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

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

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

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.



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

Maybe the only difference here is the procedural choice of an LLC
so that the venture fits into the existing legal architecture (if you
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
have not come up with... For now, we're referring to it as the "Fundable

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


On Sun, May 3, 2009 at 11:57 PM, Michel Bauwens

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,
it was inspired by the revolving funds concept,


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

I find that 'not letting the panic set in,' after its initial
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
resourced at all times... with whatever feeds us and keeps us
stable.... and

And this brings us to the idea of the whole being greater than the sum
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
literally, all owned by different people and all separate from each

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
here and now and take the first step into the unknown and see it

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

On the procedural level, we'll elect the LLC to be treated as an S
by the IRS but it will still remain an LLC not a corporation as far as
laws are concerned, which means that all members (everyone on the
who are not employees will own a fractional percentage in LLC
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
after expenses and salaries (we'll just have 1 employee who will be
project leader for the first 3-year term, most likely myself if I end
taking the biggest risk financially, but will charge $1 for salary)
we'll implement a democratic system very similar to the US model in
sense that it will have a Constitution (with an un-changeable core of
regarding how the LLC is setup and the role of the project leader)
in the LLC Agreement bu dissimilar to the US model in the sense that
will vote directly so there is no Congress or Senate or Supreme Court.
people draft the proposed rules and the people vote on them directly.
people can organize into voting blocks on their own then so they may.
project leader has veto power over software development process,
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
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

It seems to me that this architecture would work, but we can never
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
I'll incorporate it into my thinking and modify my thinking as needed
I post the proposal to the list and then go out and source the


On Sun, May 3, 2009 at 8:57 PM, Michel Bauwens

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

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

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


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

Dear all,

Thank you for participating in the fund raising experiment to
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
support for some of the ideals embodied in that vision.


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
middle of the battle! the sword being the archetype for the computer
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
and bring them into tangible form.

I'll follow up shortly with an actionable request for collective
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
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
and want tor realize. Some of us state those intentions in public
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
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,
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
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
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
support, so I'm appealing to you first, for a sign of your genuine
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),
we'll do the fund raising (for development, for about $200 on
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
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
change the spec (from what's on Fundable, aside from simply changing
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
straight to this group. I have included both Paola and Patrick since
have intellectual and social roots in the model (for the Fundable

To give you a glimpse of an important aspect the 'call for
will' that I will be sending to the list, pending your responses,
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
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
managing LLCs now that I had to do it for my business. Also, the LLC
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
and own a fractional percentage will be immediately added to the LLC
as a legal member (and that can be anyone on earth as the LLC
allows people outside the US to be members)

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


Marc Fawzi

Working at - -

Volunteering at the P2P Foundation:  - -

Monitor updates at

The work of the P2P Foundation is supported by SHIFTN,


Marc Fawzi

Working at - -

Volunteering at the P2P Foundation:  - -

Monitor updates at

The work of the P2P Foundation is supported by SHIFTN,


Marc Fawzi

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


Marc Fawzi

I cannot teach anybody anything, I can only make them think.- Socrates
Contact: projekt

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