Update on Our Legal Entity Formation


Update on Our Legal Entity Formation

Hello Ukraine Aid Ops global family! We’re writing this post to offer openness and transparency to everyone about who we are, what we have done to date, and how we are formalizing our operations since the establishment of Ukraine Aid Operations less than 2 months ago, in April 2022.

Origins of Ukraine Aid Operations

Ukraine Aid Operations was started by Harri the Estonian – @Harri_EST on Twitter – upon delivering ~6 tons of bulletproof armour plates to Kyiv in April. He personally purchased the steel, a friend of his cut and bent the plates, other friends tested the effectiveness at the gun range and another friendly company donated a large truck and paid the costs of driving the plates to Kyiv from Estonia. This was no small undertaking.

Here are a series of tweets which document these beginning steps:

https://twitter.com/Harri_Est/status/1514267767603666948 – April 13th, 1188 Hardox plates start moving towards Ukraine

https://twitter.com/Harri_Est/status/1515340245486776336 – April 16th, Poland border crossing

https://twitter.com/Harri_Est/status/1516495991943446532 – April 19th, arrival in Kyiv

https://twitter.com/Harri_Est/status/1518373788785815553 – April 24th, discussion of plate testing

https://twitter.com/UkraineAidOps/status/1519078447334711296 – April 26th, thread documenting conclusion of initial plate shipment and some deliveries

This activity attracted many offers of help and thus Ukraine Aid Operations was born. An international team of volunteers working from the US, Canada, South Africa, Europe and the UK quickly got to work – setting up fundraisers, logistics, a website, creating a logo, developing and deploying support systems, IT systems, and everything else needed to run a rapidly growing organization.

Details about UK entity formation

One of the key decisions was where to locate our formal legal entity. It was clear that we needed to formalize, but the logistics for doing that were hard to navigate. We investigated operating a company from Estonia as it’s very easy to incorporate there. We considered the UK, USA and Ukraine. The primary issue with any new entity is being able to set up a bank account. This is not easy, especially with non-resident officers of the company. During our initial fundraising efforts, we used the personal PayPal accounts for two of our UK-based volunteers and it was very challenging to manage as PayPal could see flows of money into the account which were not normal for a personal account, and so repeatedly put the account on hold causing a lot of headaches and slowing down our efforts to get protective gear to the front lines. So we knew we had to get a formal legal entity established, and fast. 

We decided to start with the UK, where we established United Aid & Logistics – to be very technical, this is a Private Limited Company by guarantee without share capital use of ‘Limited’ exemption. The legal name was chosen based on discussions among the team members at the time, and we felt it best captured who we were (a united group of people from around the world) and what we were doing (providing aid and logistics assistance). We also honestly did not know if the war would remain constrained to Ukraine (and still aren’t), and so we opted against putting Ukraine in the legal entity name as a result. The public registry entry for the company which was formed is here: UNITED AID & LOGISTICS overview – Find and update company information – GOV.UK

In order to simplify the creation process for this legal entity, we looked for a volunteer who was a UK-domiciled resident. After discussion amongst the team, Charles B. volunteered to be the sole member and director while we established the legal entity. We chose to establish a Company Limited By Guarantee because it has no Shareholders and does not allow any profits to be paid out to Members. This type of company is commonly used by charitable organizations. See more on that here: https://www.yourcompanyformations.co.uk/blog/what-is-a-company-limited-by-guarantee/

We established the UK company on the May 5th 2022 and as of now:

  • We have successfully opened bank accounts in the company name
  • We have set up dedicated donation acceptance facilities via both credit card and PayPal – all in the company name
  • We have created a formal accounting system using leading accounting software donated by a friendly bookkeeping service we know (thank you – you know who you are!)
  • We have implemented both a process and supporting software to track expenses and manage our purchase invoices
  • All funds flowing into and out of the company bank accounts are fully accounted for and reconciled multiple times a week

We will appoint an external auditor to audit the annual accounts – this will be a significant cost to the company, therefore we are seeking support and would be delighted if you can connect us with a reputable firm of UK accountants who might be willing to help us. We do not intend to register with the UK Charity Commission at the current time – the process of forming an official charity in the UK is very time-consuming (as it is in most places). A UK charity must have independent trustees and formalized decision-making procedures, which is in direct opposition to our team’s need to be flexible and adaptable in order to address the logistical challenges which Ukraine Aid Operations was created to address. At this stage – 1 month into this new company and 3 months into the war in Ukraine – we absolutely require the ability to react quickly and solve issues which have many times more impact, like securing our supply chain and making sure our volunteers on the ground are safe.

The formation costs of the company were donated by our volunteer company formations expert. Our operational software we use every day is either donated or free of charge. None of the money donated is being diverted to pay any of us. As a matter of fact, several of the volunteers on the team have donated their own personal funds directly to expenses needed by Ukraine Aid Operations in order to meet some of the critical needs we have seen. We are doing all we can to direct every penny raised directly into getting protective gear to the front lines. 

Summary of Ukraine entity formation

Благодійна Організація «Колективна допомога та логістика» has also been established in Ukraine as a registered Charity with the public registry and with the UA tax authorities.

БО “КОЛЕКТИВНА ДОПОМОГА ТА ЛОГІСТИКА” — 44890246 — Опендатабот

We intend to use this entity for any official business in Ukraine which requires evidence of a Ukrainian legal entity. For example, it allows us to more easily transport goods across the border.

Summary of US entity formation

We have also established a US legal entity called United Aid and Logistics Foundation. Information about it can be found on the Delaware corporate registry if you search by name, and it was incorporated on May 16th 2022. Its articles of incorporation state: 

Our intention with the US entity is to proceed with the necessary paperwork and process to get this registered as a 501(c)(3) so that we can allow for tax-deductible donations within the US. In contrast with the UK and Ukraine entities, the process in the US allows, once the company has submitted the initial 501(c)(3) application, for it to issue provisional tax-deductible receipts immediately, pending eventual IRS approval of the application, as opposed to having to wait until after the typical multi-month process in other jurisdictions. We believe that this will allow us to immediately raise more funds for supporting our assistance goals in Ukraine.

Next Steps

It has been an incredibly busy two months for the entire team, and are rapidly learning and growing as we gain more experience in the challenges present in solving major logistical issues in getting critical equipment to the front lines in a war-torn country. We are very proud of what we have achieved to date, and the growing list of endorsements and thanks which we have received are indicative of the impact we have had already thanks in large part to the support of donors and volunteers around the world. We are trying to solve an extremely difficult problem which few others have successfully solved to date, and we will continue to be open, honest, and transparent with you as we are doing that. This will include as mentioned above having our books inspected by well-respected independent professional auditors and making the results public.

Thank you again for your tremendous support so far on behalf of the entire Ukraine Aid Operations team. We’re excited to continue working together to help the men, women and children in Ukraine thrive in a free and peaceful Europe.

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