This is a CTP of initiative: Hackspace 4 (South-Central England, UK)
This CTP describes how the hackspace set up legal protocols and structures extremely early on in their lifespan, and how this permitted the organisation to become more legible and influential than might otherwise have been possible. As described in earlier CTPs, the founding of the hackspace happened incredibly quickly. Very shortly after the initial mailing list was created – an estimated 3 weeks – the co-founders chose to set up a company structure and bank account. In doing so, both co-founders built on their prior experience with business and legal documentation. R had been involved in running companies with his family, and through his work as a freelance contractor. J had also set up companies as part of the student-run UNIX cluster at his university. Both founders were interested in that particular aspect of running organisations and had already built up a substantial network of contacts from that work that they were able to tap into. As a result, they were able to rapidly set up the necessary structures for the hackspace and “roll straight forwards”. As the organisation evolved, they were also able to draw on the legal expertise of other organisations through shared social networks, wherein a colleague’s “friendly tame lawyer became our friendly tame lawyer”. Setting up as a non-profit company limited by guarentee also allowed the organisation to be able to take advantage of tax breaks not available to charities.
By being one of the first, and high-profile, UK hackspaces, the organisation’s legal stuctures were rapidly appropriated by other emerging organisations. As one co-founder described: “They were copied by everyone – everyone saw what we did and thought ‘We can do that’, or they copied it or outright cribbed bits of it to make it look like it was easy. One hackspace entirely based their structure on ours – they just stole what we did and ran with it”.
The appropriation of their organisation’s structure and rules, whilst at times frustrating, also added to HS4’s wider influence across the UK hackspace scene. This CTP provided the hackspace’s directors to move quickly and confidently, based on their prior experience, in a way that they recognised to be valuable and unusual: “I shouldn’t underestimate the importance of [our business experience]. A lot of people get stuck on the small stuff for so long, they’re too frightened to make decisions”.
This CTP was shaped by the co-founders prior business experience. After initial discussion on the organisations online groups, the co-founders decided to set up as a limited company as it was a structure that they were familiar with and felt would comfortably accommodate the needs of the organisation. From their prior experience, the co-founders felt that a limited company best suited the nascent organisation as it would allow them to rent a space without a single person being liable for rent and bankruptcy if things went wrong. As the long-term aims of the organisation were to find suitable premises for the group to engage in hardware- and making-related activities (which would also be costly), these issues were essential. The limited company structure also provided a democratic structure for the group, allowing them to install (and if necessary, replace), directors by the organisation’s members.
The co-founders set up the organisation as a company limited by guarantee (CLG) , to allow the space to operate as a community-run non-profit. CLGs are corporations most frequently used by non-profit organisations that require some form of legal identity – in this case, primarily to access premises. It is not limited by share capital or shareholders, but has members who are its guarantors – in the case of the company needing to close, members will contribute a small amount of money to permit this to happen. As described above, this structure permits a group of people to take on large responsibilities – and associated risks – without any one person being held ultimately liable.
Additionally, the CTP was shaped by the fact of the hackspace being one of the first to be founded in the UK, and thus able to tap into several existing networks (as described in earlier CTPs). By its presence, the hackspace was able to gain first-mover advantages in setting standards for legal structures which were further propagated by other hackspaces as they developed.
Events which shaped this CTP included the co-founders’ prior business experience; and that they were one of the first hackspaces in the UK.
There was little contestation or tension reported around the decision to set structures up - instead, the co-founders were confident in their abilities to get involved with this part of the creation process. They were also transparent about the process of doing so, clearly laying out their aims and reasoning on the organisation’s online group – which at the time had 80 members – to garner opinion and encourage feedback. However, as described above, this process moved extremely rapidly – within 24 hours, one of the co-founders had posted a detailed breakdown of the reasoning for registering a limited company, and then (following online feedback from one member) undertaken the registration process. In doing so, he also assured the group that he would take responsibility should any of the process go poorly. This CTP was recognised as being critical at the time that it happened – a necessary event for founding the organisation on stable ground. Based on their prior experience, and their hopes for the organisation, the co-founders were clear that creating a formal company structure needed to happen as quickly as possible to permit them to open a bank account, begin fundraising, and register website domain names. The co-founders were also aware of how critical it was to present a respectable, legitimate face to the the outside world to give outside actors confidence that the organisation was trustworthy and worth investing in. The side-effects of the CTP – that they would be copied, and in doing so stimulate the growth of a wider array of hackspaces across the UK – were not anticipated; however, as described above they were seen as a minor annoyance (re the theft), and a wider positive influence on the hackspace community.
The stakes for not having done so would have meant that the organisation would have moved more slowly and cautiously as it developed.
This CTP was recognised as being critical at the time that it happened – a necessary event for founding the organisation on stable ground. Based on their prior experience, and their hopes for the organisation, the co-founders were clear that creating a formal company structure needed to happen as quickly as possible to permit them to open a bank account, begin fundraising, and register website domain names. The co-founders were also aware of how critical it was to present a respectable, legitimate face to the the outside world to give outside actors confidence that the organisation was trustworthy and worth investing in.
The side-effects of the CTP – that they would be copied, and in doing so stimulate the growth of a wider array of hackspaces across the UK – were not anticipated; however, as described above they were seen as a minor annoyance (re the theft), and a wider positive influence on the hackspace community.
This CTP captured and embedded many of the organisational’s transformational aims into its legal structure from its inception. From the first, the co-founders had seen the hackspace as a ‘project’ with wider aims and intentions around democratising technology and providing space for people to ‘make their dreams’. As a result, they felt that the company shouldn’t only be restricted to London, but founded in such a way to take advantage of other spaces that emerge. In doing so, they would potentially also cut down on the ‘red tape’ (rules and regulations) which other similar enterprises would encounter. To enable this, the co-founders decided to keep the name of the company separate from the actual space that they would eventually take up.
Registering as a company permitted the organisation record and embed their purpose into the founding documents (objects). As companies in the UK can only legally trade if they do so in support of their objects, which is particularly important for non-profit foundations whose purpose will be bound by more than generating shareholder value. This move thus forced the co-founders to consider precisely what direction and values they wanted the organisation to follow and represent; focusing on promoting science, engineering and art – an interdisciplinary endeavour which reflected their own interdisciplinary backgrounds, and that of the company that they both worked for at the time. By creating legal structures – and more importantly, the knowledge and confidence to develop those structures – this CTP permitted the organisers to move more quickly in developing the hackspace.
The co-founders were aware that this was a long-term process, and that there would always be learning involved around complex legal matters, as one described with reference to learning around tax that he had had to engage in the previous year: “We’ve just spent so much time trying to figure out VAT [Value Added Tax], stuff we’d never done before. People need to know the risks before they get started – you’re going to have to make decisions on things you’ve never done before”. Group insurance was cited as an example of one of these legal unknowns - whilst insurance is a ‘massive issue’ for many hackspaces, many directors didn’t have it, putting themselves at risk. The hackspace was leading in a group buy on public liability insurance, building on their own experience.
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