[CWG-Stewardship] Concern with Contract Co.

[Greg Shatan]

I would hardly say that we are running blind.  I've been practicing law for
28 years, and I've been trying to share what I know in as
objective/coordinator-like way as possible.  We have other other lawyers on
the committee as well.  In any event, the basic concepts are fairly
straightforward until we get fairly far into the subject.  The basic high
level concepts can be set out in a couple of paragraphs

"Entity" is generally used, and I believe fairly clearly was used in this
instance, to refer to organizations with legal standing/existence (or
"legal personality," as I've also seen it called in European circles).
This embraces corporations, limited liability corporations, nonprofit
corporations, partnerships (general, limited, limited liability, etc.),
trusts, estates, etc.  So, it is merely a generic term (in the traditional
sense) that embraces a corporate entity amongst other types of entities.
Entities can sue and be sued, own property, enter into contracts, etc. --
things that a committee (like our own) cannot do. In short, a corporation
is a type of legal entity (but a committee is not) and references to
entities would include corporations (but not committees).

As far as the basics of corporate configuration, at least in the US and
other jurisdictions that I am familiar with.  For-profit corporations have
owners; this ownership is reflected through the issuance of shares, so the
owners can also be called shareholders.  Nonprofit corporations cannot have
owners (except that in certain jurisdictions a nonprofit corporation can
own a subsidiary that is also a nonprofit corporation). A corporation may
be formed by a single incorporator, but is generally required to put a
board in place (and by laws, as well).  The minimum board size is usually
3.  The minimum number of officers is also typically 3 (President, Vice
President, and Secretary/Treasurer), but these can (but need not) be the
same people as the 3 directors.  A corporation doesn't need to have a bank
account (unless it has money or needs to send or receive money, in which
case it should have an account).  I'm not aware of any way for a
corporation to carry on business without directors or officers.  However,
at least in the case of nonprofits, the officers do not need to be
employees of the corporation or remunerated in any way (for example, I am
the Vice President and a Member of the Board of the Columbia Summer Winds,
Inc., a New York nonprofit corporation, but I am not an employee or paid in
any way).  Also, there are corporate service companies that provide
disinterested directors as a service to limited purpose companies that need
directors as a formality, so that might be what your source was thinking
about.

I hope this helps.

Greg

(Caveat: this is not legal advice, in the sense of advice that would tend
to form a lawyer/client relationship).

On Fri, Nov 28, 2014 at 11:44 PM, Alan Greenberg <alan.greenberg at mcgill.ca>
wrote:

> Indeed and I had no objection to that. But at the moment, we are running
> blind.
> --
> Sent from my mobile. Please excuse brevity and typos.
>
>
> On November 28, 2014 11:24:58 PM EST, "Gomes, Chuck" <cgomes at verisign.com>
> wrote:
>>
>>  Alan,
>>
>>
>>
>> That is why I suggested on this week’s call that we should get some
>> independent legal experts to give us advice and that we should start that
>> process right away.
>>
>>
>>
>> Chuck
>>
>>
>>
>>  *From:* cwg-stewardship-bounces at icann.org [mailto:
>> cwg-stewardship-bounces at icann.org] *On Behalf Of *Alan Greenberg
>> *Sent:* Friday, November 28, 2014 6:42 PM
>> *To:* Greg Shatan; Olivier MJ Crepin-Leblond
>> *Cc:* cwg-stewardship at icann.org
>> *Subject:* Re: [CWG-Stewardship] Concern with Contract Co.
>>
>>
>>
>> In Frankfurt we used the term "entity" as if it was something other than
>> some for of company or corporation. We have now replaced it with
>> "corporation". Others assure me that a corporation is possible with no
>> Board or members or owners or shareholders or officers or bank account, but
>> I have yet to fully understand how this works.
>>
>> I will be addressing some of this in my comments, hopefully later tonight.
>>
>> Alan
>>
>> At 28/11/2014 06:32 PM, Greg Shatan wrote:
>>
>>  Olivier,
>>
>> I'm not sure exactly what you mean by the "configuration" of Contract
>> Co.  We certainly have discussed the "form" the entity would take, i.e., a
>> nonprofit corporation.  Place of incorporation has not been significantly
>> discussed in recent days, though we had a number of email exchanges and
>> some discussion of jurisdiction earlier in a variety of contexts.
>>
>> Greg
>>
>> On Fri, Nov 28, 2014 at 6:19 PM, Olivier MJ Crepin-Leblond <ocl at gih.com>
>> wrote:
>>
>> On 28/11/2014 16:36, Milton L Mueller wrote:
>>
>>
>>
>>
>>
>>
>>
>>  From: cwg-stewardship-bounces at icann.org [
>> mailto:cwg-stewardship-bounces at icann.org
>> <cwg-stewardship-bounces at icann.org>] On Behalf Of Bertrand de La Chapelle
>>
>>  Is the idea of a contract Co. a done deal? Establishing any organization
>> with whatever limited staff is usually a recipe for its growth in time.
>>
>>
>>
>>  MM: The idea that there should be a contracting entity separate from
>> ICANN is, I believe, a done deal. It reflects some of the principles we
>> agreed on (such as separability) and the general agreement that, as the
>> draft proposal says,
>>
>> “The current arrangements provided by the NTIA for the oversight and
>> accountability of the IANA Functions are generally satisfactory and the
>> objective of the CWG is to replicate these as faithfully as possible”
>>
>>
>>
>> This is not at all how I understood it. The discussion on whether the
>> "contracting entity" should be a contract co. or something else has never
>> been touched - certainly no alternatives have been seriously considered.
>>
>>
>>
>>
>> MM: On the other hand, whether the specific configuration of the Contract
>> Co. is optimal for achieving those purposes could still be open. I would
>> say is still open to _modification_; any modification that accomplishes the
>> agreed objectives but avoids any problems that might arise would be
>> welcomed by the CWG I imagine.
>>
>>
>>
>> The configuration of the Contract Co. has not been discussed either. We
>> know what functions should be undertaken and what broad characteristics
>> would be needed. No discussion of jurisdiction nor configuration of the
>> entity has been done except on RFP4 call today where we started to touch on
>> it.
>>
>>  Kind regards,
>>
>>  Olivier
>>
>> _______________________________________________
>>
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>>
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>>
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>>
>>
>>
>>
>>


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