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The Document Foundation Launches €50K Challenge, Legal Entity Quest
An anonymous reader writes "The Document Foundation, the group responsible for forking the OpenOffice.org project away from Oracle's control and into the shiny new LibreOffice suite, has announced a drive to raise €50,000 to set up as a legal entity. The Foundation, formed by numerous OpenOffice.org community members tired of the overbearing hand of Oracle preventing them from progressing the development of the popular open source productivity suite, has passed several recent milestones. It's released a full feature-complete version of its LibreOffice productivity suite, and announced deals with companies including Canonical to have LibreOffice replace OpenOffice.org as the default productivity suite in several Linux distributions."
All the links in the summary point to the same site. All the links in all the stories linked from here go back to the same web of stories on the same site. There's not a link to an actual original reference anywhere except to the original mailing list announcement about Libre Office. There's not even one to The Document Foundation's site. It's all just ad-bearing pages forming a neat little maze.
http://blog.documentfoundation.org/2011/02/16/libreoffice-community-starts-50000-euro-challenge-for-setting-up-its-foundation/
Watch this Heartland Institute video
Maybe they should incorporate in a different country, I mean, at worst were looking at around $400 for a regular corp and $800 for a non-profit (US States), at the currently ran operation needing eu 50k to start up I would seriously doubt the legitimacy of the management at this point.
Fifty thousand sounds like an outrageous figure. I can start (and have started) a company for MUCH MUCH less than that. "The Steering Committee came to the conclusion that a foundation based in Germany would provide the best stability" *cough* BS *cough*. And their second choice is the UK? What the hell? Are these people naive or just lazy? For a borderless organization, it simply strains belief that they would choose a business-hostile jurisdiction to incorporate under. Hell, I could make some phone calls and have a Hong Kong company up and running by the end of next week. Even if they wanted to stay in Europe for some reason, aren't there friendly jurisdictions like Luxembourg or Andorra or something? The equivalent to Delaware? I smell a rat, someone (or someone's cousin, fraternity brother, etc.) is making some cash off this deal.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
Fifty thousand sounds like an outrageous figure. I can start (and have started) a company for MUCH MUCH less than that. "The Steering Committee came to the conclusion that a foundation based in Germany would provide the best stability" *cough* BS *cough*. And their second choice is the UK? What the hell? Are these people naive or just lazy? For a borderless organization, it simply strains belief that they would choose a business-hostile jurisdiction to incorporate under. Hell, I could make some phone calls and have a Hong Kong company up and running by the end of next week. Even if they wanted to stay in Europe for some reason, aren't there friendly jurisdictions like Luxembourg or Andorra or something? The equivalent to Delaware? I smell a rat, someone (or someone's cousin, fraternity brother, etc.) is making some cash off this deal.
You could have RTFA and saved yourself a rant.
"After thorough investigation, the Steering Committee came to the conclusion that a foundation based in Germany would provide the best stability, not only for our users, but also for adopters, developers and enterprises," Foundation founder Florian Effenberger claimed in a statement released today. "To achieve this stability, a capital stock of at least €50,000 is considered best practice in Germany."
In other words they could probably get a €100 company the same as you can in the UK but it is considered best practice to have capital funding (a nominal stock value)
UK is business-hostile? That's news to our GDP. And we don't have an awful lot of silly laws that some countries have that would affect open-source (e.g. software patents, etc.)
According to Wiki, by GDP it goes:
Europe
America
People's Republic of China
Japan
Germany
France
United Kingdom
and has done for the last few years. PRC doesn't have a great record as regards freedom of expression, and there are communications problems in many of the others. I think just from that list, I'd be inclined to use Germany first and then UK too. Germany has a very good reputation for stability and supporting open-source.
Best practice for what, though? That sounds like a rule of thumb for opening a business. If you're going to rent office/shop space, purchase equipment, hire employees and so on and don't expect to be making a profit for a year, then that makes sense.
But this is community based software development we're talking about. Everybody already has their equipment, no office space is needed, and nobody should need to be hired (except if they need a web designer or lawyer temporarily I guess).
So what's all that money for?
As someone married to a specialist small business accountant, I can tell you that the main cause of small business failure is people like you who simply do not allow for nearly enough cash to burn through post-incorporation. (One person IT businesses don't count, they are just a tax avoidance scheme). Fifty thousand euros for a real company suggests a tight budget.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Why does a non-profit need stock?
I would want a good answer to that before I donated any money to them
You just don't have any idea what you are talking about.
If they wanted to, they could have a Germany-based company running for a few Euros - but that is not the point.
As explained on the challenge page ( http://challenge.documentfoundation.org/why/ ) they do have some good reasons to use
a "Stiftungsmodell". The basic thing is, they are not founding a company, they are forming a non-profit.
Quoting from the page:
> Foundations have quite a good tradition in Germany, and the benefits in terms of taxes,
> limited liability and international credibility are high. With the German-based model,
> activities are not limited to one country: the foundation can and will be active worldwide.
A gemeinnuetzige Stiftung is exempt from paying most taxes, and allows tax deductions for donors.
Furthermore ist is a very safe way to organize a community project, quoting again:
> In addition, the German model provides a high security and stability, as the foundation's statutes cannot be changed and,
> therefore, cannot be abused. Setting up a corporation or an association, on the other hand, would expose us to the risk that,
> if a majority of all stakeholders so decided, the statutes could be changed, even as far as removing charitable purposes.
> In order to provide safety and stability, not only for our users, adopters, developers and enterprises, but for the whole community,
> a German-based foundation is ideal.
Assuming a 5% interest rate, the 50k will net them 2.5k in interests per year,
which (the 2.5k) is considered to be the lower limit for having a working Stiftung.
The money stays in the Stiftung, it is not to pay lawyers and stuff ;-)
A "Stiftung" is a legal entity, but not a for-profit company in the usual sense. It's purpose has to be charitable and it's main function usually is to provide funding towards that goal. Plus, they may get tax exception. So the Document Foundation is aiming for creating a legal entity that actually is designed things like what they are doing.
I don't know if there is a minimal amount of money required for creating a Stiftung (I could look that up). But by German law, founding of for-profit companies is difficult. Either you end up liable for your company with everything that you own privately (your house, your car, you name it) or you have to provide a considerable amount of money as initial company funding. The minimum that you can currently get away with is 10000 euros for a Unternehmergesellschaft (haftungsbeschränkt), which has to be raised to 25000 euros during operations. That's not a fee that you pay. It's just the mandated initial capital. So requiring 50000 euros for a Stiftung does not seem out of the ordinary to me.
I know that for example in GB you can get a Ltd. for a few hundred pounds and 1 pound of required minimal capital. But that's not something that you ultimately want: nobody will trust such a company enough to make business with it in good faith. So this required minimum capital is actually a good thing.
http://www.moonlight3d.eu/
It's not just "best practice". They want to setup a so called "Stiftung", which is something like a "Foundation" in the english speaking world. It is a form of business entity that is often used in Germany for non-profit purposes, and most entities that take donations in Germany are some kind of "Stiftung". These kinds of business entities are well protected (like a GmbH or LTD) and donors get a tax refund for their donations.
And for the kind of "Stiftung" they want to set up, they need 50k base capital, as the law in Germany says. As simple as that.
On second thought, let's not go to Camelot. It is a silly place.
Non-profit doesn't mean non-expenses or non-investment. It is still a company, making money and paying its employees.