Working with other organisations
Hi all,
This is a bit of a legal question and also a bit of an "any general advice" question...
Background: Our project Ipswich Bike Kitchen CIC is a worker co-op looking for a workshop space to run an affordable cycle repair service. We've been offered one at a reasonable rent but it's not ideal. However we have also been talking to the council with another project to try and get funding for a better space. The Council are happy to fund us but their agenda is to create a "cycling hub" with the other project, which would mean joining up with them.
We've met with the other project before - a self described "social entrepreneur" rather than a co-op based in a neighbouring town. Their values are broadly speaking in line with ours, they are a not for profit CIC, although not a co-op. They are better resourced and more established as a business than ourselves, and seemed to be competing with us for a space (they do have a space in a neighboring town) until we agreed to work together. The council seems, on the surface, more comfortable talking to them. We're not sure why (patriarchy? Not understanding co-ops?). However we seem to have more experience in bike mechanics (which is the main graft of the job), and I have a few years' experience of co-ops and running a similar project before. From our point of view we're a little wary of ending up with a boss by accident, undervaluing ourselves, or compromising our autonomy.
In order to access funding for our projects to get a space and pool resources, we are wondering about legal frameworks that would allow both projects autonomy and a clear decision making process, if we do decide to work together. Whatever it is it would need to provide us with legal safeguards, equal standing, and a mechanism to share power and resources.
So my question is: What legal structure or frameworks should we consider in order to achieve this? Might a secondary co-op work, or would something else be more appropriate?
Many thanks in advance for taking the time to read and respond - any advice or experience greatly appreciated!
Su (she/her) + Joni (she/her)
Ipswich Bike Kitchen CIC
Andrew Woodcock Mon 18 Jan 2021 3:02PM
Agree with Dave, you can then work everything into the Partnership agreement, who does what, who pays for what etc.
Nathan Brown (Co-op Culture) Mon 18 Jan 2021 5:46PM
^I'd concur with Dave too.
A secondary co-op is a co-op of co-ops so not applicable here. Another option is a Company Limited by Guarantee with 2 corporate Members (your co-op and the CIC) who appoint Directors. But the LLP is far simpler.
Su Mon 18 Jan 2021 10:05PM
Ah yes of course - I can't believe that didn't occur to me re: secondary co-ops! Thanks for pointing it out and elaborating on the LLP vs Limited by guarantee thing.
Sean Farmelo Mon 18 Jan 2021 6:48PM
Sounds tough. If the other company are just running the 'hub' aspect of it that seems like the part which would demand more of the funding. I guess that's fine so long as you know you can make enough money and do all of the repair aspect of the hub, and still get a fair share of the funding support. I hope it goes well finding a new space regardless Su!
Su Mon 18 Jan 2021 10:19PM
It is a bit tricky and not without risk. I guess it's simpler to go it alone, but we do need the work and the lack of a suitable space is holding us back. Thanks!
Su Mon 18 Jan 2021 11:04PM
Thanks so much for all the responses you've all been really helpful 🤙
I'm wondering how permanently an LLP would tie the two projects together (e.g. if we decided to go our separate ways at some point). I've booked a free business advice session to discuss it because I realise this is not a simple answer!
I suppose I'm wondering if anyone knows of examples or has experience/advice where this sort of partnership has worked (or not!) for a co-op entering into it with a company that isn't a co-op.
Thanks again for taking the time and thought to respond, it's much appreciated!
Dave Hollings Tue 19 Jan 2021 7:29AM
It is standard to have a retirement clause in a LLP agreement so that any partner can leave the partnership after giving the defined period of notice in the agreement.
As a LLP must have at least two members, unless the other partner can find a new partner the LLP must legally be dissolved if there are only two partners.
Dave
Nathan Brown (Co-op Culture) Thu 4 Feb 2021 10:40AM
And if you fail to dissolve the LLP before you find yourself with one Member, the Member can find they have joint and severable liability rather than Limited Liability (I have read this applies if you have only one Member for more than 6 months. I cannot account for the veracity of this statement). Someone I know was advised by Companies House that if they found themselves with only one Member, The Crown could in theory take the remaining assets. Again, not my advice so cannot account for the veracity of this statement.
Martyn Johnston Tue 19 Jan 2021 7:14PM
Hey Su, perhaps more generally, in Bradford we have Capital of Cycling operating something that sounds similar to what you have planned and very much in partnership with the local authority. Although they are a charity the people involved are experienced cooperators. They're "hub" is also 3 or 4 years established and they are very nice people. Dave and Anthony (from Peddlers in Leeds) are the main people. Hope this tip helps. Good luck with your project :) https://www.capitalofcycling.org/
Dave Hollings · Mon 18 Jan 2021 2:57PM
Form a Limited Liability Partnership.
Both enterprises can keep their own structure, remain autonomous, have an equal say and have limited liability if the LLP collapses.
Thanks
Dave