[ changing boats mid-river ]
You already run something. Here is what becoming a co-op actually changes
Three pictures for the three ways this usually goes, then the exact Washington and California paths. Nothing here asks you to close down and start over.
[ three ways this goes ]
Find the one that sounds like you
[ step 1 of the same story ]
Working for yourself? There is nothing to convert
You form the co-op fresh, then move the work into it.
A sole proprietorship is not an entity, so there is nothing to convert. You form the co-op as a new entity, then move the contracts, licenses, equipment, and goodwill into it, and close the old schedule C chapter of your taxes. The co-op's bank account, insurance, and client agreements should all be in the co-op's name from day one.
[ step 2 of the same story ]
Have an LLC? You may not need to convert at all
The agreement can already hold one member, one vote.
An LLC can often run cooperatively without converting at all: the operating agreement can hold one-member-one-vote, patronage, and everything else. Converting the entity is worth it when you want the co-op statute to carry those rules for you, or when members want the word on the door.
[ step 3 of the same story ]
Whatever you choose, money moves before papers do
One honest session with an accountant first.
Whatever you do, the move is a taxable and contractual event, not just a filing. Asset transfers, member capital accounts, and who owes what on the way in all want one honest session with a co-op-friendly accountant before papers move.
[ written out in full ]
The Washington and California paths, in order
These two states we have read ourselves. Other states follow the general path above, and each state page carries the founding statute we verified.
[ Washington ]
- Existing Washington corporation: amend the articles to elect employee cooperative status under Chapter 23.78 RCW. The election is written into the articles themselves, so the cooperative rules ride on the statute from then on.
- Existing cooperative organized under some other statute: RCW 23.86.195 lets it reorganize under the cooperative associations chapter.
- Existing LLC: the Secretary of State's Business Entity Conversions page lists which conversions each entity type can make, with a ten-dollar conversion fee plus the new entity's origination fee. If the co-op chapter is not an offered target for your entity, the clean path is to form the cooperative association and merge or move the business into it.
source: Chapter 23.78 RCW, RCW 23.86.195, Washington Secretary of State Business Entity Conversions page
[ California ]
- Existing California corporation: Corporations Code section 12310.5 lets a corporation elect to be governed as a worker cooperative by a statement in its articles or its amended articles, so conversion is an articles amendment under the Cooperative Corporation Law.
- Existing California LLC, partnership, or out-of-state entity: the Secretary of State's conversion program allows conversion to another California entity type under Corporations Code sections 1150, 3300, 15911.01, 16901, and 17710.01, with forms and fees on the conversion page.
- Existing sole proprietorship: there is nothing to convert. Form the cooperative corporation under section 12300 and move the business in.
- Friendly explainer worth reading first: the Sustainable Economies Law Center's piece on LLC versus cooperative corporation for worker co-ops, written for California.
source: Cal. Corp. Code §§ 12200, 12300, 12310.5, and the Secretary of State conversion program
Checked September 2026. Conversion law moves, so read the current statute or filing page before you file.