Structure and Strategy (for the Creative Enterprise), part 3

What kind of organizational structures are best suited to a creative enterprise?  Guess what? Depends on your strategy.

But here are the common types:

  1. Sole Proprietorship
  2. Partnership
  3. Company
  4. Society

The characteristics of a sole proprietorship include: keeping it simple (in some ways, yet, perhaps, inviting complexity in other ways), going solo (although it could mean a slew of supporters and collaborators), no liability protection (hopefully, you’ll never need any), no “shares”, i.e. no granting of partial ownership to outside investors.

The characteristics of a partnership include: two or more individuals “carrying on business in common with a view of profit” (according to the B.C. Partnership Act); full liability of each partner for the actions of the other(s); might not be officially stated but can be determined by a court of law.

The characteristics of a company include: for profit; shareholders with limited liability; a distinct entity from all its shareholders; specialized management separate from the shareholders; freely transferable shareholder interests; shareholder control.

The characteristics of a society include: distinct entity from all its members; limited liability for officers, directors and members; specialized management separate from the members; no shareholders; not for profit.

These four common types of organizations don’t complete the full picture of options. Here is a great article by Jane Marsland on “Shared Platforms” – what they are, how they work and why they’re useful:

http://metcalffoundation.com/wp-content/uploads/2013/06/Shared-Platforms-and-CVOs.pdf

Basically, a “shared platform” is a charitable, non-profit organization – a type of society – that coordinates charitable projects among multiple organizations.  The advantage of such an organization is that it can provide an array of professional, cost-effective services to arts organizations such as  governance oversight, legal compliance, financial management, grant administration, human resources, etc.

In a future post, this blog will highlight some of the considerations when working with others toward shared (or sometimes not shared) goals.  Sharing, of course, is something we learned in kindergarten. But nowhere is it more complicated than in the arts world as creative visions intersect with social and economic limitations.  Having formal written agreements is crucial.  What are the parameters involved?

Stay tuned.

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