Incorporating your co-operative comes with a lot of benefits. You can open a bank account, you’ll have an official name, and you’ll be one step closer to getting up and running. For Indigenous co-operatives that want to operate on a First Nation, there will be a few extra steps — so it might be helpful to incorporate sooner rather than later.
Here are 4 reasons you should incorporate now:
Start selling memberships
Co-ops need support from members and the communities they serve. Once your co-op is incorporated, you can start selling memberships, getting people involved, and building momentum. This step will give your co-op more credibility with community members and any partners or lenders you’ll approach. Plus, members can provide feedback and help the business succeed.
Secure a location
Once incorporated, it’s easier to get a location for the co-op. Setting up shop on Nation can provide members and employees many benefits, but it can be complicated. In most cases, the co-op’s board will need to lease land from the First Nation’s government by obtaining a Band Council Resolution (BCR). This process can take time. The co-op can’t enter this agreement until it’s incorporated, so it’s best to do this right away.
Start raising money
Once incorporated, your co-op can open a bank account. A bank account is handy because you’ll need to deposit all those membership fees the co-op is collecting. You’ll also be able to pursue other options for raising money. Co-ops can fundraise better than individuals. Most co-ops will raise money by applying for government grants, taking on loans from a financial institution, or securing credit from suppliers. Incorporated businesses are investment-ready.
For Indigenous co-ops, many organizations can offer financial support. Canada’s network of Aboriginal Financial Institutions provides grants, loans, and support for new businesses.
Your co-op will need to create a GST account and start working through the complex taxation system on Nation to begin operating. Taxation is a tricky space to navigate, so it’s important to start as soon as possible and seek an accountant’s advice to help with the process of on-Nation taxation. Incorporating sooner will ensure your co-op gets ahead of this work so that when you’re ready to open, you can focus on the business.
Don’t lose that momentum. Incorporate early. To learn more, check out our “stress-free” incorporation process. And for lots more information on creating a co-operative on First Nation, download the Your Way, Together guidebook.