The Future of Company Law: Decentralized Autonomous Organization (DAO)

TABLE OF CONTENTS

FOREWORD ............................................................................................................... V

2nd PREFACE ............................................................................................................ VII

1st PREFACE .............................................................................................................. IX

TABLE OF CONTENTS ........................................................................................... XI

ABBREVIATIONS ................................................................................................ XVII

ABSTRACT .......................................................................................................... XXIII

ZUSAMMENFASSUNG ...................................................................................... XXIII

SCOPE .......................................................................................................................... 1

CHAPTER I:

INTRODUCTION to BLOCKCHAIN

I. BASICS of BLOCKCHAIN .................................................................................... 9

1. History and Definition .......................................................................................... 9

2. Technology ......................................................................................................... 13

3. Advantages and Disadvantages ........................................................................... 15

4. Related Terms ..................................................................................................... 17

4.1. Distributed Ledger Technology .................................................................. 17

4.2. Oracle ......................................................................................................... 19

4.3. Crypto-asset ................................................................................................ 20

4.4. Ethereum .................................................................................................... 23

4.5. Smart Contract ............................................................................................ 24

4.6. Decentralized Autonomous Organization ................................................... 27

4.7. Initial Coin Offering ................................................................................... 28

II. LEGAL DEVELOPMENTS .................................................................................. 29

1. Civil Law Jurisdictions ....................................................................................... 30

1.1. Germany ....................................................................................................... 30

1.2. Türkiye ....................................................................................................... 32

1.3. Switzerland ................................................................................................. 33

2. European Union .................................................................................................. 35

3. Common Law Jurisdictions ................................................................................ 39

3.1. United Kingdom ......................................................................................... 39

3.2. United States............................................................................................... 40

4. Notable Examples around the World .................................................................. 42

III. FUNDAMENTAL NOTIONS related to DAO and THEIR LEGAL NATURE... 44

1. Introduction ......................................................................................................... 44

2. Crypto-asset ........................................................................................................ 45

2.1. Introduction ................................................................................................ 45

2.2. Definition, Related Terms and Differences ................................................ 45

2.3. Legal Analyses ........................................................................................... 47

2.3.1. Introduction ........................................................................................... 47

2.3.2. Civil Law Jurisdictions ......................................................................... 48

2.3.2.1. German Law .................................................................................. 48

2.3.2.1.1. Classification as Property ....................................................... 49

2.3.2.1.2. Classification as Money .......................................................... 53

2.3.2.1.3. Classification as Financial Mediums ...................................... 55

2.3.2.1.4. Classification as Intellectual Property Rights ......................... 59

2.3.2.2. Turkish Law ................................................................................... 60

2.3.3. European Union Law ............................................................................ 63

2.3.4. Common Law Jurisdictions .................................................................. 66

2.3.4.1. United Kingdom ............................................................................ 66

2.3.4.2. United States .................................................................................. 68

2.3.5. Interim Result ....................................................................................... 70

3. Smart Contract .................................................................................................... 73

3.1. Definition, Legal Analyses and Regulatory Aspects ................................. 74

3.2. Legal Capacity ........................................................................................... 80

3.3. Offer and Acceptance ................................................................................. 83

3.4. Language and Format ................................................................................. 88

3.5. Execution and Termination ........................................................................ 91

IV. INTERIM CONCLUSION .................................................................................... 95

CHAPTER II:

THE EXISTING LEGAL WRAPPERS Application of the Existing Legal Wrappers to DAO

I. BASICS of DAO ................................................................................................. 109

1. Introduction ....................................................................................................... 109

2. Definition throughout Historical Trajectory ..................................................... 110

3. Features of DAO ............................................................................................... 114

4. Taxonomies and Market Practice ...................................................................... 116

II. CURRENT LEGAL DEVELOPMENTS ............................................................ 119

1. Civil Law Jurisdictions ..................................................................................... 119

2. Common Law Jurisdictions .............................................................................. 120

3. Notable Examples around the World ................................................................ 122

III. GENERAL LEGAL REVIEWS on DAO ........................................................... 123

1. Introduction ....................................................................................................... 123

2. Legal Nature ..................................................................................................... 125

3. Liability ............................................................................................................. 129

4. Bodies and Their Relations ............................................................................... 132

IV. APPLICATION of THE EXISTING LEGAL WRAPPERS to DAO ................. 134

1. Introduction ....................................................................................................... 134

2. Partnership ........................................................................................................ 135

2.1. Introduction .............................................................................................. 135

2.2. Civil Law Jurisdictions ............................................................................ 136

2.2.1. Ordinary Partnership (Adi Ortaklık / Gesellschaft bürgerlichen Rechts) ................................................................................................ 136

2.2.1.1. Legal Nature and Liability ........................................................... 137

2.2.1.2. Establishment ............................................................................... 144

2.2.1.3. Mandatory Bodies ........................................................................ 151

2.2.1.4. Relationships................................................................................ 153

2.2.1.5. Dissolution of Partner Status and Partnership .............................. 159

2.2.2. Other Forms ....................................................................................... 165

2.2.3. Interim Result .................................................................................... 165

2.3. Common Law Jurisdictions ......................................................................... 167

2.3.1. Introduction ........................................................................................ 167

2.3.2. General Partnership ............................................................................ 168

2.3.3. Limited Partnership and Sister Forms ................................................ 171

2.3.3.1. Limited Partnership..................................................................... 171

2.3.3.2. Limited Liability Partnership ...................................................... 174

2.3.4. Unincorporated (Non-Profit) Association .......................................... 175

2.3.5. Interim Result .................................................................................... 177

3. Corporation ....................................................................................................... 177

3.1. Introduction .............................................................................................. 178

3.2. Civil Law Jurisdictions ............................................................................. 179

3.2.1. Introduction ......................................................................................... 179

3.2.2. Joint Stock Company (Anonim Ortaklık / Aktiengesellschaft) ........... 179

3.2.2.1. Legal Nature and Liability ........................................................... 181

3.2.2.2. Establishment ............................................................................... 183

3.2.2.2.1. Basics of Establishment Process and Articles of Association ........................................................................... 183

3.2.2.2.2. Capital................................................................................... 185

3.2.2.3. Mandatory Bodies ........................................................................ 189

3.2.2.3.1. Introduction .......................................................................... 189

3.2.2.3.2. Management Board ............................................................... 189

3.2.2.3.3. General Assembly ................................................................. 191

3.2.2.3.4. Supervisory Board ................................................................ 194

3.2.2.4. Share and Shareholders ................................................................ 195

3.2.2.4.1. Introduction .......................................................................... 196

3.2.2.4.2. Rights and Obligations ......................................................... 198

3.2.2.4.3. Voting Rights ........................................................................ 200

3.2.2.4.4. Shareholder Decision-Making .............................................. 202

3.2.2.5. Audit ............................................................................................ 204

3.2.2.6. Dissolution and Termination........................................................ 205

3.2.2.7. Interim Result .............................................................................. 206

3.2.3. Limited Company (Limited Şirket / Gesellschaft mit beschränkter Haftung) .............................................................................................. 207

3.2.3.1. Legal Nature and Liability ........................................................... 208

3.2.3.2. Establishment ............................................................................... 209

3.2.3.2.1. Basics of Establishment Process and Articles of Association ........................................................................... 210

3.2.3.2.2. Capital................................................................................... 211

3.2.3.3. Bodies .......................................................................................... 212

3.2.3.3.1. Introduction .......................................................................... 212

3.2.3.3.2. Directors ............................................................................... 212

3.2.3.3.3. Shareholders Meeting ........................................................... 213

3.2.3.4. Share and Shareholders ................................................................ 215

3.2.3.4.1. Rights and Obligations ......................................................... 215

3.2.3.4.2. Share Transfer....................................................................... 217

3.2.3.5. Audit ............................................................................................ 218

3.2.3.6. Dissolution and Termination........................................................ 219

3.2.3.7. Interim Result .............................................................................. 220

3.3. Common Law Jurisdictions ...................................................................... 221

3.3.1. Introduction ........................................................................................ 221

3.3.2. Public Limited Company / Corporation ............................................. 222

3.3.3. Private Limited Company / Limited Liability Company ................... 223

V. NEW LEGAL WRAPPERS TAILORED for DAO ............................................ 225

1. Introduction ....................................................................................................... 225

2. Vermont ............................................................................................................ 226

3. Wyoming – Tennessee – Marshall Islands ........................................................ 227

4. Utah................................................................................................................... 232

5. Delaware ........................................................................................................... 236

6. Model Law ........................................................................................................ 237

VI. INTERIM CONCLUSION .................................................................................. 239

CHAPTER III:

THE NEW CODE A New Form Recommendation for DAO

I. INTRODUCTION ............................................................................................... 269

II. THE NEW CODE ................................................................................................ 272

III. INTERIM CONCLUSION .................................................................................. 321

CONCLUSION ......................................................................................................... 331

BIBLIOGRAPHY ..................................................................................................... 359

CURRICULUM VITAE ........................................................................................... 377