The co-operative movement is founded on the principle of democratic member governance so it will be fascinating to see whether there are applications for One Click Orgs in this sphere.

Over the last few months we’ve been talking to Russ and Jonty, founders of the Hackspace, to understand how they wanted the organisation’s governance to develop and plan the best approach to virtualising its legal structure. Unlike One Click Orgs’ existing platform for Associations where the legal structure is created from scratch, we’ll need to reverse engineer the Hackspace’s existing articles to replace references to meetings and paper notices with links to the electronic platform. This requires some delicate choreography.

The first step will involve passing a resolution that replaces the “Proceedings of the Board” section of the articles with new clauses permitting Directors to make proposals and vote on them anytime with the decisions logged electronically. Then we’ll make a model change to the platform to separate Members’ powers from Directors’. Next the sections dealing with “General Meetings”, “Proceedings at General Meetings”, “Members’ Powers” and “Votes of Members” will be replaced, virtualising the appointment of new members, the election of board members and removing the requirement to hold an annual general meeting. Finally the filing of annual returns to Companies House will be automated. As ever, the code and legal provisions created in the course of the project will all be released under open licences so anyone is free to reuse and adapt them.

This is an important project for a number of reasons:

• It will create a legal template that can be localised to different jurisdictions around the world which will make it a lot easier for people to set up hackerspaces.
• It will reduce the bureacratic overhead of running a hackerspace which for many people has to fit alongside a day job.
• It will open up new possibilities to involve the members of a hackerspace in how it is run.
• As well as hackerspaces the resulting platform will be relevant to a wide range of other non-profits.
• It will provide a natural “next step” for projects which have set up on the One Click Orgs platform for Associations (currently in closed Beta)
• The project will thoroughly test the UK’s 2006 Companies Act which includes a lot of innovations favourable to virtual corporations. In the process it will clarify what further legislative amendments are required for fully virtual corporations so we can campaign for those revisions to be made.

We’re organising a special hacknight at the Trampery this Thursday from 7pm to 10pm to get started on the project so come along and code with us if you’re in the neighbourhood.

Chris and I made a short presentation at last week’s London Hackspace Meetup, which we filmed. Here’s the first part in which I introduce the project. The second and third parts showing Chris’ demo and code walkthrough will follow.

There was a huge amount of interest in the project. It was a particular pleasure to meet Oliver Goodenough (Co-Director of the Berkman Center’s Law Lab) and David Johnson (Senior Resident Fellow at the Center for Democracy and Technology). They were jointly responsible for the reforms passed in the Vermont state legislature in 2008 opening the way for virtual corporations. Both Oliver and David have graciously agreed to join One Click Orgs’ Advisory Board.

One of the most interesting topics discussed at the Berkman summit was the way that virtual corporations could undermine key planks of the corporate regulation regime. Currently the vast majority of corporations are registered in the jurisdiction in which they’re located. The notable exception is the United States where the state of Delaware has a long-standing reputation for business-friendly company law which has led a lot of ventures to incorporate there.

The emergence of virtual corporations threatens to cut the tie between the location of a business and the jurisdiction where it registers. Just as shipping businesses register their fleets under “flags of convenience” such as the Bahamas where regulations are looser and multi-national firms organise their tax affairs around the laxest regimes, businesses will increasingly be free to incorporate in whichever jurisdiction in the world has the most favourable company law. This raises a host of questions about how governments will be able to fulfill their responsibilities to protect consumers and shareholders from abuses and fraud.

The invention of artificial personality and limited liability by the UK Parliament in the nineteenth century reflected a quid pro quo where joint-stock corporations gained significant privileges and protections in return for which they submitted to state regulation and agreed to place key information in the public domain. That bargain is now in danger of unraveling.

Virtual corporations pose many other questions for society. The internet has given rise to millions of online communities which will soon have an easy route to acquire legal personality. Are we ready for a world where “guilds” in the online game World of Warcraft can become corporations, own assets, have their own governance systems and enter into contracts with the rest of the world?

Important advantages are offered by virtual corporations. They will permit entrepreneurs to set up a venture in a matter of hours in response to a new opportunity and greatly reduce the bureaucratic friction involved in running a company. But we need to be sure that the regulatory regime keeps up with the challenges presented by this new world.

The event is free and open to guests, so feel free to come along if you are around in London!

Following is the blurb for the event:

For two millennia democratic systems have been designed to accommodate a set of limiting factors which the internet has rendered obsolete. This opens the door to substantially new models of democracy which are more fluid, more responsive to changing circumstances and more efficient at harnessing a society’s collective intelligence. The seminar draws on ideas explored by Charles in his chapter on emergent democracy which forms part of O’Reilly’s forthcoming book “Open Government”.

Charles is CEO of the social analytic software business Trampoline Systems, recently recognised by Red Herring as one of the world’s top 100 technology firms. He is founder of think tank CIRCUS foundation and Director of the One Click Orgs project, providing automating legal structures and governance tools for non-profits. Charles is a Fellow of the School for Social Entrepreneurs, a board member of Fondacja Techsoup and was the final person to be mentored by Michael Young.