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Comment by marcinzm | Hacker News Reader

>By comparison, many other European countries (Germany, France, Sweden, Belgium, …) have specific types of legal entities for associations that have appropriate restrictions on what can be done with them. For example, they can generally not be sold, are required to be internally democratic with fixed statutes, usually (but not always) have open membership and an elected board. I think that would go a long way to fixing these recurrent issues.

As I understand it you can set all those things up in an American non-profit and many do in fact have that setup. So it's not a shortcoming of the legal system but of the people who created the entity. They chose not to do those things and no one objected strongly enough.

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Fair, but one significant advantage of having a specific legal form is that the way the organization is set up is immediately apparent from the legal name. This also means that any non-profit that is not set up as such will automatically be subject to much more scrutiny.

On other other hand, when I read "Signal Messenger LLC" or similar I have no way of easily knowing whether the organization is in fact set up in such a way.

The main difference is the cost associated with it.

In order to be an non-profit organization you need an founding meeting, board elections and all of it have to be notarized and drawn up by an attorney before being validated by the state an process that takes weeks if not months where as anyone can set up an company online in about 15 minutes.

For some European nations the processes are far more similar and as code civil courts can do their own fact finding you don't need to pay an notary to validate everything or have an attorney draw up a whole bunch of documentation just to found an small non-profit association.

In Australia, setting up an association of members is as easy as a limited liability company. You can become a Federally registered not-for-profit as an incorporated association.

The cost of having a model set of a constitution and doing the paperwork is as simple as doing the same for a limited liability private company.

It varies from state to state, but in the states I'm aware of (at least 3) it's not nearly as hard as you're making it sound. An attorney is not required and, while the non-profit status may take some time to approve, the existence of the corporation itself generally is essentially the same as founding a for-profit corporation. In particular, attorneys are not required, and it is generally pretty easy to get things notarized for free (most banks have notaries on staff and I've never had one charge me.)

I know multiple people who have set up non-profits on their own, without any lawyers, and have not had any difficulties throughout the process.

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