QUESTION: An anonymous SEE Change subscriber asks: Our team is ready to start-up our social venture and we're really excited about it. Though, every time we think about the legalities of our venture, we feel a little lost and, quite frankly, overwhelmed about what legal structure we should choose. We don't want to make the wrong choice. What should we do?

ANSWER:

First of all, congratulations to your team for getting to this point! And second of all, do not allow your entrepreneurial spirit and creativity to be stymied by the choice of legal structure because any legal structure can achieve your social venture’s mission.

Here’s a vantage point I suggest to help your team feel less overwhelmed about choosing a legal structure (and it even rhymes): “Why your social venture exists will determine What to do...“How” to do it, is up to you!”

Legal structure is the embodiment of the “How”. The inherent distinction within legal structures is that different structures follow a different logic. For social ventures, I advise that legal structures be built from the mission up, not the other way around.

So, gather your team together and begin to address the issue of legal structure by taking these three steps:

1. Focus on getting clear about your venture’s mission(s).
2. Get as clear as you can about the ecosystem of relationships that will help your venture accomplish its goals (e.g. Who do you rely on? Who exposes you to risk? Who do you want to avoid? Who do you want a relationship with?) and think about the benefits and risks of inviting individuals/organizations into specific roles (e.g. owner, manager, director, contractor, etc.)
3. Consult with a lawyer to explore the legal structure options.

With the process, the choice of legal structure will become apparent to your start-up team and, once chosen, will serve as the strategic roadmap for your social venture. All the best!

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Natalie McFarlane is the founder of Positive Impact Law Group, a law firm for social enterprises. She obtained her LL.B. from the University of Windsor in 2004 where she served as an elected Faculty Council Representative, Vice-President of the Black Law Student’s Association of Canada (Windsor Chapter), and Editorial Assistant of the Windsor Review of Legal and Social Issues. Natalie was called to the Ontario Bar in 2005. Her professional legal experience includes serving the role of In-house Counsel and Assistant Corporate Secretary at multinational institutions in the financial services sector.

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