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"I really hope that we'll get a legal precedent for this actually being possible and durable in at least some countries, because that was the promise of OpenAI

"I really hope that we'll get a legal precedent for this actually being possible and durable in at least some countries, because that was the promise of OpenAI at some point as well." Lawyer here - it is basically impossible to do what they (and others) want. There are few (if any?) countries, where either provision would survive bankruptcy, for example. They could always choose to dissolve rather than restructure, but if they did choose to restructure, i'm not aware of a country where the restrictions here would be enforced on the successor. On top of this, in most (all?) countries, agreements not to file for bankruptcy are not enforceable ;) So that's one mechanism. In most countries, however, these provisions would be "easily" removable through shareholder + officer vote. Some companies go pretty far down the path of trying to use trusts as shareholders and requirements on trustees and such to try to ensure such a thing never occurs. You can also do hilarious (to me) things like create enough shareholders (let's say 7 billion), make shares non-transferrable, etc, so that even though theoretically it requires a vote, such a vote is practically impossible. I also had a friend who explored whether you could legally require the place of voting to be like "the surface of the sun" or something that ensures voting can't occur, but unfortunately, you usually can't. Companies really aren't meant for this kind of thing - not that there is something better, but what tehy are trying to do is pretty fundamentally opposed to how countries want companies to operate. If it's really a big enough deal, the "correct" answer is to create a new corporate form, much like we created LLC's, etc (LLC's are less than 100 years old, so it's not impossible)

vessenes 2y ago
It seems to me you could create non revocable trust that gets most of this done, with specific instructions to the trustees. That trust would own 100% of the company, and could issue voting and economic rights akin to shares, with the proviso that the trustee cannot implement a sale. That said, creditors could still force the sub into bankruptcy in most countries; even then I think the trustee could be instructed to always choose a restructuring rather than a windup if possible. You'd probably put that trust somewhere with UK Trust law.
- DannyBee 2y ago
  Trusts get complicated quickly, and I'll admit i don't know enough about per-country/per-state (in the US) trust law to know if you could achieve this for real everywhere. I'm sure there are countries you can mostly achieve it, and places where it's really hard. One major problem with trusts is in lots of places you usually can't undo the action of a rogue trustee, only seek damages/etc against them. It gets complicated there too - whether you can order the return of property, etc, often depends on the status of who it was sold to and whether they knew or should have known, or ... This usually means you have to enjoin them ahead of time if you can. In the end, the law generally assumes money damages are a sufficient remedy. Not always true, but mostly true. Again, even this varies by country/state. Honestly, given some of these are talking about many billions of dollars in companies, i'm sort of surprised at the lack of legislative assistance. Creating a corporate form that supports this much more effectively is not hard (states/countries definitely have the power to do it), and despite the common view of legislators/etc, this sort of non-controversial thing is not that hard to get passed, though it takes time. I suspect it's mostly related to "nobody starts trying to get this done 10 years before they want it done" :P
  - vessenes 2y ago
    There were a series of performance art type challenges to citizens united in Washington state, including one guy who wanted to marry a company (application denied - company was under 18 years old. Really.) And given Seattle’s economic history and trajectory, “permanent” trusts that can revive your frozen head in a couple of hundred years are not uncommonly sought after but difficult to achieve in the US. As you say, trust law is complex, not least because there are basically three overlapping trust systems. I think UK law is likely the one you’d want for these. Scottish based trust law includes the concept of reverting a trust for the common good, (based on an amazing amazing sequence of events where the sole surviving relative of a rich Scottish dude challenged his trust formed for the purpose of putting statues of himself up everywhere in Scotland — she won, trust dissolved, then when she died with no heirs or relatives, she tried to make the same bequest — the state itself dissolved the trust and took the money.) And, my very basic understanding of Civil law trusts is that they are less interested in the beneficial owner part of the trust and more interested in following civic/statutory rules. Well, maybe a civil law country would be a good place to start here actually. Obviously, IANAL.
jjani 2y ago
> You can also do hilarious (to me) things like create enough shareholders (let's say 7 billion), make shares non-transferrable, etc, so that even though theoretically it requires a vote, such a vote is practically impossible. Doesn't this mean it's quite possible to achieve what they want? Is there a limit on how absurd the statutes can get (at least in your jurisdiction)? Votes have to be held at 3:00AM on Mondays, in person, at the company voting office, which happens to be on top of Mt. Everest?
- anticensor 2y ago
  In-person voting requirements are typically enforceable if the place is real and legally and practically accessible. IANAL though.
hedora 2y ago
A corollary to the above is that it’s impossible for a company to gather personal information but not put it up for sale. This is doubly true for public companies, as we saw with Twitter.
lazyasciiart 2y ago
Didn’t Patagonia pretty much achieve this?
- DannyBee 2y ago
  Kind of, sort of - they depend on the trustees not going rogue.

vessenes 2y ago

It seems to me you could create non revocable trust that gets most of this done, with specific instructions to the trustees. That trust would own 100% of the company, and could issue voting and economic rights akin to shares, with the proviso that the trustee cannot implement a sale. That said, creditors could still force the sub into bankruptcy in most countries; even then I think the trustee could be instructed to always choose a restructuring rather than a windup if possible. You'd probably put that trust somewhere with UK Trust law.

DannyBee 2y ago
Trusts get complicated quickly, and I'll admit i don't know enough about per-country/per-state (in the US) trust law to know if you could achieve this for real everywhere. I'm sure there are countries you can mostly achieve it, and places where it's really hard. One major problem with trusts is in lots of places you usually can't undo the action of a rogue trustee, only seek damages/etc against them. It gets complicated there too - whether you can order the return of property, etc, often depends on the status of who it was sold to and whether they knew or should have known, or ... This usually means you have to enjoin them ahead of time if you can. In the end, the law generally assumes money damages are a sufficient remedy. Not always true, but mostly true. Again, even this varies by country/state. Honestly, given some of these are talking about many billions of dollars in companies, i'm sort of surprised at the lack of legislative assistance. Creating a corporate form that supports this much more effectively is not hard (states/countries definitely have the power to do it), and despite the common view of legislators/etc, this sort of non-controversial thing is not that hard to get passed, though it takes time. I suspect it's mostly related to "nobody starts trying to get this done 10 years before they want it done" :P
- vessenes 2y ago
  There were a series of performance art type challenges to citizens united in Washington state, including one guy who wanted to marry a company (application denied - company was under 18 years old. Really.) And given Seattle’s economic history and trajectory, “permanent” trusts that can revive your frozen head in a couple of hundred years are not uncommonly sought after but difficult to achieve in the US. As you say, trust law is complex, not least because there are basically three overlapping trust systems. I think UK law is likely the one you’d want for these. Scottish based trust law includes the concept of reverting a trust for the common good, (based on an amazing amazing sequence of events where the sole surviving relative of a rich Scottish dude challenged his trust formed for the purpose of putting statues of himself up everywhere in Scotland — she won, trust dissolved, then when she died with no heirs or relatives, she tried to make the same bequest — the state itself dissolved the trust and took the money.) And, my very basic understanding of Civil law trusts is that they are less interested in the beneficial owner part of the trust and more interested in following civic/statutory rules. Well, maybe a civil law country would be a good place to start here actually. Obviously, IANAL.

jjani 2y ago

> You can also do hilarious (to me) things like create enough shareholders (let's say 7 billion), make shares non-transferrable, etc, so that even though theoretically it requires a vote, such a vote is practically impossible. Doesn't this mean it's quite possible to achieve what they want? Is there a limit on how absurd the statutes can get (at least in your jurisdiction)? Votes have to be held at 3:00AM on Mondays, in person, at the company voting office, which happens to be on top of Mt. Everest?

anticensor 2y ago
In-person voting requirements are typically enforceable if the place is real and legally and practically accessible. IANAL though.

hedora 2y ago

A corollary to the above is that it’s impossible for a company to gather personal information but not put it up for sale. This is doubly true for public companies, as we saw with Twitter.

lazyasciiart 2y ago

Didn’t Patagonia pretty much achieve this?

DannyBee 2y ago
Kind of, sort of - they depend on the trustees not going rogue.