Legal Structure: D2G2M Foundation¶
Overview¶
The D2G2M Foundation uses a hybrid legal structure combining German nonprofit and for-profit entities to maximize compliance, tax benefits, and operational flexibility.
Recommended Structure¶
┌─────────────────────────────────────────────────────────────┐
│ D2G2M FOUNDATION LEGAL ARCHITECTURE │
├─────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────────────┐ │
│ │ D2G2M e.V. │ ← German Nonprofit (Parent) │
│ │ (Gemeinnützig) │ Tax-exempt donations │
│ └──────────┬──────────┘ │
│ │ 100% owns │
│ ┌──────────▼──────────┐ │
│ │ D2G2M Tech UG │ ← German Limited (Operations) │
│ │ (haftungsbeschränkt)│ Token issuance, services │
│ └──────────┬──────────┘ │
│ │ Controls │
│ ┌──────────▼──────────┐ │
│ │ D2G2M DAO │ ← On-chain Governance │
│ │ (Aragon/Snapshot) │ $D2G2M token holders vote │
│ └─────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────┘
Entity Comparison¶
| Structure | Formation Cost | Liability | Token Issuance | Recommendation |
|---|---|---|---|---|
| e.V. (Verein) | ~€100 | None | ⚠️ Complex | ✅ Parent Entity |
| gGmbH (gemeinnützig) | €25,000 | Limited | ⚠️ Restricted | ❌ Capital intensive |
| UG (haftungsbeschränkt) | €1 min | Limited | ✅ Possible | ✅ Operations |
| GmbH | €25,000 | Limited | ✅ Possible | ⚠️ Future scale |
Formation Timeline¶
| Week | Action | Cost | Responsible | Duration |
|---|---|---|---|---|
| 1 | Draft e.V. Satzung (statutes) | €0 | Founder | 5 days |
| 2 | Gründungsversammlung (founding meeting, 7+ members) | €0 | Founders | 1 day |
| 3 | Notary appointment | €100-200 | Notary | 1 day |
| 4 | Register at Amtsgericht (local court) | €75 | Court | 2-4 weeks |
| 5 | Apply for Gemeinnützigkeit (nonprofit status) | €0 | Tax office | 4-8 weeks |
| 6 | Form UG (parallel to e.V. process) | €1+ capital | Founder | 1 day |
| 7 | Register UG at Handelsregister (commercial registry) | €150 | Court | 2-3 weeks |
| 8 | Open bank accounts | €0-50 | Bank | 1-2 weeks |
Total Timeline: 8-12 weeks
Total Cost: €326-426 + €1 UG capital
e.V. (Verein) - Nonprofit Parent¶
What is an e.V.?¶
e.V. = eingetragener Verein = Registered Association
Key Features: - German nonprofit legal form - Requires 7+ founding members - Purpose: Public benefit (gemeinnützig) - Tax-exempt for donations - No profit distribution to members
Benefits¶
✅ Tax-exempt donations - Donors get tax deduction
✅ Low formation cost - ~€100 total
✅ Trusted reputation - Germans trust e.V. structure
✅ Stable governance - Board elected by members
Limitations¶
⚠️ Slow decision-making - Member votes required
⚠️ No profit distribution - Surplus stays in entity
⚠️ Complex token issuance - Needs careful structuring
Use Cases for D2G2M¶
- Accept tax-deductible donations
- Own intellectual property
- Control UG as 100% shareholder
- Provide public benefit (open source, education)
UG (haftungsbeschränkt) - Operations¶
What is a UG?¶
UG = Unternehmergesellschaft (haftungsbeschränkt) = Entrepreneurial Company (Limited Liability)
Key Features: - German limited liability company - Minimum capital: €1 (!) - Limited liability for founders - Can issue tokens/equity - For-profit operations
Benefits¶
✅ Minimal capital - Start with €1
✅ Fast formation - 2-3 weeks
✅ Limited liability - Personal assets protected
✅ Token issuance - Legally straightforward
✅ Profit distribution - To shareholders (here: e.V.)
Limitations¶
⚠️ 25% retained earnings - Until €25K equity reached
⚠️ Higher accounting costs - Annual audit required
⚠️ No tax exemption - Standard corporate tax (~30%)
Use Cases for D2G2M¶
- Day-to-day operations
- Token issuance ($D2G2M)
- Service contracts with dealers
- Revenue generation
- DAO control interface
DAO (Decentralized Autonomous Organization)¶
What is a DAO?¶
DAO = Smart contract-based governance system
Key Features: - Token holders vote on proposals - On-chain execution via Aragon/Snapshot - Transparent decision-making - No central authority
Benefits¶
✅ Decentralized - No single point of failure
✅ Transparent - All votes public on blockchain
✅ Global - Anyone can participate
✅ Automated - Smart contracts execute decisions
Limitations¶
⚠️ Legal uncertainty - No German DAO law yet
⚠️ Gas costs - Voting requires MATIC
⚠️ Complexity - Technical barrier for non-crypto users
Use Cases for D2G2M¶
- Feature prioritization votes
- Fee structure changes
- Partnership approvals
- Treasury spending proposals
Governance Flow¶
Decision Types¶
graph TD
A[Proposal Created] --> B{Decision Type}
B -->|Legal/Compliance| C[e.V. Board]
B -->|Operational| D[UG Management]
B -->|Community| E[DAO Vote]
C --> F[Board Vote]
D --> G[Executive Decision]
E --> H[Token Holder Vote]
F --> I{Approved?}
G --> I
H --> I
I -->|Yes| J[Execute via UG]
I -->|No| K[Rejected]
style C fill:#FFE0B2
style D fill:#FF6E40
style E fill:#FF9E80Authority Matrix¶
| Decision Type | e.V. Board | UG Management | DAO Vote | Examples |
|---|---|---|---|---|
| Legal contracts | ✅ Approve | ❌ Propose | ❌ Consult | Partnership agreements |
| Hiring | ✅ Approve | ✅ Execute | ❌ N/A | Team expansion |
| Major spending | ✅ Approve | ❌ Propose | ✅ Advisory | >€50K expenses |
| Feature roadmap | ❌ N/A | ❌ Propose | ✅ Decide | New product features |
| Fee changes | ❌ N/A | ❌ Propose | ✅ Decide | Transaction fee updates |
| Day-to-day ops | ❌ N/A | ✅ Execute | ❌ N/A | Bug fixes, deployments |
Satzung (Statutes) - Key Clauses¶
e.V. Satzung Highlights¶
§1 NAME UND SITZ
(1) Der Verein führt den Namen "D2G2M Foundation e.V."
(2) Der Sitz des Vereins ist in [CITY], Deutschland.
§2 ZWECK
(1) Zweck des Vereins ist die Förderung von:
- Open-Source-Software
- Digitaler Bildung
- Dezentraler Technologien
§3 GEMEINNÜTZIGKEIT
(1) Der Verein verfolgt ausschließlich gemeinnützige Zwecke.
(2) Mittel des Vereins dürfen nur für satzungsgemäße Zwecke verwendet werden.
§4 MITGLIEDSCHAFT
(1) Gründungsmitglieder: 7 Personen (namentlich aufgeführt)
(2) Beitritt: Antrag an Vorstand, Aufnahme nach Beschluss
§5 VORSTAND
(1) Vorstand besteht aus mindestens 2 Personen
(2) Amtszeit: 2 Jahre
(3) Vertretungsberechtigung: Einzeln oder gemeinsam
§6 MITGLIEDERVERSAMMLUNG
(1) Mindestens einmal jährlich
(2) Beschlussfähig bei 50% Anwesenheit
(3) Einfache Mehrheit, Satzungsänderungen 2/3-Mehrheit
Formation Checklist¶
Pre-Formation¶
- [ ] Identify 7+ founding members
- [ ] Draft Satzung (statutes)
- [ ] Define roles (board members)
- [ ] Reserve entity names
- [ ] Secure initial funding (€500)
e.V. Formation (Weeks 1-8)¶
- [ ] Week 1: Finalize Satzung
- [ ] Week 2: Hold Gründungsversammlung (founding meeting)
- [ ] Week 3: Notarize documents
- [ ] Week 4: Submit to Amtsgericht
- [ ] Week 5: Apply for Gemeinnützigkeit (tax exemption)
- [ ] Week 6-8: Wait for registration confirmation
UG Formation (Parallel)¶
- [ ] Week 6: Draft UG Gesellschaftsvertrag (articles)
- [ ] Week 6: Deposit €1 capital to notary account
- [ ] Week 7: Notarize UG formation
- [ ] Week 7: Submit to Handelsregister
- [ ] Week 8-9: Wait for registration
Post-Formation¶
- [ ] Open bank accounts (e.V. + UG)
- [ ] Apply for tax ID (Steuernummer)
- [ ] Set up accounting system
- [ ] Transfer IP from founder to e.V.
- [ ] e.V. becomes 100% UG shareholder
Ongoing Compliance¶
e.V. Requirements¶
| Task | Frequency | Responsible | Deadline |
|---|---|---|---|
| Mitgliederversammlung (Annual general meeting) | Yearly | Board | Q1 each year |
| Financial report | Yearly | Treasurer | 3 months after fiscal year |
| Board minutes | Per meeting | Secretary | 2 weeks after meeting |
| Member registry | Ongoing | Board | Updated within 1 month |
UG Requirements¶
| Task | Frequency | Responsible | Deadline |
|---|---|---|---|
| Annual audit | Yearly | Tax advisor | 5 months after fiscal year |
| Tax declaration | Yearly | Tax advisor | July 31 |
| Gesellschafterversammlung (Shareholder meeting) | Yearly | Management | Q1 each year |
| Retained earnings (25%) | Ongoing | CFO | Until €25K equity |
Costs Breakdown¶
One-Time Formation Costs¶
| Item | e.V. | UG | Total |
|---|---|---|---|
| Notary | €100-200 | €150-300 | €250-500 |
| Court registration | €75 | €150 | €225 |
| Capital deposit | €0 | €1 | €1 |
| Legal consultation (optional) | €500-1,000 | €500-1,000 | €1,000-2,000 |
| TOTAL | €675-1,275 | €801-1,451 | €1,476-2,726 |
Ongoing Annual Costs¶
| Item | e.V. | UG | Total |
|---|---|---|---|
| Accounting/bookkeeping | €300-600 | €1,500-3,000 | €1,800-3,600 |
| Tax advisor | €0 (exempt) | €500-1,500 | €500-1,500 |
| Liability insurance | €200-400 | €300-600 | €500-1,000 |
| Bank fees | €0-120 | €0-120 | €0-240 |
| TOTAL | €500-1,120 | €2,300-5,220 | €2,800-6,340 |
First Year Total: €4,276-9,066
Subsequent Years: €2,800-6,340/year
Frequently Asked Questions¶
Why not just a GmbH?¶
Answer: GmbH requires €25,000 capital. UG starts with €1. Both have limited liability, but UG is accessible for early-stage projects.
Why e.V. + UG instead of just UG?¶
Answer: e.V. provides tax-exempt donation acceptance and public trust. UG handles commercial operations. Best of both worlds.
Can non-Germans be board members?¶
Answer: Yes, but at least one board member must have a German address for legal correspondence.
What if crypto regulations ban tokens?¶
Answer: UG can pivot to traditional equity. DAO becomes advisory board. Legal structure remains intact.
How long until we can issue $D2G2M token?¶
Answer: UG must be registered first (~8-10 weeks). Then token issuance is legally straightforward via UG.
Next Steps¶
Immediate Actions¶
- Recruit 7 founding members for e.V.
- Draft Satzung based on template above
- Schedule Gründungsversammlung (in-person required)
- Find notary in target city
Resources¶
- German e.V. Guide (German)
- UG Formation Checklist (German)
- Sample Satzung Templates (German)
- Legal consultation firms
Related: - Funding Stages - D2G2M Vision - Token Economics