<div dir="ltr"><div class="gmail_default" style="font-family:arial narrow,sans-serif">Does anyone know how being an LLC interacts with being umbrella-ed under Noisebridge or another nonprofit if it is compatible at all? (So that hypothetical surpluses would not be profits?)<br>
</div></div><div class="gmail_extra"><br><br><div class="gmail_quote">On Thu, Jul 18, 2013 at 10:57 AM, William Budington <span dir="ltr"><<a href="mailto:bill@inputoutput.io" target="_blank">bill@inputoutput.io</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">The advantages of LLC as I understand it is:<br>
<br>
1) It would give us a Tax ID #<br>
a) So we can sign up for stripe<br>
b) so we can get off community bank of the bay<br>
2) It's limited liability, so if someone gets injured at sudoroom and<br>
sues it won't rest on one person's hands<br>
<br>
Bill<br>
<div class="HOEnZb"><div class="h5"><br>
On 07/18/2013 10:50 AM, Marina Kukso wrote:<br>
> thanks bill, very helpful!<br>
><br>
> what are the advantages to filing as an LLC?<br>
><br>
> also, i think that jenny recently had a call with james from the school<br>
> factory - jenny, could you possibly share some of what you both discussed?<br>
><br>
> - marina<br>
><br>
><br>
> On Thu, Jul 18, 2013 at 10:43 AM, William Budington <<a href="mailto:bill@inputoutput.io">bill@inputoutput.io</a>>wrote:<br>
><br>
>> Hey all,<br>
>><br>
>> I talked to Danny O'Brien (Noisebridge's financial functionary)<br>
>> yesterday about the sudoroom legal status. I know this has been an<br>
>> ongoing discussion so I'm going to summarize the options we've already<br>
>> looked into and present the new information Danny has brought to my<br>
>> attention.<br>
>><br>
>> *Why do we need a legal status?*<br>
>> Over the past few months we've found various challenges to our normal<br>
>> operations since we don't have a legal status. We aren't able to sign<br>
>> up for services like Stripe without having a federal tax id. In<br>
>> addition, since we are formally under one person's name, he is liable if<br>
>> anything happens at sudoroom. Also, we aren't able to sign up for most<br>
>> banks -- only the Community Bank of the Bay will actually give us a bank<br>
>> account with our status as a DBA. And as we've seen, Community Bank of<br>
>> the Bay is not the most web-savvy organization, and so it's hard for us<br>
>> to actually check our balances.<br>
>><br>
>> *What we've looked at*<br>
>> Our eventual goal has been to get 501(c)3 status for sudoroom. This is<br>
>> a status that would allow us to accept tax-deductible donations and be<br>
>> incorporated formally as a nonprofit. A lot of Hacker Spaces go this<br>
>> route, and it seems like a reasonable long-term goal. One of the<br>
>> problems we've been warned of is that it takes a long time to actually<br>
>> be granted 501(c)3 status - upwards of 2 years, which can as I<br>
>> understand be expedited to 10 months.<br>
>><br>
>> Because of this delay, we've looked into some other options -- namely<br>
>> being umbrella'd under another organization's 501(c)3 status. This<br>
>> would involve 10% of our revenue going to said umbrella organization to<br>
>> cover costs of the books. I've been in contact with Danny at<br>
>> Noisebridge and Jenny has been in contact with (Steve?) at the School<br>
>> Factory and discussing if this is a possibility. It is certainly one<br>
>> way to go, but as for Noisebridge they've only umbrella'd Noisetor, and<br>
>> they didn't need a separate account for that.<br>
>><br>
>> *What I've learned recently*<br>
>> Danny mentioned that his partner is looking into nonprofit status for a<br>
>> new feminist hacker space in SF, and has investigated these options as<br>
>> well as others. In order to have a certain degree of autonomy, it is<br>
>> probably in our interests to actually not go the umbrella route and<br>
>> pursue separate legal status altogether. He also mentioned that there's<br>
>> no reason why we couldn't incorporate as an LLC or other corporate<br>
>> status before pursuing 501c3 status, and that even if it takes a number<br>
>> of years to be granted non-profit status we can transition from an LLC<br>
>> without much of a problem. There's no real disadvantage to having LLC<br>
>> status in the meantime, as I understand it. The main advantage of<br>
>> nonprofit status is tax deduction, but that is usually superseded on<br>
>> most peoples taxes by the standard deduction. The main place where it<br>
>> does make a difference is when employers do matching donations for their<br>
>> employees, then it can make a difference.<br>
>><br>
>> *The plan*<br>
>> It makes sense to me to pursue the options that would resolve our<br>
>> short-term problems without impeding the path to our long-term goals.<br>
>> It seems to me reasonable as a short-term goal to register as an LLC<br>
>> (Jenny tells me this can be done in an afternoon and with $50 with a<br>
>> drive to Sacramento), and as a longer term goal actually pursuing<br>
>> nonprofit, 501c3 status.<br>
>><br>
>> *Disclaimer*<br>
>> There may be caveats to this plan and I'm not a lawyer.<br>
>><br>
>><br>
>> Bill<br>
>><br>
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>><br>
><br>
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