Hello Francis, A few answers to your questions in both posts. We have researched this over 3 years, taken legal advice and as a member of the British Business Angel Association, spoken to lots of relevant people about the law. (1) The collaboratively created and de-risked plan is used as the basis for a multi-party legal agreement, to provide constraints under which the business is run and to allow a trusted 3rd party (such as Paypal or a bank) to divert payments to stakeholders as they are received. Obviously, where cash is taken, this could cause problems, but for those only taking online payments, credit cards or cheques it would work. (2) Initially, when the individuals and businesses supply time and resource on a paid out of revenue basis, they would be working as freelancers or suppliers. Tax would be deducted when revenues are received by the bank. This is currently common practice in angel funded companies where entrepreneurs are paid in stock and the tax only becomes due when it is sold. (3) The current FSMA (Financial Services and Markets Act) regulations only apply to investors. The time and resource providers are suppliers who collectively help each other to decide whether or not to supply their (spare) time or lend their (spare) resource. We work with a partnering angel network to channel cash to client companies. More details on how the risk reduction and rewards process can be found here - [http://www.piefinance.com/DealmakerInfo.aspx] http://www.piefinance.com/DealmakerInfo.aspx I hope that answers your questions, but if not would like to hear of other concerns not covered. Thanks Senake
-----Original Message----- From: "Francis Davey" <[email protected]> Sent: Wednesday, June 16, 2010 11:47am To: "mySociety public, general purpose discussion list" <[email protected]> Subject: Re: [mySociety:public] Views wanted - on our sustainable solution enterprise and employment creation solution On 16 June 2010 11:27, Alexander Harrowell <[email protected]> wrote: > It's a horrible idea, it hugely undervalues ordinary people's time and effort, > it takes absolutely no account of the fact the people involved need not > promises of jam tomorrow but wages, now, to pay things like rent, and it > reinforces the unpleasant tendency of jobs in quite a lot of sectors to be > monopolised by rich kids who can live off the Bank of Mum & Dad while working > for free in order to make a start. > > Also, given that some huge percentage of startups crash and burn, what happens > to my wages? (putting my head above the parapet in a moment of lucidity) unless I am missing something, it doesn't look like whoever put this together took much (any?) legal advice. A big question (sort of implicit in Alexander's remark) is what is the status of someone contributing their work in this way? The sign up page gives no indication of what the relationship with the end user will be, yet one of the claimed advantages of this system is that someone else (a trusted third party) takes care of some of it for you - so surely they ought to know. Now status has boring lawyerly style implications. There's the National Minimum Wage Act 1998 (for instance) - this looks dangerously like it might be unpaid work (at least some of the time) and therefore unlawful. Are the work contributors employees? (in which case you had better be paying SMP, SSP, accounting for payroll tax, paying redundancy money etc). If they aren't employees, what are they? Partners (in which case you create a complex legal relationship you probably don't want and there will be tax implications)? Or just unconnected members of the public who are contracting with you for equity - in which case that looks to me rather like it comes under OFT regulation and, trust me, the shoals which you have to navigate to stay on the right side of the law there are much more tortuous than anything in employment law. Got to have it one way. And "there will be tax implications" is probably always going to be true 8-). -- Francis Davey _______________________________________________ Mailing list [email protected] Archive, settings, or unsubscribe: https://secure.mysociety.org/admin/lists/mailman/listinfo/developers-public
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