Proposed structure: the Hub

Thank you Sam, this is excellent. I only have 1 question regarding the "other entities" shown on your diagram, adjacent the OPs/Engine Room entity; is that indicating that the HE can in future set up more companies to suit different operational objectives?

My other thoughts about this relate to the
Financial Relationship between the two

1. If my personal "vision" of the Operational entity (OE), being mostly about raising funds for the activities of the Holding/Cultural entity (HE), was accepted then I would expect that the OE would need to be a wholly owned subsidiary of the HE. This is said only with a layperson's knowledge of legal structures and accounting practices however. I am unsure if being a wholly owned subsidiary would negate the partitioning of risk from the assets and this needs to be confirmed by our legal consultants.

2. I think what would need to happen is that the HE actually sells the tickets and then the OE has a budget to work with. The HE transfers that budget to the OE and keeps the rest to fund its activities. The loose idea I have is that the HE directly funds theme camps, workshops and artists because they are the cultural component of the event, but that funding and support is not limited to Burning Seed (though some grants should be contingent on the work being at the event to ensure the event stays interesting!). The OE uses it budget only for the event production expenses like infrastructure, event insurance and contractors (medical, site engineer/OHS professional, toilets etc).
   
   This should satisfy the objective of protecting the assets (mainly the cash from operating profit) from the risk of the event. It would also give the Board of the OE the autonomy it needs to function efficiently and without a great deal of interference when it comes to making decisions about expenses. The members of the HE would approve this whole figure budget at the AGM, as it is a significant use of entity funds, but they would not need to approve the individual amounts; the Board of the OE is responsible for meeting its goals within the budget.
   
   The feasibility of this idea needs to be confirmed when the accounting working group forms to test all these assumptions.

Thanks Madeline, yes exactly. There's no reason the head entity should be constrained to just the one event or project. And if we create it with the intention of being a hub for other burning seed community projects, we get the benefit of only having to run the one election to create a representative group of the burning seed community.

Burning Seed is a lot more than just the annual event and I think it suits the needs of the community to have their representative entity separated from the annual event org in order to clarify the distinction.

Financial relationship

I agree. I think it's really up to the experts as to what the legal relationship between the two entities is. My guess is that the head entity sells tickets and enters into a contract with the Event entity. The contract would state that it pays the event entity $X (the amount requested by Engine Room) in exchange for putting on the event. The event entity would be free to use this money however it knows best; for example saving up for assets, hiring toilet pumpers, etc.

A contract is most likely to give the head entity enough "distance" from the event to allow it to be considered separate from a tax and liability perspective, but again, we absolutely should let the experts make that call. It's never a straight forward answer when it comes to tax or liability.

I'd like to add though that this distance does not need to be reflected in the operational relationship between the entities. In fact, the hub entity and event (or any other) operational entities should be in constant and close contact.

The Burning Seed even entity and hub entity should collaborate as to any money from ticket sales that is not passed on to the operating entity; but if this happens it absolutely needs to be made clear to the ticket buyer.

Agreeing with the last point of making it clear to the ticket holder where the money is going. Most would assume the money they are paying for entry to the event, will only be spent on event costs.

Hey Sam, that's pretty much how I see it, with the HE being a hub that can support and, in some cases, spin off various entities and initiatives, with the caveat of course that all of the details above are yet to be worked out, including appointment of the board and the relationship between the 2 entities. I also note that the diagram has 'Sunburnt Arts' as the HE name, and I think there's a good argument to be made for the 2 entities to have different names, for reasons including separation of IP just like for financial assets. Sunburnt Arts was effectively chosen for the OE, and I propose the the name Red Earth City is retained in some way as the name of the HE. Perhaps that need its own thread?

I have been thinking about this retention of the name for a few days. I think that the Hub model lends itself to the Cultural org being named Sunburnt Arts and the Burning Seed operational entity being named Red Earth City Limited.

My rationale:
The cultural org (is) a national burner organisation and the name reflects that it supports and encompasses all the expressions and manifestations of burner culture under the Australian sun (given they align with the purposes). Therefore the Cultural Org should be Sunburnt Arts Limited.

The BS Operational entity is there to produce Red Earth City; it refers to place, which is important as so much of what a burn is about is placemaking and holding space for people to self-express, co-create and participate as a citizen of an imagined, yet manifested "city". Burning Seed might have to move due to flooding or a change of land use rules, but we will still attend Red Earth City in its new location. Burning Seed takes place at Red Earth City therefore the Burning Seed entity should be Red Earth City Limited.

Another burn could be tied in a similar way to the Cultural org but in another imagined, ephemeral location. For example two more residential burns could emerge in Phoenixville or Sparksopolis. If Phoenixburn pops up in the central desert in a place called Phoenixville, then the entity responsible for producing it might be called Phoenix Productions Ltd. Sparklederby could take place in Sparksopolis on a beach in Queensland and its org could be registered as Sparklepony Incorporated. And so on and so forth. Both of these orgs could have a relationship to Sunburnt Arts but they have distinct corporate and IP indentities.

For anyone that link to the diagram here is a jpg.

@Susanne Parris can you read this?

Yes, I can read your email

Testing 1 2 3

So where do I vote?