Legal requirements for crowdfunding platforms in France

[Changaco]

Liberapay received the following email on March 14:

Madame / Monsieur,

Je dirige l’association professionnelle Financement Participatif France (FPF). Depuis 2012, FPF s’efforce de permettre le développement du financement participatif dans les meilleures conditions possibles. A ce titre, nous veillons notamment au respect de la déontologie et de la réglementation pour s’assurer de maintenir la confiance des porteurs de projet et des contributeurs dans le secteur. [Pour en savoir plus sur FPF : http://financeparticipative.org/]

C’est pourquoi je me permets de vous signaler que pour exercer une activité de financement participatif ou cagnottes en ligne, il vous faut être immatriculé en tant qu’intermédiaire en financement participatif (IFP) sur le site de l’Orias : https://www.orias.fr/. Vous trouverez une notice d’information de l’ACPR ici.

Je vous invite donc à vous rapprocher de l’Orias et reste à disposition pour tout complément d’information,

Bien cordialement,

I'm not sure what to do about this. What I've found is that the definition of a “crowdfunding intermediary” in French law was significantly altered in 2021, such that it's no longer clear that Liberapay falls outside of it. If Liberapay falls within the scope of this revised law, then at the very least it can't keep operating as it as so far, and quite possibly its legal entity needs to “move” to a country in which it wouldn't be regulated.

[Changaco]

I see four possible courses of action:

1. Ignore the law. This would be risking, for the failure to comply with the requirement to register as a crowdfunding platform, two years in jail and/or a €6000 fine.
2. Try to comply with the law. This means paying €250 every year for the mandatory registration as a crowdfunding platform, paying who knows how much for a mandatory insurance, and trying to comply with various rules.
3. Reestablish Liberapay in another country which doesn't regulate crowdfunding platforms that facilitate donations or purchases (as opposed to crowdfunding platforms that facilitate lending or investment, which are covered by EU regulation 2020/1503).
4. Shut down Liberapay.

[jorgesumle]

3. Reestablish Liberapay in another country which doesn't regulate crowdfunding platforms that facilitate donations or purchases (as opposed to crowdfunding platforms that facilitate lending or investment, which are covered by EU regulation 2020/1503).

I would choose this option. I live in Spain, maybe the rules here are better, but I honestly don't know. Switzerland might be a good option, but again I don't know, we would have to research.

[jorgesumle]

I'm not sure what to do about this. What I've found is that the definition of a “crowdfunding intermediary” in French law was significantly altered in 2021, such that it's no longer clear that Liberapay falls outside of it.

@Changaco, I think you should use some money from the Liberapay organization to ask a French lawyer to know if Liberapay is operating illegally, and also ask for advice if that's the case. It's better to be safe. If French laws are not friendly enough, Liberapay legal organization might have to move to another country.

[Changaco]

I've started looking into business lawyers, but at this point I'm not really looking for confirmation of the problem, and I've pretty much given up on the possibility of complying with the law, because it doesn't seem possible for Liberapay to fully comply. This impossibility stems in particular from the requirement in article R548-10 to establish a standard contract between the donor and the recipient. Such a contract goes against the basic idea of Liberapay, and precludes anonymous donations because it must include the personal information of the donor and recipient.

Creating a new legal entity in another country could be an opportunity to adopt a limited liability structure, which would shield me and @jorgesumle from the financial risk of running Liberapay. This risk is currently almost inexistent, but it would increase with the implementation of liberapay/liberapay.com#2238 and/or liberapay/liberapay.com#2324.

Which country should a new legal entity be established in? Well, Liberapay could actually use at least two, one in the EU and one in the US (#45), but the Liberapay software isn't ready to handle multiple Stripe accounts for the platform itself, so we can focus on the EU for now. What we need to know is: does the candidate country currently constrain crowdfunding platforms beyond what's in EU regulations and directives, and if so, what are the constraints? What we'd also like to know is: what's the probability that the candidate country will regulate crowdfunding platforms with national laws in the future?