Petition to form the Corporation

Phillip,

The next generation of large-scale enterprises and innovative joint-ventures is quite close. What we need is the ability to form corporations; The ability to issue stock in exchange for corporate ownership and voting rights.

With the introduction of the corporation, opportunities about for new industries: the first SL stock market, investment banking, brokerage services, etc etc...

We're ready to begin innovating, we just need a little help from you

Sincerely,
Jacqueline Richelieu

What's keeping you from forming a RL corporation that operated in SL? You know, like www.riversrunred.com ?
If you wanna play businessperson, at least have the balls to do it right.

I think different group types would be interisting to see. Not just corporations but all different kind of groups types.

Right now however the current groups are buggy and lacking in features, so I'd first like to see those patched up some.

I have to ask, should it even be legal for you to setup a business in SL and make tax-free money there? How does selling textures in SL differ from selling textures on the web?
How does selling content on this particular medium differ from selling content on all the other media?

I have an ATM in Europa (111,111) that will give out a notecard that describes a stock market website for SL me and a friend are working on.

> You know, like www.riversrunred.com ?

Woah, this is good.

No, what you need is the ability to enforce contracts. Corporations serve an entirely different purpose that you have no need of until there are contracts that can be enforced.

Please stop confusing the concept of groups held together by contractual obligation and corporations. They are simply not the same thing.

Corporations are created in order to limit personal liability to what you invest in a business. This is all you risk now in Second Life. There is simply no means to collect an outstanding debt so, practically, you cannot claim to have one.

Second Life does not need corporations nor would having them at this point do any good at all.

It is not legal to make tax-free money. You are required to report the income. The only difference is that with a Linden being worth less than a penny, most transactions are far smaller and thus unlikely to attract much attention.

Reporting hobby income:
http://www.irs.gov/individuals/page/0,,id%3D14477,00.html

Are you a business or a hobby:
http://www.irs.gov/businesses/small/article/0,,id=99239,00.html

Careful, barter can count as income as well:
http://www.irs.gov/businesses/small/article/0,,id=118385,00.html

Pratically very few of us are ever likely to run into any problems with this sort of things but then again most people driving over the speed limit aren't caught; yet the laws remain, keeping it illegal.

Yeah but you can't exactly Ebay $1L. The transactions with IGE and GOM obviously are reported on their taxes. When you sell $50kL for $250, and you do that 10 times, that's pretty noticeable.

I don't understand why you need contracts. Just like in RL, if you give a $500 investment to a company and they fail, you would be out of luck. It was an investment, if they company fails, too bad. Don't invest unless you trust the guy, or consider it a donation.

The major flaw in your contract idea is the guy gets all the money, cashes it out to go buy textures or whatever, and never returns. No video game contract, no matter what form it takes is going prevent abuse of trust. If you allow contracts, you are practically inviting scammers to rip off residents.



Might not need it.. Didn't need Mini Putt either but it was fun to play with when it was done. Not everyone creates a corporation on purely capitalist motives.

Oh yeah, what SL really needs (like a hole in the head) is to be infested with lawyers.

SL's Community Standards are a breath of fresh air in a 1st-world putrified by politicians, fundamentalists and moralists, all hell bent on coercing everyone else to their own view and implementing their coercion through the teflon-coated hands of lawyers. The money flows in, but the spilled blood never sticks.

No thank you.

Just as incorporation can be handled out-of-world if that is what is needed to persue SL goals, so can contracts.

A contract between AV1 and AV2 ain't gonna be enforced unless the Lindens what to get into the arbitration business (highly unlikely), but a contract between AV1's-human and AV2's-human is quite enforcable today.

- Ace

I'm not sure you understand the proposal.. I don't need a RL corporation in SL, I need a SL corporation in RL.

You seem to be backwards.

Its not actual RL earnings until you cash out into RL money. Otherwise, its all virtual, dear.

I think you, also, are confused. Corporations exist for far more than limited liability, dear. Corporations exist for a myriad of reasons - to name a few: better access to capital markets, better access to human capital, ownership/contingency concerns, etc etc...

I'm not the one confusing anything hun.. I'd take a look at your own thought process first. Have a nice day!

Jacqueline, did you read the notecard that my ATM will give out in Europa (111,111) ?

I think my solution might work for you. If you see anything that I didn't include in the notecard that you think is important in terms of "Corporations", I'll update with any feedback you have.

What possible advantage would a "corporation", with all its benefits, have by being created and sanctioned in SL, versus one created in RL?

If you want to pool capital, and limit liability, and all of those other things that incorporation offer, why not just do it in the real world?

*scratching head with puzzled look*

- Ace

Jacqueline wants to bring in corporations because she wants to introduce restrictions beyond those in the SL Community Standards.

Corporations do 3 things (I should know, I run one):

1. Give incorporated groups advantages over unincorporated people. That's a restriction on unincorporated people. Jacqueline actually lists some of them directly in her post.
   
2. Live by global coercion (law) instead of local consensus between individuals. That's a restriction on the company's staff, on the company's customers, and through bring global, on the entire world that enshrines the corporate regulation.
   
3. Create a whole tier of parasites to implement the coercion. That's a restriction on anyone who isn't a law creator (politician) or a law administrator (lawyer, judge), or law enforcer (various).
   

There's probably more, but those three tend to encompass most of the issues.

Contrast that with the SL Community Standards --- basically no restrictions for consensual behaviour, and only very minor global restrictions with regard to M vs PG and to abuse of the freedoms of others. A breath of fresh air.

Even worse though from my point of view (as an engineer whose entire reason for existence is to create real things instead of barriers) is the final line:
Philip and his staff and the thousands of people in SL have been innovating all along. You are advocating bringing some of the worst innovation-repressing features of 1L into Second Life.

No thanks Jacqueline. Keep the problems of 1L in 1L.

One of Second Life's distinct advantages is the ability to control parts of the world through programs. Contracts here need not make use of lawyers or courts. What we need from the Lindens in order to create something like a contract would be scriptable groups. By joining a group you are, in effect, signing onto the script governing the group.

Allow groups to hold money in a general group fund and let the group script control access/distribution and not only would you have something like a contract, you would also have a company.

Contracts between groups and such would require a somewhat different mechanism so perhaps groups aren't the best general form to handle contracts, or perhaps groups would allow other groups to join as members. And clearly more fuctions call need to be added to allow the sort of detail that you would want in a contract, but I think you can make some decent guesses as to how this might work.

Until Jacqueline explains why she wants a corporation, I wouldn't assume she only wants them for those 3 reasons you listed.

I am very interested to hear Jacqueline thoughts on SLEX and what needs of hers if fails to meet.





The Second Life Exchange or SLEX will allow you hold money in group fund and let the group script control/access/distribution. When SLEX launches, this will be in a limited form but it will be the first feature we improve.

If there are "clearly more functions" then let me know. These other functions that a "corporation" might serve in SL are not clear to me. If you can list what other functions a corporation should have in Second Life, I can add this to SLEX.

Oh dear, must we go through this again?
SL is not a game, and this is not monopoly money we're dealing with.
SL is a platform for 3D content creation, hosting and publishing, featuring a subscription-based micropayment system that makes it easier for you to acquire content.
You deposit USD into the system on a monthly basis and it is converted into a weekly stipend.
Popular users are also eligible for a weekly bonus, and hosts of popular creations are also awarded a daily bonus, so as to encourage the growth of popular and entertaining content, which attracts more subscribers. In addition, those who perform consistently throughout the month are awarded another bonus in USD, as part of a profit-sharing system between LL and its content "developers".
None of this detracts from the fact that SL "economy" is essentially a micropayment system.
I'm all for better group controls, but if you want to start a project large enough to require a corporation, you should really look into hiring people as a real corporation instead of pretending that this is "just a game" and that RL standards, laws and regulations should not apply here.

Hey Jack!

I haven't been IW (as of yet) today, but I will certainly check it out once I log in

Thanks for pointing me in your direction.

Oh dear. At no point does my desire to incorporate wish to impose any of the above restrictions. And I disagree with your *implicit* assumption that corporations tend to restrict innovation more than encourage it.

Corporations are springboards of innovation. They allow access to greater resources (financial, human, distribution, etc) than can be attained by an individual. If there were not obvious RW advantages of incorporating, corporations would cease to exist in RL.

I'm amazed that people bemoan the dearth of innovation while at the same time express modern-day luddite stances against new forms of organization. There's only two choices: Either you accept innovation in all its forms or you don't. To judge which innovations are "better" than others is simply a matter of taste and preference.

Respectfully,
Jaq

Jacqueline, you need to look at your history books again. The Luddites opposed innovation in technology, not innovation in organization.

On top of that, you seem to be failing to grasp the difference between innovation and progress. Innovation merely implies novelty. Progress implies improvement, and technical progress in particular is a scientifically measureable thing, so that the degree of progress in issue X can be given a number measured along a scalar axis.

Innovation is far less tangible than that, and while we can usually clearly say "This is new", we cannot say by how much it is newer than what came before. And what's worse, the judgement of whether something new is better than something old is a matter of opinion. If someone sprays paint all over your lounge it'll probably be something new, but it's not necessarily better.

And so it is in SL. You can talk all you like about the intangible and extremely subjective benefits of bringing 1L business structures into Second Life, and even about the 1L financial gains of business links with SL, but I don't find anything that restricts my freedom in SL to be an improvement here.

Giving certain groups of people privileges and benefits above others is certainly a restriction. Eg. if you want to set up the "stock market, investment banking, brokerage services" that you mentioned in your first post, can I do the same? Oh, I see, I cannot do so because I don't have the financial muscle in 1L to back it up? There you go. You've just introduced a restriction in SL based on the restrictions in 1L.

No thanks.

cant trust anyone who uses the word 'dear' so condescendingly