Starting a Not For Profit
Discussion
Not For profit organisation, i.e. a holding company that receives donations and uses them for purposes other than creating any sort of revenue.
Idea is as follows:
1/ Start a holding co. that spends time coming up with ideas that can screw over the motoring experience (i.e. satelite tracking speed camera's from space etc)
2/ Patent such ideas to prevent them from ever being used to screw up the motoring experience
3/ Create a corporate structure to prevent patents from ever being sold if the Founder (i.e. me) ever gets into financial difficulty
I am think something of the sort of an off-the-shelf type Co. with Zero employees, no office just P.O. Box etc (i.e. minimal running costs). Whoever wants to can submit ideas, the Co. gets them patented and stores them for time memorial. Running costs are covered by donations.
Anyway, how does one go about setting this up?
Zigs
Idea is as follows:
1/ Start a holding co. that spends time coming up with ideas that can screw over the motoring experience (i.e. satelite tracking speed camera's from space etc)
2/ Patent such ideas to prevent them from ever being used to screw up the motoring experience
3/ Create a corporate structure to prevent patents from ever being sold if the Founder (i.e. me) ever gets into financial difficulty
I am think something of the sort of an off-the-shelf type Co. with Zero employees, no office just P.O. Box etc (i.e. minimal running costs). Whoever wants to can submit ideas, the Co. gets them patented and stores them for time memorial. Running costs are covered by donations.
Anyway, how does one go about setting this up?
Zigs
Edited by Zigs on Monday 14th May 10:51
If you did manage to come up with such brill idea that was worthy of a patent, you are telling us you would lock the patent away and never put the product into production? Pull the other one mate.
Patent protection only lasts a limited amount of time anyway so the idea is flawed if you ask me.
Patent protection only lasts a limited amount of time anyway so the idea is flawed if you ask me.
Actually James I am an engineer (well, qualified as, now in Investment Banking) and one of my prof's at uni invented mobile laser speed camera's (yeah, I feel old). The amount of social popularity it generated for him personally wasn't worth any money IMO and besides, I do well enough without having to sell off patents to screw up my passion of motoring.
Do you understand how corporate structures can effect the sale of firm assets? If not, then maybe you should buy This. If I wanted to patent and sell stuff to make money why bother to make a company? anyway, not the point, but let me know how your reading goes
I doubt that these patents would be worth anything anyway as the only group that could use them for value would potentially be public sector departments looking to limit or control the use of roads. Not much of a market, no demand, low value, but that isn't the point either. The point is if you patent something it cannot be developed by other people.
How long do patents last in the UK, what is the law about renewing patents?
Zigs
Do you understand how corporate structures can effect the sale of firm assets? If not, then maybe you should buy This. If I wanted to patent and sell stuff to make money why bother to make a company? anyway, not the point, but let me know how your reading goes
I doubt that these patents would be worth anything anyway as the only group that could use them for value would potentially be public sector departments looking to limit or control the use of roads. Not much of a market, no demand, low value, but that isn't the point either. The point is if you patent something it cannot be developed by other people.
How long do patents last in the UK, what is the law about renewing patents?
Zigs
A holding compny is a company that holds and owns shares in other companies. Are you sure that is what you mean?
Generally, there is no such thing as a "not for profit" limited company but there are lots of companies out there which do not make profits.
Setting up a company like this is no different to setting up any company.
Generally, there is no such thing as a "not for profit" limited company but there are lots of companies out there which do not make profits.
Setting up a company like this is no different to setting up any company.
let me get the business set up first 
I want to incorporate this weekend.
I have some ideas for patenting - are there any patent lawyers on here that can tell me the cheapest way to get something patented? Is patent pending sufficient to stop the idea being used and how long does it last before you have to produce a further developed product to retain the patent?
If you are a patent lawyer and work in london, I will take you out for a beer or three after work if you don't mind talking shop for some of it
I need to find out the cost of patenting and keeping patented these ideas. I can then determine the operating cost of the business based on a predicted number of patents a year and I will probably look to sell shares for a nominal price (as a kind of novelty given that we can't really sell this type of co. - "hey, I own 2% of XYZ corp that protects my motoring pleasure!"
to fund the patent process. To make sure that the patents can never be sold, my Articles of Association and Shareholders Agreement will give each shareholder a veto right on the sale of patents (the only asset of the firm). Hopefully we will get a few hundred shareholders and if even one of them remains a petrolhead, the patents will be safe from the evil hands of those who would use them against us!
Zigs
I want to incorporate this weekend. I have some ideas for patenting - are there any patent lawyers on here that can tell me the cheapest way to get something patented? Is patent pending sufficient to stop the idea being used and how long does it last before you have to produce a further developed product to retain the patent?
If you are a patent lawyer and work in london, I will take you out for a beer or three after work if you don't mind talking shop for some of it
I need to find out the cost of patenting and keeping patented these ideas. I can then determine the operating cost of the business based on a predicted number of patents a year and I will probably look to sell shares for a nominal price (as a kind of novelty given that we can't really sell this type of co. - "hey, I own 2% of XYZ corp that protects my motoring pleasure!"
to fund the patent process. To make sure that the patents can never be sold, my Articles of Association and Shareholders Agreement will give each shareholder a veto right on the sale of patents (the only asset of the firm). Hopefully we will get a few hundred shareholders and if even one of them remains a petrolhead, the patents will be safe from the evil hands of those who would use them against us! Zigs
Yeah, it all depends on the magnitude of the running costs. As I said, this business will run on donations on a not for profit basis, as in I won't take a salary and hopefully neigther will anybody else who helps out with the process. The objective is really to protect an asset, that asset is the joy of motoring and hopefully there will be enough people passionate about this to run a virtual company of X patents per year.
That being the case, hopefully the only thing that I will need to do is cover the short term cash flow requirements.
Completing financial statements is no problem. This company will never get over the £58K threshold to be liable for VAT and never even come close to the £1million required for audited accounts...
That being the case, hopefully the only thing that I will need to do is cover the short term cash flow requirements.
Completing financial statements is no problem. This company will never get over the £58K threshold to be liable for VAT and never even come close to the £1million required for audited accounts...
The company will still need to file full statutory accounts at Companies House. These account do need to comply with all the accounting standards and the disclosures required under Accounting Regulations and Company Law.
Are you completely up to speed on all these issues?
What is your understanding of the term "not for profit"?
As the company looks like it intends to have income, how do you know whether it will make a profit or not?
What is going to happen if it does make a profit?
Are you completely up to speed on all these issues?
What is your understanding of the term "not for profit"?
As the company looks like it intends to have income, how do you know whether it will make a profit or not?
What is going to happen if it does make a profit?
I claim no knowledge what so ever, but I am sure there is a PistonHead out there who does have the required knowledge and wants to be a Director of said company.
The only income will be in the form of donations. Since the company will never sell anything of meaning (lets exclude things like car stickers / T-shirts and whatever people would like to show that they actively voice objection to the current nanny culture around motoring) it is unlikely that it will make a profit. If donations exceed operating expenses and a profit is made, that profit will be wholy directed towards the running of the company, that is, to pay for more patents, maintain existing patents and required professional services where these cannot be obtained gratis. The company will have no employees and NO salaries, dividends, directors fees or royalties will be paid, ever.
I am sure that all financial statements need to be done correctly, but is there not some sort of small business pack out there that lets you complete this in a question / answer type format for people without a financial background? How does Joe Plumber who runs a small business and can't afford an accountant get by?
The only income will be in the form of donations. Since the company will never sell anything of meaning (lets exclude things like car stickers / T-shirts and whatever people would like to show that they actively voice objection to the current nanny culture around motoring) it is unlikely that it will make a profit. If donations exceed operating expenses and a profit is made, that profit will be wholy directed towards the running of the company, that is, to pay for more patents, maintain existing patents and required professional services where these cannot be obtained gratis. The company will have no employees and NO salaries, dividends, directors fees or royalties will be paid, ever.
I am sure that all financial statements need to be done correctly, but is there not some sort of small business pack out there that lets you complete this in a question / answer type format for people without a financial background? How does Joe Plumber who runs a small business and can't afford an accountant get by?
Eric,
I thought a bit more about you profit questions and you are right, it could turn a profit. I donate to fram africa and lost dogs home and a bunch of other random charities and I am sure that they turn a profit so it is possible. I suppose the point is, money donated must be used for the reason for which it was donated, this creates a problem.
If the company receives more donations than it can spend on company activities, you build a capital reserve of sorts (retained earnings). If the company has a wad of cash and then for whatever reason decides to stop trading, where does the cash go? It would go to the shareholders. Now if you don't accept donations and run the company like a mutual fund, where each 'investment' returns a series of shares, then investors would get out whatever was left if the company liquidated based on their level of investment over time. The problem with this is that A) Financial Regulation sucks b@lls B) There would be negative return and not everybody would understand that and I don't want to go to jail for mis-selling anything C) Donations are tax deductable and investments are not.
I'll think it over -> the intention is not to take money from motorists, it is to prevent motoring from becoming so restricted that it just isn't fun anymore.
Ideas welcome
Zigs
I thought a bit more about you profit questions and you are right, it could turn a profit. I donate to fram africa and lost dogs home and a bunch of other random charities and I am sure that they turn a profit so it is possible. I suppose the point is, money donated must be used for the reason for which it was donated, this creates a problem.
If the company receives more donations than it can spend on company activities, you build a capital reserve of sorts (retained earnings). If the company has a wad of cash and then for whatever reason decides to stop trading, where does the cash go? It would go to the shareholders. Now if you don't accept donations and run the company like a mutual fund, where each 'investment' returns a series of shares, then investors would get out whatever was left if the company liquidated based on their level of investment over time. The problem with this is that A) Financial Regulation sucks b@lls B) There would be negative return and not everybody would understand that and I don't want to go to jail for mis-selling anything C) Donations are tax deductable and investments are not.
I'll think it over -> the intention is not to take money from motorists, it is to prevent motoring from becoming so restricted that it just isn't fun anymore.
Ideas welcome
Zigs
You might say that I am biased (I am an accountant after all) but I have NEVER seen a formal set of statutory limited company accounts prepared properly by a non-qualified accountant. In fact, some of the "home assembled" accounts I HAVE seen have been laughably inaccurate and illegal in the form in which they have been presented to Companies House - resulting in them being rejected by both Companies House and HM Revenue and Customs - with subsequent fines and penalties being levied.
Just because the company seeks to reinvest any surpluses back into the business does NOT mean that it has NOT generated a profit. If it has generated a surplus there is every chance that it will have made a taxable profit which will result in the necessity to file Corporation Tax computations and Returns with the Revenue.
Also, giving away its profits to some outside charity or charities will NOT help reduce its profits for tax purposes. In the UK, charitable donations do not automatically result in tax relief for a business.
Once you go down the limited company route with a business you are asking for trouble if you do not get professional assistance pretty quickly.
Just because the company seeks to reinvest any surpluses back into the business does NOT mean that it has NOT generated a profit. If it has generated a surplus there is every chance that it will have made a taxable profit which will result in the necessity to file Corporation Tax computations and Returns with the Revenue.
Also, giving away its profits to some outside charity or charities will NOT help reduce its profits for tax purposes. In the UK, charitable donations do not automatically result in tax relief for a business.
Once you go down the limited company route with a business you are asking for trouble if you do not get professional assistance pretty quickly.
Edited by Eric Mc on Monday 14th May 19:23
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