Talk:By Laws

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Foundation Location

From the IRC 4/26/2007

[05:20] kontro: I have to say too that I do not like af to be in us or europe. [05:20] kontro: Since developing countries are most interested about Adempiere. [05:20] croo: not in europe? I was thinking some countriesin europe are quiet pro open source [05:21] croo: that's true [05:21] karsten-thiemann: hmm - bulgaria [05:21] kontro: If af is in europe or us shadows of colonialism start creeping out. [05:21] croo: I was thinking about strength in law to protect it .. i.e. no software patents

[05:26] --Juddm 05:50, 29 April 2007 (EDT)juddm: one of the advantages of europe is that the eu is granting lots of money to support open source [05:26] --Juddm 05:50, 29 April 2007 (EDT)juddm: and if we could get some people accross europe to collaborate - that is abother trigger point for money [05:26] croo: yes the 7th framework! [05:26] --Juddm 05:50, 29 April 2007 (EDT)juddm: and the money doesn't come with strings attached in a commercial sense - but for the better good [05:26] kontro: Yes but in states tax laws make life of foundation easier. [05:27] croo: but I think it goes mostly to acedemic ... but still if the use it to study/research adempiere then we still gain [05:27] --Juddm 05:50, 29 April 2007 (EDT)juddm: similar tax laws in europe too

[05:28] fer_luck: hmmm.. I think that if we open up a foundation in the us we will be more opened to legal stuff attacks... [05:28] fer_luck: EU has no patents for software! [05:28] croo: well that's what I was agruing in the council [05:29] --Juddm 05:50, 29 April 2007 (EDT)juddm: i agree - eu would have been worth considering [05:29] fer_luck: my vote is for EU.. [05:30] --Juddm 05:50, 29 April 2007 (EDT)juddm: we are all going to vote for places close to us - I guess we need to do a comparison between the locations with pluses and minuses [05:30] fer_luck: specially thinking about compiere.. what if they find any way to sue us? then good bye adempiere..

[05:33] croo: yes, but all eu countries are not equal .. [05:34] croo: I suggested that I could quickly open a foundation in Ireland but because of MS very large influence here I dind't think it should be here [05:34] fer_luck: tell me one thing, why not malasya... the government there is also involved with adempiere.. let red take care of it..

let red take care of it.. .. better not, remember the last time i took care of the forking debate and we ended up ith this bazaar. It is time the bazaar takes care of itself. I think if we keep showing interest in wearing out this debate, a resolution is in sight. So for now, let's proceed with what Joel did, and move the ship to the country that u all decide - Red1 11:51, 27 April 2007 (EDT)

To avoid FUD I just want to add a comment on "specially thinking about compiere.. what if they find any way to sue us? then good bye adempiere.." -> Adempiere is since the beginning very concerned about license issues, we consulted the FSF and lawyers about licensing options. GPL allows rigth to fork, and we respect copyright in all forms. So, it's very hard that Compiere can think on demanding Adempiere - and talking about business, I think this is undesirable for Compiere, nobody would want to convert on other SCO for OpenSource (and Microsoft would not back such demand :-) - and also a demand from Compiere would put Adempiere high in all news (big "free" good publicity for Adempiere, "bad" publicity for Compiere) - so, concluding I think a demand from Compiere is very far from possible, and it can be good for Adempiere if happens. CarlosRuiz 11:12, 27 April 2007 (EDT)

We should really focus on the governance model and processes rather than physical location. I mean the world is flat now and it really doesn't matter that much where the foundation are :) Hengsin 01:08, 28 April 2007 (EDT)

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I have two concerns with the USA as a location.

1. its strong software patent laws (mixed with a weak patent process).
2. The “Sarbanes-Oxley Act” which I understand places a real burden on governance with steep penalties for non-compliance.

There is a possible 3rd reason which I will address in the Corporate Form section.

And to address Carlos' point on Compiere. I do not see them as a threat... the code is after all GPL'd. But as the project grows in functionality and we look for creative solutions to problems we face, we may find ourselves curtailed because of some stupid patent granted by the USPTO (United States Patent & Trademark Office). Joel argues we have no money let them sue... but it's not just about money. I think last years RIM & NTP (was it?) fiasco is a case in point; non payment (for whatever reason) in this case was resulting in the complete shutdown of their service. Software patents represent a real treat to the Open Source. With Europe acting as a safe haven (just about mind), I think the big players are playing nice.. but I believe that would change if no such haven existed.

One other potential benefit of an entity in Europe is the European Union has recognised the potential value of Open Source and has allocated a vast budget to fund to projects in this area. Now perhaps the funds may not come to us directly (they often go to academic projects) but even if academics used it to work on Adempiere we still gain! Anyway 'EU Funding' is not a subject I have experience in personally so I cannot say what the chances of funding are but I think it's a point worth considering when making any decision.

There is also significant funding in Europe for projects that might arise out of the Adempiere 'space'

Once the important issues of by-laws are resolved, i.e. members chosen by meritocracy, selecting a board to guide matters, that board may chose to instantiate legal entities in any locations where funding can be obtained. A more important issue is a central governing mechanism so that these efforts can work in concert. jsSolutions 11:52, 28 April 2007 (EDT)

--Croo 07:06, 28 April 2007 (EDT)

PS. I am not concerned where the offices are but rather where the incorporation is! --Croo 07:37, 28 April 2007 (EDT)

Corporate Form

From Carlos Lameiro: I agree with the "trustee" vs "director" role, and there are other forms of legal entities apart from "Inc", such as "Trusts" http://www.hmrc.gov.uk/pdfs/ir152.htm

There are also partnerships, and especially limited liability partnerships. http://www.companieshouse.gov.uk/about/gbhtml/gbllp1.shtml

pdf version of above link http://www.companieshouse.gov.uk/about/pdf/gbllp1.pdf

Note "limited liability partnerships are not available for all activities such as non-profit-making activities." However, is this a real issue?

(by the way, these links are the best I found within 5 minutes, I am sure there may be better ones out there for more info, but it is a start). I have tried to pick non-business-like web sites with info, and in a country which is fairly neutral for the Adempiere Community.)

What does the Admpiere Community actually ressemble? Non-profit Inc, Trust, Partnership, Limited Liability Partnership, Joint-Venture.

IMHO, I believe that the Adempiere Community is a collaboration of people (including legal entities), that have a vested interest in the growth of the Community and its assets (already identified), and bringing individual effort and support towards the community. This to me indicates a partnership, and to ensure limited liability, well, it indicates a "limited liability partnership". Following this line, who are the partners? It is clear that to start, all the developers are partners, and together should also form the Board of "Direction" - not just the 5 members that Redhaun proposes.

jsSolutions 09:04, 27 April 2007 (EDT)

corporate form

A 'not-for-profit corporation' is the only appropriate form in this case. The others are all for the benefit of individuals in one form or another. Best to look at successful open-source software initiatives for lessons good and bad.

trustees

Per your link above, "Trustees are the legal owners of the trust property." Also, Wikipedia says "The word trustee is a legal term that refers to a holder of property on behalf of a beneficiary." Technically this seems inappropriate as well, since no individuals have ownership of bazaar assets. Directors of a corporation are managers and don't pretend to have any ownership. That being said, in real life application the terms are essentially synonymous: "Many other corporations call their governing boards a board of trustees, though in those cases, they act as a board of directors. " So it's probably just a semantic choice.

---

During the council debate I suggested we had 3 requirements

an Entity of neutral ownership (that is to say, no one owns it!)

an Entity to own the Project IP

an Entity to own any funds to develop & promote the project

I then suggested that a single foundation could fulfill all three.

What the definition of a foundation is seems to be open to debate. Now company formation is not, in anyway, a speciality of mine but I had in my mind that there existed a Form of legal entity that could exist in its own right... that is to say it had its own legal personality not owned by anybody!

I know the Ireland and UK do not have such a corporate form and neither does the USA (this is my third point on the Location question above). Though all have many corporations/companies called the xzy Foundation. But as I understand these are simply companies owned by the named members (rather than shareholders). To copy & paste what I said on this point in the council discussion

“The core requirement, as I see item is the ownership of the project to be neutral; that is to say, no one owns it! We wish this so there can be no doubt that we will not suddenly become closed and accept huge sums of money from venture capitalists to make good from the Adempiere name and community built up around it. We are still a small community can easily be known by all and hence earn trust. But, hopefully, we will not always be so small and so that may not always be the case. Also with new contributors considering joining there is no absolutely guarantee that what they work for will not be snatched away. So I feel strongly this is an important factor.”

---

These matters need to be clear in the by-laws, so that they apply no matter where the entity resides. From the US IRS code related to 501(c)(3) organizations:

"none of its earnings may inure to any private shareholder or individual"

"In addition, an organization's assets must be permanently dedicated to an exempt purpose. This means that if an organization dissolves, its assets must be distributed for an exempt purpose, to the federal government, or to a state or local government for a public purpose."

No matter what entity might be formed, the applicable law should include these protections. jsSolutions 11:52, 28 April 2007 (EDT)

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I think we should investigate this Foundation structure more closely. Some countries require Foundations to be government owned and/or to have large sums of currency in the initial starting fund. But not all are so; I believe the Netherlands has a fairly relaxed approach to Foundations, but I have no practical experience of creating one and I do not think we have any NL based community members who can advise! or do we?

See the following http://www.efc.be/ftp/public/EU/LegalTF/2004_Comparative%20chart-Highlights.pdf for a good overview of the different forms Foundations take in different European countries.

But in summary I think we should consider the “no owner” rather than “no profit” aspect.

--Croo 07:14, 28 April 2007 (EDT)

Good document Colin! I think that having an unlimited cap on the tax deduction in the hands of the donators (whether they be a corporation or an individual) is attractive. After all, the AF is in place to serve the community and people who want to donate to this good cause should be able to choose how much they donate if they choose to do so.

--Juddm 05:34, 29 April 2007 (EDT)

Membership

I was looking for the membership qualification but can only see the part about Admission of Members. I humbly like to propose that all members stated in the Developer's List be admitted as 'pioneer' members of this Foundation. Then they may act as stated in that by-law on admitting further members. - Red1 01:12, 25 April 2007 (EDT)

I disagree, membership must be based on meritocracy (as all in bazaar) - and there are people listed as developers that hasn't shown any contribution. Recently I purged a little that list (based on community feedback and opinions) but the list still needs to be purged a lot. I suppose the initial members must be council members, and start the process of nominating new members as in apache foundation. NOTE: I know this can be badly seen as I'm council member and looks like an auto-nomination, but as Redhuan said some time ago referring to council members: "But those of u here are those who stuck their necks out and have contributed when it made no sense to do so." - CarlosRuiz 15:13, 26 April 2007 (EDT)

I affirm your action of purging for the sake of pruning the Developer's List for dead wood. What i mean by membership re those that remains - Red1 04:14, 27 April 2007 (EDT)

To broaden that just a little, what about all those that make an effort to attend in Berlin can be the first members? Does that exclude those who wanted to but couldn't come (AFalcone) ? No, because it's a meritocracy, and visible contributors can all immediately be nominated. jsSolutions 15:44, 26 April 2007 (EDT)

Those who attend in our activity should be allowed to sign up as members as that is the original (legacy) form of membership sign-up in physical orgs. For anyone making an effort to show up is proof of interest. But we should also introduce fees (as in legacy mode) for such that are outside our Developer's List. A sort of Union fee or Foundation donation. Now if they willing to pay that, do not we regard them as concerned members who care for our common interest? They should be given a voice and as stated in the by-laws their voice can be heard but their votes not counted. - Red1 04:14, 27 April 2007 (EDT)

I have to disagree with "But we should also introduce fees (as in legacy mode) for such that are outside our Developer's List." It perpetuates the idea that this is a developer centric initiative. Without minimizing their role, the success of ADempiere is equally dependent on analysts, documentors, testers, key users. Unless we want to add them to the developers list, they should be allowed to be recommended as members without paying a fee. - jsSolutions 09:45, 27 April 2007 (EDT)

1st - also disagree about fees to be member, membership must be a complete meritocracy. Fees must be for sponsorship.

2nd - I'll try to present again the proposal -> first-members must be council members - maybe our first meeting in Berlin is to propose and vote for other members based on merits (we have really LOTS of names in the merit list, just let's vote for them) - being in the developer list is not a signal, attending the conference wouldn't be either.

3rd - asking for possible remote participation here Talk:European_ADempiere_Conference#Remote_participation

CarlosRuiz 19:15, 27 April 2007 (EDT)

Meritocracy(contributions) and open voting base should be the way to go. The current developer list is not a good reference as it doesn't reflect the level of contribution and doesn't include non-developer contribution. Fee base membership could be a controversial issue and I think this need more discussion on its merit, not for now but something to be discuss later. Hengsin 01:18, 28 April 2007 (EDT)

If the current developer's list is not reflective of the whole set of our contributors, then we make it so. We had earlier accepted on day one that the developer's list should include all those - be they SMEs, non-coders but experts, and any one who contributes and cares for the project. To be based on SF's list is to give a base of certainty and reference. And that SF is always guaranteed to be open and unbiased. Facts are easily verified by their join-date, acitivty, posts, etc. I am merely proposing the medium. It is open to us to determine the content of such a list. - Red1 05:07, 28 April 2007 (EDT)

Another concern I have about using the SF list is that it blurs the distinction between the project and the legal entity. They are both parts of the bazaar, but different parts. The developer list in SF is for the project, and that is it's own self-organized thing. The AF is a different part of the bazaar, for a different purpose. The member list should be people that want to participate in those activities. My guess is kontro wants to be on the developer list, but doesn't want to have to vote for a new secretary/treasurer  :-)

No resolution to handle commercial matters in the dev list. That leaves to the ABA. AF shall receive eventually grants and donations even from ABA. It can have its own officers to admin things. Matters of office bearers should not bog down the Dev List which focus on its own project roadmap. In short, no extra noise nor politics. - Red1 12:06, 28 April 2007 (EDT)

Well I guess the membership question to an extent depends on what Corporation Form is decided on.

So let me ask; what is the intended purpose of the membership? If it is to decide on the application's (or project as a whole for that matter) roadmap, then I believe all those who contribute should have a say and hence be members. In this I agree with Joel, the developer list does not necessarily equate to a contributor list and successful product requires the input of all those he mentions. I would also add those who offer help & support in the forums, who are often the public face of the project.

But what, as an extreme example, if someone like IBM turns up with 1,000 employees contributing ... are they 1000 members or 1?

Can companies simply buy membership, such a red1 proposes? Like others I disagree with this. If a company has money and wants to effect the roadmap, they can simply sponsor that specific functionality (as Carlos suggests) and effect the roadmap so.

--Croo 07:34, 28 April 2007 (EDT)

My suggestion on purchased membership is at the ADempiereBusiness Alliance (lower level) akin to the Apache Foundation, where its developers doesn't join our dev list nor have more than one vote on that ABA. The AF remains a bazaaar formalization of its SF's dev list and community concern. No business here, as the ABA handles that. - Red1 12:08, 28 April 2007 (EDT)

LLP vs non-profit corp

Hi Joel, I agree that the Trust has attributes which do not lend themselves to the community. For this reason I try to indicate that the LLP is probably more suitable - did you have a look at the pdf? Any thoughts? With regards to the non-profit corp, who owns the shares of the corp? What the non-profit actually mean? What conditions must be met to be non-profit? Rgds, CLameiro

An LLP designed to bring fiscal profit to 'partners'. Those partners own the entity. In the US at least, income and taxes flow directly to the partners personally. A non-profit doesn't have shares. It can't pass profit to individuals. The proposed foundation is coordinated by the board of directors, who are chosen by the members, who are chosen by each other. jsSolutions 21:46, 27 April 2007 (EDT)

Non profit is an important criteria for any organization that works for the community. Let me phrase it this way - It doesn't operate for profit but operate for the benefits of the community. Hengsin 00:58, 28 April 2007 (EDT)

To use the country analogy, we are now forming our govt next. Then under the govt, its various ministries including of Finance and Commerce. Under that it can have its GLCs or govt linked companies. That is where i believe your LLP should come in. - Red1 12:10, 28 April 2007 (EDT)