooperative practices with a general business corporation than with a co-op-specific legal entity.

Tax as Part of Legal Entity Choice.

Associations (LLCs, LCAs) are taxed as partnerships by default.  LLCs and LCAs can elect to be taxed as a corporation, and if they “operate on a cooperative basis” within the meaning of Subchapter T, they can subtract patronage dividends from their taxable income. Cooperative and general business corporations are taxed as corporations, and can subtract patronage dividends if they operate on a cooperative basis. The choice between partnership and corporate taxation is often a factor in legal entity choice .

Visit these pages for a longer discussion, that is not state-specific, on:

Producer Cooperatives

Agricultural cooperatives generally form under the Agricultural Co-Operative Act, 805 ILCS 315.  Over 100 agricultural cooperatives formed under this law operate in Illinois, as well as several others formed under the laws of other states. This statute is tailored to cooperatives that sell the products of their members and/or provide farm supplies, equipment, and/or financing to their members. See Sections 18 and 19 of this law, discussing marketing contracts. This statute also clearly states that agricultural cooperatives are not illegal monopolies. See 805 ILCS 315/29.

Organization, Who Can Be a Member

Agricultural cooperatives can be formed with or without stock. To form an agricultural cooperative under this law, 11 or more persons must serve as organizers; a majority of those 11 must reside in Illinois, and they must all be engaged in the production of agricultural products.  805 ILCS 315/3.  “Agricultural products” include “horticultural, viticultural, forestry, dairy, live stock, poultry, bee and any farm and aquatic products and fur bearing animals raised in captivity and their products.” 805 ILCS 315/2(a).

An agricultural cooperative formed under this law may only admit as members, and may only issue common stock to, persons engaged in the production of agricultural products, and other cooperatives. The member is the producer: if the producer is a legal entity, the legal entity is the member, and the member specifies an individual authorized to act for the member.

Patronage dividends

After an agricultural cooperative pays any dividends on stock and sets aside a reserve, the remaining net income is required to be distributed to members or patrons on the basis of patronage. See 805 ILCS 315/15.4.


The section of this statute that discusses meeting notices is from 1993, and it requires meeting notices to be given by mail or by publishing them in a newspaper. Therefore a cooperative formed under this law may want to include a waiver of meeting notices and a promise to give notice electronically in its membership agreement.

Capital Structure and Investors

If organized without stock, then the articles of incorporation need to include “whether the property rights and interest of each member shall be equal or unequal; if unequal the general rule or rules applicable to all members by which the property rights and interest, respectively of each member may and shall be determined and fixed[.]” 805 ILCS 315/8(f). The articles must also state the rules for admitting new members. Note that these kinds of provisions are generally in an organization’s bylaws, which are not reviewed by the state, but an agricultural cooperative must put these internal rules in its articles of incorporation.

Agricultural cooperatives formed under this law can have stock; stock can have par value or no par value; if a class of stock does have par value, that par value must be at least $1 and no more than $1,000. Unlike the Co-operative Act, the Agricultural Co-Operative Act does not cap share ownership at $10,000 per person.

Agricultural cooperatives can have preferred stock.  The cooperative can pay dividends on any class of stock, but only up to 8% of the stock price per year. 805 ILCS 315/15.4; See 805 ILCS 315/8(g); see also 805 ILCS 315/2(a) (definition of “association”). Common stock can only be sold to persons “engaged in the production of agricultural products,” but “Preferred stock may be sold to any person, member, or non-member[.]” 805 ILCS 315/15.6.

Securities Law – Agricultural Cooperatives Can Offer Unregistered Stock to the Public

In general, organizations may not offer and sell securities (investment opportunities) to the public unless the offering is registered with the state and/or federal regulators, or unless an exemption is available.  Illinois law has a broad exemption for agricultural cooperatives. “Any security issued by a bona fide agricultural cooperative operating in this State” is exempt from the registration requirement. 815 ILCS 5/3(R). This means: agricultural cooperatives can have non-member investors, and can solicit investment from any Illinois resident without the need to register the offering.Anti-fraud provisions would still apply, so certain documents and good practices would still be needed. (Nothing in is legal advice, and securities law is an area to be especially careful and get advice from a lawyer.)

Form: Articles of Incorporation for Agricultural Cooperative

This is the form for an Illinois agricultural cooperative’s articles of incorporation:

Nonprofit Cooperatives

Some cooperatives in Illinois form under Illinois’ law for non-profit corporations, the General Not For Profit Corporation Act of 1986 , 805 ILCS 105. This is the same law used by charitable organizations. This law provides for a legal entity that can have members or no members. It does not have shares, and it cannot be owned by anyone. A member-based not for profit corporation can be formed under this law for many different purposes, and some of these purposes are useful for cooperatives. These include:

  • Educational – cooperative schools such as preschools form as member-based non-profits.
  • “Electrification on a cooperative basis” 805 ILCS 105/103.05, purpose number 21.
  • “Telephone service on a mutual or cooperative basis.” (22)
  • “Ownership and operation of water supply facilities for drinking and general domestic use on a mutual or cooperative basis.”(23).
  • “Ownership or administration of residential property on a cooperative basis.” (24)
  • “Administration and operation of property owned on a condominium basis or by a homeowner association.” (25).
  • “Administration and operation of an organization on a cooperative basis producing or furnishing goods, services, or facilities primarily for the benefit of its members who are consumers of those goods, services, or facilities.” (26).
  • “The administration and operation of an organization for the purpose of assisting low-income consumers in the acquisition of utility and telephone services.” (30).
  • “Furnishing of natural gas on a cooperative basis.” (33)

There are even more, very specific purposes that did not fit into this list! If you are considering a not for profit corporation for a specific purpose, check out Section 103.05 of the General Not For Profit Corporation Act of 1986 !

In general, the major distinction between a for-profit legal entity and a not-for-profit legal entity is that the for-profit entity can pay out its profits to its owners, but a not-for-profit corporation cannot. That is, generally, a not-for-profit corporation can pay reasonable salaries to employees, and it can earn revenue, but it cannot split its revenue among its members.

But, an Illinois not-for-profit corporation can distribute its funds “to any person or organization who or which has made payments to the corporation for goods or services, as a fractional repayment of such payments, provided all such persons or organizations in any category are repaid on an equal pro rata basis.” 805 ILCS 105/109.10. This allows a not-for-profit consumer cooperative to make payments to members that are functionally the same as patronage dividends. A not-for-profit consumer cooperative can also return a member’s contribution (membership fee/capital contribution) Id. at Section 109.10.

A not for profit cooperative formed under the  General Not For Profit Corporation Act of 1986  and a cooperative corporation formed under the Co-Operative Act can both be effective legal entities for operating a consumer co-op and paying patronage dividends to members. The difference is that the (for-profit) cooperative corporation can have stock, and can reward investment in its stock with dividends; and it can pay out profits from business with non-members to its shareholders.  A not-for-profit corporation cannot do these things.

A non-profit preschool, buying club, or housing cooperative, which does not expect any revenue from non-members, and which has no need to pay dividends on stock, could choose this statute for organizing their cooperative.

Sample Bylaws and Operating Agreements

Agricultural cooperatives

The best bylaws I can find are not state-specific: the National Council of Farmer Cooperatives’ Sample Bylaw Project. These sample bylaws contain many provisions to help agricultural cooperatives.

More coming soon!

Major Cases

Based on 7 years of serving Illinois cooperatives, this author does not believe there are any cases interpreting Illinois law as applied to cooperatives that are commonly cited as “landmark cases” that are also currently relevant. The following cases may be of interest in some situations:

A housing cooperative can evict a member under landlord-tenant law:

Quality Management Services, Inc. v. Banker, 685 N.E.2d 367 (Ill. App. 1st Dist. 1997).

A member of a housing cooperative had failed to pay $2,503.25 in carrying charges–fees due to the cooperative to cover the member’s portion of the cooperative’s operating expenses. The cooperative attempted to evict the members, and obtained an order of possession and money judgment in circuit court. The members appealed, arguing that the Forcible Entry and Detainer Act does not apply to cooperatives. The court discussed its view that in general, cooperatives are within the scope of that Act because the proprietary lease or occupancy agreement between the cooperative and its members generally creates a landlord-tenant relationship.  Also, the occupancy agreement in this case stated:

The Member expressly agrees that there exists under this Occupancy Agreement a landlord-tenant relationship and that in the event of a breach or threatened breach by the Member of any covenant or provision of this agreement, there shall be available to the Cooperative such legal remedy or remedies as are available to a landlord for the breach or threatened breach under the law by a tenant or any provision of a lease or rental agreement.

The appellate court affirmed the eviction.

The Agricultural Co-operative Act does not impose a duty to redeem preferred stock held by a member who withdraws.

Christian County Farmers Supply Co. v. Rivard, 476 NE 2d 452 (Ill. App. Ct. 5th Dist. 1985). Defendant Rivard became a member of an agricultural cooperative and purchased one share of common stock, and later acquired shares of the cooperative’s preferred stock. Rivard stopped farming and stopped patronizing the cooperative. The cooperative sued Rivard for payments owed for goods and services, and the cooperative won in the circuit court. Rivard appealed, arguing that he was entitled to a set-off in the amount of the value of his preferred stock; that the cooperative had a duty to return the value of his preferred stock when he withdrew his membership.

Under the Agricultural Co-operative Act and the cooperative’s articles of incorporation, common stock is not transferable and can only be sold to producers who are patrons of the cooperative, but there are no such restrictions on preferred stock. The Act also provided (and still does provide) that:

In case of the withdrawal or expulsion of a member, unless otherwise limited or restricted in the articles of incorporation or any amendment thereto, the board of directors shall equitably and conclusively appraise his membership and/or common stock interests in the association and shall fix the amount thereof in money, which shall be paid to him within one year after such expulsion or withdrawal.

Held: that this statutory language does not apply to preferred stock, only common stock, and an agricultural cooperative is not required to re-purchase or return the value of a departing member’s preferred stock.

State Specific Secondary Sources

Cooperation Chicago: Building Chicago’s Worker Cooperative Ecosystem (August 2018). This source was written before the passage of the Limited Worker Cooperative Association Act (and recommended such a law).

Legal Structures for Investment Cooperatives in Illinois (2016)

This is just one of many news articles introducing the new Limited Worker Cooperative Association Act: Fifty by Fifty: Illinois 14th State to Legally Recognize Worker Cooperatives (Sep 12, 2019)

Cooperative Support Organizations

Legal Support for Cooperatives

Legal Clinics

Community Enterprise & Solidarity Economy Clinic, John Marshall Law School

UIC John Marshall Law School
300 S. State Street
Chicago, Illinois 60604
Phone: 312.427.2737 ext. 144

Director: Renee Hatcher
Phone: 312.427.2737 ext. 829

This clinic provides free legal service including comprehensive legal advice for forming and operating a business. This clinic has expertise in cooperatives.

Institute for Justice Clinic on Entrepreneurship

6020 South University Avenue
Chicago, IL 60637
(773) 834-3129

This clinic provides free legal service for low-income entrepreneurs, including comprehensive legal advice for forming and operating a business. This clinic has expertise in cooperatives. This clinic also holds educational events for entrepreneurs and does policy advocacy work.

The Community Law Project of the Chicago Lawyers’ Committee for Civil Rights

Information about applying for service is here:

This clinic’s expertise includes legal advice for businesses, including cooperatives.

Private Attorneys for Cooperatives

Fatimeh Pahlavan, Esq.
Expertise: legal advice for mission-driven entrepreneurs, including cooperatives: general business law, securities law, and trademarks. Provides educational workshops as an alternative form of legal service.

Sarah Kaplan, Esq.
(312) 469-0794
Expertise: legal advice for solidarity economy businesses, focusing on cooperatives: getting started, business structuring, securities law, and trademarks.

Dennis Kelleher, Esq.
Expertise: legal advice and business development for worker cooperatives 

Laddie Lushin, Esq.
4120 Braintree Hill Rd.
Braintree, VT 05060-8854
tele. (802)728-9728
Expertise: 40 yrs. experience with co-operatives; no types of co-operatives or states of domicile excluded, special area of interest: LLCs as an organizational vehicle for co-operatives.

Business Support for Cooperatives

Non-Profits and Clinics

Centro de Trabajadores Unidos–United Workers’ Center is an immigrant-run organization on the Southeast Side of Chicago. It is a support and organizing center by and for immigrant workers.  It has a worker cooperative incubator.

Co-op Ed Center

Institute for Justice Clinic on Entrepreneurship
6020 South University Avenue
Chicago, IL 60637
(773) 834-3129

In addition to legal service, this clinic provides business planning advice for low-income entrepreneurs. Its public educational events cover both legal and business planning topics. This clinic has expertise in cooperatives.

Value-Added Sustainable Development Center, part of the Illinois Institute for Rural Affairs at Western Illinois University
Illinois Institute for Rural Affairs
Western Illinois University
518 Stipes Hall
1 University Circle
Macomb, IL 61455

Provides a wide range of cooperative development services to start and assist development of cooperatives in rural Illinois.

Private Consultants for Cooperatives

Corrigan Nadon-Nichols
(847) 886-4607
Expertise: business consulting, focusing on cooperatives. Corrigan also serves non-profits.

Camille Kerr, Upside Down Consulting
Expertise: Converting existing businesses to worker-ownership, union-incubated cooperatives, start-up worker cooperatives.

Dennis Kelleher
Expertise: legal advice and business development for worker cooperatives

The ICA Group
(617) 232-8765
Expertise: Converting existing businesses to worker-ownership, market research and business planning for new cooperatives, and more.

Project Equity
Expertise: Converting existing businesses to worker-ownership.


Sarah Kaplan has served as legal counsel to more than 50 cooperatives since 2012, including worker co-ops, food co-ops, cannabis and hemp co-ops, platform co-ops, and cooperative investment funds. Sarah has been excited about co-ops for over 20 years, and she is motivated to help self-directed folks be even more empowered. Sarah loves to talk with cooperators–call (312) 469-0794 or email

[1] See, accessed on December 12, 2019.

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