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On Fri, Oct 02, 2020 at 09:10:53AM +0100, Michael Meeks wrote:
On 30/09/2020 09:40, Andreas Mantke wrote:

 c) form sub-group to work out and publish business entity proposals
    URL: https://redmine.documentfoundation.org/issues/3294
    Status: Criteria list (Lothar) Draft proposal for Luxemburg entity
(Paolo), next meeting orga(Thorsten)  ->> 
https://nextcloud.documentfoundation.org/s/NeBWm25cd2LHyoq

I took a look at the above document. My general impression is that any
CIC / SIS / ... like structure will have to be carefully considered to
see whether the inherent limitations thereof are something that can be
lived with, or whether they will lead to similar/same problems as with
TDF money, which is what we try to avoid!

The Luxembourg SIS has the clear advantage over (my understanding of)
the previous UK CIC proposal that it would be clearly owned by TDF,
the management has to present its report (at least once per year) to
the shareholder (TDF), and the shareholder (TDF) approves... or not!
of the management's past actions. Just like in any company. In a
Luxembourg SIS, that report is not only on the general management of
the company and its accounts, but also specifically on the "social
purpose" of the SIS, and must measurably demonstrate whether the goals
(which must be quantifiable) have been met, or not, and "how much"
they have been met.

Another approach, which was my first thought before reading the above
linked document, is to make a straight commercial company, fully owned
by TDF. This will clearly allow "any" commercial activity, while
ensuring that any profits, if not tendered out, are ploughed back into
the community by way of TDF.

I'm a big believer in the "theory" of incentives. A taxable structure
also comes with an incentive to spend the money (tender it out), since
the tenders will count as expenses, and reduce the income tax owed.
I'm not saying that is in itself a reason to choose a taxable
structure.


In all cases (CIC/SIS-like structure or straight commercial company),
we have to delineate clearly the functioning of the company, and its
governance. In order to allow the company to be focused, and so that
it is not just an echo chamber of TDF processes, we could consider
that, while economically fully owned by TDF, the governance is such
that a group of "well-chosen" people (initially formally
chosen/approved by the TDF as incorporator of the company; in practice
can be chosen by the TDF BoD, by "the community at large" according to
some process, ...) will be able to run the company (or choose the
people that will). If we choose for that, there are company types that
allow it.

I understand that "the TDF BoD runs the company" is emphatically not
a governance model we want for the company. So the question is: what
governance model do we want? Once that question is answered, we can
start to think technically to choose a structure type that will match
that.


Just to give me an impression of scale, what would be the order of
magnitude of the expected cashflow (turnover) in the "expected average
success" scenario? What would be the order of magnitude of the
turnover in the "sky high, we never thought we would be so successful
financially" scenario?

-- 
Lionel

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