From: sdavidm@iconz.co.nz (David Murray)
Date: Tue, 21 Nov 1995 03:46:57 +0800
To: cypherpunks@toad.com
Subject: Re: Anonymity and Intellectual Capital
In-Reply-To: <Pine.3.89.9511182108.B25524-0100000@tesla.cc.uottawa.ca>
Message-ID: <pnr747988188m@iconz.co.nz>
MIME-Version: 1.0
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In message <Pine.3.89.9511182108.B25524-0100000@tesla.cc.uottawa.ca>, s1113645@tesla.cc.uottawa.ca said:
> On Sat, 18 Nov 1995, David Murray wrote:
> 
> > unincorporated, or deed of settlement, company.
> 
...
 
> Barring escrow services, I don't see how contracts (or a lot of 
> other laws) could be enforced against these entities when they can simply pop
> in and out of existence (unless they have some physical counterpart, like 
> a storefront and merchandise. But then these are easily linkable to True 
> Names, unlike software companies, financial services or any other part of 
> the info economy.)

But the assets of the company are held by (known) trustees and exposed to
judgment - the pseudonymous part just means that _only_ those assets are
exposed.

For instance, an enterprising cypherpunk decides it would be a good thing
to run a restaurant with a crypto-anarchy theme (cajun style Blacknet burgers,
anonymous avocado salad, Phil Zimmerman celebrity cocktail...). Unaccountably,
a thousand other cypherpunks decide to invest $100 each. More understandably,
they don't want it to be known that they invested. By buying shares in an
unincorporated company pseudonymously (including anonymously) they can risk
$100, but $100 only. The money is (initially) held in the trustee's bank
account (having been subscribed in ecash), so the cheques for the tables and
chairs won't bounce. The chairs, tables, kitchen equipment, lease etc will
also be held by the trustee on trust for the partnership/company, and will
be available for creditors should the partnership not meet its obligations.

So doing business with an unincorporated company is very much like doing
business with an incorporated company/corporation. (I can see that audited
accounts, for instance, could be useful in attracting investors/reassuring
creditors.)

Note that the argument works just as well for intangible assets - even digital
assets - as for tangible ones like tables. So our enterprising cypherpunk
might well have started a bank, insurance company or mutual fund (except for
all the other regulatory hassles :-)
  
> Besides, if companies in general can set up other companies, in a 
> trustworthy and non-anon jurisdiction, couldn't these foreign anon companies 
> do the same in the present system and therefore make it very hard to know 
> if any company in any country is non-anon?

Yes. But you have to have your base anon corporation to be the penultimate
stockholder of the other corporations. And it can be expensive - perhaps too
expensive to be worth the gain in anonymity. There is also the matter of having
to have human directors with revealed True Names in most non-anon and
"trustworthy" jurisdictions.

There are other ways to anonymise corporations - I presented a proposal to the
list about a year ago that simply interposed a unit-like trust as sole (legal)
shareholder of the corporation, the "units" in the trust mirroring the shares
but being held anonymously.

Any of these structures can/might be useful. What I like about unincorporated
companies, however, is the way they rely only on the common law and equity,
and bypass statute - enabling, perhaps, less reliance upon the law of any
particular State.

> I'm not completely sure I understood your explanation of a 
> deed-of-settlement corp. and the idea of an "unincorporated" company. 
                     ^^^^^
Not "corporation", "company", as in collective noun :-) An incorported company
is a corporation, but in general, company ~= corporation. It is just that for
well over a hundred years there have not been any companies that have _not_
been incorporated, except dance companies, infantry companies etc.
   
> (Unincorporated in what way, and what were the registration and ID 
> requirements?)

Unincorporated in every way :-) Which is to say, not a seperate legal entity
but a partnership (of shareholders) coupled with a trust of the partnership
assets.

And because it relies only on partnership/agency/contract law and the law of
trusts, there were no registration or ID requirements, just as there are no
registration or ID requirements for forming a partnership or trust now.
 
(Compare, for instance, the requirement on NZ incorporated companies to keep
public records of the name and [in the case of natural persons, residential]
address of everyone who has been a shareholder in the last ten years.)

> Any references? Thanks.

A lot of Corporate/Company law books have some coverage of this stuff in their
historical chapters - try English or Australian texts (Gower is quite good).
Legal history texts also often have something. Du Bois published a book (in
the 1940's ?) that seems to be cited for all manner of minutiae - it has
something about the Bubble Act in its (long) title. [If you find this book,
how about sending me a summary :-) Chapter III is probably most useful.] And
J. Reeder "Corporate Loan Financing in the 17th and 18th Centuries" (1973) 2 Anglo-American Law Review 487 is supposed to have something about bond issues
by unincorporated companies (or is it bank lending?).

Cheers,

Dm.


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