I think there are many legitimate concerns about this project, but what you are saying address none of them. In fact your first questions mean you don't understand it.
I think as a lawyer who practices a great deal of corporate transactions, I have a much better idea than most on the legal structure and compliance issue with corporations on a state by state basis.
But instead of telling me my question shows I don't understand, please answer any of the following:
-Are the token holders shareholders?
-If shareholders do the token holders also get to vote for the board, or are their tokens/shares non-voting?
-How many members are on this board? Since it is all autonomous how do you know the DAO has the minimum amount of board members are required by law? If say DAO is a DE corp (min 3 board members) and DE amends the law, how is DAO's code going to keep up?
Viewing this as a corporate attorney is the wrong approach as it's not a "corporation" and there is not really any legal framework as the idea is too new (CFTC commissioner just mentioned to "do no harm" to blockchain tech).
1. no, but they have a vote and can transfer a token which also represents their vote
I think the key thing to emphasize as well is that "The DAO" is just a program which now has clearly defined rules for managing its assets in the form of cryptocurrency. When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors). Whether those contracts with outside parties are enforceable, and how they will be enforced is within the realm of "to be determined" at this point. That does not at all mean the prospects for this type of setup/idea (DAO) are negative going forward.
> When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors).
Is the DAO a legal entity with recognized agents with authority to enter into contracts on its behalf? If not, how can this possibly work?
Like I said "to be determined" is what I understand, however they appear initially to be employing a real-world company avatar: DAO.Link, based in Switzerland. [0]
Edit: Also, do keep in mind that the Contractor would be able to see the contract is in effect by viewing it in the "blockchain". The question is only a matter of real-world enforcement in the specific case of the smart contract criteria not being satisfied at contract completion, due to incorrect/false data inputs to it by people in The DAO.
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Like I said "to be determined" is what I understand, however they appear initially to be employing a real-world company avatar: DAO.Link, based in Switzerland.
Sounds to me like DAO.Link (which appears to be an offering of Slock.it) is the actual legal business entity involved, and that the legal basis and enforcement mechanisms for assuring that it acts as expected by the participants of the blockchain-based entities it interacts with is...somewhat murky.
> I think as a lawyer who practices a great deal of corporate transaction
Well, I think we can both see these systems are an attempt to circumvent individuals like yourself (At least partially, some human legal representation will likely still be used.)
Taxi drivers similarly complained a lot about the legality of Uber.
This isn't a complaint about the legality of the DAO, but that the description of it as a "corporation" is simply false. A corporation refers to a specific type of legal entity, which the DAO simply is not.
All the questions will_brown asks are simple and straightforward and meaningful for any corporation. They are in some cases murky and/or inapplicable for the DAO, because the DAO is very much unlike a corporation.
I'm not sure if you are trying to compare my legal knowledge to that of a Taxi driver, or suggesting my position is not based on law but an irrational fear of competition, or maybe you are implying taxi drivers were wrong about Uber so I must be about DAO.
Maybe it helps my point, maybe not, but Uber is certainly illegal in many jurisdictions. Take Miami-Dade county, there are 10,000 Uber drivers and nearly 3,000 tickets have been issued ($1,010/ticket) something like $2.9M in fines. Moreover, Uber sends out training for Miami Drivers on how to avoid getting stopped/ticketed/impounded in Miami as an unlicensed ride for hire and when Uber drivers do get ticketed/impounded Uber provides the drivers a lawyer for their case (oddly its their FL corporate lobbyist not a traffic/criminal defense lawyer). Finally, the Miami-Dade ordinance carries a potential penalty of 45 days jail.
> I'm not sure if you are trying to compare my legal knowledge to that of a Taxi driver ...
Certainly not, I see no evidence that you don't have a strong understanding of the law, far beyond my own.
I guess what I'm saying is that Uber and the DAO both operate in a legal grey zone- And both of them likely have aspects that directly conflict with current law. However, I think it's clear that the legal system is a "living institution" and has been surprisingly welcoming of new innovative business models and technologies recently (as with Uber and things related to the DAO like Bitcoin) and is one of the reasons I still feel relatively optimistic about the future of the US economy.
What made Uber succeed, to a large degree, is that clearly a lot of societal pressure had built up over decades due to poor experiences with the taxi system- I think it's undeniable that this had an influence on the positive legal rulings around Uber, so far as those exist in many parts of the country.
Similarly, alternative governance systems like the DAO will keep appearing and I think eventually are likely to get some support from the existing legal system.
> Take Miami-Dade county...
Yikes! Glad I don't live there anymore, as my lifestyle depends significantly on access to ride sharing services.
> I guess what I'm saying is that Uber and the DAO both operate in a legal grey zone-
What is required to be a corporation is not really a legal gray zone. The DAO doesn't operate in a legal gray zone as to that characterization, its just flat inaccurate.
Insofar as the DAO is a mechanism for constructing contracts between actual legal persons (either natural persons or corporations), it may operate in a poorly-tested area as to whether valid contracts are formed, how those contracts are interpreted and what law they are governed by, and whether and to what extent they are enforceable, true.
I hear you, but I don't think I've ever used the word "corporation" in this forum or claimed that the DAO is a corporation, or directly disputed any claim made by another comment as to whether the DAO is or isn't a corporation.
Whether or not the DAO meets the definition of a "corporation" doesn't seem like a very interesting question to me, and I think it's too early to know how/if it matters if the legal system uses the word "corporation" to refer to the DAO.
But instead of telling me my question shows I don't understand, please answer any of the following:
-Are the token holders shareholders?
-If shareholders do the token holders also get to vote for the board, or are their tokens/shares non-voting?
-How many members are on this board? Since it is all autonomous how do you know the DAO has the minimum amount of board members are required by law? If say DAO is a DE corp (min 3 board members) and DE amends the law, how is DAO's code going to keep up?