[Steering Committee] Legal Status

[Jason Lee]

On Tue, Jul 15, 2008 at 7:37 PM, ryan hoegg <ryan.hoegg at gmail.com> wrote:
> OK let me know when, and I'll try to be there.  I'm in town the rest of the
> month.  Thanks for doing the legwork on this!

Actually, I had lunch with them last Thursday. :P  Here's what I found.

They didn't like the idea of the charitable non-profit.  They said
your donors have to be really varied to qualify.  If they're not, then
you lose charity status and become a foundation, at which point you
have to give away a certain amount of money (they though maybe 5%) to
charities of some sort.  Fail to do that, and you lose your legal
status altogether and we're back to square one.

What they suggested is this:  First, they set us up as a non-stock
entity.  That will get us the legal liability shielding we're after,
and will cost about $500 to get everything prepared and filed.  Once
that's done, if we want to keep going, we can pursue "business league"
status (which I think is the 501c6 we've discussed).  This gives us
non-profit status, and will allow our sponsors some tax benefits in
that they will be able to write off dollar-for-dollar anything they
give to us.  It will also allow us to buy things for the JUG tax free,
if I recall correctly, so we all benefit.  They haven't gotten a good
handle on what it will take from them in terms of hours, etc., and
they're not sure at this point that we'd even qualify as a business
league, but they're estimate on cost is that it could "easily" be at
least $1,000, so we may want to rethink that part.  I don't know, but
we can discuss it in detail at our SC meeting on the 28th.

By the way, for what it's worth, I related to them our original idea
about teaming up with the .net guys, and described the response of my
other lawyer friend ("Eww" while making a funny face).  Mark's
response, "I was thinking the same thing but didn't want to say
anything."  I got the impression that he thinks it's probably legally
possibly, but not advisable due to the possible commingling of funds
and fund raising, etc.  That's off the table, I think, but thought it
might be of interest.

-- 
Jason Lee, SCJP
Mojarra and Mojarra Scales Dev Team
https://mojarra.dev.java.net
https://scales.dev.java.net
http://blogs.steeplesoft.com