Tax Structure

Updates

In July, 2013 some of our folks spoke with potential fiscal sponsors (The School Factory & Noisebridge). Here was the result of the discussion with Noisebridge: http://lists.sudoroom.org/pipermail/sudo-discuss/2013-July/thread.html#3141 (this thread also includes some concerns & thoughts from a few of the sudoers).

Plan

The current situation, based on a confluence of factors, is as follows:

• sudo room has many reasons to incorporate and select a tax structure, including but not limited to:
  1. forming partnerships with other entities (Fiscal Sponsors, Counter Culture Labs, the Public School)
  2. the ability to put the entity's name on rental contracts / leases
  3. purchase goods and services as the entity
  4. benefit from the prevention of individual liability
  5. purchase insurance of various sorts
  6. generally conduct business in a more consistent and unified fashion
  7. operate with greater overall expenditure.

Research

Below are some notes from multiple efforts of research on the various tax structure statues that would be of benefit to the sudo room community and hacker space.

Types

Associations

• Read about (high-level): Voluntary Associations, Freedom of Association, and Cooperatives, which can fall under various classifications below.
• California Unincorporated Association
  • Secretary of State Business Entities FAQ.
    • Relevant forms.
  • Review of law for Californian Unincorporated Associations (circa 2004).

Non-profit

501(c)(3)

Charitable Organization

External Guides

• Start a 501(c)3 Non-Profit

Socially Responsible Corporations

B Corps

• B Corporation - Structure for corporations that do social good. For more info, see this site on Couchsurfing's decision to become a B Corp.

Limited Liability Partnerships

(from Blond's Black Letter Law Outlines, 1996)

for further detail, see resources such as MyOwnBusiness.Org - Session 5: Business organization

• In a limited partnership there are two kinds of partners:
  • General partners, similar to partners in a general partnership, control the management and are personally liable for partnership debts.
  • Limited Partners do not participate in management and are not liable for debts beyond their initial investment

• In order the limit personal liability further, a corporation can exist as the sole general partner in a limited partnership with the limited partners acting as the officers of the corporation.

• This wall has been knocked down by some courts and held up by others with certain requirements, such as:
  • the corporation also exists for other purposes;
  • the state clearly allows corporations to be the sole general partner in limited partnerships;
  • the limited partners act as officers in a corporate, not personal capacity; and
  • the contracting parties are aware of the structure of the partnership.

Relevant Law, Uniform & California

UNIFORM LIMITED PARTNERSHIP ACT (2001)

California Code - Chapter 3: California Revised Limited Partnership Act (15611. - 15724.)

Incorporation Services Options

Rocketlawyer: Start an LLC

Political Organizations

501(c)(4)

Super PACs

527 Group

Labor Unions

501(c)(5)