I definitely agree that a membership corporation is the best way to go. However, I'm not sure we need to have it in Deleware. Though there are benefits, I don't see them as being large enough to justify the additional expense/effort.
Couldn't we just register in one of the PMC states? On Jul 20, 2009, at 6:24 AM, Blake Johnson wrote: > > As far as I see it, there are two possible organizational structures > that Habari might consider for an Habari org: limited liability > company (LLC), or membership corporation (also known as a non-stock > corporation). Both structures have the benefit of protecting the > assets of the individuals that participate in the organization, but > there are some important differences. > > LLC > - must declare a set of owners; changes in ownership must be filed > with the state > - allows for declaration of an external manager > - not eligible for non-profit status > - "pass-through" tax status > - must prepare individual Schedule K's for all owners > - owners include revenue/losses from the LLC on their personal tax > returns > - many owners = a lot of extra tax work > > Membership corporation > - creates a separate legal entity which is managed by a group of > "members" (no shareholders) > - members are not eligible to receive dividends > - membership changes need only be recorded in meeting minutes > - may apply for 501(c)3 status > - the ASF seems to have had little trouble obtaining this. They filed > under the "scientific purposes" section of 501(c)3. See: > http://www.apache.org/foundation/records/ASF-1023.pdf > - taxed separately (must file its own tax return if revenue exceeds > $25,000 in a given year) > > From my perspective, the membership corporation seems like the natural > choice for us because the project management committee (PMC) would > become the members of the corporation. It removes the issue of > deciding on a small subset of people to become owners which you might > consider to avoid extra paperwork with an LLC. > > If others agree, then the next steps are as follows. > > 1) Agree upon a set of bylaws. I might again suggest that we look to > the ASF for guidance here. Check out their bylaws: > http://www.apache.org/foundation/bylaws.html > > That should provide a starting point for discussion, which we can > modify to suit our particular needs. > > 2) Choose a state for formation. Since Habari does not have a physical > office anywhere, we are free to file wherever we choose. Many > organizations with similar freedom choose Delaware because of its > Chancery court system which allows for efficient resolution of > business disputes (the Delaware state website claims that 50% of all > publicly traded companies are based in Delaware: http://corp.delaware.gov/) > > 3) Pay a company to act as our registered agent. Just do a google > search for "Delaware corporation" and you'll see plenty of choices. I > have no idea which ones are reputable. But, unless one of you own a > piece of property in Delaware that you want to declare as Habari's > office, we need to hire someone else that can take on this role for > us. It looks like the fees for this service are quite cheap... > > 4) The list continues with actually filing paperwork. As this message > is already quite long, though, I'll stop here. > > --Blake > > --~--~---------~--~----~------------~-------~--~----~ To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/habari-dev -~----------~----~----~----~------~----~------~--~---
