Opening an account for NPOC, NCUC and NCSG in Estonia

[Ayden Férdeline]

I am disappointed that the concerns that Moritz has raised have been glossed aside so quickly, as his concerns are well-founded. I think this proposal - that the NCSG open a bank account in Estonia - is under-developed and I don't see how the NCSG Executive Committee could be in a position to properly assess the risks in the absence of independent legal advice. As Stephanie alluded to in an earlier email, there are benefits to our current structure, and if there is to be a change to it, I think it should be on the basis of a solid proposal and informed legal opinion, and not written on the back of a napkin.

Ayden

‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
On Sunday, January 13, 2019 11:19 AM, Raoul Plommer <plommer at GMAIL.COM> wrote:

> Yes, I am well aware of the maintenance, that a nonprofit organisation needs, for I created one a little over a year ago and am the chair of it. I'm quite sure Estonia is less strict on things than Finland and maintaining the necessary skeleton of a nonprofit org is actually not that hard.
>
> In any case, the fiscal responsibility is the hardest part, but even that means that we just need to store receipts of our transactions and submit them at the end of the year. We are doing this anyway. I would also say, that all three organisations have less than ten transactions per year.
>
> I now have the ambition of creating a registered organisation to "support" NPOC in Estonia and open a bank account for it. It will also need its own charter but I already know how to go about it. Once we have all this set up and working, perhaps NCUC and NCSG can then be better persuaded to follow the same route.
>
> -Raoul
>
> On Sun, 13 Jan 2019 at 00:16, Moritz Bartl <bartl at renewablefreedom.org> wrote:
>
>> On 08.01.19 09:30, James Gannon wrote:
>>> This is a lot more complicated a topic than I think people are giving
>>> credit to.
>>> No-one has yet spoken about legal liabilities that come from
>>> establishing a legal entity, and I also don’t believe that anyone has
>>> spoken to ICANN legal yet (Currently we only exist as an entity within
>>> the ICANN bylaws, also there are interactions with the Empowered
>>> Community responsibilities that would need to be incorporated into the
>>> establishment of any entity).
>>>
>>> Please don’t take this as a negative thing, but I think people are
>>> underestimating the work and complexity involved here.
>>
>> This. A hundred times this.
>>
>> What is being discussed here is _not_ merely "opening a bank account".
>> What you are discussing is to set up organizations.
>>
>> At our foundation, a lot of what we do is help grassroots/early stage
>> projects bootstrap, to help them set up their own non-profits (and
>> sometimes for-profits), and to deal with the complexities arising from it.
>>
>> My usual recommendation is to think hard about it, and to better partner
>> with an existing organization that has good procedures to cover your own
>> governance model. This is called "fiscal sponsorship", a concept well
>> established in the US (with a lot of providers) but not so much in
>> Europe. We also started our own fiscal sponsor for free software
>> projects in 2016, now handling 15+ projects with distributed teams and
>> loose membership, with an annual budget of more than 500k.
>>
>> We have investigated "the Estonian model". Don't be fooled by the ease
>> of setting up: You also need to maintain it. There is little information
>> available about Estonians non-profit tax regime and laws regarding
>> international activities. I know from our own work that in many European
>> countries, acting internationally is _not_ straightforward, and you
>> cannot simply pay whatever invoices and travel without carefully
>> crafting bylaws, defining governance structures, and having a story
>> around every singe receipt. Someone needs to make sure this information
>> is there. It is NOT simply a meeting every once in a while, it requires
>> constant caretaking or it will cause a lot of headaches for the poor
>> soul that needs to clean up.
>>
>> Fiscal sponsors have established processes, support somewhat
>> fuzzy/in-process governance models, and of course don't require a change
>> of legal bank account owner.
>>
>> If you run an account under your name, or a shared account with someone
>> else, you have the full legal responsibility. But, maybe more
>> importantly, what you receive to this account is (shared) income. If you
>> don't declare it with your taxes, you are committing tax fraud. If you
>> buy services, you buy them for you, and they become your legal
>> responsibility. You can do so as a group, no problem, but you are not
>> magically "not a legal entity".
>>
>> You will not be able to create "an international organization". An
>> organization always needs a location and thus a tax regime it will
>> operate under. There are some "modern forms" like the European SE, but
>> they are mostly European in name/appearance and not by jurisdiction:
>> https://en.wikipedia.org/wiki/Societas_Europaea
>>
>> --
>> Moritz Bartl, Germany
>>
>> Renewable Freedom Foundation
>> https://www.renewablefreedom.org/
>> Center for the Cultivation of Technology
>> https://www.techcultivation.org/
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