Q: I belong to an artist co op that is set up as a not for profit corporation. Can we post "calls for artist" on our web
Currently we find new artists (who are shareholders and purchase their share for $50 when they join. that $50 is refunded to them when they leave) by accepting applications from our website or from artists who come into the gallery, we also find new artists at art fairs. We would like to post a "call for artists" on our website and in our newsletter. We have been told by some of the members that we have never done this because it "isn't allowed" because we are a corporation or because we are operating in a Not for profit business plan. We are incorporated as a business, not a charity or non-profit. Thank you!
A:
Colorado business can be for-profit, not-for-profit, or a benefit corporation. For-profit corporations and benefit corporations can invite folks from the public to become shareholders, but must obey some fairly complicated rules about advertising stock, publishing a prospectus, and following federal securities law. However, a non-profit that is properly set up as a charity can solicit donations from the public. But a non-profit that collects donations is not selling a share of the organization.
Since you are incorporated as a business, you will want to be very careful about advertising shares for sale or trying to attract new shareholders. Instead, your participants could buy a license, buy a subscriptions, or buy an enrollment in your program. This allows your participants to pay to participate, but avoids the appearance that you are selling stock in a corporation. Shakespeare said 'a rose by any other name would smell as sweet' but, in business, it can make a big difference what name you give to your members.
Find an attorney you trust and ask about ways to sell a membership that does not trigger the laws associated with selling "shares" of the company. By reworking your policies and being careful with how label the participation, you absolutely can put your "call for artists" on the co-op website.
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