6 ms·

A corporation, being a legal fiction, can only act through physical persons. So in that respect, no corporation can be truly autonomous. It sounds like what th

A corporation, being a legal fiction, can only act through physical persons. So in that respect, no corporation can be truly autonomous. It sounds like what they have done is taken all the paperwork associated with corporate activity: by-laws, annual meeting minutes, resolutions, etc., and put them into a block chain. A more proper description would be a paperless corporation.

drcode 10y ago
That's like saying a car can't be autonomous because some programmers wrote the software that it uses.
- DigitalJack 10y ago
  No, a corporation is a legal entity that must have directors and officers, aka people. Without that, you don't have a corporation. And after reading the article, they aren't a legally recognized corporation.
  - dragonwriter 10y ago
    > No, a corporation is a legal entity that must have directors and officers, aka people. OR, a corporation is a legal entity formed by a corporate charter that is treated as a person under the law. In any case, whatever these ethereum-based things are, they aren't corporations.
    - zardo 10y ago
      >In any case, whatever these ethereum-based things are, they aren't corporations. They may end up creating and operating corporations, but DAOs are their own thing.
      - dragonwriter 10y ago
        > They may end up creating and operating corporations Sure, if people ever make the rather radical changes to law that would be required for them to create, operate, or even merely passively own shares in corporations, that might be the case.
        zardo 10y ago
        I should have been more clear, that is what I meant. However, I don't think it's far fetched that some tiny island nation will do exactly that
      - will_brown 10y ago
        To expand on Dragonwriter's point just a little. Lets pretend DAO somehow autonomously filed Articles of Incorporation in DE. What is required by DE? A DE physical address for the corp.; a registered agent located in DE; and a incorporator (doesn't need to be shareholder, but must be an individual). Already we see it is an impossibility for DAO to do this autonomously. But lets pretend it wasn't impossible, DAO autonomously entered into a Lease, contacted with a registered agent, contracted with a corporate lawyer too be the incorporator and file the Articles. Whats the next step? A bank account, well DAO doesn't have a social security, and doesn't qualify for TIN. The Corp. can't get an EIN, which means it can't open a bank account, which effectively means it can't do business. Well again, lets pretend the DAO C-Corp doesn't need a bank account because well Bitcoin is perfect right? DAO autonomously creates a Bitcoin wallet for the corp and does all business through that, well the company still doesn't have an EIN, which means it won't be able to pay taxes.
        HillaryBriss 10y ago
        > won't be able to pay taxes Sounds like the ultimate corporation to me. Until now, corporations have had to spends millions of dollars on accountants and lobbyists to avoid paying taxes. Well, friends ... no more. Because this organization is genetically incapable of paying taxes! Forgot the Cayman Islands and Nicaragua! Forget double Dutch reverse corporate inverse backdoor Irish LLCs with a post office box in Nevada! Gentlemen, put down your cigars and cognac and get to know your new best friend: little DAO ...
    - c2315261 10y ago
      Ethereum still exists?
      - drdeca 10y ago
        Yes
  - mathattack 10y ago
    The ownership chain also has to ultimately go back to people.
    - trentmb 10y ago
      I don't see why a tree couldn't own it. https://en.wikipedia.org/wiki/Tree_That_Owns_Itself https://en.wikipedia.org/wiki/Tree_That_Owns_Itself
    - roywiggins 10y ago
      Not always: > In February 2004, for example, Formations House created three companies: Corporate Nominees, Legal Nominees, and Professional Nominees. The second company owns the other two, while itself being owned by the first company. The third company is secretary for the other two, while its own secretary is the first company. The second company is director of the other two, while its own director is the first company. These three companies then became directors, secretaries and shareholders of other structures, in an increasingly baffling multidimensional web of crisscrossing lines of control. If you looked for the companies’ real owners, the most you could eventually discover was that the original three all owned, controlled and managed each other. https://www.theguardian.com/business/2016/apr/19/offshore-central-london-curious-case-29-harley-street https://www.theguardian.com/business/2016/apr/19/offshore-ce... This was fixed in law in 2008 in the UK, but for all I know there are jurisdictions that allow these sorts of shenanigans still.
- dandelany 10y ago
  No, it's a bit more like saying a car can't be autonomous because it still has people telling it where to go.
  - drcode 10y ago
    Agreed, your analogy is even better.
street 10y ago
And in fact, in many countries, the DAO actually is a legal company/association, just not officially incorporated. But incorporating is not required everywhere for the normal laws to apply. Just the fact that people put their money together and are acting as a group gives them various legal requirements. The fact that the DAO limits what they can do might interfere with their ability to follow the laws; that does not mean that the laws do not apply. You don't get to throw your hands in the air and say "we cannot pay taxes on our profits, it's physically impossible" when you made it impossible yourself by creating and/or associating with the DAO.
- dragonwriter 10y ago
  Right. In fact, an business entity that doesn't go through the formalities of becoming a legal corporation, LLC, etc., may expose its members to unexpected legal responsibilities. E.g., if the agreement were seen as forming a general partnership, each member would be jointly and severally liable for all legal liabilities of the partnership.
  - irq-1 10y ago
    Two of the big advantages of a modern joint-stock company are: limited financial liability and professional management. Management limits the need for input and activity of the investor. (You don't even need to vote your shares.) Do the members of the DAO want to vote on every little thing?
    - dmix 10y ago
      Could they not just vote for professional managers to handle the small tasks for x compensation?
  - fudged71 10y ago
    However, the members are anonymous, so it may be impossible to track down 100% of participants.
cloudjacker 10y ago
Self propagating code can perform all the functions of a corporation. The only difference is that in the past the code had no way to acquire goods and resources from humans and other corporations because it couldn't control and transmit value. Now code can. The DAO is a start, code can do everything the DAO does.
- vkou 10y ago
  What stops non-blockchain code from making purchases, hiring people, etc? Just because it uses a third party (A bank account) to store value doesn't make my WidgetFactoryFactory AI any less of an autonomous corporation.
  - cloudjacker 10y ago
    That entirely depends on if we are talking about this DAO or DAOs in general. A DAO focused on gaining revenue doesn't need to hire people to achieve that. There a decentralized asset exchanges where other companies have raised capital. A DAO could access those to buy shares completely programmatically, for example. It could trade oil futures till eternity if it wanted. It could create a contract for an agent at a particular address that promises payment for the construction of a robot factory in Shenzen, in that example a human would be the agent on the other side of that address, but the DAO doesn't need to know that.
    - homogeneous 10y ago
      How does the DOA know that the robot factory in Shenzen was built successfully and to specification?
      - cloudjacker 10y ago
        Presumably when new robots start executing based on the signature of the smart contract and conducting tasks in line with the contract. The main goal would be the new machines, not necessarily the means to the end.
a3camero 10y ago
They have put hardly any of the paperwork associated with companies on the blockchain. Here's my brief comparison between The DAO and some of the features of regular corporations: http://www.cameronhuff.com/blog/slock-it-dao-paper/index.html http://www.cameronhuff.com/blog/slock-it-dao-paper/index.htm.... This is more like a group of people pooling their money to invest. A savings club. The contract also gives them the right to withdraw their money if they don't like the direction it's headed. Furthermore it's not a corporation. A "corporation" requires complying with a number of jurisdiction-specific rules (such as filing fees and certain paperwork). If you don't complete the steps, you generally don't have a corporation. In some places you would have a partnership or some other structure that's different from just a group of individuals. The laws differ by jurisdiction.

drcode 10y ago

That's like saying a car can't be autonomous because some programmers wrote the software that it uses.

DigitalJack 10y ago
No, a corporation is a legal entity that must have directors and officers, aka people. Without that, you don't have a corporation. And after reading the article, they aren't a legally recognized corporation.
- dragonwriter 10y ago
  > No, a corporation is a legal entity that must have directors and officers, aka people. OR, a corporation is a legal entity formed by a corporate charter that is treated as a person under the law. In any case, whatever these ethereum-based things are, they aren't corporations.
  - zardo 10y ago
    >In any case, whatever these ethereum-based things are, they aren't corporations. They may end up creating and operating corporations, but DAOs are their own thing.
    - dragonwriter 10y ago
      > They may end up creating and operating corporations Sure, if people ever make the rather radical changes to law that would be required for them to create, operate, or even merely passively own shares in corporations, that might be the case.
      - zardo 10y ago
        I should have been more clear, that is what I meant. However, I don't think it's far fetched that some tiny island nation will do exactly that
    - will_brown 10y ago
      To expand on Dragonwriter's point just a little. Lets pretend DAO somehow autonomously filed Articles of Incorporation in DE. What is required by DE? A DE physical address for the corp.; a registered agent located in DE; and a incorporator (doesn't need to be shareholder, but must be an individual). Already we see it is an impossibility for DAO to do this autonomously. But lets pretend it wasn't impossible, DAO autonomously entered into a Lease, contacted with a registered agent, contracted with a corporate lawyer too be the incorporator and file the Articles. Whats the next step? A bank account, well DAO doesn't have a social security, and doesn't qualify for TIN. The Corp. can't get an EIN, which means it can't open a bank account, which effectively means it can't do business. Well again, lets pretend the DAO C-Corp doesn't need a bank account because well Bitcoin is perfect right? DAO autonomously creates a Bitcoin wallet for the corp and does all business through that, well the company still doesn't have an EIN, which means it won't be able to pay taxes.
      - HillaryBriss 10y ago
        > won't be able to pay taxes Sounds like the ultimate corporation to me. Until now, corporations have had to spends millions of dollars on accountants and lobbyists to avoid paying taxes. Well, friends ... no more. Because this organization is genetically incapable of paying taxes! Forgot the Cayman Islands and Nicaragua! Forget double Dutch reverse corporate inverse backdoor Irish LLCs with a post office box in Nevada! Gentlemen, put down your cigars and cognac and get to know your new best friend: little DAO ...
  - c2315261 10y ago
    Ethereum still exists?
    - drdeca 10y ago
      Yes
- mathattack 10y ago
  The ownership chain also has to ultimately go back to people.
  - trentmb 10y ago
    I don't see why a tree couldn't own it. https://en.wikipedia.org/wiki/Tree_That_Owns_Itself https://en.wikipedia.org/wiki/Tree_That_Owns_Itself
  - roywiggins 10y ago
    Not always: > In February 2004, for example, Formations House created three companies: Corporate Nominees, Legal Nominees, and Professional Nominees. The second company owns the other two, while itself being owned by the first company. The third company is secretary for the other two, while its own secretary is the first company. The second company is director of the other two, while its own director is the first company. These three companies then became directors, secretaries and shareholders of other structures, in an increasingly baffling multidimensional web of crisscrossing lines of control. If you looked for the companies’ real owners, the most you could eventually discover was that the original three all owned, controlled and managed each other. https://www.theguardian.com/business/2016/apr/19/offshore-central-london-curious-case-29-harley-street https://www.theguardian.com/business/2016/apr/19/offshore-ce... This was fixed in law in 2008 in the UK, but for all I know there are jurisdictions that allow these sorts of shenanigans still.
dandelany 10y ago
No, it's a bit more like saying a car can't be autonomous because it still has people telling it where to go.
- drcode 10y ago
  Agreed, your analogy is even better.

street 10y ago

And in fact, in many countries, the DAO actually is a legal company/association, just not officially incorporated. But incorporating is not required everywhere for the normal laws to apply. Just the fact that people put their money together and are acting as a group gives them various legal requirements. The fact that the DAO limits what they can do might interfere with their ability to follow the laws; that does not mean that the laws do not apply. You don't get to throw your hands in the air and say "we cannot pay taxes on our profits, it's physically impossible" when you made it impossible yourself by creating and/or associating with the DAO.

dragonwriter 10y ago
Right. In fact, an business entity that doesn't go through the formalities of becoming a legal corporation, LLC, etc., may expose its members to unexpected legal responsibilities. E.g., if the agreement were seen as forming a general partnership, each member would be jointly and severally liable for all legal liabilities of the partnership.
- irq-1 10y ago
  Two of the big advantages of a modern joint-stock company are: limited financial liability and professional management. Management limits the need for input and activity of the investor. (You don't even need to vote your shares.) Do the members of the DAO want to vote on every little thing?
  - dmix 10y ago
    Could they not just vote for professional managers to handle the small tasks for x compensation?
- fudged71 10y ago
  However, the members are anonymous, so it may be impossible to track down 100% of participants.

cloudjacker 10y ago

Self propagating code can perform all the functions of a corporation. The only difference is that in the past the code had no way to acquire goods and resources from humans and other corporations because it couldn't control and transmit value. Now code can. The DAO is a start, code can do everything the DAO does.

vkou 10y ago
What stops non-blockchain code from making purchases, hiring people, etc? Just because it uses a third party (A bank account) to store value doesn't make my WidgetFactoryFactory AI any less of an autonomous corporation.
- cloudjacker 10y ago
  That entirely depends on if we are talking about this DAO or DAOs in general. A DAO focused on gaining revenue doesn't need to hire people to achieve that. There a decentralized asset exchanges where other companies have raised capital. A DAO could access those to buy shares completely programmatically, for example. It could trade oil futures till eternity if it wanted. It could create a contract for an agent at a particular address that promises payment for the construction of a robot factory in Shenzen, in that example a human would be the agent on the other side of that address, but the DAO doesn't need to know that.
  - homogeneous 10y ago
    How does the DOA know that the robot factory in Shenzen was built successfully and to specification?
    - cloudjacker 10y ago
      Presumably when new robots start executing based on the signature of the smart contract and conducting tasks in line with the contract. The main goal would be the new machines, not necessarily the means to the end.

a3camero 10y ago

They have put hardly any of the paperwork associated with companies on the blockchain. Here's my brief comparison between The DAO and some of the features of regular corporations: http://www.cameronhuff.com/blog/slock-it-dao-paper/index.html http://www.cameronhuff.com/blog/slock-it-dao-paper/index.htm.... This is more like a group of people pooling their money to invest. A savings club. The contract also gives them the right to withdraw their money if they don't like the direction it's headed. Furthermore it's not a corporation. A "corporation" requires complying with a number of jurisdiction-specific rules (such as filing fees and certain paperwork). If you don't complete the steps, you generally don't have a corporation. In some places you would have a partnership or some other structure that's different from just a group of individuals. The laws differ by jurisdiction.