I mentioned earlier the news that the state of Vermont makes it now possible to incorporate a legally recognized limited liability entity that only exists on the Internet. James Wagner Au pointed out that this option is potentially open “even for corporations that exist only in Second Life”.
I try to follow this up closely and to write a more comprehensive story about this, but for now I just have some reactions which I like to share here, they give a European perspective on the issue.
In my newspaper De Tijd (Dutch language) the initial reaction of Professor Jos Dumortier (ICT law, university of Leuven) was not very excited. He does not see that this new development could be very useful for a European – Belgian in this case – citizen.
It is a form of administrative simplification. But if the economic activities are situated mainly in Belgium, the Belgian fiscal and social law will prevail.
Dumortier pointed out that what matters is not just the place where the entity is incorporated, but also where the entity is really managed.
I still wonder of course, what if the company is managed in for instance Second Life, where the partners meet in their virtual offices and take decisions etc? So I also asked Pierre-François Docquir, a legal scholar from the Perelman Centre of the Université Libre de Bruxelles (ULB) and a specialist in Virtual Law.
He was pretty excited about this develoment, though he admitted there are a number of questions as yet unanswered.
What is interesting about this, is that it helps people who are dispersed geographically and in time to collaborate. In the virtual corporation one does not need to inject money, it is also possible to start out with intellectual capital and expertise. It helps to structure a group people who want to share their expertise and work together in a non-hierarchical way.
Of course, even if the virtual corporation starts out without physical headquarters, it can develop its business and acquire intellectual property rights and other rights and of course also earn money. These assets can be shared in this new structure.
It is obvious a lot of study needs to be done, but it will be interesting to see what kind of corporations will be the first to use the new structure.
To be continued.
Roland Legrand
