[sudo-discuss] Articles of Incorporation

Thu Oct 17 16:47:05 PDT 2013

my inclination would be to stick to nonprofit designation and clear the path for 501c3.  so far we have been basically living month to month, so not really sure there is value in trying to define equity and member shares at the moment.  i look forward to many sudo-affiliated cooperative organizations in the future though.

Oct 17, 2013 04:22:27 PM, juul at labitat.dk wrote:
On Thu, Oct 17, 2013 at 2:15 PM, Eddan Katz eddan at clear.net> wrote:
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In the interest of expediting the administrative part of the process in filing these documents, here's the link to the state of CA page - http://www.sos.ca.gov/business/be/forms.htm.
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As a non-profit, Sudo Room would be filing either the Form ARTS-MU (mutual benefit) or ARTS-PB-501(c)(3) (public benefit) [$30 - one-time fee] as well as the Statement of Information on Form SI-100 [$20, mandatory renewal annually or biennially).
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An overall concise and informative resource I've found for establishing and operating a co-operative Articles of Incorporation can be found at http://www.rurdev.usda.gov/rbs/pub/cir40/cir40rpt.htm. I am trying to sift through what's relevant for us to consider in comparison with the draft Marc sent around.
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>I did some research on the California Cooperative corporation structure today. I have gathered some relevant notes and citations here:
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  https://sudoroom.org/wiki/Notes_on_coops
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>This section is specifically relevant for the discussions around limiting hierarchical power that we had at yesterday's meeting:
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>  https://sudoroom.org/wiki/Notes_on_coops#Power_of_directors
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>My conclusion so far is that I haven't found anything that makes the cooperative structure better suited for sudo room than e.g. a public benefit corporation, if we're assuming that we will be operating as a non-profit that does not intend to make a profit for its members. I may, however, be missing something, and if I am, please let me know.
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>If we were to assume that we were interested in making a profit for our members (technically "for our members as patrons") then the Cooperative model starts to look much more interesting, but then we loose the ability to become a 501(c)3 (and I assume we loose the ability to become a 501(c)10 as well).
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>-- 
>Marc/Juul
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On Oct 17, 2013, at 10:37 AM, Hol Gaskill hol at gaskill.com> wrote:
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> I was at sudo last wednesday through meeting time hoping to discuss this issue and get caught up, and we only had 4 people so we didn't really feel there was consensus to make broad strokes.  I'll be honest - it had been a while and I was really looking forward to chewing on some of this language.  Taking the articles to sacramento with a week's notice to all n-7 sudoers after so much time going back and forth does not seem proper.  Is there a specific deadline that coincides with a week from now?  I will absolutely take a look at the revised articles this week and submit proposed revisions for discussion and I encourage everyone who cares about small but significant details to do the same.  I don't agree with the approach taken on timing here, but I am more interested in registering sudo room's legal status as a nonprofit than making procedural objections so I join the voices calling for revisions this week if ever.  I also volunteer to be on the board in some role that involves spreadsheets or whatever nuts and bolts tasks need a person of contact with minimal public component.
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> Oct 16, 2013 06:22:45 PM, juul at labitat.dk wrote:
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> Hi everysudoer
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>> For those of you who don't already know, sudo room is aiming to incorporate as a california non-profit, with the long-term goal of reaching 501(c)3 status.
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>> For now, we're working out Articles of Incorporation. These are based mostly on Noisebridge's Articles of Incorporation:
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>>   https://sudoroom.org/wiki/Articles_of_Incorporation
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>> In reading this, it may surprise people to see all of this talk of a board of directors and hierarchical structures. Most, if not all of this is required by law ( this law: http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=corp ) and we can safely ignore it in the day to day running of our hackerspace. Instead of trying to explain, I will quote Mitch Altman responding to the question "What is the management structure [of Noisebridge] like?":
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>> "There isn't any. The official line is that we're an anarchist collective but the reality is that it's more of a web of trust model, with the usual elements of feudalism that crystallize out of any anarchic group. There's a board that appoints officers who technically have executive authority with regards to the space, but the reality is that if any of them actually exercised power they'd get thrown out. For certain things, like insurance, taxes, and our nonprofit filings, they have duties but those are invisible to the day-to-day operations."
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>> So, the important thing to remember is that these Articles of Incorporation allow the members to throw out any director who abuses their power. We will then go on to define how our day to day space is run outside of the articles of incorporation (e.g. in our bylaws).
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>> The power of a majority of the members to remove directors is defined in 7.6.c.2: https://sudoroom.org/wiki/Articles_of_Incorporation#c._Removal_of_Directors
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>> If we want to tweak the Noisebridge articles of incorporation at all, I believe that the following are most in need of editing:
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>>   * Article 3 - This is about our purpose and values. We can and should more or less freely change 3.1 and 3.2, but 3.3 should remain unchanged.
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>>   * Article 6.1 - A member is proposed for membership by one existing member. Do we want to change this to two?
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>>   * The Articles talk about how the board can fix fees for the members to pay, but we are almost certainly interested in letting members pay for their membership with work, by putting in time instead of money. I don't think we can put this into our articles of incorporation for two reasons:
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>>     1. The California Corporations code specifically says that the board may levy dues, but says nothing about levy'ing anything in place of dues:
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>>     "5351.  A corporation may levy dues, assessments or fees upon its
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>      members pursuant to its articles or bylaws, but a member upon
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>      learning of them may avoid liability for them by promptly resigning
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>      from membership, except where the member is, by contract or
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>      otherwise, liable for them. Article or bylaw provisions authorizing
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>      such dues, assessments or fees do not, of themselves, create such
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>      liability."
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>>       http://www.leginfo.ca.gov/cgi-bin/displaycode?section=corp&group=05001-06000&file=5350-5354
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>      2. I'm worried that we may count as an employer if we give out membership in return for work, which may subject us to a whole set of other laws. However, I am not a lawyer.
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>>     Keep it mind that "membership" for the purposes of the articles of incorporation only refers to the right to vote on things related to the board and articles of incorporation. So we could fix this by simply defining additional membership in our bylaws that define the more important things, such as being part of decision-making at our weekly meetings and 24/7 access to the space, and defining a membership fee in the bylaws that can be substituted by putting in work. We then simply have the directors set an official membership fee of 0. The only weirdness with this solution: It would be easier to become a member in the eyes of the articles of incorporation (requiring only trust of another member) than it would be to become a member in the eyes of the bylaws.
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>> --
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>> Marc/Juul
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