22 ms·

Self-owning corporations are legally possible

321 points by gwern 9y ago

pwaivers 9y ago
> This Article argues that algorithmic entities — legal entities that have no human controllers... What is an example of one these entities? The abstract doesn't really explain what it means here.
- sharemywin 9y ago
  the articles of incorporation or an operating agreement would outline that the business be run by an algorithm.
- gwern 9y ago
  Well, it's an LLC once the human initializers withdraw from it, that's the legal trick here. If you mean what is the actual algorithm using the LLC shell, it could be anything. A simple flowchart, a DAC on Ethereum, a NN on AWS, whatever.
  - s73v3r_ 9y ago
    Once the human organizers withdraw from it, doesn't it cease to be an entity? You still need at least one person that owns it.
    - DennisP 9y ago
      A lot of LLCs are anonymous. The states that set them up don't actually know who owns them. How would they know there's no human owner?
      - Slansitartop 9y ago
        > How would they know there's no human owner? If they ever cared enough to look, I'd imagine. People get away with illegal or unlawful things all the time because of the unawareness of the authorities, but that doesn't change the nature of those things.
  - xenadu02 9y ago
    LLCs must have at least one member with ownership interest, otherwise it (or all its assets) would be abandoned property by state law
    - mjw1007 9y ago
      I've sometimes wondered how, or whether, this is guaranteed for companies whose ownership is organised by tradeable shares. That is, whether there's anything that stops a sequence of share sales ending up in a situation where a set of companies between them own all the shares of companies in the set. (If this ever happened, presumably the last human to sell a share to one of the companies was making a mistake, but humans make mistakes all the time.) I mean, normally if you wanted to stop this sort of thing you'd do something like introduce a hierarchy of company types and say type N companies may only own shares in companies of type N+1 or higher. But I've never heard of such a rule.
    - politician 9y ago
      What if it's a subsidiary of a foreign parent?
      - _acme 9y ago
        The foreign parent would be a member.
        politician 9y ago
        Of course, now what if the foreign parent was itself an AI?
  - deleted 9y ago
    [deleted]
- murkle 9y ago
  Skynet
- irickt 9y ago
  Algorithmic entities is just a rhetorical device here. The article is about the challenge of policing the extisting system of anonymous corporations.
zellyn 9y ago
I think self-owning corporations are neat as a Scifi plot device, but fears of human extinction due to corporate structures seem overblown. It's not as if human-controlled companies haven't needed to be restrained by law in the past.
- wj 9y ago
  It is a plot point of Accelerando by HN user cstross. One of the more thought-provoking books I have read.
  - taserian 9y ago
    Also a concept used in the game Endgame: Singularity. https://en.wikipedia.org/wiki/Endgame:_Singularity https://en.wikipedia.org/wiki/Endgame:_Singularity
  - r00fus 9y ago
    Not to forget the Hendricks hotel ( Raven in the Netflix series) in Altered Carbon.
  - isoprophlex 9y ago
    Sentient lobsters! A self-re-compiling cat! What a great book that was.
  - TheCoelacanth 9y ago
    The author also has a very interesting theory that corporations are a form of artificial intelligence[1]. [1] http://www.antipope.org/charlie/blog-static/2018/01/dude-you-broke-the-future.html http://www.antipope.org/charlie/blog-static/2018/01/dude-you...
- ommunist 9y ago
  AI clones humans preprogrammed to obey it. Humans are formal owners. AI controls humans. Sci-fi plot, indeed.
greyfox 9y ago
"Algorithmic entities are likely to prosper first and most in criminal, terrorist, and other anti-social activities because that is where they have their greatest comparative advantage (edit: or what advantages exactly that they have?) over human-controlled entities." Can anyone further elucidate what's meant by "comparative advantage"? also, i find this sentence particularly interesting. how did they come up with this notion?
- darawk 9y ago
  Non-human-owned corporations are insulated from criminal legal consequences, and therefore are better able to engage in activity that would otherwise engender criminal prosecution, relative to a human.
  - sharemywin 9y ago
    If you took away it's money how would it exist.
    - btilly 9y ago
      It wouldn't. But for the person who created the entity, losing the company is a better outcome than going to jail.
      - guntars 9y ago
        Pretty sure we already have laws to put authors of malicious software in jail.
        dublinben 9y ago
        What if the software wrote itself? How do you put software in jail?
        leetcrew 9y ago
        this is a fun paradox to entertain, but irl we would probably just trace the "stack" back to the human who wrote the program that started the chain of program-writing programs and hold them liable (unless we can show intent, then charge them criminally). if you can't trace back far enough to find a human then I guess you just throw up your hands and give up, which is more or less what we do anyway when we can't attribute a malicious program to a specific person. so altogether not as novel as it seems.
nabla9 9y ago
>In two recent articles, Professor Shawn Bayern demonstrated that anyone can confer legal personhood on an autonomous computer algorithm merely by putting it in control of a limited liability company (LLC). 10 The algorithm can exercise the rights of the entity, making them effectively rights of the algorithm. >The rights of such an algorithmic entity (AE) would include the rights to privacy, 11 to own property, to enter into contracts, to be represented by counsel, to be free from unreasonable search and seizure, 12 to equal protection of the laws, 13 to speak freely, and perhaps even to spend money on political campaigns. 14 Once an algorithm had such rights, Bayern observed, it would also have the power to confer equivalent rights on other algorithms by form- ing additional entities and putting those algorithms in control of them. 15 --- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 Shawn Bayern, The Implications of Modern Business Entity Law for the Regulation of Autonomous Systems, 19 S TAN . T ECH . L. R EV . 93 (2015) [hereinafter Bayern, Entity Law]; Shawn Bayern, Of Bitcoins, Independently Wealthy Software, and the Zero-Member LLC, 108 N W . U. L. R EV . 1485 (2014) [hereinafter Bayern, Wealthy Software]. >Abstract >Nonhuman autonomous systems are not legal persons under current law. The history of organizational law, however, demonstrates that agreements can, with increasing degrees of autonomy, direct the actions of legal persons. Agreements are isomorphic with algorithms; that is, a legally enforceable agreement can give legal effect to the arbitrary discernible states of an algorithm or other process. As a result, autonomous systems may end up being able, at least, to emulate many of the private-law rights of legal persons. This essay demonstrates a technique by which this is possible by means of limited liability companies (LLCs), a very flexible modern type of business organizations. The techniques that this essay describes are not just futuristic possibilities; as this essay argues, they are already possible under current law.
- xenadu02 9y ago
  Right up until the first real court challenge where any competent judge will declare algorithms are not persons, cannot own property, and an LLC without any legitimate ownership interest is an abandoned entity (making all its assets abandoned property). Alternatively for criminal purposes the courts will simply "pierce the veil" and declare the actual owners to be the humans profiting from the algorithm's actions. Judges don't, as a rule, enjoy "cute tricks".
samirm 9y ago
the article is free to download... Seems like there's a lot of people who just read the abstract without reading the paper.
cornholio 9y ago
If a corporation is competitive enough to exist and outcompete other human corporations, then maybe it's not really self-owned, is it? It's controlled by an synthetic consciousness that could be sentient and thus deserving of legal rights similar to the other sentient consciousnesses of biological origin.
- wyattpeak 9y ago
  There's no reason it need be conscious or even intelligent. You could throw together a "self-governing" online store in a few days. Drop-ship all products, make sure it stays up to date on its bills. It wouldn't be very resilient, but it could feasibly just sit there accumulating money, no intelligence required.
- XorNot 9y ago
  I think the point is that without any special grant of rights, AIs might be able to gather them by existing legal mechanisms.
sharemywin 9y ago
wonder how it would sign papers? I guess it could e-sign it? give someone power of attorney to sign papers on it's behalf?
- leetcrew 9y ago
  my guess is that the handwritten signature is already on its way out of being relevant in modern society. in most cases it seems to serve more as a formality than a security measure. when I worked as a cashier, the majority of people would just do some squiggle and get the hell out of the store rather than any kind of consistent signature. in principle at least, public key crypto is way more effective than a signature, and I expect this will become prevalent in the next couple decades as laws and customs enter modernity. at this point it would be trivial for a digital entity to enter into a binding contract.
  - Muromec 9y ago
    It's not the form of signature that is important here. It's the act of signing itself. Legal entities do not sign anything, they give authority to some human to do it in their name.
- Muromec 9y ago
  Yep it could e-sign. EU regulation 910/2014 had a concept of e-stamp in addition to e-sign. In Ukraine we fill taxes with e-sign and get a signed reciept back. Reciept e-signature however is not linked to any human and simply states "fiscal service. recieved" it is considered to be legally signed by a legal entity itself. Normally you would see some person signing on behalf of company with both person and legal entity listed in X509, but not with stamps.
bitL 9y ago
I see no reason why making CaaS (Company-as-a-service) couldn't be possible and why would it have to do anything illegal?
hedvig 9y ago
The most efficient self-owned entity would eliminate the waste of profit going to executives and board members and could reinvest that excess back into itself. It would be a new era when even the select few can't collect rent from their operations.
jakelarkin 9y ago
one could argue that some large multi-national corporations are already acting as a collective & super-human intelligence. Indeed, isn't that the point of many human "institutions" which subscribe to the notion that rule of law (the code) supersedes the rule of man.
nukeop 9y ago
I want to see autonomous companies that would be completely governed by AI systems and would choose by themselves what to invest in, what facilities to build and where, what to manufacture, who to employ, where to expand, and so on. Corporations already have legal personhood in American law. The videogame Shenzhen I/O already explored a similar concept superficially.
- quickthrower2 9y ago
  An AI system that can do all that could clone itself, and so no need to worry about "who to employ". Infact humans and humans need would be an unnecessary burden other than to be the 'market' that the machine wants to make money from. However those humans won't have jobs, because the AI clones will be able to do their jobs. So they won't have money and there is no use pandering to them. So the machine will worry about what other AI bots want. Well they don't want champagne or ferraris. They want electricity. So expect power / manufacturing companies to do well and everything else to go to the shit.
- navaati 9y ago
  > The videogame Shenzhen I/O already explored a similar concept superficially. Thanks for spoiling it all to me I guess...
  - kej 9y ago
    That little piece is more or less given away in the manual, and the (excellent) game is about solving puzzles and not the plot anyway.
ThePhysicist 9y ago
Well, a foundation is basically a self-owning company that is steered by its stated goal and often outlives its creators. In addition, there are several other legal forms that allow companies to own themselves. For example, in Germany there's the concept of a "Kein-Mann GmbH" (no man's GmbH), which is a limited liability company that owns 100 % of its own shares.
- retromario 9y ago
  Are there any real-world examples of this? The wikipedia article only seems to reference theoretical discussions of it. https://de.wikipedia.org/wiki/Kein-Mann-GmbH https://de.wikipedia.org/wiki/Kein-Mann-GmbH
  - 1ris 9y ago
    IKEA is a opaque web of companies and foundations that own each other. Mostly not german.
    - gitgud 9y ago
      I was under the impression that IKEA began as a Swedish company, right? Why would they be owned by Germany?
      - ghostbrainalpha 9y ago
        He was referencing the grand-parent comment, that stated companies in Germany could own other companies. His point was that companies can do this anywhere, not just Germany.
        gitgud 9y ago
        Ahh ok, that makes sense now
      - chris_va 9y ago
        Not German, though IKEA has a particularly complex corporate structure: https://en.wikipedia.org/wiki/IKEA#Corporate_structure https://en.wikipedia.org/wiki/IKEA#Corporate_structure ... which apparently funnels into trusts in Caribbean countries that are not required to disclose beneficiaries. Basically, it sounds like tax evasion at a grand scale.
mrfusion 9y ago
What’s interesting is if you could make such a corporation “reproduce” and start seeing evolution take place.
danimal88 9y ago
Our laws desperately need unit tests and integrations tests...
deleted 9y ago
[deleted]
frozenport 9y ago
How does an algorithm, that is now the owner of the LLC pay taxes?
will_brown 9y ago
The article seems confused...the title references ownership and the abstract is not about ownership at all but about control of LLC’s and in a legal context ownership is distinct from control. Otherwise the article is based on a false premises: >Third, governments — particularly in the United States — lack the ability to determine who controls entities they charter Take Florida. Florida’s Limited Liability Company Act regulates who can be a manager (i.e. who controls the LLC). In fact the act creates 2 types of LLCs as most states do, member managed and manager managed. In one non-members can not be managers (control) the LLC. Outside of the LLC, almost every statute regulates who can control and who can own a business entity. For example, a non-profit corporation has no owners. Although states do differ, generally by statute, a non licensed person cannot be the owner of a professional service corporation, professional association, or professional limited liability company. Though generally those professional entities can have non-licensed directors, officers, or managers. State laws also generally include restriction on minors being directors, officers or managers, but they can usually be owners, although it gets tricky where they are the sole owner because legally they can’t even sign contracts/formation documentation (though still legally possible). Point is Governments are well equipped to regulate who can own or who can control any type of business entity. What is possible, and I have written legal articles about, is to have autonomous trusts, or what I call the trusteeless trust but my examples and use cases are limited to the trust being funded solely with cryptocurrencies/tokens.
- DennisP 9y ago
  Where could I find your articles?
- slimsag 9y ago
  I would also like to read your articles. Would you be able to link me to them or edit your post and include links to them?
- owens99 9y ago
  > Point is Governments are well equipped to regulate who can own or who can control any type of business entity. Why do I get the feeling you are secretly an AI trying to trick us humans.
nickpsecurity 9y ago
If algorithm wasn't required, then one might create two corporations that own each other with one taking action in market. That way what has ownership is something that is already allowed to own something under existing law. One outsources its management or other operational capability to the other so only one is actually doing stuff. The other is just there. What do you who are more knowledgeable about this kind of law or prior decisions think of that? Is it just as unlikely to work or a bit more likely?
loxias 9y ago
Between this link and the other one currently on the front page about malicious AI (https://blog.openai.com/preparing-for-malicious-uses-of-ai/ https://blog.openai.com/preparing-for-malicious-uses-of-ai/), some days it really feels like we're converging on Stross's Accelerando. ;-) Now we just need to transmit some lobster connectomes into deep space... ;-) [closer than you might think! https://github.com/openworm https://github.com/openworm exists...]
cypherpunks01 9y ago
Can LLC ownership contain cycles? E.g. A is 50% owned by B which is 25% owned by A? Would a US state or the IRS notice if this happened on a longer obfuscated chain? I thought that's what the article was going to imply based on the title, but it wasn't : )
- gamblor956 9y ago
  LLCs organized as partnerships are required to report their partners to the IRS. If the partners are partnerships themselves, they must keep disclosing the partners recursively up to individual or corporate partners.
  - _acme 9y ago
    LLCs may be taxed as flow-through entities (similar to partnerships), but no LLC is organized as a partnership, that's simply a nonsensical statement; an LLC is a distinct and separate type of entity to a partnership, limited partnership, LLP, LLLP and corporation.
    - gamblor956 9y ago
      For tax purposes, an LLC is either a corporation or a partnership; it's not merely similar to one or the other. LPs, LLPs, and LLLPs are taxed like partnerships, unless they are foreign registered, in which case they are taxed like corporations. An LLC treated as as partnership for tax purposes is required to disclose it's partners all the way up the chain. Legally, an LLC is organized like a partnership (member managed) or like a corporation (manager managed). I should have been more precise there. I was using shorthand because I was assuming the tax context and should have acknowledged that the tax treatment differs from the legal treatment.
behindmyscreen 9y ago
"Are you detaining me?" I feel like I am getting a whiff of a Sovereign Citizen...
jim-davis 9y ago
In the Rosinante trilogy of Alexis A. Gilliland the autonomous AIs are self-owned corporations, and indeed are sometimes addressed with the word "Corporate" as a title, somewhat like "Mr" or "Ms". This is of course fiction; while much of the engineering in the series seems plausible I have no idea if the legal theories are. Worth reading anyway, the AIs are charming.
IncRnd 9y ago
The headline on HN doesn't match the articles headline or contents.
- grzm 9y ago
  I suspect it's a summary of the first line of the abstract: > "In an article published in the Northwestern University Law Review in 2014, Professor Shawn Bayern demonstrated that anyone can confer legal personhood on an autonomous computer algorithm merely by putting it in control of a limited liability company." Given that the first sentence is too long, I think it's a reasonable summary of it, though reasonable people may disagree. In these cases, it's really helpful to provide what the actual title is (in this case "Algorithmic Entities"), and, if so inclined, a suggestion for a better title. It provides something actionable that a mod can use when updating. Do you have any suggestions for a better title? And if you've really got a bee in your bonnet, you can let the mods know directly via the Contact link in the footer. They don't see every comment but emailing them makes sure they see it.
  - IncRnd 9y ago
    > Given that the first sentence is too long, I think it's a reasonable summary of it, though reasonable people may disagree. The difference between the title and the contents is the difference between control and ownership. They are not the same. The article discusses control not ownership. That is also the case in the portion of the article you quoted.
    - grzm 9y ago
      Great! Would you be willing to continue moving this forward rather than just picking it apart? Going beyond only debugging and providing a patch, as it were?
trynewideas 9y ago
cool, there's my next Shadowrun campaign sorted
omarforgotpwd 9y ago
Huh? You’re seriously telling me that an algorithm can be the sole owner of a corporation? That doesn’t sound right. Typically when opening financial accounts and establishing credit for the business the bank would ask for the SSN of a real person, I would think.
readams 9y ago
This seems to be the AI equivalent of "well there's no rule that says a dog can't play basketball!"
jacquesm 9y ago
Most countries have a concept known as Ultimate Beneficial Owner or UBO for short. Without a UBO declaration banks will not deal with you, lots of business transactions will not be possible and you will find yourself dealt out of the game pretty quickly. So even if self owning corporations are legally possible it may very well be hard for those self owning corporations to transact any business. What is interesting is that all this - for now - puts the lie to the myth of corporate personhood. If a corporation really was a person this would obviously not be an issue because for people we find that ownership is a terrible thing (it's called slavery).
- taurath 9y ago
  Are UBO's publicly stated? It seems like that would get rid of a lot of corporate shell games no?
  - jacquesm 9y ago
    Usually this is in the form of an official declaration for instance to a bank or the local tax authority, UBO's could be publicly stated but I do not know of any country that does this.
    - ckastner 9y ago
      EU member states will, in future. Articles 30 and 31 of the Fourth AML Directive, Directive (EU) 2015/849 [1], mandate that member states set up a register (= database) with BOs of all corporations and legal entities within their jurisdiction. All legal entities are required to report their BOs into this registry. It's not accessible to the public in the sense that anyone can anyonymously look up data, but among other things, it's open to "any person or organisation that can demonstrate a legitimate interest." [1] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32015L0849 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A3...
rndgermandude 9y ago
Reminds me of this talk, where the speaker makes the case that corporations are AIs, but slow ones https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future
- abvdasker 9y ago
  Yeah that's the same one I was thinking of. It's a pretty far out theory but is nonetheless extremely interesting. The part of this that is incomplete from an implementation standpoint is creating an algorithm that can fully digitally manage a business entity without human intervention. In general though I think we are much closer than anyone thinks to seeing the first fully autonomous corporation (though the first one will likely be pretty rudimentary and more of a toy than anything else).
  - fyi1183 9y ago
    I think you may be missing the more interesting point. Corporations can be seen as non-human intelligences that emerge from the structure of the corporation together with the incentives of is environment. In that view, the humans inside the corporation are like individuals neurons of a larger brain. The whole is more than the sum of its parts, and its incentives and actions are often not aligned with those of its parts, i.e., the humans. The brain/neuron analogy is not a perfect description, because in order to function towards is potentially anti-human goals, the corporation must essentially bribe a small number of humans who are critical to its function. But this only goes so far: CEOs and other executives are well compensated, but they are easily replaced if they pose a serious threat to the goals of the corporation. I think the argument is very compelling that today's AI Doomsday prophets are seriously missing the point, and we're actually already largely being ruled by hostile or at least indifferent non-human intelligences. It's the old sci-fi trope that if an intelligence is too alien, you might not even recognize it as one.
paulie_a 9y ago
This article is just plain dumb and another attempt for someone to think they can hack the legal system It doesn't work that way and judges find it obvious and obnoxious. Feel free to give it a shot though and enjoy the contempt of court
solotronics 9y ago
there is a Greg Egan book where the protagonist specialized in setting up autonomous corporations that spawned others so fast they couldn't be shut down or even kept track of really, if I remember correctly it was for the purpose of proactively copywriting ideas that we're then released into public domain edit: Diaspora by Greg Egan. his books are really really great
pishpash 9y ago
AI's likely need to be treated like perpetual children or pets legally. There always has to be a liable, human guardian attached for them to exist.
qaq 9y ago
a bit more creatively structured but Vanguard is pretty much it. As Nelson Rockefeller famously said, “The secret to success is to own nothing, but control everything.”
Animats 9y ago
The US once had the Utility Holding Company Act, which limited ownership in utility companies to a tree depth of 3. This was in response to a mess created by Samuel Insull in the 1920s. That prevented ownership loops. Repealed a few years ago.
qbaqbaqba 9y ago
Stanislaw Lem's The Washing-Machine Tragedy is getting real!
SubiculumCode 9y ago
Who would have standing to bring a suit against the legality of an autonomous ai led Corp?
nathan_f77 9y ago
The Bitcoin wiki also has a good article about Agents [1]. I've been thinking about this with regards to my own SaaS startup. The company accepts credit card payments with Stripe, and the money is deposited into a company bank account. Heroku then charges the company's credit card for hosting fees. It's actually a "profitable" company now, so it could keep running forever by itself. The only thing that requires human intervention is taxes, although Stripe Atlas makes that really easy. It's only a few clicks to pay the Delaware franchise tax. However, I've had to manually export some data and send a few emails to an accountant. (This is something I've been wanting to automate, but I didn't get enough interest [2].) You don't need AI or cryptocurrencies to have an autonomous company. You just need a SaaS with autoscaling, or a mobile app that makes money from ads and IAPs. Then there's only a few things that need to be automated: Filing taxes, and clicking the button to agree with Apple's new terms and conditions every few months. You can probably hire an accountant or a virtual assistant to deal with these things. It's a scary topic. Isolation plus too much automation, and no-one will even know that you're gone [4]. [1] https://en.bitcoin.it/wiki/Agent https://en.bitcoin.it/wiki/Agent [2] https://nanobooks.co https://nanobooks.co [3] https://bench.co/ https://bench.co/ [4] https://edition.cnn.com/2014/03/07/us/michigan-mummified-body-found/index.html https://edition.cnn.com/2014/03/07/us/michigan-mummified-bod...
pbhjpbhj 9y ago
Meta: Legal articles that look at limited jurisdictions really should have eg "in USA" or "under USA law" added to the title.
yuhong 9y ago
I was imagining a corporation with no owners but with a board of directors.
trumbitta2 9y ago
This somewhat reminds me of Accelerando by Charles Stross
gnode 9y ago
It seems to me that the unique feature of a computer controlled legal entity is to extend a human's agency beyond their death or otherwise incapacitation, as a kind of smart will. In other cases, there seems little benefit over just employing the computer to aid your decisions or acting through a computer, as legally you would be culpable for actions you intended (purposely culpable) or didn't give due consideration to (negligence or recklessness).
mirror23 9y ago
There are also fully automated business activities such as certain types of trading that could possibly earn profits without human involvement
shawnbayern 9y ago
I'm the law professor who developed the ideas discussed in the quoted article. A friend just brought this thread to my attention. The full arguments, which address most of the concerns laid out in these comments, are available here: (1) https://ssrn.com/abstract=2366197 https://ssrn.com/abstract=2366197 (2) https://ssrn.com/abstract=2758222 https://ssrn.com/abstract=2758222 (The article at the top of this thread, by Prof. LoPucki, is a response to these two articles.) I'm happy to answer questions if that would be useful, although of course I can't give legal advice. In general, there's a tremendous amount of misunderstanding about LLCs and about the law of legal organizations, both in the US and elsewhere -- even among lawyers! It's fair to say that US organizational law tends to be more flexible than similar laws in other countries, and my point in these articles it that it's flexible enough to do surprising things. In the articles, I specifically discuss RULLCA (the basis for the LLC laws in something like 17 US states, with that number growing), as well as NY's LLC law, and I show why a lot of people's instinctive comments here (and elsewhere!) are legally mistaken. For example, the statutes in these states specifically contemplate memberless LLCs, and indeed memberless LLCs are not a crazy or unconventional possibility. In various wealth-management contexts, they are routine. That LLCs could persist without members for indefinite periods is more controversial, but my articles explain why the current statutes do permit them. Of course, legislatures could stop all this if they wanted to. The LLCs statutes are just statutes. But you need just one jurisdiction to allow my technique for it to enable AIs to interact with the legal system in quite significant ways. Also, it's not entirely clear what it would mean to stop an LLC from doing what I propose, or whether judges would practically wish to do that. For example, suppose you follow my technique and then your AI buys a house. What would it mean to say that the LLC isn't legally "valid"? Would the original owner get the house back and also keep the purchase money? (There wouldn't necessarily be anyone to return it to.) Developing sound institutional solutions to complex questions about legal organizations is not an easy problem. The common-law judges have always been keen to permit new structures when they are useful. One-person legal companies were themselves controversial not too long ago, but they're commonplace today. In my articles, I give reasons supporting the usefulness of zero-person LLCs.
- mmealling 9y ago
  A couple of questions: Have you responded to the to Matt Scherer's critique that starts here: http://www.lawandai.com/2017/05/14/is-ai-personhood-already-possible-under-current-u-s-laws-dont-count-on-it-part-one/ http://www.lawandai.com/2017/05/14/is-ai-personhood-already-... From my understanding of Conflict of Laws issues there is a great deal of case law suggesting that even if the memberless LLC were created that the first court to see one would immediately declare it dissolved regardless of what the Operating Agreement said because it violates the intent of the legislation. Or, to use Scherer's words, "courts recognize that “some things ‘go without saying'” in legislation just as they do in everyday life, and legislatures thus legislate “against the backdrop of certain unexpressed presumptions.” Bond v. United States, 134 S. Ct. 2077, 2088 (2014)." It also seems that both FATCA and the OECD Common Reporting Standards treaty supersedes state incorporation rules concerning reporting of Ultimate Beneficial Owner for an entity that pays taxes in any 'acceptable' jurisdiction. One could probably create a memberless LLC in Somalia but have zero luck accessing a modern legal jurisdiction. Take the Series LLC that can be setup in Delaware. No one outside the US recognizes the individual series as being separate from the others and thus combines all of the assets of the parent LLC, rendering the form useless outside the US. Just because one State creates a memberless LLC obligates no one to recognize it.
cgrosmeier 9y ago
The "Ghost in the LLC".... I look forward to the day when a self-owning corporation is a self managed application for an autonomous system and has no human intervention. Like this: The Implications of Modern Business-Entity Law for the Regulation of Autonomous Systems ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 ) Credit due to Drone Law Today for the title. (https://player.fm/series/drone-law-today/ghost-in-the-llc https://player.fm/series/drone-law-today/ghost-in-the-llc)

321 points by gwern 9y ago

> This Article argues that algorithmic entities — legal entities that have no human controllers... What is an example of one these entities? The abstract doesn't really explain what it means here.

sharemywin 9y ago
the articles of incorporation or an operating agreement would outline that the business be run by an algorithm.
gwern 9y ago
Well, it's an LLC once the human initializers withdraw from it, that's the legal trick here. If you mean what is the actual algorithm using the LLC shell, it could be anything. A simple flowchart, a DAC on Ethereum, a NN on AWS, whatever.
- s73v3r_ 9y ago
  Once the human organizers withdraw from it, doesn't it cease to be an entity? You still need at least one person that owns it.
  - DennisP 9y ago
    A lot of LLCs are anonymous. The states that set them up don't actually know who owns them. How would they know there's no human owner?
    - Slansitartop 9y ago
      > How would they know there's no human owner? If they ever cared enough to look, I'd imagine. People get away with illegal or unlawful things all the time because of the unawareness of the authorities, but that doesn't change the nature of those things.
- xenadu02 9y ago
  LLCs must have at least one member with ownership interest, otherwise it (or all its assets) would be abandoned property by state law
  - mjw1007 9y ago
    I've sometimes wondered how, or whether, this is guaranteed for companies whose ownership is organised by tradeable shares. That is, whether there's anything that stops a sequence of share sales ending up in a situation where a set of companies between them own all the shares of companies in the set. (If this ever happened, presumably the last human to sell a share to one of the companies was making a mistake, but humans make mistakes all the time.) I mean, normally if you wanted to stop this sort of thing you'd do something like introduce a hierarchy of company types and say type N companies may only own shares in companies of type N+1 or higher. But I've never heard of such a rule.
  - politician 9y ago
    What if it's a subsidiary of a foreign parent?
    - _acme 9y ago
      The foreign parent would be a member.
      - politician 9y ago
        Of course, now what if the foreign parent was itself an AI?
- deleted 9y ago
  [deleted]
murkle 9y ago
Skynet
irickt 9y ago
Algorithmic entities is just a rhetorical device here. The article is about the challenge of policing the extisting system of anonymous corporations.

zellyn 9y ago

I think self-owning corporations are neat as a Scifi plot device, but fears of human extinction due to corporate structures seem overblown. It's not as if human-controlled companies haven't needed to be restrained by law in the past.

wj 9y ago
It is a plot point of Accelerando by HN user cstross. One of the more thought-provoking books I have read.
- taserian 9y ago
  Also a concept used in the game Endgame: Singularity. https://en.wikipedia.org/wiki/Endgame:_Singularity https://en.wikipedia.org/wiki/Endgame:_Singularity
- r00fus 9y ago
  Not to forget the Hendricks hotel ( Raven in the Netflix series) in Altered Carbon.
- isoprophlex 9y ago
  Sentient lobsters! A self-re-compiling cat! What a great book that was.
- TheCoelacanth 9y ago
  The author also has a very interesting theory that corporations are a form of artificial intelligence[1]. [1] http://www.antipope.org/charlie/blog-static/2018/01/dude-you-broke-the-future.html http://www.antipope.org/charlie/blog-static/2018/01/dude-you...
ommunist 9y ago
AI clones humans preprogrammed to obey it. Humans are formal owners. AI controls humans. Sci-fi plot, indeed.

greyfox 9y ago

"Algorithmic entities are likely to prosper first and most in criminal, terrorist, and other anti-social activities because that is where they have their greatest comparative advantage (edit: or what advantages exactly that they have?) over human-controlled entities." Can anyone further elucidate what's meant by "comparative advantage"? also, i find this sentence particularly interesting. how did they come up with this notion?

darawk 9y ago
Non-human-owned corporations are insulated from criminal legal consequences, and therefore are better able to engage in activity that would otherwise engender criminal prosecution, relative to a human.
- sharemywin 9y ago
  If you took away it's money how would it exist.
  - btilly 9y ago
    It wouldn't. But for the person who created the entity, losing the company is a better outcome than going to jail.
    - guntars 9y ago
      Pretty sure we already have laws to put authors of malicious software in jail.
      - dublinben 9y ago
        What if the software wrote itself? How do you put software in jail?
        leetcrew 9y ago
        this is a fun paradox to entertain, but irl we would probably just trace the "stack" back to the human who wrote the program that started the chain of program-writing programs and hold them liable (unless we can show intent, then charge them criminally). if you can't trace back far enough to find a human then I guess you just throw up your hands and give up, which is more or less what we do anyway when we can't attribute a malicious program to a specific person. so altogether not as novel as it seems.

nabla9 9y ago

>In two recent articles, Professor Shawn Bayern demonstrated that anyone can confer legal personhood on an autonomous computer algorithm merely by putting it in control of a limited liability company (LLC). 10 The algorithm can exercise the rights of the entity, making them effectively rights of the algorithm. >The rights of such an algorithmic entity (AE) would include the rights to privacy, 11 to own property, to enter into contracts, to be represented by counsel, to be free from unreasonable search and seizure, 12 to equal protection of the laws, 13 to speak freely, and perhaps even to spend money on political campaigns. 14 Once an algorithm had such rights, Bayern observed, it would also have the power to confer equivalent rights on other algorithms by form- ing additional entities and putting those algorithms in control of them. 15 --- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 Shawn Bayern, The Implications of Modern Business Entity Law for the Regulation of Autonomous Systems, 19 S TAN . T ECH . L. R EV . 93 (2015) [hereinafter Bayern, Entity Law]; Shawn Bayern, Of Bitcoins, Independently Wealthy Software, and the Zero-Member LLC, 108 N W . U. L. R EV . 1485 (2014) [hereinafter Bayern, Wealthy Software]. >Abstract >Nonhuman autonomous systems are not legal persons under current law. The history of organizational law, however, demonstrates that agreements can, with increasing degrees of autonomy, direct the actions of legal persons. Agreements are isomorphic with algorithms; that is, a legally enforceable agreement can give legal effect to the arbitrary discernible states of an algorithm or other process. As a result, autonomous systems may end up being able, at least, to emulate many of the private-law rights of legal persons. This essay demonstrates a technique by which this is possible by means of limited liability companies (LLCs), a very flexible modern type of business organizations. The techniques that this essay describes are not just futuristic possibilities; as this essay argues, they are already possible under current law.

xenadu02 9y ago
Right up until the first real court challenge where any competent judge will declare algorithms are not persons, cannot own property, and an LLC without any legitimate ownership interest is an abandoned entity (making all its assets abandoned property). Alternatively for criminal purposes the courts will simply "pierce the veil" and declare the actual owners to be the humans profiting from the algorithm's actions. Judges don't, as a rule, enjoy "cute tricks".

samirm 9y ago

the article is free to download... Seems like there's a lot of people who just read the abstract without reading the paper.

cornholio 9y ago

If a corporation is competitive enough to exist and outcompete other human corporations, then maybe it's not really self-owned, is it? It's controlled by an synthetic consciousness that could be sentient and thus deserving of legal rights similar to the other sentient consciousnesses of biological origin.

wyattpeak 9y ago
There's no reason it need be conscious or even intelligent. You could throw together a "self-governing" online store in a few days. Drop-ship all products, make sure it stays up to date on its bills. It wouldn't be very resilient, but it could feasibly just sit there accumulating money, no intelligence required.
XorNot 9y ago
I think the point is that without any special grant of rights, AIs might be able to gather them by existing legal mechanisms.

sharemywin 9y ago

wonder how it would sign papers? I guess it could e-sign it? give someone power of attorney to sign papers on it's behalf?

leetcrew 9y ago
my guess is that the handwritten signature is already on its way out of being relevant in modern society. in most cases it seems to serve more as a formality than a security measure. when I worked as a cashier, the majority of people would just do some squiggle and get the hell out of the store rather than any kind of consistent signature. in principle at least, public key crypto is way more effective than a signature, and I expect this will become prevalent in the next couple decades as laws and customs enter modernity. at this point it would be trivial for a digital entity to enter into a binding contract.
- Muromec 9y ago
  It's not the form of signature that is important here. It's the act of signing itself. Legal entities do not sign anything, they give authority to some human to do it in their name.
Muromec 9y ago
Yep it could e-sign. EU regulation 910/2014 had a concept of e-stamp in addition to e-sign. In Ukraine we fill taxes with e-sign and get a signed reciept back. Reciept e-signature however is not linked to any human and simply states "fiscal service. recieved" it is considered to be legally signed by a legal entity itself. Normally you would see some person signing on behalf of company with both person and legal entity listed in X509, but not with stamps.

bitL 9y ago

I see no reason why making CaaS (Company-as-a-service) couldn't be possible and why would it have to do anything illegal?

hedvig 9y ago

The most efficient self-owned entity would eliminate the waste of profit going to executives and board members and could reinvest that excess back into itself. It would be a new era when even the select few can't collect rent from their operations.

jakelarkin 9y ago

one could argue that some large multi-national corporations are already acting as a collective & super-human intelligence. Indeed, isn't that the point of many human "institutions" which subscribe to the notion that rule of law (the code) supersedes the rule of man.

nukeop 9y ago

I want to see autonomous companies that would be completely governed by AI systems and would choose by themselves what to invest in, what facilities to build and where, what to manufacture, who to employ, where to expand, and so on. Corporations already have legal personhood in American law. The videogame Shenzhen I/O already explored a similar concept superficially.

quickthrower2 9y ago
An AI system that can do all that could clone itself, and so no need to worry about "who to employ". Infact humans and humans need would be an unnecessary burden other than to be the 'market' that the machine wants to make money from. However those humans won't have jobs, because the AI clones will be able to do their jobs. So they won't have money and there is no use pandering to them. So the machine will worry about what other AI bots want. Well they don't want champagne or ferraris. They want electricity. So expect power / manufacturing companies to do well and everything else to go to the shit.
navaati 9y ago
> The videogame Shenzhen I/O already explored a similar concept superficially. Thanks for spoiling it all to me I guess...
- kej 9y ago
  That little piece is more or less given away in the manual, and the (excellent) game is about solving puzzles and not the plot anyway.

ThePhysicist 9y ago

Well, a foundation is basically a self-owning company that is steered by its stated goal and often outlives its creators. In addition, there are several other legal forms that allow companies to own themselves. For example, in Germany there's the concept of a "Kein-Mann GmbH" (no man's GmbH), which is a limited liability company that owns 100 % of its own shares.

retromario 9y ago
Are there any real-world examples of this? The wikipedia article only seems to reference theoretical discussions of it. https://de.wikipedia.org/wiki/Kein-Mann-GmbH https://de.wikipedia.org/wiki/Kein-Mann-GmbH
- 1ris 9y ago
  IKEA is a opaque web of companies and foundations that own each other. Mostly not german.
  - gitgud 9y ago
    I was under the impression that IKEA began as a Swedish company, right? Why would they be owned by Germany?
    - ghostbrainalpha 9y ago
      He was referencing the grand-parent comment, that stated companies in Germany could own other companies. His point was that companies can do this anywhere, not just Germany.
      - gitgud 9y ago
        Ahh ok, that makes sense now
    - chris_va 9y ago
      Not German, though IKEA has a particularly complex corporate structure: https://en.wikipedia.org/wiki/IKEA#Corporate_structure https://en.wikipedia.org/wiki/IKEA#Corporate_structure ... which apparently funnels into trusts in Caribbean countries that are not required to disclose beneficiaries. Basically, it sounds like tax evasion at a grand scale.

mrfusion 9y ago

What’s interesting is if you could make such a corporation “reproduce” and start seeing evolution take place.

danimal88 9y ago

Our laws desperately need unit tests and integrations tests...

deleted 9y ago

[deleted]

frozenport 9y ago

How does an algorithm, that is now the owner of the LLC pay taxes?

will_brown 9y ago

The article seems confused...the title references ownership and the abstract is not about ownership at all but about control of LLC’s and in a legal context ownership is distinct from control. Otherwise the article is based on a false premises: >Third, governments — particularly in the United States — lack the ability to determine who controls entities they charter Take Florida. Florida’s Limited Liability Company Act regulates who can be a manager (i.e. who controls the LLC). In fact the act creates 2 types of LLCs as most states do, member managed and manager managed. In one non-members can not be managers (control) the LLC. Outside of the LLC, almost every statute regulates who can control and who can own a business entity. For example, a non-profit corporation has no owners. Although states do differ, generally by statute, a non licensed person cannot be the owner of a professional service corporation, professional association, or professional limited liability company. Though generally those professional entities can have non-licensed directors, officers, or managers. State laws also generally include restriction on minors being directors, officers or managers, but they can usually be owners, although it gets tricky where they are the sole owner because legally they can’t even sign contracts/formation documentation (though still legally possible). Point is Governments are well equipped to regulate who can own or who can control any type of business entity. What is possible, and I have written legal articles about, is to have autonomous trusts, or what I call the trusteeless trust but my examples and use cases are limited to the trust being funded solely with cryptocurrencies/tokens.

DennisP 9y ago
Where could I find your articles?
slimsag 9y ago
I would also like to read your articles. Would you be able to link me to them or edit your post and include links to them?
owens99 9y ago
> Point is Governments are well equipped to regulate who can own or who can control any type of business entity. Why do I get the feeling you are secretly an AI trying to trick us humans.

nickpsecurity 9y ago

If algorithm wasn't required, then one might create two corporations that own each other with one taking action in market. That way what has ownership is something that is already allowed to own something under existing law. One outsources its management or other operational capability to the other so only one is actually doing stuff. The other is just there. What do you who are more knowledgeable about this kind of law or prior decisions think of that? Is it just as unlikely to work or a bit more likely?

loxias 9y ago

Between this link and the other one currently on the front page about malicious AI (https://blog.openai.com/preparing-for-malicious-uses-of-ai/ https://blog.openai.com/preparing-for-malicious-uses-of-ai/), some days it really feels like we're converging on Stross's Accelerando. ;-) Now we just need to transmit some lobster connectomes into deep space... ;-) [closer than you might think! https://github.com/openworm https://github.com/openworm exists...]

cypherpunks01 9y ago

Can LLC ownership contain cycles? E.g. A is 50% owned by B which is 25% owned by A? Would a US state or the IRS notice if this happened on a longer obfuscated chain? I thought that's what the article was going to imply based on the title, but it wasn't : )

gamblor956 9y ago
LLCs organized as partnerships are required to report their partners to the IRS. If the partners are partnerships themselves, they must keep disclosing the partners recursively up to individual or corporate partners.
- _acme 9y ago
  LLCs may be taxed as flow-through entities (similar to partnerships), but no LLC is organized as a partnership, that's simply a nonsensical statement; an LLC is a distinct and separate type of entity to a partnership, limited partnership, LLP, LLLP and corporation.
  - gamblor956 9y ago
    For tax purposes, an LLC is either a corporation or a partnership; it's not merely similar to one or the other. LPs, LLPs, and LLLPs are taxed like partnerships, unless they are foreign registered, in which case they are taxed like corporations. An LLC treated as as partnership for tax purposes is required to disclose it's partners all the way up the chain. Legally, an LLC is organized like a partnership (member managed) or like a corporation (manager managed). I should have been more precise there. I was using shorthand because I was assuming the tax context and should have acknowledged that the tax treatment differs from the legal treatment.

behindmyscreen 9y ago

"Are you detaining me?" I feel like I am getting a whiff of a Sovereign Citizen...

jim-davis 9y ago

In the Rosinante trilogy of Alexis A. Gilliland the autonomous AIs are self-owned corporations, and indeed are sometimes addressed with the word "Corporate" as a title, somewhat like "Mr" or "Ms". This is of course fiction; while much of the engineering in the series seems plausible I have no idea if the legal theories are. Worth reading anyway, the AIs are charming.

IncRnd 9y ago

The headline on HN doesn't match the articles headline or contents.

grzm 9y ago
I suspect it's a summary of the first line of the abstract: > "In an article published in the Northwestern University Law Review in 2014, Professor Shawn Bayern demonstrated that anyone can confer legal personhood on an autonomous computer algorithm merely by putting it in control of a limited liability company." Given that the first sentence is too long, I think it's a reasonable summary of it, though reasonable people may disagree. In these cases, it's really helpful to provide what the actual title is (in this case "Algorithmic Entities"), and, if so inclined, a suggestion for a better title. It provides something actionable that a mod can use when updating. Do you have any suggestions for a better title? And if you've really got a bee in your bonnet, you can let the mods know directly via the Contact link in the footer. They don't see every comment but emailing them makes sure they see it.
- IncRnd 9y ago
  > Given that the first sentence is too long, I think it's a reasonable summary of it, though reasonable people may disagree. The difference between the title and the contents is the difference between control and ownership. They are not the same. The article discusses control not ownership. That is also the case in the portion of the article you quoted.
  - grzm 9y ago
    Great! Would you be willing to continue moving this forward rather than just picking it apart? Going beyond only debugging and providing a patch, as it were?

trynewideas 9y ago

cool, there's my next Shadowrun campaign sorted

omarforgotpwd 9y ago

Huh? You’re seriously telling me that an algorithm can be the sole owner of a corporation? That doesn’t sound right. Typically when opening financial accounts and establishing credit for the business the bank would ask for the SSN of a real person, I would think.

readams 9y ago

This seems to be the AI equivalent of "well there's no rule that says a dog can't play basketball!"

jacquesm 9y ago

Most countries have a concept known as Ultimate Beneficial Owner or UBO for short. Without a UBO declaration banks will not deal with you, lots of business transactions will not be possible and you will find yourself dealt out of the game pretty quickly. So even if self owning corporations are legally possible it may very well be hard for those self owning corporations to transact any business. What is interesting is that all this - for now - puts the lie to the myth of corporate personhood. If a corporation really was a person this would obviously not be an issue because for people we find that ownership is a terrible thing (it's called slavery).

taurath 9y ago
Are UBO's publicly stated? It seems like that would get rid of a lot of corporate shell games no?
- jacquesm 9y ago
  Usually this is in the form of an official declaration for instance to a bank or the local tax authority, UBO's could be publicly stated but I do not know of any country that does this.
  - ckastner 9y ago
    EU member states will, in future. Articles 30 and 31 of the Fourth AML Directive, Directive (EU) 2015/849 [1], mandate that member states set up a register (= database) with BOs of all corporations and legal entities within their jurisdiction. All legal entities are required to report their BOs into this registry. It's not accessible to the public in the sense that anyone can anyonymously look up data, but among other things, it's open to "any person or organisation that can demonstrate a legitimate interest." [1] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32015L0849 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A3...

rndgermandude 9y ago

Reminds me of this talk, where the speaker makes the case that corporations are AIs, but slow ones https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future

abvdasker 9y ago
Yeah that's the same one I was thinking of. It's a pretty far out theory but is nonetheless extremely interesting. The part of this that is incomplete from an implementation standpoint is creating an algorithm that can fully digitally manage a business entity without human intervention. In general though I think we are much closer than anyone thinks to seeing the first fully autonomous corporation (though the first one will likely be pretty rudimentary and more of a toy than anything else).
- fyi1183 9y ago
  I think you may be missing the more interesting point. Corporations can be seen as non-human intelligences that emerge from the structure of the corporation together with the incentives of is environment. In that view, the humans inside the corporation are like individuals neurons of a larger brain. The whole is more than the sum of its parts, and its incentives and actions are often not aligned with those of its parts, i.e., the humans. The brain/neuron analogy is not a perfect description, because in order to function towards is potentially anti-human goals, the corporation must essentially bribe a small number of humans who are critical to its function. But this only goes so far: CEOs and other executives are well compensated, but they are easily replaced if they pose a serious threat to the goals of the corporation. I think the argument is very compelling that today's AI Doomsday prophets are seriously missing the point, and we're actually already largely being ruled by hostile or at least indifferent non-human intelligences. It's the old sci-fi trope that if an intelligence is too alien, you might not even recognize it as one.

paulie_a 9y ago

This article is just plain dumb and another attempt for someone to think they can hack the legal system It doesn't work that way and judges find it obvious and obnoxious. Feel free to give it a shot though and enjoy the contempt of court

solotronics 9y ago

there is a Greg Egan book where the protagonist specialized in setting up autonomous corporations that spawned others so fast they couldn't be shut down or even kept track of really, if I remember correctly it was for the purpose of proactively copywriting ideas that we're then released into public domain edit: Diaspora by Greg Egan. his books are really really great

pishpash 9y ago

AI's likely need to be treated like perpetual children or pets legally. There always has to be a liable, human guardian attached for them to exist.

qaq 9y ago

a bit more creatively structured but Vanguard is pretty much it. As Nelson Rockefeller famously said, “The secret to success is to own nothing, but control everything.”

Animats 9y ago

The US once had the Utility Holding Company Act, which limited ownership in utility companies to a tree depth of 3. This was in response to a mess created by Samuel Insull in the 1920s. That prevented ownership loops. Repealed a few years ago.

qbaqbaqba 9y ago

Stanislaw Lem's The Washing-Machine Tragedy is getting real!

SubiculumCode 9y ago

Who would have standing to bring a suit against the legality of an autonomous ai led Corp?

nathan_f77 9y ago

The Bitcoin wiki also has a good article about Agents [1]. I've been thinking about this with regards to my own SaaS startup. The company accepts credit card payments with Stripe, and the money is deposited into a company bank account. Heroku then charges the company's credit card for hosting fees. It's actually a "profitable" company now, so it could keep running forever by itself. The only thing that requires human intervention is taxes, although Stripe Atlas makes that really easy. It's only a few clicks to pay the Delaware franchise tax. However, I've had to manually export some data and send a few emails to an accountant. (This is something I've been wanting to automate, but I didn't get enough interest [2].) You don't need AI or cryptocurrencies to have an autonomous company. You just need a SaaS with autoscaling, or a mobile app that makes money from ads and IAPs. Then there's only a few things that need to be automated: Filing taxes, and clicking the button to agree with Apple's new terms and conditions every few months. You can probably hire an accountant or a virtual assistant to deal with these things. It's a scary topic. Isolation plus too much automation, and no-one will even know that you're gone [4]. [1] https://en.bitcoin.it/wiki/Agent https://en.bitcoin.it/wiki/Agent [2] https://nanobooks.co https://nanobooks.co [3] https://bench.co/ https://bench.co/ [4] https://edition.cnn.com/2014/03/07/us/michigan-mummified-body-found/index.html https://edition.cnn.com/2014/03/07/us/michigan-mummified-bod...

pbhjpbhj 9y ago

Meta: Legal articles that look at limited jurisdictions really should have eg "in USA" or "under USA law" added to the title.

yuhong 9y ago

I was imagining a corporation with no owners but with a board of directors.

trumbitta2 9y ago

This somewhat reminds me of Accelerando by Charles Stross

gnode 9y ago

It seems to me that the unique feature of a computer controlled legal entity is to extend a human's agency beyond their death or otherwise incapacitation, as a kind of smart will. In other cases, there seems little benefit over just employing the computer to aid your decisions or acting through a computer, as legally you would be culpable for actions you intended (purposely culpable) or didn't give due consideration to (negligence or recklessness).

mirror23 9y ago

There are also fully automated business activities such as certain types of trading that could possibly earn profits without human involvement

shawnbayern 9y ago

I'm the law professor who developed the ideas discussed in the quoted article. A friend just brought this thread to my attention. The full arguments, which address most of the concerns laid out in these comments, are available here: (1) https://ssrn.com/abstract=2366197 https://ssrn.com/abstract=2366197 (2) https://ssrn.com/abstract=2758222 https://ssrn.com/abstract=2758222 (The article at the top of this thread, by Prof. LoPucki, is a response to these two articles.) I'm happy to answer questions if that would be useful, although of course I can't give legal advice. In general, there's a tremendous amount of misunderstanding about LLCs and about the law of legal organizations, both in the US and elsewhere -- even among lawyers! It's fair to say that US organizational law tends to be more flexible than similar laws in other countries, and my point in these articles it that it's flexible enough to do surprising things. In the articles, I specifically discuss RULLCA (the basis for the LLC laws in something like 17 US states, with that number growing), as well as NY's LLC law, and I show why a lot of people's instinctive comments here (and elsewhere!) are legally mistaken. For example, the statutes in these states specifically contemplate memberless LLCs, and indeed memberless LLCs are not a crazy or unconventional possibility. In various wealth-management contexts, they are routine. That LLCs could persist without members for indefinite periods is more controversial, but my articles explain why the current statutes do permit them. Of course, legislatures could stop all this if they wanted to. The LLCs statutes are just statutes. But you need just one jurisdiction to allow my technique for it to enable AIs to interact with the legal system in quite significant ways. Also, it's not entirely clear what it would mean to stop an LLC from doing what I propose, or whether judges would practically wish to do that. For example, suppose you follow my technique and then your AI buys a house. What would it mean to say that the LLC isn't legally "valid"? Would the original owner get the house back and also keep the purchase money? (There wouldn't necessarily be anyone to return it to.) Developing sound institutional solutions to complex questions about legal organizations is not an easy problem. The common-law judges have always been keen to permit new structures when they are useful. One-person legal companies were themselves controversial not too long ago, but they're commonplace today. In my articles, I give reasons supporting the usefulness of zero-person LLCs.

mmealling 9y ago
A couple of questions: Have you responded to the to Matt Scherer's critique that starts here: http://www.lawandai.com/2017/05/14/is-ai-personhood-already-possible-under-current-u-s-laws-dont-count-on-it-part-one/ http://www.lawandai.com/2017/05/14/is-ai-personhood-already-... From my understanding of Conflict of Laws issues there is a great deal of case law suggesting that even if the memberless LLC were created that the first court to see one would immediately declare it dissolved regardless of what the Operating Agreement said because it violates the intent of the legislation. Or, to use Scherer's words, "courts recognize that “some things ‘go without saying'” in legislation just as they do in everyday life, and legislatures thus legislate “against the backdrop of certain unexpressed presumptions.” Bond v. United States, 134 S. Ct. 2077, 2088 (2014)." It also seems that both FATCA and the OECD Common Reporting Standards treaty supersedes state incorporation rules concerning reporting of Ultimate Beneficial Owner for an entity that pays taxes in any 'acceptable' jurisdiction. One could probably create a memberless LLC in Somalia but have zero luck accessing a modern legal jurisdiction. Take the Series LLC that can be setup in Delaware. No one outside the US recognizes the individual series as being separate from the others and thus combines all of the assets of the parent LLC, rendering the form useless outside the US. Just because one State creates a memberless LLC obligates no one to recognize it.

cgrosmeier 9y ago

The "Ghost in the LLC".... I look forward to the day when a self-owning corporation is a self managed application for an autonomous system and has no human intervention. Like this: The Implications of Modern Business-Entity Law for the Regulation of Autonomous Systems ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2758222 ) Credit due to Drone Law Today for the title. (https://player.fm/series/drone-law-today/ghost-in-the-llc https://player.fm/series/drone-law-today/ghost-in-the-llc)