[CCWG-ACCT] member organization and single membership structure
Nigel Roberts
nigel at channelisles.net
Thu Jul 9 16:21:33 UTC 2015
Very interesting and helpful comments.
Here's where I am at. I was, for about four years, a Board Member of a
non-profit, ICANN-like organisation in the UK. (The Radio Society of
Great Britain -- see www.rsgb.org).
That was originally founded by some bloke named Marconi, and some of his
chums in 1913, but it was incorporated as a company Limited by Guarantee
in the 1920s, which it remains this day.
The liability of each member (there are no shareholders) is limited to
an amount that is set in the Articles. In the case of very old
organisations like this, it's just one pound!.
The Members control the board by election, and the Board, just like the
ICANN Board, has a fiduciary duty.
Now, I'm NOT suggesting that individual SOs establish themselves under
English or Scottish law as this sort of incorporated non-profit (which
is PARTICULARLY suited to a membership model), nor indeed as the more
modern Community Interest Company (CIC).
But what I'm saying is that my instincts, as shown by Edward's very
scary but accurate scenario, are to avoid woolly, inchoate, structures
and prefer well-defined (and, to be honest, inexpensive) formal
structures such are provided for in the law of most European states.
My two eurocents.
On 09/07/15 16:15, Edward Morris wrote:
> Hi Nigel,
>
> I'm in the U.K. and have raised the issue in the past, but only to
> suggest that because of this some SOAC's might want to consider the more
> complex formation of a PBC as an option going forward.
>
> You are correct about the status of UA's in the UK (Scotland as well as
> England and Wales - different legal system, as you know). The same holds
> true in Finland, the country where I received the bulk of my legal
> education. Over time, though, in both countries the courts would
> eventually recognise the liability protection afforded by California law
> as a matter of comity. Long term, I don't see a problem. That said, I'm
> pretty sure that were I to want to sue someone involved in a SOAC in the
> UK for actions of the SOAC I'd be able to get through a Directions
> Hearing and force a trial upon the other party. That's why
> indemnification is particularly important if UA's are used going forward.
>
> Might I also respectfully suggest that most of us are already part of
> UA's, albeit of the non registered variety. I would suspect I could make
> the case that the NCSG, NCUC and GNSO, all of which I'm active in, could
> currently be construed as UA's under British law and elsewhere and thus
> I could already be held liable for the actions of these organs. I don't
> see where any of the proposed structures would make my individual
> situation worse going forward.
>
> Kind Regards,
>
> Ed Morris
>
>
> On Thu, Jul 9, 2015 at 3:20 PM, Nigel Roberts <nigel at channelisles.net
> <mailto:nigel at channelisles.net>> wrote:
>
> One of the leading authorites on this matter, and the real dangers
> of UA structures is the Gillingham Bus Disaster case (RE GILLINGHAM
> BUS DISASTER FUND [1958] Ch 300)
>
> https://books.google.com/books?id=s5h4LUHhYC0C&pg=PA145&lpg=PA145&dq=Gillingham+Bus+Disaster+appeal+judgment&source=bl&ots=rGrH81jGKn&sig=jCRoZq2-tiGTN7MUuzoteOS0oPw&hl=en&sa=X&ei=r4KeVbjAHIT2UpHHi4AL&ved=0CCQQ6AEwAQ#v=onepage&q=Gillingham%20Bus%20Disaster%20appeal%20judgment&f=false
>
> Happy reading.
>
>
>
>
> On 09/07/15 15:17, Nigel Roberts wrote:
>
> Unincorporated associations in English, and Scottish law
> explicitly have
> unlimited liability. There is no registration involved, they simply
> exist as a matter of law. So if you and I formed a bridge club
> at our
> local pub, and invited members, that would automatically be a
> UA, would
> NOT have legal personality, and the members, and more
> particularly, the
> officers, would have UNlimited liabtliy
>
> The assets of the UA are held on trust, in the legal name of the
> officers, for the purposes of the UA.
>
> I am assuming the difference here is that a California
> unincorporated
> assocation is not an unregistered entity but is a creature of
> statute
> (state law), giving limited liability following a registration
> process.
>
> Is that correct?
>
>
> Nigel
>
> PS: I apologise for not having read every single email that was sent
> before I joined this list last week; as my law professor (a High
> Court
> judge said: "Nothing is obvious to everybody").
>
> On 09/07/15 15:07, Greg Shatan wrote:
>
> Nigel,
>
> A California unincorporated association is a limited
> liability vehicle,
> as it is in certain other jurisdictions. If we were to go
> down the
> route of have SO/ACs be/create/empower (three different
> options) a legal
> entity, one would expect a choice to be made that would
> shield SO/ACs
> and their members from unlimited legal liability (and there
> are a
> variety of options to do so). While this should be implicit
> by now in
> this discussion, since it has been explicitly discussed in
> the past, I'm
> glad for the opportunity to make it explicit once again.
> Suggesting
> someone cross the street is not equivalent to telling them
> to walk into
> traffic.
>
> Greg
>
> On Thu, Jul 9, 2015 at 9:40 AM, Nigel Roberts
> <nigel at channelisles.net <mailto:nigel at channelisles.net>
> <mailto:nigel at channelisles.net
> <mailto:nigel at channelisles.net>>> wrote:
>
> Greg, all
>
> I have a deadly serious question.
>
> Why would any Member of an SO voluntarily submit to the
> danger of
> unlimited monetary liability?
>
> So why is anyone even considering UA status for more
> than 10 seconds?
>
>
> Nigel
>
> See
>
> http://www.scvo.org.uk/setting-up-a-charity/decide-on-a-structure/voluntary-or-unincorporated-association/
>
>
>
> On 09/07/15 14:35, Seun Ojedeji wrote:
>
> On Thu, Jul 9, 2015 at 1:34 PM, Greg Shatan
> <gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>
> <mailto:gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>>
> <mailto:gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>
> <mailto:gregshatanipc at gmail.com
> <mailto:gregshatanipc at gmail.com>>>> wrote:
>
> Seun,
>
> Can you point where this understanding and
> learning comes
> from? I
> don't think any of this is correct, unless you are
> referring to a
> "council" where each SO/AC is a statutory
> member of the
> corporation.
>
>
> Yes indeed thats what i was referring to
>
> This is not the case in the "single member
> model," where
> there is
> only one statutory member.
>
>
> Okay thanks for clarifying that for me. So if i get
> this
> correctly; does
> it mean one of the SO/AC will be a member and then
> every other
> SO and AC
> exercise their powers through that single member?.
> Specifically
> which of
> the SO/AC will be member in the single member model?
>
> However if one of the SO/AC won't have to become a
> member but
> the entire
> council becoming a UA to fulfill membership
> requirement, how
> will that
> address some SO/AC not wanting to enter into such legal
> formality? also
> how will accountability of the council be ensured
> as it could
> then mean
> creating a mini-ICANN board as the council members
> would have
> the voting
> rights, independence et all. Perhaps the council
> can be limited
> by its
> governing document, but how will removing council
> members for
> instance
> be in effect if the populating source(SO/AC) is not
> a UA.
>
> Perhaps its not as complicated as i am imagining it
> so it will
> be good
> to hear some clarifications.
>
> Regards
>
>
> Greg
>
> On Thursday, July 9, 2015, Seun Ojedeji
> <seun.ojedeji at gmail.com
> <mailto:seun.ojedeji at gmail.com>
> <mailto:seun.ojedeji at gmail.com <mailto:seun.ojedeji at gmail.com>>
> <mailto:seun.ojedeji at gmail.com
> <mailto:seun.ojedeji at gmail.com>
> <mailto:seun.ojedeji at gmail.com
> <mailto:seun.ojedeji at gmail.com>>>> wrote:
>
> I understand the powers would be bestowed
> on the council
> individuals and not their source position;
>
> For instance one of the option is to
> populate the
> community
> council with leaders of SO/AC, which IMO
> would be the
> cheapest
> route in this model so they would be
> occupying a
> virtual seat
> and exercise those powers when required.
> It would also
> allow the
> various SO/AC internet accountability
> mechanisms
> apply to
> council including removal of members.
>
> However, I then learnt that the council
> cannot be
> formed by
> SO/AC leader positions but rather to the
> occupants of
> that
> position. This would mean having to
> rewrite the
> bylaw/document
> forming the council often since leaders of
> those
> positions are
> dynamic and could change at anytime. Will
> be good to
> know if
> that is no longer the case
>
> Regards
> Sent from Google nexus 4
> kindly excuse brevity and typos.
>
> On 7 Jul 2015 2:56 pm, "Roelof Meijer"
> <Roelof.Meijer at sidn.nl
> <mailto:Roelof.Meijer at sidn.nl> <mailto:Roelof.Meijer at sidn.nl
> <mailto:Roelof.Meijer at sidn.nl>>>
> wrote:
>
> Interesting, we’re back on the subject
> of a single
> member
> structure. It was written off before
>
> Cheers,
>
> Roelof
>
> From:
> <accountability-cross-community-bounces at icann.org
> <mailto:accountability-cross-community-bounces at icann.org>
>
> <mailto:accountability-cross-community-bounces at icann.org
> <mailto:accountability-cross-community-bounces at icann.org>>> on
> behalf of Roelof Meijer
> <roelof.meijer at sidn.nl <mailto:roelof.meijer at sidn.nl>
> <mailto:roelof.meijer at sidn.nl
> <mailto:roelof.meijer at sidn.nl>>>
> Date: woensdag 22 april 2015 15:56
> To: "avri at acm.org
> <mailto:avri at acm.org> <mailto:avri at acm.org
> <mailto:avri at acm.org>>"
> <avri at acm.org <mailto:avri at acm.org>
> <mailto:avri at acm.org <mailto:avri at acm.org>>>,
>
> "accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>
> <mailto:accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>>"
>
> <accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>
> <mailto:accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>>>
> Subject: Re: [CCWG-ACCT] member
> organization and
> single
> membership structure
>
> Hi Avri,
>
> The sole membership construction, is a
> possibility
> described
> in the legal document in several
> places: the
> comments by the
> legal experts on the PCCWG mechanism
> template (page
> 64) and
> the Community Council mechanism
> template (page
> 69). I
> sent several emails about it to the
> WP1 list,
> suggesting to
> look in the possibility as indeed it
> would not
> necessitate
> every SO and AC to become a legal
> entity. And, as
> you do,
> suggesting: "make the „Community
> Council” the sole
> member of
> ICANN (and thus a formal legal
> entity), consisting
> of either
> the SO and AC chairs or SO/AC elected
> representatives” (from
> an email of 14 April).
>
> And I would think it would enable the
> SO’s and AC’s
> themselves to continue appointing
> directors, as
> they do now.
> But that’s just guessing, based on the
> fact that
> the SO’s
> and AC’s themselves would not change
> status
>
> Best,
>
> Roelof
>
> From: Avri Doria <avri at acm.org
> <mailto:avri at acm.org>
> <mailto:avri at acm.org <mailto:avri at acm.org>>>
> Organization: Technicalities
> Reply-To: "avri at acm.org
> <mailto:avri at acm.org> <mailto:avri at acm.org
> <mailto:avri at acm.org>>"
> <avri at acm.org <mailto:avri at acm.org>
> <mailto:avri at acm.org <mailto:avri at acm.org>>>
> Date: woensdag 22 april 2015 15:09
> To:
> "accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>
> <mailto:accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>>"
>
> <accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>
> <mailto:accountability-cross-community at icann.org
> <mailto:accountability-cross-community at icann.org>>>
> Subject: Re: [CCWG-ACCT] member
> organization and
> single
> membership structure
>
> Hi,
>
> On 22-Apr-15 08:26, Roelof Meijer wrote:
>
> 2)
> What I find quite frustrating is
> that I have
> raised the
> point of the possibility (or not)
> of a single
> membership
> structure – an option mentioned by
> Sidley and
> Adler &
> Colving in their legal advice –
> several times
> by now
> without getting any substantial
> reaction. I am
> not aware
> that any serious effort to
> investigate this has
> led to a
> formal write-off.
>
>
> In some way that might lessen the
> complexity of
> making most
> SOAC an individual legal entity.
>
> How would it work? Would we continue
> to appoint
> Directors
> just as we do now?
>
> Or would there need to be some sort of
> Members
> Council that
> took actions, working simliarly to the the
> executive board
> or community council idea?
>
> thanks
>
> avri
>
>
>
>
>
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> --
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> ------------------------------------------------------------------------
>
> /Seun Ojedeji,
> Federal University Oye-Ekiti
> web: http://www.fuoye.edu.ng
> Mobile: +2348035233535 <tel:%2B2348035233535>
> <tel:%2B2348035233535>
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> <mailto:seun.ojedeji at fuoye.edu.ng>
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> <mailto:seun.ojedeji at fuoye.edu.ng>>>/
>
> The key to understanding is humility - my
> view !
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