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Andy, I'd like to help out with the legal stuff. Please let me know where to meet at 4pm tomorrow.<br><br>Mitch.<br><br><br>-----------------------<br>> Date: Fri, 8 Feb 2008 10:48:00 -0800<br>> From: adi@hexapodia.org<br>> To: matt@peterson.org<br>> Subject: DBAs and LLCs and 501(c)3, oh my! (was Re: [Noisebridge-discuss] Meeting notes posted for Thu 7th)<br>> CC: noisebridge-discuss@lists.noisebridge.net<br>> <br>> On Fri, Feb 08, 2008 at 09:22:24AM -0800, Matt Peterson wrote:<br>> > An LLC appears to be the logical least-path-of-resistance at this <br>> > point, mostly because non-profit money tracking needs to be very <br>> > extensive and an unknown "thumbs up" commitment from various <br>> > government levels for approval. A concern also exists on setting up a <br>> > non-profit correctly to factor in board member insurance. This is not <br>> > to say a 501c3 isn't the best option, again just not the easiest for <br>> > the initial setup months.<br>> <br>> I'd just like to expand on my thinking here, since I seem to have the<br>> most knowledge given my shiny new Nolo press books. (Kinda scary, eh?)<br>> <br>> First off, if you have *ANY* willingness to help make this happen on the<br>> legal front, please come do legal homework with me Saturday around 4 PM<br>> in the mission! I don't want to be the sole resource here. Exact<br>> location to be announced, email for details.<br>> <br>> Starting out with a DBA gets us a bank account and the beginnings of an<br>> official group identity. (Given that we don't want to make interest on<br>> our bank account for tax reasons, and so we'll have several thousand<br>> dollars sitting there doing nothing, banks should be falling over each<br>> other to hold our money for us.) The costs are pretty minimal: under<br>> $100 in fees plus a bunch of annoying time spent waiting in line at City<br>> Hall. Given that we have monies we would like to start collecting --<br>> more specifically, I have money I want to donate towards the cause<br>> starting immediately -- there really isn't any reason not to do this<br>> now.<br>> <br>> <br>> There appear to be two routes to take from there:<br>> 1. incorporate as a California LLC, a for-profit entity.<br>> 2. incorporate as a California non-profit corporation.<br>> 2a. Shoot for 501(c)3 status.<br>> 2b. operate as a "fraternal organization" akin to the Shriners.<br>> (this is managed under other sections of 501(c).)<br>> <br>> I've considered and dismissed the following possibilities:<br>> - a different for-profit organization (C corp, S corp, partnership)<br>> (the llc is specifically tailored to the for-profit version of what<br>> we're trying to do here; if we can't go nonprofit, LLC is the really<br>> obvious choice.)<br>> - incorporating in a different state<br>> (several people have recommended against this. There are papers and<br>> fees associated with being an out-of-state corp operating in<br>> california, plus two sets of rules to deal with.)<br>> <br>> It is possible (though it may be somewhat expensive, say maybe $4k in<br>> legal costs) to start out as an LLC and transition to a non-profit.<br>> <br>> Both LLC and nonprofit have expenses associated with them; it looks like<br>> paperwork and fees are going to cost us a minimum of $1k per year.<br>> <br>> -andy<br>> _______________________________________________<br>> Noisebridge-discuss mailing list<br>> Noisebridge-discuss@lists.noisebridge.net<br>> https://www.noisebridge.net/mailman/listinfo/noisebridge-discuss<br></body>
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