[registrars] Re: NC/DNSO Legal entity.

["Erica Roberts" <erica.roberts@bigpond.com>]

Thanks Paul,
The possibility of having a trustee account is an option under
consideration.  As you say, it has the advantage of simplicity and does not
involve us in complex 'administrative baggage' .  As you point out,
donations can certainly be made a Trust Account.
However I understand that the problem relates to the wants/needs of
sponsors - ie.  sponsors need/want (for tax, invoiceing , etc reasons)  to
make donations to legal entities. I'm told that the absence of a legal
entity makes fund raising very difficult.  I claim no expertise in this and
would be interested in advice from people with fund raising/commercial
finance expertise.
The other issue relates to contracting a provider of Secretariat services.
I agree that these should be provided under a contract of a sort used for
consultants rather than employment relationship. However the signatories of
any contract must (as far as I am aware) be legal entities.  Since neither
the DNSO nor the NC is a legal entity, they cannot be signatories to any
contract.  Can the Trustee be the signatory?  If so, what is the
relationship between the Trustee and the NC and the contracted provider of
Secretariat services?  I find it difficult to believe that there is not a
legal solution to this issue but so far, at least, I have not seen how this
issue could be resolved.
 I guess the key questions are:
1.  Given that the DNSO is not a legal entity, how can it enter into (or
otherwise control) a legal contract with a provider of Secretariat services?
; and
2.  Is it critical to the success of a fund raising effort, that the funds
are provided to a legal entity which is subject to corporate law?

erica
----- Original Message -----
From: "Paul M. Kane" <Paul.Kane@io.io>
To: "Erica Roberts" <erica.roberts@bigpond.com>
Cc: "Elana Broitman" <ebroitman@register.com>; <registrars@dnso.org>; "Ken
Stubbs" <kstubbs@corenic.org>; "Paul M. Kane" <Paul.Kane@reacto.com>
Sent: Thursday, December 14, 2000 7:39 AM
Subject: Re: NC/DNSO Legal entity.


> Morning Erica
>
> Thank you for this email..... as I am only recently learning of the
proposal to
> have a separate legal entity for the DNSO/NC ... can we discuss this
before the
> NC tel conf and also at the NC tel conf on the 19th.
>
> Erica Roberts wrote:
>
> > Thanks for your follow up question.  I should have given you more
background
> > so that you can appreciate the issue better.
> >
> > The Names Council Budget Committee has been tasked not only with
developing
> > a budget for the Names Council and a system for managing that budget.
Tho
> > it is not finalised yet, the Committee is coming to the view that some
form
> > of  legal entity (a not-for-profit) is required to administer the DNSO
> > funds.
>
> I do not accept that an "advisory panel" needs to have a separate legal
entity
> to manage a relatively small budget.  Funds could (and should) IMHO be
held in a
> third party trustee bank account and administered by an accountant/book
keeper.
> If a separate entity is created it brings load of political "baggage" that
runs
> the risk the NC getting bogged down in administrative "stuff" rather than
> focusing on what is best for the constituency and the internet.
>
>
> > There are several reasons for this.
> > As you may be aware, Verisign/NSI have undertaken to contribute $100,000
> > toward the costs of a professional Secretariat for the NC which is
payable,
> > on a dollar
> > for dollar basis, as matching sponsorship is received.  Our advice is
that
> > in order to secure the required sponsorship we need to establish a legal
> > entity which can receive, manage and account for the donations from
sponsors
> > and the management of the DNSO Budget, and be a
> > party to a contract of employment for a professional secretariat.
>
> The two issues of donation and expenditure are separate.  Donation can be
to any
> person, entity or trust account so that's not a big problem... and the
trustee
> account manager can operate a couple of ledgers, but you are right
employment
> brings "burdens".  To that end may I suggest the person
responsible/appointed
> recognises that he/she is a "sub-contractor" to the DNSO, whose services
are
> engaged on a contract for service basis at the pleasure of the NC, until
> termination of the contract/resignation/disqualification from service. As
for
> the person/entity issuing the contract that could be the trustee
book-keeper or
> ICANN as the "glue".
>
> > The Budget Committe is therefore exploring options for establishing a
legal
> > entity - a not-for-profit association of some kind.
> > The suggestion has been made that the legal entity should be established
> > under French law.  Given that the common language of the Internet and of
> > ICANN is English, it seems to me to be inappropriate  to establish  a
legal
> > entity to administer DNSO funds in a non-English speaking jurisdiction.
> > Most importantly, it would mean that the members of the Names Council
and
> > DNSO constituencies would not generally be in a position to ensure
comliance
> > with relevant legislation because they are not French speakers.  The
same
> > would apply to setting up the entity in any other non-english speaking
> > jurisdiction - such as, for example, Japan, Indonesia or China.
> > However, this is obviously a sensitive and important issue.  Since I am
> > representing
> > the Registrars Constituency, I want to be clear that I am speaking on
your
> > behalf in this matter.  But to do this, I need your guidance.
>
> I urge you not to go down this route at all.  In which ever country the
> "association" is incorporated you will alienate other countries and we the
NC
> are about "building bridges". What happens if the association is in one
> jurisdiction and the best NC Secretariat Contractor applicant is in
another
> jurisdiction (or is replaced with someone in another jurisdiction). It is
messy
> and unnecessary complicated (and possibly expensive) in my view.....
>
> > The Budget Committee will be reporting to the names Council at its next
> > meeting on 19 Dec.  Since we wish to begin the fund raising and
Secretariat
> > search process early in the new year,
> > the question of whether, where and how a legal entity should be
established
> > will need to be considered by the NC and decided soon.
>
> I will look forward to participating in the debate but if there is a
decision to
> go down this route I think it is essential that every NC constituency
consult
> their members because the ramifications could be onerous.
>
> Thank you for keeping us informed..... much appreciated..... speak to you
soon
>
> Best regards
>
> Paul
>
>