[apnic-talk] Re: comments on legal documents
Dear David,
>Date: Sat, 16 May 1998 17:50:40 +0800
>From: "David R. Conrad" <davidc at apnic dot net>
>Technically, I suppose it could be argued (although I'd disagree). One
>alternative structure would be to issue shares to all members which means a
>large amount of additional complications
I think there is another alternative. That is, to define the relation
between APNIC and "APNIC corporation" as a contract. Anyway, the
relation is an important point to be discussed. Concerning this point,
it is little bit hard for me to understand the "Declaration of Trust".
Why don't you use trust agreement to define the relation between the
beneficiaries(=Executive Council) and the trustee(=David)? I think it's
more effective for the beneficiaries to control the corporation.
>Instead, the proposal is that the single share be held in trust for the EC
>which represents the members. See the Trust Statement for the specific
>details. Since the EC is democratically elected by the membership and the
>share holder, by the requirements of the Trust Statement, acts on behalf of
>and for the EC, I would contend that the structure is NOT an autocracy and
>would be interested in seeing your counter-arguments.
So the structure is highly dependent on the effectiveness of the Trust
Statement, I understand. Here "effectiveness" means that: whether or
not lots of rights and responsibilities of the shareholder and
directors of "APNIC Pty Ltd" are well controlled by the
beneficiaries(=Executive Council). I think this is a quite hard
question to answer. Note that in the real world laws and legal
contracts sometimes contradicts to each other, and when we face to a
contradiction in a particular legal issue we must think about the
priority of these laws and contracts. Usually, I understand, public
laws have highest priority, so we must keep in mind that the
Declaration of Trust might not always an "all-mighty-card". It is
little bit hard for me to believe this framework is perfect, but I
admit that the proposed structure works for our purpose "to some
extent". About this point, our legal advisor says that he feels it
quite difficult to check more than one thousand pages of the
Corporation law of Australia.
>Note however that your analysis is quite true for the existing APNIC
>structure. It is indeed an autocracy, and this is THE most critical wart
>that needs to be fixed in APNIC's structure as it relies on the goodwill
>and honesty of the single share holder to insure APNIC acts on behalf of
>its members. In retrospect, it was a mistake to accept this structure and
>I apologize to the membership.
Does "existing APNIC structure" mean "the Seychelles based" structure?
I think the proposed "Australia based" structure still have same wart,
and needs to be fixed.
>As I believe I explained in the meeting in Manila when you brought this up,
>it is my understanding that the concept of "non-profit" applies only to
>charitable organizations in Australia and APNIC has not applied for
>charitable status, thus I believe it safe to say that APNIC is _not_ a
>non-profit organization under Australian law.
I think your understanding is wrong, and it's better to check this
point with lawyers. I understand ISOC is a non-profit organization
under Virginia law, and I suppose there is a similar legal framework
in AU.
>It is, however, tax exempt for all member derived income (a little over 98%
>of our income) by virtue of the Australian interpretation of "the doctrine
>of mutuality".
Could you give me a reference to this. What's the name of the law this
assertion grounded on?
>On the contrary, I would contend that given APNIC's Articles of Association
>EXPLICITLY define it to be non-profit and that it may never "declare or pay
>dividends" (Articles, clause 15.1), whether or not the Australian
>government treats APNIC as a "non-profit" is essentially irrelevant.
In many countries, whether the government treats the organization
non-profit or not is an essential factor in taxation and other
things. Probably it's desirable to discuss each issues individually.
The tax problem is a one issue, and might be resolved by "the doctrine
of mutuality" you mentioned, and I think we must investigate if there
is any other issues related to "non-profitness".
>Primarily convenience and the speed in which the everything can be
>finalized. Also, with the exception of the wart you have noted, I do
>subscribe to the "if it ain't broke, don't fix it" school of thought.
Probably I subscribe to a little bit different school. I would like
to add some additional codes for safety, which may be redundant, to a
system which is not ensured to be perfect. I said that the proposed
structure works "to some extent" but I can not believe it is perfect,
so I would like to propose to add some "safety codes". Perhaps I will
write about this today or tomorrow.
----
N. Maruyama (Vice President of JPNIC)
maruyama at nic dot ad dot jp
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