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Legal matters
Thread poster: Marion Schimmelpfennig

Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
Dec 11, 2004

There will probably be legal matters involved at some stage of this project. This is the place to discuss them.

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Derek Gill Franßen  Identity Verified
Germany
Local time: 02:33
German to English
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Legal Matters Dec 12, 2004

This seems like it could be an interesting project and I suppose this is the part of 'the' project, where my abilities may come in handy at one point or another. Please feel free to contact me with any questions on the legal aspects (especially with regard to German, European and American law) - I can't promise that I'll always be available for pro bono work, but I'll do what I can for a good cause...

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N.M. Eklund  Identity Verified
France
Local time: 02:33
Member (2005)
French to English
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Structure development Dec 12, 2004

Hello everyone, I decided to bump the following from my previous posting on livejournal.

Structure: Formation of legal entity and geographic headquarters.

I have put together several nonexhaustive options-

1. Affiliation with a large association to use known name in obtaining more markets (Unesco, Unicef, Translators without Borders, etc.) all profits go to this one association.

2. Create a foundation and solicit individual donations
-Interesting idea if want to make more than one edition.
(for those who are truly inspired and would like to dedicate full time, this option allows them to be lightly remunerated for their efforts.)

3. Contact sponsors (several larger charities) – same base as for a foundation.

4. Apply for a grant (requires a lot of research to find correct foundation grant)

In summing up these options, there are some essentials to consider.

We will have to set up an accounting system separately to justify expenses, as well as declaring the existence of a legal person to local authorities.

Since we have translators from all around the world helping us, it would be wise to explore the legal/fiscal/logistical advantages to setting up a 'headquarters' in a particular country.

I have special connections here in France. I will gather some information and post what I learn. I suggest others do the same, such as in Marion's country (Denmark?), or the USA. Let me just mention that UNESCO has it's headquarters based in Paris, and that many large French groups, companies, and government associations find the legislative climate highly favorable to sponsoring/funding charitive actions.
(But there are geographical limits)

Natalia Eklund


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N.M. Eklund  Identity Verified
France
Local time: 02:33
Member (2005)
French to English
+ ...
Structure Development follow up Dec 12, 2004

Hello again everyone,
Since creating my first post, I spoke with several finance, tax and legal professionals here in France.
I explained to them the nature of our project and our ideas for it's development. Once we have finished our brainstorming, they advised the following:

1. We will have to decide on a country for headquartering the charitive action.

2. Under French law 1901, any charitive action can be filed as an Association. All that is needed to become official is a document stating the goal of the association, and a named secretary and treasurer, both domiciled in France. There are no charges for this.

Afterwards, any money received is free from tax.

Problem: Only French companies donating to a French association can declare a deduction from taxes. They believe the same rules exist in most other countries. And though the fusion of the European Union should open up the possibilities of donating to other charities, the measures have not been set up yet.

Solution: Each country can set up it's own association stating as it's goal, to collect and send money to the mother association. (A type of association branch, but still legally as separate entity)

This would require a lot of dedicated people doing what's necessary in each country.

3. They suggest that I take a meeting with someone from UNICEF. If we want to avoid associating ouselves with such a large organization, they can at least assist us by directing us to actions, charities, and organizations appropriate for us.

4. However, they advise that associating ourselves with an international organization like UNICEF will help us avoid many headaches. For example, an international organization already has branches in other countries which we could use as a legal address for fundraising concerns, as well as localized book publishing and distribution concerns.

5. As a last advice, they suggested we decide several options of distribution. Even though this is a last step, it is something that must be put in motion as early as possible. The large company FNAC is an good example. An agreement with the headquarters will get the book distributed in any of their stores. Basically, we should not depend on contacts made through charities or other organizations.

This information is as much for Marion as for anyone else. If we are agreed, I can make an appointment to meet with someone at UNICEF to discuss our options. It is not necessary to already have our documents together to just ask some questions.

Also, I would be interested to hear what Derek has to say about US regulations concerning international donations, etc.

I hope that everyone will continue to be inspired as the project progresses. We will all need some dedicated people to pull this off.


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Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
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Good points! Maybe too early? Dec 12, 2004

Thanks for joining us again, Natalia, we really appreciate your comments and expertise!

I think we really have to discuss your suggestions thoroughly as they seem important. However, I'd like to point out that if we associate with one (big) charity, we might loose control. Not sure if this would actually be the case, but I think that's a real possibility. Also, I have heard several rather negative things about some (larger) charities. We have to be careful whom to involve and when and how. Again, I think your comments are very important, but we need to be careful.

[Edited at 2004-12-13 08:07]

[Edited at 2004-12-13 08:07]


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Fortiter
Local time: 02:33
French to Italian
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The Independent.... Dec 12, 2004

Perhaps I look like an individualistic but I think it's important to keep "free" (not only in the economic meaning) and indipendent. Above all, I'd stay far away from Unicef too (on these pages I learnt I'm not alone in keeping this mind).

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N.M. Eklund  Identity Verified
France
Local time: 02:33
Member (2005)
French to English
+ ...
The Pro's and con's of a large associate Dec 12, 2004

Hello Marion,
Sorry, it took me a while to catch up with the forum change.

I agree with the hesitations others have mentioned. If there is hesitation in associating with a large charity or UNICEF, we should respect that and do our best without.

But we should be sure to envisage all the possibilities and not turn away from a good solution for the children because we are afraid that others will take the project away.

I believe that speaking to someone at Unicef, who knows the international charity situation, would only give us some good advice. They would know who we should speak to, and who not to speak to. And they may even make some suggestions that we had not even thought of, without even expecting an offical association.

We need to remember that we are working for the children, and therefore are all on the same side.

Natalia Eklund


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Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
TOPIC STARTER
We should simply be careful Dec 12, 2004

Thank you for your honest comment, Natalia. It's not that I (or we) are totally against teaming up with large charities, it's just that we should think and talk about the pros and cons comprehensively before acting (and maybe later on regretting it).

I'm not even sure we should speak to someone at this stage, and if we did, then I probably would only give them a very, very rough outline, for example that a group of persons from different countries are thinking about a project in which "products" are sold and the profit is supposed to go to children in need. That's all I would tell them.

I might sound a bit paranoid, but believe me, the world is full of evil people

See also my post at http://www.proz.com/topic/27492

[Edited at 2004-12-12 20:27]

In this context, "Band Aid" (with Bob Geldof) and "USA for Africa" immediately came to my mind as "trustworthy".

The interesting thing about these two projects is that they, too, sold products all over the world and gave the money to children all over the world. I would be more than interested what the legal and organizational issues have been!


[Edited at 2004-12-12 20:33]

[Edited at 2004-12-13 08:06]


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xxxCMJ_Trans
Local time: 02:33
French to English
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big organisations Dec 14, 2004

A word of warning - they say 90% of all money that is given to an organisation such as Oxfam is spent on overheads.
I reckon there are other ways of doing things. If the thing takes off, then will be time to consider "bigger" avenues


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Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
TOPIC STARTER
idea: founding our own charitable / non-profit assoiation Dec 19, 2004

Since I am a member and president of a local animal shelter (registered as a charitable society), I don't know why I didn't think of this before (Alzheimer, maybe ).

Why don't we found a charitable / non-profit association / society?

Our local charity for animals works internationally as well and we don't pay any taxes because we are a non-profit organization. Apart from collecting donations, we also conduct bazars where we sell things. As long as we don't make profit, all this is tax-free. We also regularly support animal charities in other countries by donating money. So this does not sound all that different from what we are trying to do here.

In case Derek Gill doesn't follow this discussion right now, I will try to contact him to hear his opinion.


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Blithe
Local time: 20:33
Russian
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a layman's opinion Dec 19, 2004

Marion Schimmelpfennig wrote:

Why don't we found a charitable / non-profit association / society?



I don't know much about charities (besides donating regularly to good causes), but it looks like the best option to me.


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elzosim  Identity Verified
Local time: 03:33
English to Greek
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Yes Dec 19, 2004

I agree with this idea too.

I'm also a member of a non-profit organisation and we are exempt from taxes too. We do not issue invoices or receipts and have no other financial obligation.


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Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
TOPIC STARTER
What I know about non-profit associations.... Dec 20, 2004

...is not very much since I wasn't a member when our animal shelter society was founded and until now I have not been very interested in the legeal stuff. Also, our founder doesn't know more about an international activity, but I will find out elsewhere (I already sent Derek Gill an email and hope he'll reply soon; if not, I will contact a lawyer; or does any one of you have a good lawyer contact?).

For those of you who know German, this web site could be of interest (haven't yet found the time to read it thoroughly): http://vereinsknowhow.de/organis/

The difference between Natalia's idea of a foundation (at least in Germany) and a (non-profit) society is the following (bad translation below):

Verein und Stiftung sind beides Körperschaften und können damit beide gemeinnützig sein, wenn sie entsprechende Zwecke fördern. Sie unterscheiden sich lediglich in Ihrer Rechtsform. Bei einem Verein handelt es sich um einen Personenzusammenschluss, der zu einem bestimmten Zweck gegründet worden ist. Bei einer Stiftung handelt es sich dagegen um eine selbstständige Vermögensmasse, die einem bestimmten Zweck gewidmet ist und ihre Tätigkeit grundsätzlch aus Ihren Vermögenserträgen finanziert.

(bad translation: both society and foundation are corporations/bodies and can therefore be charitable/non-profit, if they support such aims. The only difference is their legal form. A society/association is a union of persons working for a special purpose, while a foundation is based on independet assets (money) dedicated to a special cause; all work and actions are financed from those assets).

Natalia: Maybe you can elaborate on your ideas, especially on the foundation?

Founding a non-profit society (in Germany) is quite easy. You need a certain number of people joining it (at least seven, I think), you need to have regulations / statutes and arcticles, and you need to register in the register of associations. That's about it.

The most important question in my opinion is whether members from different countries will pose a problem. This, I will try to find out soon.

[Edited at 2004-12-20 08:09]


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Marion Schimmelpfennig  Identity Verified
Local time: 02:33
Member (2003)
English to German
TOPIC STARTER
I found out interesting facts... Dec 20, 2004

A charitable society might be the kind of thing we are looking for, although we will have to answer some important questions first and talk to an experienced and creative tax adviser!

- Founding a non-profit / charitable society in Germany is indeed easy.

- At least seven members are required. It doesn't matter where they live.

- We need statutes.

And now it gets a bit difficult:

- We must not write in our statutes that we intend to publish and sell a book as this would be viewed as a commercial business operation. Instead, it should read something like "collecting money to help children in need".

- Founding a non-profit society does not necessarily mean all incoming money is tax-free: As long as our net profit does not exceed 3835 euros, there are no taxes. I am no tax adivser, but I think this should be OK as we plan to spend the money on kids. Also, as long as our gross income (the money from our sales) does not exceed 30.687 euros, it's no problem - even if our net profit is higher. But since we want to sell the book worldwide, this figure will certainly (hopefully) be higher and then we will have to pay 25 or 26 % corporation taxes. Not good.

- There is still the possibility that our publisher(s) donate(s) the money from the book sales, but this is probably too risky, because it will be obvious to the revenue office that the money is the result from book sales, thus from a commercial business.

So we will either have to find a way around those problems with the help of a tax adviser or find another solution.

Any ideas???


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