teonanacatl Posted January 9, 2015 Possibly the least discussed section in Mollison's permaculture book is the chapter on setting up a business/community/trust. Im struggling to understand how it all works though so Id like some help. The following paragraphs will be me putting down all the info as Mollison puts it plus other research onto paper in order for me to try and consolidate what is proposed. "?" are things Im not sure of and Ill try come up with a list of questions at the end. So a community/ family of people sets up a company, this company acts as a trustee for a for-profit public trust (he calls it the institute trust). This trust issues shares to members and partakes in no trading or cash-flow. A second non-profit trust is set up by the company but separate from the first trust (the trading trust). The non-profit trust owns nothing and employs no one. It leases land/buildings from the profit trust for free as it funds the profit trust. Employees are volunteers. Both trusts are income tax free and one can probably get tax deductible status? Or one can route funds to them via a tax deductible trust at a cost of 2-4%. The trading trust (non-profit) registers a number of useful businesses (real estate, consultancy, travel agent, publisher etc). It can also hold shares. The non-profit trust is for cooperative money flows and the institute trust is for informational/ research flows. The trading trust is non-profit so it must distribute all its income, it can do this to the institute trust or other charities as a tax free/deductible donations, it can also give this money to people and dependants working for the trading trust, probably just enough to survive, all other money is better in the trust? Once the money is in the institute trust it can no longer be used or profit from it. It does not employ anyone either so no one can personally profit from it, it is run for public benefit. Not sure what happens to the shares that were given to members at the start? But one can start an institute/company and employ people through that for public good, say a school. Trading trusts come and go, but land should be heavily insulated and the institute/public trust doesnt take risks. All land donations go to the trading trust, the trading trust pays all transfer costs. Only land that is fully owned or has some financing attached pass to the public trust. Part owned land is a risk and stays in the trading trust. So the public institute trust owns everything that is paid off including tools, intellectual property and land etc. If one wants to buy more land then the public trust can loan the money to the trading trust, the property is then transferred to the public trust when the repayments are complete. The trading trust puts down deposits on land and once its paid off it goes to the institute. Any land can end up in the institute. For example gov land that the institute uses to build a farm for public good. Benefits: - land is free from tax, rates and gov charges, or at lease cheaper? - Links with other institutes for research etc. - Insulated situation - Donations tax deductible - Not corperate so no income tax So I see the advantages do using this sort of a system as I understand it is low/no income tax/ fees. A secure system for holding of property (used in the broad sense). The possibility of acquisition of funds, land for public benefit. Seems a lot of paperwork though, may only be worthwhile if one was making considerable money? Mollison wrote his books a long time ago, is this financial structure is still relevant? Are there easier options, say a family trust? Did I get that all correct? Has anyone had experience with this system? 1 Share this post Link to post Share on other sites
