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Question: Is it technically possible to run a distributed corp and pay entirely in Bitcoin?  (Voting closed: January 28, 2014, 08:57:30 PM)
Yes - 7 (53.8%)
No - 3 (23.1%)
Almost but not ready for prime time - 3 (23.1%)
Total Voters: 13

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Author Topic: Is it possible to run a completely distributed corporation and pay in BTC?  (Read 729 times)
Luckybit
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October 30, 2013, 08:57:30 PM
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I'm just wondering whether or not it is possible to do it technically speaking? Why or why not?
What would need to be built to allow for it and why aren't we seeing any distributed corporations if it is possible?

For all the talk on how revolutionary Bitcoin can be all the corporations seem to be exactly as they were. When are we going to completely demolish the archaic corporation and replace it with a new way of doing things?

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DeathAndTaxes
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October 30, 2013, 09:00:58 PM
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Not sure what you mean by decentralized, but corporations are artificial legal entities that doesn't exist outside the law of a state.  This is in contrast to a "natural human" which exists materially exists regardless of the laws of a particular state. 

In this respect every corporation has a "center", a home, where it is incorporated.  Corporations are institutions of the state, they are created by the state, the exist at the will of the state, and they can be ended by state.  Two examples of the latter would be a corporation being dissolved because the corporation didn't pay taxes, or piercing the corporate shield to make operators of a corporation liable in the case of fraud.
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October 30, 2013, 09:01:36 PM
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When are we going to completely demolish the archaic corporation and replace it with a new way of doing things?


Well, there is a way, but it involves immanentizing the eschaton, so you might or might not be interested.
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October 30, 2013, 09:06:27 PM
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Not sure what you mean by decentralized, but corporations are artificial legal entities that doesn't exist outside the law of a state.  This is in contrast to a "natural human" which exists materially exists regardless of the laws of a particular state. 

In this respect every corporation has a "center", a home, where it is incorporated.  Corporations are institutions of the state, they are created by the state, the exist at the will of the state, and they can be ended by state.  Two examples of the latter would be a corporation being dissolved because the corporation didn't pay taxes, or piercing the corporate shield to make operators of a corporation liable in the case of fraud.


Couldn't we use some sort of smart contract to create distributed corporations without the need of any home or center state? Couldn't we use a virtual office?
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Gerald Davis


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October 30, 2013, 09:15:29 PM
 #5

Couldn't we use some sort of smart contract to create distributed corporations without the need of any home or center state? Couldn't we use a virtual office?

You could probably make a "distributed business" but it wouldn't be a corporation and you would have no protection under the law.  A corporation is a legal entity, it doesn't exist outside the law and the state defines the parameters of that existance. You can't just say "we have formed xyz Inc".   When you file incorporation documents (with a state) the state creates xyz, Inc to be a separate entity under the law.   So if you don't do that no corporation exists, and while your business may operate outside the state YOU (as a potential owner, employer, or investor) can't operate outside of a state.  Maybe someday but not today.  No matter where you are YOU fall within the scope of a state.

Why does that matter?  Corporations (and other legal constructs like LLC, limited companies, limited master partnerships) exists to decouple the business from its principals (owners, investors, etc).  The incorporation process creates a new entity (hence the term corporate personhood) and this entity legally distinct from its owners.


Why would you want to decouple the business from ownership of the business?

A corporation can file its tax returns, own assets, incur debts, be sued, etc separate from its owners.   That is the whole point of a corporation.   If you own shares in google and google doesn't pay its taxes you as a shareholder have no direct liability (although the share price might decline).  Google is a distinct entity from its owners.   Now on the other hand say your "decentralized company" doesn't pay its taxes.  Under the eyes of the state the "decentralized business" doesn't exist.  YOU own it, YOU (well all owners jointly) are liable.  The same thing would happen if customers sued "the business".  Under the  law the business doesn't exist as a distinct entity.  The lawyers of the customers would sue YOU personally which means all your personal assets remain liable.  If the "company" borrows money well in reality as an owner YOU are borrowing money.  When the company defaults on a loan, the creditors will sue you directly.  Starting to see the picture. 


Simple version
1) States makes laws
2) Laws are what make a corporation.
3) Corporations only "exist" with #1 & #2.
4) If no corporation exists then law will simply see the business and the owners as the same entity.
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October 30, 2013, 09:22:56 PM
 #6

Absolutely. I'm doing something similar. I have an LLC located and registered in the state where I live but have no 'real' office and no employees I've ever met in real life. Everything is done via the Internet. The only difference is that I don't pay in Bitcoin but it would be trivial to do so.

Software engineer, security researcher, privacy activist, and general pot stirrer. Will work for bitcoin.
Luckybit
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October 30, 2013, 10:13:20 PM
 #7

I think that it's possible but you are still subject to state laws and taxes then.

How? if it's not in any specific state?
Luckybit
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October 30, 2013, 10:14:41 PM
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Couldn't we use some sort of smart contract to create distributed corporations without the need of any home or center state? Couldn't we use a virtual office?

You could probably make a "distributed business" but it wouldn't be a corporation and you would have no protection under the law.  A corporation is a legal entity, it doesn't exist outside the law and the state defines the parameters of that existance. You can't just say "we have formed xyz Inc".   When you file incorporation documents (with a state) the state creates xyz, Inc to be a separate entity under the law.   So if you don't do that no corporation exists, and while your business may operate outside the state YOU (as a potential owner, employer, or investor) can't operate outside of a state.  Maybe someday but not today.  No matter where you are YOU fall within the scope of a state.

Why does that matter?  Corporations (and other legal constructs like LLC, limited companies, limited master partnerships) exists to decouple the business from its principals (owners, investors, etc).  The incorporation process creates a new entity (hence the term corporate personhood) and this entity legally distinct from its owners.


Why would you want to decouple the business from ownership of the business?

A corporation can file its tax returns, own assets, incur debts, be sued, etc separate from its owners.   That is the whole point of a corporation.   If you own shares in google and google doesn't pay its taxes you as a shareholder have no direct liability (although the share price might decline).  Google is a distinct entity from its owners.   Now on the other hand say your "decentralized company" doesn't pay its taxes.  Under the eyes of the state the "decentralized business" doesn't exist.  YOU own it, YOU (well all owners jointly) are liable.  The same thing would happen if customers sued "the business".  Under the  law the business doesn't exist as a distinct entity.  The lawyers of the customers would sue YOU personally which means all your personal assets remain liable.  If the "company" borrows money well in reality as an owner YOU are borrowing money.  When the company defaults on a loan, the creditors will sue you directly.  Starting to see the picture.  


Simple version
1) States makes laws
2) Laws are what make a corporation.
3) Corporations only "exist" with #1 & #2.
4) If no corporation exists then law will simply see the business and the owners as the same entity.

Sure you can.
http://en.wikipedia.org/wiki/Sole_proprietorship

Sole proprietorship is an example. Also you can register it under the laws of micro nations rather than traditional nations if you need to for legal reasons.

Absolutely. I'm doing something similar. I have an LLC located and registered in the state where I live but have no 'real' office and no employees I've ever met in real life. Everything is done via the Internet. The only difference is that I don't pay in Bitcoin but it would be trivial to do so.

Can you describe how you went about doing this and how you would go about paying in Bitcoin while handling all the accounting?
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Gerald Davis


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October 30, 2013, 10:21:18 PM
 #9

Yeah that's not decentralized or a corporation.  I never said you can't run a business and use Bitcoins.   You asked about "completely distributed corporation".   Maybe those words don't mean what you think they mean.

Sole proprietorship =/= corporation
Registered with state =/= "completely distributed"
Luckybit
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October 30, 2013, 11:15:30 PM
 #10

Yeah that's not decentralized or a corporation.  I never said you can't run a business and use Bitcoins.   You asked about "completely distributed corporation".   Maybe those words don't mean what you think they mean.

Sole proprietorship =/= corporation
Registered with state =/= "completely distributed"


Distributed, not decentralized. It can have a central owner but the employees are distributed. While decentralized would mean ownership would be decentralized via crowdfunding but it could be that all employees work in the same city.

If there is a virtual office why can't you choose a micro nation or some other really friendly nation to register in just to have a corporate face to the virtual office?
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Gerald Davis


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October 31, 2013, 12:15:55 AM
 #11

Yeah I think we are going in circles here so I will opt out.  If you are asking can you run a business and pay people in Bitcoins?  Well the answer is sure.  What would make you think otherwise.
CIYAM
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Ian Knowles - CIYAM Lead Developer


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October 31, 2013, 05:06:29 AM
 #12

If you think organization rather than a corporation than you might find CIYAM Open (http://ciyam.org/open) will give you some ideas.

With CIYAM anyone can create 100% generated C++ web applications in literally minutes.

GPG Public Key | 1ciyam3htJit1feGa26p2wQ4aw6KFTejU
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