[hackerspaces] Hackerspace law: unincorporated association
john at duksta.org
Thu Aug 5 13:45:52 CEST 2010
On Aug 4, 2010, at 7:57 PM, Russ Garrett wrote:
> The first thing we did is incorporate as a company. The whole point in
> incorporation is it gives legal protection for a risky endeavour
> (generally in return for slightly more transparency). To me, this is a
> no-brainer (although apparently running a corporation is a lot cheaper
> in the UK than in the US).
I have to agree here. Going as an unincorporated entity is just an invitation for trouble. It really isn't that much trouble or that expensive to incorporate or establish an LLC. In most US states, the fee to the secretary of state to file articles of incorporation/organization for a corp or LLC is less than $200. The fee for filing the your annual report should be $50 or $100. Just be sure to file that annual report every year, lest you lose your LLC status.
We're getting ready to create an LLC for QuahogCon, as I ran it as a d/b/a this year and kind of fretted about the personal liability implications of that. We won't be filing for non-profit status, so the only thing we need to figure out is how to deal with the tax consequences of any money left over year to year. In the US, LLCs filing taxes a corporation pass tax liability through to the members based on distributions. One of our members has a query out to accountant and attorney friends as to whether we can avoid this tax liability by never making distributions to the LLC members.
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