Exciting times! It’s time to give a little update about our legal status. From a legal point of view Trustroots has been a hobby project so far, but we obviously need a non-profit legal base for our project.
We now have the Trustroots Foundation.
We just set up a Limited by Guarantee (LBG) in the United Kingdom under section 60 exemption with by-laws that allow us to easily add the so called CIC status to our entity.
Some typical LBGs in the UK would be clubs and membership organisations such as workers’ co-operatives, non-governmental organizations (NGOs) and charities. For example the OpenStreetMap Foundation, the Open Knowledge Foundation and the UK Hackspace Foundation are LGBs.
Why in the United Kingdom?
For a moment we had also considered setting up a Dutch foundation but finally we chose the United Kingdom. There are several reasons we opted for the UK.
- All legal stuff is in English.
- The UK is pretty advanced when it comes to allowing handling things online.
- Incorporation is very straightforward and relatively low cost.
Why Limited by Guarantee under section 60 exemption?
- It’s fast and relatively affordable to set up.
- It’s possible to apply for CIC status, which is a special form recently created for social enterprises
- It is very flexible, this is why many NGOs and charities choose the LBG form.
- Additionally, section 60 exemption from the obligation to have name ending with “limited” requires that:
- The company purposes are for the public benefit.
- It is a non for profit.
- Assets are to be specially protected on winding up.
- Using the word Foundation in the name also requires that any profits should be used to further the objects of the company and not paid to the members as dividends.
Could Trustroots assets be sold?
The guarantee of LBG under section 60 requires a clause where in case of Trustroots Foundation ceasing to exist, assets could be moved only to another non-profit entity where transferring assets is limited in the same way. CIC status would make this even more specific, but isn’t required for this.
Additionally our by-laws (articles of association) specifically prohibit selling the users database and specify that the company code will be licensed under an open source license.
Why not a charity?
There is a lot of regulation around charities that we do not want to deal with at this point. Charities are required to submit more complex (and costly) audited accounts, etc. It’s still an option though; if we ever grow big enough we can look at this option again. What is essential is to have a non-profit status,which we now have, to move ahead with the project.
How will Trustroots be funded?
We’re considering donations, government and European grants as well as merchandising.
Who are the board?
We: Mikael, Kasper, Carlos, Natalia and Callum.
Open and non-profit future
Legal form and by-laws are of course a very strong way of proving we are serious about setting this project onto an open and non-profit path. We also hope that with our backgrounds we can assure you we are serious about giving this project the best possible future imaginable.
What does the future hold?
There is still an awfully lot to do. Volunteering has to be organised and a lot of features need implementing. It’s amazing how many people already helped us or reached out to tell us they want to participate in the project. Thank you! Keep those messages coming and feel free to step up and help us in any way.
Please, ask any questions bellow and let us hear about any ideas you might have to make the Trustroots Foundation better.
This post was written collaboratively by the entire Trustroots team.