[HOT] Fw: advise on legal guidance for HOT organization formation

Mikel Maron mikel_maron at yahoo.com
Wed Jul 21 03:15:50 BST 2010

Received this unofficial, IANAL advice.

The approach you propose sounds practical, however I'm afraid  we have no 
experience establishing a legal entity in either USA or France.  Generally I 
guess you might want to think about the  following:
	* How to ensure long term aligned governance between both    entities: eg have 
substantially same group of board members on both    sides...?
	* Annual accounts and reporting requirements will be duplicated    - this 
could require considerable effort. Don't underestimate the admin    burden 
regulatory requirements of any non-profit - who will do    this?
	* To be eligible for tax-deductible donations I think a US    organisation has 
to achieve 501(c)(3) status with the IRS. Not sure for French    non-profits. 

	* Having a French    non-profit won't (as far as I know) allow donors in other 
EU countries to    donate to it tax-free, unfortunately. You would need a 
non-profit entity in    every country where you have donors, which of course 
isn't    practical.
Getting authoritiative legal advice on this is going  to be a bit tricky. You 
aren't likely to find a lawyer who has know-how across  multiple jurisdictions. 
But you could try via the new Thomson Reuters Foundation  initiative TrustLaw, 
which brokers pro bono work: http://www.trust.org/trustlaw/pro-bono/
The ideal situation, I guess, sees single governance structure, with two legal 
entities providing status as needed for funding, etc. I don't know if it's 
possible to stipulate the same board of directors on both sides, via the 
elections laid out in the HOT US by-laws; later on the Board could amend the HOT 
US by-laws if this seemed reasonable. 

TrustLaw has been suggested a couple times for pro-bono legal advice for us. The 
kicker is that you need to be an established entity to apply. We could do this 
either through OSMF or OSM US, and then ask for advice on setting up the 
relationships between two entities. Apparently there's some paper work in the 
process, etc., so going through OSM US could end up being quicker to qualify.


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