Forming a Cooperative Corporation

Not every state allows for the formation of journalism-oriented cooperative corporations. In those states which do have a cooperative form, the procedure for forming a cooperative often tracks the procedures for forming a regular for-profit corporation (or non-profit corporation, if you are forming a non-profit cooperative). However, in addition to the normal process of forming a corporation, cooperatives must also decide whether to permit uneven ownership interests in the cooperative, as well as how and when to issue "patronage dividends" to patrons of the cooperative to reduce federal (and possibly state) tax liability. See the Legal Guide section on Taxation of Cooperatives and "Patronage Dividends."

The specific procedure for forming a cooperative can vary greatly from state to state, and you should review information specific to your state before attempting to form a cooperative there. The State Law: Forming a Cooperative Corporation section will help you determine whether a journalism cooperative can be formed in the states covered in this Guide and, if so, the process for doing so.


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