Zucker­berg Ini­tia­tive

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Mark

Zucker­berg, founder of Face­book, has de­fended the un­usual com­pany struc­ture cho­sen for the eye-catching phil­an­thropic ven­ture launched to cel­e­brate the birth of his daugh­ter. Zucker­berg will give away 99% of his stake in Face­book, worth $45bn (£30bn), to fund the Chan Zucker­berg Ini­tia­tive.

Rather than set up a sim­ple char­ity, Zucker­berg formed a lim­ited li­a­bil­ity com­pany (LLC) to ad­min­is­ter the money. An LLC brings cer­tain tax ex­emp­tions but also al­lows in­vest­ment for profit.

Crit­ics have said the struc­ture of the Chan Zucker­berg Ini­tia­tive could pro­vide a way for the Face­book founder to avoid pay­ing tax on the sale of his shares. They have also ques­tioned why he did not set up a not-for-profit char­ity in­stead. An LLC al­lows Zucker­berg to keep hold of the vot­ing and al­lo­ca­tion of the shares he puts into it.

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