Co-Cant Lobby: A Case Study

501(c)(6) is a membership organization such as business leagues, industry trade associations or chambers of commerce that is advancing a common business interest and wanting to promote common interest without engaging in some type profit oriented business. The purpose of organization is the promotion of the common business interest of its members. All of the net earnings of organization must be reinvested into the organization, and no part of it may not inure to the benefit of any private shareholder or individual. It may not be organized for profit to engage in an activity ordinarily carried out for profit. The drawbacks for having this type of corporate form are:

1. Non-tax deductible (but deductible as a business expense).

2. League

Association.
3. Does not provide service to individual or specific member of organization.
4. Not being engaged in a regular business.
And the advantage for having this type are:
1. Allows a wide-range of lobbying
2. Tax can be deductible as a business expense.
Another type of corporate form is a cooperative. A cooperative is a voluntary, democratic and autonomous business form. It leads by values, is very well integrated with the community and focuses on the sustainability of the industry. It does really well in terms of public perception due to the fact that it shares responsibility between the members and incentivizes them to do the best for the company and the community regardless of profit maximization. Because the goal of a cooperative is the quality of the output, they deemphasize the return on investment and the maximization of profit distribution. This could be a downside to some.
Other drawbacks are ineffective and slow decision-making where everybody has one vote regardless of their qualifications and investments in the company (Dontigney,2016). Liability is also a shared cost where personal finances might suffer because of another member´s mistake but it is limited to a member's investment. The risk of liability could also be handled through the surpluses or by insurance. Generic marketing and aggregating producers risk differentiators getting lost in the lump sum and possible unfavorable associations (Johnston,2016). Cooperatives can be financed directly from their members by them paying membership fee or making contributions. Likewise they can use the cooperatives surpluses to finance their activities, or get funding from multiple flexible sources such as federal state or non-profit agencies, grants, loans, preferred stock shareholders, and crowdfunding (Abel,2016). To insure it's success and longevity, a cooperative should aim for patient capital from members, grants and non-voting equity.
In Indonesia, there is also a type of cooperative, it is called koperasi. There are two categories of cooperative, which are primary cooperative and secondary cooperative. For establishing primary cooperative, there is a minimum of 20 member needed and they should share some of their money as the source of capital for the cooperative. The other category is secondary cooperative that is formed by a minimum of three primary cooperatives (Leks, 2016).
Cooperative in Indonesia share value and profit for all of the members. There are four types of cooperatives that is regulated by Cooperative Law: consumer cooperative, service cooperative, producer cooperative and the last is saving and loan cooperative. In consumer cooperative, commodities are usually collected and distributed for their members and also non-members. For service cooperative, they usually work for services in transportation, cleaning service, medical, and other services. Producer cooperative and saving and loan cooperatives are the most common types of cooperatives in Indonesia. Local farmers in a rural area made their own cooperative, which is called Koperasi Unit Desa (KUD). In this cooperative, seeds, fertilizers and pesticides are being distributed with a reasonable price (Leks, 2016).
In cooperatives, each member is an owner and their participation and control are required. Each member has their voice to influence policy and management. From the Cooperative Law article 75, participation shares from government and community can be obtained by cooperative in Indonesia. Profit can be gained by government and community from proportion of their participation. The same case will happen if the cooperative suffers with losses. Government and community will bear with these losses based on the amount of investment they made on their participation shares. When members of cooperative submit their membership application, they pay a fee that becomes their primary deposit. This primary deposit cannot be returned. Beside primary deposit, the source of capital for cooperative in Indonesia comes from (Leks, 2016):
1. Bequest
2. Participation share
3. Loan capital which come from member of cooperatives, other cooperatives, banks or another financial institution, and debt letter.
4. Another source that is legitimate and not contrary with law
Cooperative in the United States and Indonesia are just the same in their practice. They have similar characteristic about membership, sources of capital, profit and loss. The type of cooperative is also similar. The difference between them is just they are regulated under different law and institution.
In Colombia, there is no such legal form as 501(c)(6). However, considering some of the key descriptive elements of this form, it's relevant to say that the chamber of commerce, boards of trade and real state boards are private non-profit institutions attached to major entities of the government. (Camara de Comercio de Bogota, 2016). On the other side, non-profits cannot participate at all in political campaigns or can contribute to politics.
Now talking about a similar legal form to 501(c)(6) in Colombia, within the category ESAL (Entidad Sin Animo de Lucro – Non Profit). There are two main legal forms, which are fundacion and asosiacion. The second one, asosiacion, is the closest legal form to 501(c)(6). These organizations are created by a group that share a common interest, such as engineers, architects, coffee exporters, etc. (Cruz,2007). There is no maximum or minimum of partners and they are completely regulated by its statutes. The purpose of these organizations is to promote a common interest, where all of the earning are reinvested in the organization activities and purpose. In this sense, the organization cares about an internal overall benefit for all of its member. (Alcaldia de Bogota, 2013) For example, Mental Health Association.
The two main sources of revenue are membership fees and donations. 501(c)6 cannot receive donations, but as it was mentioned before this was the most similar form to it, though with some notable differences. No part of the earning can be distributed between private shareholders or individuals, and they cannot participate in regular business activities. These type of organizations can give tax exemption to donors, but they still have to pay tax for their own activities unless very specific cases where its actions are targeted to a larger community benefit, such as in educational activities. (Alcaldia de Bogota, 2013)

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