Message 05574 [Homepage] [Navigation]
Thread: oxenT05573 Message: 2/5 L1 [In index]
[First in Thread] [Last in Thread] [Date Next] [Date Prev]
[Next in Thread] [Prev in Thread] [Next Thread] [Prev Thread]

[ox-en] Re: A Thank You Message + Fundable Clone



[Converted from multipart/alternative]

[1 text/plain]
I'm running a sole proprietorship now.

I can go S Corp with it any time even after adding partners.

S corp is called "pass thru" ...

Sole Proprietor is NOT called "pass thru." It's called sole proprietorship.
That's a common confusion you're enforcing.

In a partnership LLC you can have S Corp status which is a pass thru status
as far taxes go and you file 1020S not 1040 as would be the case in a sole
propriotorship.

To give others a background as to your behavior:

Alex came to me asking me to talk to him on Skype. I said I'm not that into
Skype.

Then I said the discussion is not of enough interest to me to go thru the
hassle of setting up a video conference.

So he replied saying "maybe you're a jerk"

I discussed his behavior with others and came to the conclusion that I don't
really want to deal with this guy.

I'll continue this discussion with Paola, Michel and others.

Marc


On Mon, May 4, 2009 at 7:17 AM, Alex Rollin <alex.rollin gmail.com> wrote:

On Mon, May 4, 2009 at 4:06 PM, marc fawzi <marc.fawzi gmail.com> wrote:

<<

S Corps are a mess for tax purposes as I understand it.  Pass through
for LLCs are easier.



"Pass thru" implies an S Corp and only an S Corp (but an LLC may elect to
be
an S Corp.)

To clarify, let me explain there three ways an LLC can be classified by
the
IRS:

1) like a sole proprietorship (member taxes and LLC taxes are the same
and
member files 1040 with Schedule C)  -- This is what I do for my business
since, you're right, I don't need to deal with employer tax stuff and my
tax
benefit right now from an S Corp would be very small (a couple thousand
dollars) for which the accounting overhead is not justified. The key
disadvantage here is that business loans and investments by outsiders are
difficult to approach because the owner's taxes income is the same as
that
of the LLC and even if two bank accounts are used for business and
personal,
as I have done, most lenders and investors are not comfortable with the
lack
of separation between personal and business income streams, as that makes
their analysis of the company's valuation (in case the company defaults
or
goes into bankruptcy) harder since the owner takes all profit, i.e. there
is
no known salary. In my case, I don't expect to seek loans or investments
for
my consulting business, at least not in the next 3 years and I can always
incorporate as an S Corp if I do go that route in the future since a
corporation is better for the major VCs to work with than an LLC as it
designed to be more transparent to leading up to IPO or M&As.

2) like a partnership (members taxes and LLC taxes are the same and
members
file 1040 with Schedule C individually where each member must state a
percentage of net loss or profit on their taxes based on the percentage
allocation per member of net loss or profit stated in the LLC Agreement
and
has nothing to do with number of units or ownership percentage.) Same
disadvatange as #1.

Pass through is possible with the partnership option.  That is what I
was recommending before Marc Fawzi confused it further.  Not the S
Corp which wil require quite a bit more annual overhead.

3) like an S corp (the LLC must elect to be treated as an S Corp for tax
purposes in the first 75 days after its formation. Members taxes and LLC
taxes are "pass through"  so in this sense Alex is confusing the term
"sole
proprietorship" which is the simpler structure he's advocating with the
term
"pass thrue" which is associated with S Corp status; the LLC members who
are
employees file 1020S and the members who are not employees can, in normal
situations, take profit as dividends as well as deduct loss, both per
their
allocated percentage of profit and loss (which is based on LLC Agreement
not
on number of units). I find this LLC-as-S-Corp structure to work best for
single owners and partnerships (with unlimited number of members) where
the
LLC may want to borrow from banks down the road based on its
profitability/valuation but have no expectation of going the IPO or the
leveraged M&A routes, both of which would require the involvement of a
major
VC and thus a Corporation structure rather than an LLC. So this would
work
for the Fundable Clone LLC aka Owned By The Universe LLC because there is
no
plan to "sell out."  In this case, members who are not employees will be
assigned 0% of net profit and loss (because membership is open to
everyone
and no one is expected to perform any work in return).

This is not sophisticated enough to stay alive for long, in my
opinion, because of derived


<<

Beating 1% is not possible with traditional payment mechanisms like
Paypal and Visa debit because the transaction costs themselves are
higher than 1%.



Good point.

Then it's PayPal or Visa's percentage + 1%, which would be closer to 3%
combined, still not 10%.

Depends on the handler.  And no agreement about how to cover ongoing
costs?  Remember the Google Servers?

Another way is to use direct payment to the user's bank account which
costs
very little fixed fee, not a percentage. There is a company in Redwood
City,
CA that I had spoken with that does that. I'll look them up again. I
remember the cost being something like $0.25 per transaction, fixed. But
I
am not sure if they cover all banks, but they do cover a lot of banks.
They
were formed by guys who left Visa, in the building across from the
building
where I used to work.

 <<

Whatever the case, it is diminishing returns.

You can incorporate as an LLC in Delaware for under $200 very easily.




Go do that and then let me know. I tried. It turns out there are a lot of
companies with deceptive pricing tactics. They only mention their own fee
and then you would have to pay $100-$200 for state filing fee then $150
for
rush service or else wait 35 days for the LLC to be formed... and to get
an
EIN you'd pay $60 and to get resident agent services you pay $90 to $200.

I've done it already, thanks very much.
As it runs out it was very easy.
Registered agent is a necessity. Ongoing costs, again?  How to pay for
those, the 1%?  Maybe?

LegalZoom was the best in transparency, although they did make one
mistake
on my SS-4 form when obtaining the EIN, but it's the kind of mistake that
won't affect me.

<<
One fax later, done.

Te software for holding authorizations against debits for something
like Paypal, which is one of the primary functions, is quite
complicated.



Only the credit card number is taken. The authorization is not performed
until the fund is closed.

Not for me, Marc.  Wrong again.  Mine cleared immediately, in this
case, through Paypal.

 Marc

A



On Mon, May 4, 2009 at 9:08 AM, marc fawzi <marc.fawzi gmail.com>
wrote:
Sam, if you do have it, please feel free to forward so I may see if we
can
extract immediate benefit from it for the Fundable Clone project.

Maybe the only difference here is the procedural choice of an LLC
structure
so that the venture fits into the existing legal architecture (if you
can
call the mess of laws we have an 'architecture;  but nevertheless it's
important to leverage the existing system)

The proposed name for the LLC, which the elected project leader will
administer, is "Owned By the Universe, LLC" and the application name I
still
have not come up with... For now, we're referring to it as the
"Fundable
Clone"

Please take the time to read the whole thread which may motivate you
to
support the project.

Marc

On Sun, May 3, 2009 at 11:57 PM, Michel Bauwens
<michelsub2004 gmail.com>
wrote:

Hi Marc,

I once worked on a similar project with Sam, perhaps he still has the
documentation, we never really started it beyond the conceptual
stage,
but
it was inspired by the revolving funds concept,

Michel

On Mon, May 4, 2009 at 1:09 PM, marc fawzi <marc.fawzi gmail.com>
wrote:

I find that 'not letting the panic set in,' after its initial
onslaught
or surprise attack, is just a choice when we're resourced but
otherwise an
uphill battle, so I find that the key to coping is to make sure that
we're
resourced at all times... with whatever feeds us and keeps us
stable.... and
money.

And this brings us to the idea of the whole being greater than the
sum
of
its parts.

We need collectivism, like we need a family. The human family is
extremely fractured and the Internet has yet to fulfill its promise
in
bringing people together as one family. There are a trillion web
pages,
literally, all owned by different people and all separate from each
other.

We need one place where everyone on the planet gets to participate
in
solving the money problem.

But before we get grandiose with our intention, we need to think in
the
here and now and take the first step into the unknown and see it
through.

I'm going to circulate the proposal with the whole p2p list and
setup
a
fund to fund the Fundable Clone on Fundable itself and I'll set it
at
$1000
and I'll cover any remainder to close the fund and pay for the
development
and LLC formation (the latter alone costs $650 [using
LegalZoom.com])

On the procedural level, we'll elect the LLC to be treated as an S
Corp
by the IRS but it will still remain an LLC not a corporation as far
as
the
laws are concerned, which means that all members (everyone on the
planet)
who are not employees will own a fractional percentage in LLC
ownership
units (I'll see if we can issue 6 billion units at formation to
reflect our
intent to have the whole planet own the venture) and any and all
profits
after expenses and salaries (we'll just have 1 employee who will be
the
project leader for the first 3-year term, most likely myself if I
end
up
taking the biggest risk financially, but will charge $1 for salary)
and
we'll implement a democratic system very similar to the US model in
the
sense that it will have a Constitution (with an un-changeable core
of
rules
regarding how the LLC is setup and the role of the project leader)
embodied
in the LLC Agreement bu dissimilar to the US model in the sense that
people
will vote directly so there is no Congress or Senate or Supreme
Court.
The
people draft the proposed rules and the people vote on them
directly.
If
people can organize into voting blocks on their own then so they
may.
The
project leader has veto power over software development process,
application
architecture and project management process but not over application
features or policy development, which are voted on by the member
(i.e.
everyone.) The project leader is limited to 2 terms but needs to run
for
election each term. The project leader can be nominated for
impeachment by a
special advisory counsel elected ahead of time by the members
(everyone) but
impeachement can only happen through popular vote.

Any profits that are above and beyond future operating
expenses/investments will go to charities voted by the members
(everyone)

It seems to me that this architecture would work, but we can never
know
until we try it.

If you guys have any further feedback (talking to the generous
lurkers
here as well as Michel, Ryan and Paola) please feel free to share it
and
I'll incorporate it into my thinking and modify my thinking as
needed
before
I post the proposal to the list and then go out and source the
development.

Marc



On Sun, May 3, 2009 at 8:57 PM, Michel Bauwens
<michelsub2004 gmail.com>
wrote:

Thanks to all, and to you in particular Marc, for this support.
This
is
going to be a very busy week, but I'm going to start sorting out
the
paypal
issue and then will inform you once I get the computer ...

Good luck with the fundable clone, I will look at it from the
sidelines,
but of source support the initiative,

teaching here start in 2-3 weeks, panic is slowly setting in <g>

Michel

On Fri, May 1, 2009 at 4:47 PM, marc fawzi <marc.fawzi gmail.com>
wrote:

Dear all,

Thank you for participating in the fund raising experiment to
replace
Michel's laptop.

The fund has been closed successfully having exceeded its target
by
about 5%. Funds on their way to Michel.

It was a very refreshing experience to see genuine collective
action
take place with such speed and efficacy, and I attribute it
Michel's
relentless pursuit of promoting and advancing the p2p vision and
our
innate
support for some of the ideals embodied in that vision.

Michel,

These days, I don't think anyone can carry out the fight without a
computer and net access. Ane we wouldn't let you lose your sword
in
the
middle of the battle! the sword being the archetype for the
computer
these
days just as the pen was a few decades ago and just as the type
writer had
been 50 years ago...

Thanks again for all your work to promote some of the ideals we
share
and bring them into tangible form.

I'll follow up shortly with an actionable request for collective
will
to clone Fundable (if possible as a collectively supported project
for under
$500) such that we (the p2p research community) can avoid the 10%
fee next
time we need to do collective fund raising.

All, again,

We all know that the risk in demonstrating our will is much higher
than
the risk in our stating intentions and certainly much harder than
the risk
in just 'having' those intentions.

We all have the best of intentions with respect to the ideals we
share
and want tor realize. Some of us state those intentions in public
(gasp!)
and some of us test those intentions in public (gasp X 2!) yet
many
of us
are afraid of pulling the trigger since we may miss.

Having said that, I assure you that having been responsible for
the
"technical part of" the successful delivery from water vapor of
multi-million dollar product launches, under conditions of abuse
by
capitalist parties, that if the p2pf community endorses the idea
of
cloning
Fundable (so we can liberate the good idea behind it and let it
enrich our
community and our world) and we manage to secure a bid from a
solid
development partner (in India or Estern Europe) for less than
$500,
hopefully closer to $200 then I will work with all to have it
done,
asap,
and establish a precdence for great and effective collaboration.

The advantages to us would be a demonstration of our will to bring
a
good idea into the world, without shackles.

I'll be sending out a call for Fundable Cloning shortly, and I
would
love to see that we are not just people with good will but we know
a
good
idea when we see one (especially when we see one in action!) and
that we
have the audacity of hope (borrowing from Barack, the greatest
change maker
of our time) to make it work WITHOUT the abusive 10% fee, i.e.
create a
self-sustaining clone that consumes only 1% or less in fees.

I don't want to deceive myself or you: I am in it for both the
_thrill
of the task_ and the practical benefit it will bring to our
community and
hopefully the world, but I want to note upfront that the _thrill_
comes from
a fast, coordinated rhythm.

Success or failure only depends on whether or not it stops being a
thrill and turns into a chore, but I know, too, that it's up to me
to make
it thrilling or not, yet I can't really do that without some
forthcoming
support, so I'm appealing to you first, for a sign of your genuine
support,
before I go ahead and make a public request to the list for
collective will.

We'll do it right, as pure and simple replication of what exists
already and what we just witnessed in action! (i.e. clone
Fundable),
and
we'll do the fund raising (for development, for about $200 on
Fundable
itself) What is playing in our favor is the fact that 99% of the
cost of any
e-commerce app (like Fundable) is in coming up with the
requirements, from
requirement specification definitions in paragraphs and use cases
to
actual
screen mockups and state diagrams, and coalescing all of that from
air! In
our case all of that has been done already for us by Fundable.
It's
a case
of pure digital replication of an existing digital good/service,
so
the cost
is purely marginal. If we prick that reality bubble with any
attempt
to
change the spec (from what's on Fundable, aside from simply
changing
the
number 10% to 1% in the code) then we will lose this reality and
costs will
escalate rather quickly, and, in fact, exponentially.

How many people from this limited group support this idea? You may
email me indvidually with your thoughts, comments, concerns, or
reply
straight to this group. I have included both Paola and Patrick
since
both
have intellectual and social roots in the model (for the Fundable
clone)

To give you a glimpse of an important aspect the 'call for
collective
will' that I will be sending to the list, pending your responses,
the
Fundable Clone will be own by an LLC (limited liability company)
that will
be owned by the universe literally since the LLC as a legal
structure can
have all 6 billion people on earth as members, each having a
fractional
percent ownership of the company, with the company being a
protective shield
between the users (the market) and the members. Membership units
will not be
based on amount contributed to the Clone development fund because
the amount
is marginal. So anyone in the universe who wants to register as a
member and
have fractional percent ownership will be able to do so. I'm
versed
at
managing LLCs now that I had to do it for my business. Also, the
LLC
would
elect to be treated as an S Corp so it can save maximally on taxes
and hire
staff in the future, and I guarantee that it can all be done for
1%
in fees.
None of us will own the LLC and all of us will own the LLC. This
idea is
partially inspired by Patrick's model of shared ownership of
resources, but
without the complication of allocations. Everyone who wants to be
a
member
and own a fractional percentage will be immediately added to the
LLC
entity
as a legal member (and that can be anyone on earth as the LLC
structure
allows people outside the US to be members)

This country is led by lawyes (and Barack is a good conscious
lawyer)
and sometimes the lawyers actually come up with structures that
make
sense.
The LLC is one such structure, and we can leverage maximmally in
p2p
implementations.

--

Marc Fawzi
Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
LinkedIn: http://www.linkedin.com/in/marcfawzi



--
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University-
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

Volunteering at the P2P Foundation:
http://p2pfoundation.net  - http://blog.p2pfoundation.net -
http://p2pfoundation.ning.com

Monitor updates at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
http://www.shiftn.com/



--

Marc Fawzi
Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
LinkedIn: http://www.linkedin.com/in/marcfawzi



--
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

Volunteering at the P2P Foundation:
http://p2pfoundation.net  - http://blog.p2pfoundation.net -
http://p2pfoundation.ning.com

Monitor updates at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
http://www.shiftn.com/



--

Marc Fawzi
Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
LinkedIn: http://www.linkedin.com/in/marcfawzi




--
Alex
I cannot teach anybody anything, I can only make them think.- Socrates



--

Marc Fawzi
Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
LinkedIn: http://www.linkedin.com/in/marcfawzi




--
Alex
I cannot teach anybody anything, I can only make them think.- Socrates




-- 

Marc Fawzi
Facebook: http://www.facebook.com/people/Marc-Fawzi/605919256
LinkedIn: http://www.linkedin.com/in/marcfawzi


[2 text/html]
_________________________________
Web-Site: http://www.oekonux.org/
Organization: http://www.oekonux.de/projekt/
Contact: projekt oekonux.de



Thread: oxenT05573 Message: 2/5 L1 [In index]
Message 05574 [Homepage] [Navigation]