Legality of IPOing securities on GLBSE
Stephen Gornick:
Quote from: Chaang Noi (Goat) ช้างน้อย on May 29, 2012, 05:54:02 AM
We should form our own nation ;D
Does anyone know anything about this?
Quote
Under the new law, for example, a board meeting may be conducted “in person or through the use of [an] electronic or telecommunications medium.” A “‘virtual company’ will be, as a legal matter, a Vermont limited liability company,” said Johnson. And other states are required to recognize the corporation as a legitimate LLC.
- http://gigaom.com/2008/06/17/vermont-oks-the-creation-of-virtual-corporations/
The Icelandic Modern Media Initiative is a proposal that was passed by their legislature.
Quote
Highlights from the proposal:
* Virtual limited liability companies"
- http://blog.p2pfoundation.net/icelandic-modern-media-initiative-press-release/2010/06/21
Quote
A virtual limited liability company (VLCC) is a type of legal entity that does not require a physical presence or in-person board meetings. The company type was first legalised in Vermont, USA in 2008[1] and in 2010 the Icelandic Modern Media Initiative began drafting legislation based on the Vermont law which would allow virtual companies in Iceland. The project, which was started by MP Birgitta Jónsdóttir (chairman), information activist Smári McCarthy and others was later succeeded by the International Modern Media Institute and is currently ongoing.
- http://en.wikipedia.org/wiki/Virtual_limited_liability_companies
Bitcoin Oz:
Quote from: Stephen Gornick on May 29, 2012, 09:18:26 AM
Quote from: Chaang Noi (Goat) ช้างน้อย on May 29, 2012, 05:54:02 AM
We should form our own nation ;D
Does anyone know anything about this?
Quote
Under the new law, for example, a board meeting may be conducted “in person or through the use of [an] electronic or telecommunications medium.” A “‘virtual company’ will be, as a legal matter, a Vermont limited liability company,” said Johnson. And other states are required to recognize the corporation as a legitimate LLC.
- http://gigaom.com/2008/06/17/vermont-oks-the-creation-of-virtual-corporations/
The Icelandic Modern Media Initiative is a proposal that was passed by their legislature.
Quote
Highlights from the proposal:
* Virtual limited liability companies"
- http://blog.p2pfoundation.net/icelandic-modern-media-initiative-press-release/2010/06/21
Quote
A virtual limited liability company (VLCC) is a type of legal entity that does not require a physical presence or in-person board meetings. The company type was first legalised in Vermont, USA in 2008[1] and in 2010 the Icelandic Modern Media Initiative began drafting legislation based on the Vermont law which would allow virtual companies in Iceland. The project, which was started by MP Birgitta Jónsdóttir (chairman), information activist Smári McCarthy and others was later succeeded by the International Modern Media Institute and is currently ongoing.
- http://en.wikipedia.org/wiki/Virtual_limited_liability_companies
We should see about moving the glbse server to iceland. Ive been reading about them opening large data centres there because the power is so cheap.
MatthewLM:
Are the companies listed on the GLBSE public companies? Seems like some of these "companies" aren't even incorporated. I smell illegality in all corners I'm afraid.
PatrickHarnett:
Quote from: MatthewLM on May 31, 2012, 10:08:03 PM
Are the companies listed on the GLBSE public companies? Seems like some of these "companies" aren't even incorporated. I smell illegality in all corners I'm afraid.
You do not need incorporation to be a legal entity. There is a lot of ignorance about companies, company formation and entities. For a lot of what appears on GLBSE an unincorporated joint venture is a good vehicle.
As an aside, have you bothered to check the legality of Apple, WellsFargo or any other "company" you've done business with lately (eg - your local food mart)?
Stephen Gornick:
Quote from: PatrickHarnett on June 02, 2012, 01:36:08 AM
You do not need incorporation to be a legal entity.
But in no jurisdictions yet is there a legal entity for a "project". Kickstarter has projects, but no equity so the funds to the project on Kickstart are not "investments" but instead are donations (or pre-sales, in most instances).
So currently these "shares" sold on GBLSE have no legal claim against the profits from the project nor would they have any claim against any assets purchased from either those profits or from the proceeds of the IPO.
Think of "investments" in any of the current GLBSE assets as gentleman's agreements backed by reputation. (Well, I've seen loans and bonds listed as assets, so maybe those would be the exception where it is a legal contract which could be enforced through the legal system.)
There's no reason a GLBSE asset couldn't truly be a chartered corporation or LLC though (except for how offering equity to the public in this manner is something that is illegal in certain jurisdictions). There might be tax havens like Anguilla or Cyprus that don't have restrictions against offering equity to the public (unaccredited investors). Iceland is looking at the concept of a VLLC which presumably would be owned by shareholders.
The reason this entity definition might be relevant has to do with the ability to claim capital gains instead of having to declare proceeds from selling shares as regular income. Listing an asset on GLBSE as a corporation or LLC entity would probably satisfy the definition of being an equity, and thus long term investment gains would enjoy the benefit of a lower tax rate as being capital gains. Additionally, with a corporation or LLC there is civil and crimiinal code that limits actions the issuer might consider.
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