My husband and I have an LLC for our work doing small engine repair. Occasionally our son helps a little, but otherwise it’s just us.
My husband has a close friend and former co-worker who is losing their job, and we are very busy and could use help, but we are deeply morally opposed to profiting from someone else’s labor. I was thinking that perhaps we could subcontract stuff to her for a little bit, and if things are working out, then we figure out how to restructure the business.*
There is a restaurant in a nearby town that is worker-owned, but I haven’t asked there for advice partly because their structure is byzantine, and idk if that comparison is apples-to-oranges because of the wildly different industries.
*
I understand that sharing ownership means sharing control. I would have qualms about that with pretty much every person I know because most people aren’t as obsessed with details and informed decision-making etc as I am; I am not concerned about that with this friend, because she has the same flavor of AuDHD as I do. I was undiagnosed when we met her, and our striking similarities in personalities and behaviors were a huge part of the reasons for seeking diagnosis.
Also, it’s a rural area, everybody knows everybody, and she is someone with deep roots who is pretty universally loved and respected. There are few people I would trust to try to step into my life and fill in for me if I were seriously injured, but I know she would give everything as much or more care than I do. She is the best.
It’s not very hard, you just need to refile your LLC into a partnership LLC and then write up an operating agreement. The only real difference will come during tax season, as you will only be able to split deductions based on ownership percentage.
Tbh, it doesn’t really matter whether you are legally “worker-owned”. The operating agreement dictates responsibility and reward regardless of whether they own 33% or 5%, so long as it’s not a publicly traded company.
Your biggest concern is most likely going to be the reduction in tax offsetting for whoever is investing in the LLC, ie paying for items associated with the business with money not originating from the business itself.
“Worker owned” businesses are mostly a legal fiction in the US, and are mostly dependent on operating agreements, or they are non-profits. The tax system here just isn’t set up to accommodate equitable organizations that are more than just a handful of people.