- 1 Updates
- 2 Situation
- 3 Research
- 3.1 Unincorporated Options
- 3.2 Incorporation Options
- 3.2.1 Non-profit
- 3.2.2 Socially Responsible Corporations
- 3.2.3 Limited Liability Partnerships
- 3.2.4 Crowdfunding Intermediaries
- 3.2.5 Political Organizations
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).
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:
- forming partnerships with other entities (Fiscal Sponsors, Counter Culture Labs, the Public School), etc
- the ability to put sudo room's name on rental contracts / leases
- purchase goods and services as sudo room
- avoid individual member liability, benefit from corporate liability
- purchase insurance of various sorts
- generally conduct business in a more consistent and unified fashion
- operate with greater overall expenditure (bigger budget).
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.
It's not neccessary to incorporate to do some things. As a voluntary membership association, a group is exercising its right to free association, protected by common law derived from the first amendment.
- 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.
- Review of law for Californian Unincorporated Associations (circa 2004).
Socially Responsible Corporations
- 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
Incorporation Services Options