GROUPS
Look at the difference between
a co-op member
and a "producer".
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Musicians form bands, visual artists rent studios
and run galleries together, writers co-author books,
performers set up their own shows.
Co-ops
You should make one master list of expenses and income.
CRA wants to see a statement for the whole enterprise on each member’s tax return,
showing who was in the group, your share of the whole deal,
and any extra expenses you put out yourself.
This is the co-op T2124, which each of you includes in the return together with
the T2124 showing the rest of your business income. The two incomes together appear on the tax form as your Gross Business income.
Thrash out who will do what — put it in writing and all sign.
Have one person keep the books.
Everyone in a group production should be able to check the books,
but one person fills in who bought what, who was reimbursed, and what was earned –
and then passes on the final income and expenses details to every co-op member.
Get professional advice from your lawyer and tax preparer before committing to a co-op.
In Toronto, ALAS offers nearly free advice from experienced arts lawyers to performers and visual artists.
Talk to your professional association, ask around your friends, go to people who’ve been successful in what you want to do.
Ask ACTRA, Equity, WIFT, LIFT, a local artists’ gallery, film school, fine arts course —
do they know of a similar operation to yours?
Google [your city] artist co-op and see how many come out of the woodwork. We scored twenty-five in the first three pages with “Vancouver”.
Other Projects
Members of a co-op share the costs, the revenue, and the legal responsibilities.
You can pay for everything, including fees to the rest of the group, take all the the profits, and cover any loss, and be the business owner.
As the creative producer/band leader/self-producing playwright, etc., you should lay out the income and expenses on a separate T2124 on your tax return.
The fees to the rest of the group are expenses, and so is anything you drew from the project’s bank account. Get a signature for each fee paid, as a record of your business expense.
Decide which parts of the project you are going to be farming out. Pay the fee and let the expert work for you.