DBAs and LLCs and 501(c)3, oh my! (was Re: [Noisebridge-discuss] Meeting notes posted for Thu 7t

[Rachel McConnell]

If I can find any contact info, I will do this.  Although I'm not sure 
the people I know did the startup work; SFPA has been around for ages.

R

Mitch Altman wrote:
> Rachel,
> 
> Do you think it might help if you contacted people who you do know, who 
> used to be on the board, if they can remember how they started things?
> 
> Mitch.
> 
> 
> ----------------
>  > Date: Fri, 8 Feb 2008 11:24:39 -0800
>  > From: rachel at xtreme.com
>  > To: noisebridge-discuss at lists.noisebridge.net
>  > Subject: Re: DBAs and LLCs and 501(c)3, oh my! (was Re: 
> [Noisebridge-discuss] Meeting notes posted for Thu 7th)
>  >
>  > Does anyone know someone involved with managing any similar organization
>  > here whose brain we could pick?
>  >
>  > I used to know people running the San Francisco Pool Association, which
>  > has nothing to do with hacking but is a member-based organization not
>  > trying to turn a profit. I checked their website last night and
>  > unfortunately all the current officers are people I don't know, but I'm
>  > going to shoot them an email anyway to see if they'll talk a little bit
>  > about how they're organized, what they like & don't like about it, and
>  > how much it costs.
>  >
>  > I think we have, or can get, some of this info from other hackspaces
>  > elsewhere, but I think it would be useful to talk to other CA
>  > organizations specifically.
>  >
>  > Rachel
>  >
>  > Andy Isaacson wrote:
>  > > On Fri, Feb 08, 2008 at 09:22:24AM -0800, Matt Peterson wrote:
>  > >> An LLC appears to be the logical least-path-of-resistance at this
>  > >> point, mostly because non-profit money tracking needs to be very
>  > >> extensive and an unknown "thumbs up" commitment from various
>  > >> government levels for approval. A concern also exists on setting up a
>  > >> non-profit correctly to factor in board member insurance. This is not
>  > >> to say a 501c3 isn't the best option, again just not the easiest for
>  > >> the initial setup months.
>  > >
>  > > I'd just like to expand on my thinking here, since I seem to have the
>  > > most knowledge given my shiny new Nolo press books. (Kinda scary, eh?)
>  > >
>  > > First off, if you have *ANY* willingness to help make this happen 
> on the
>  > > legal front, please come do legal homework with me Saturday around 4 PM
>  > > in the mission! I don't want to be the sole resource here. Exact
>  > > location to be announced, email for details.
>  > >
>  > > Starting out with a DBA gets us a bank account and the beginnings of an
>  > > official group identity. (Given that we don't want to make interest on
>  > > our bank account for tax reasons, and so we'll have several thousand
>  > > dollars sitting there doing nothing, banks should be falling over each
>  > > other to hold our money for us.) The costs are pretty minimal: under
>  > > $100 in fees plus a bunch of annoying time spent waiting in line at 
> City
>  > > Hall. Given that we have monies we would like to start collecting --
>  > > more specifically, I have money I want to donate towards the cause
>  > > starting immediately -- there really isn't any reason not to do this
>  > > now.
>  > >
>  > >
>  > > There appear to be two routes to take from there:
>  > > 1. incorporate as a California LLC, a for-profit entity.
>  > > 2. incorporate as a California non-profit corporation.
>  > > 2a. Shoot for 501(c)3 status.
>  > > 2b. operate as a "fraternal organization" akin to the Shriners.
>  > > (this is managed under other sections of 501(c).)
>  > >
>  > > I've considered and dismissed the following possibilities:
>  > > - a different for-profit organization (C corp, S corp, partnership)
>  > > (the llc is specifically tailored to the for-profit version of what
>  > > we're trying to do here; if we can't go nonprofit, LLC is the really
>  > > obvious choice.)
>  > > - incorporating in a different state
>  > > (several people have recommended against this. There are papers and
>  > > fees associated with being an out-of-state corp operating in
>  > > california, plus two sets of rules to deal with.)
>  > >
>  > > It is possible (though it may be somewhat expensive, say maybe $4k in
>  > > legal costs) to start out as an LLC and transition to a non-profit.
>  > >
>  > > Both LLC and nonprofit have expenses associated with them; it looks 
> like
>  > > paperwork and fees are going to cost us a minimum of $1k per year.
>  > >
>  > > -andy
>  > > _______________________________________________
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