
Investors of the DAO: unlimited liability for their partnership's misdeeds? - mazsa
http://www.bloomberg.com/view/articles/2016-05-17/blockchain-company-wants-to-reinvent-companies?
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bmh_ca
Reversion of a business enterprise to a partnership seems a rather
overwhelming concern, as DAO seems to be creating full-liability (general)
partnerships as a substitute for the modern corporation.

The advantages of the corporation are not just its capacity to organization
decision making but also, among others:

1\. limited liability of shareholders/owners

2\. hundreds of years of legislative advancement and precedents giving
relatively unambiguous roles and responsibilities – including record keeping,
ownership, and tax

3\. legal impersonation of a person, giving right to property ownership,
insurability, and others

4\. survivorship and estate planning of its incorporators

There are a variety of legal entities that could be used in place of the
corporation, including partnerships of various forms, trusts, and a variety of
sometimes-fancy associations (e.g. the Swiss Verein). The corporation has
become dominant for a reason, the reasons for which did not seem addressed by
the DAO, as far as I saw.

The advancements of technology strikes me as a necessary but relatively minor
part of a multitude of state social structures that need to be simultaneously
advanced to make this a choice comparable to the modern corporation.

None of which is to say that the corporation is the optimal mechanism for
organizing business, but I'm not yet convinced that technological advancement
alone is sufficient to compete. Other things have to catch up.

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mazsa
"The DAO's investors [...] might now be keenly interested in whether they are
in fact general partners in the DAO under local law. Because general partners
tend to have unlimited liability for their partnership's misdeeds. Even if the
smart contract says otherwise. Without the protections of limited liability
based in local law, all you have to rely on is cryptography."

