Legal structure

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The legal structure is an organizational interface, it specifies and organizes relations between the organization and other organizations (and institutions) in the ecosystem. For example, it determines how information and resources flows beyond the organizational membrane and in between organizations. It is dependent on social norms and laws, normally enforced by institutions, including the state. Thus, this structural dimension is focused outwards, and can be considered as an interface layer between the organization and its ecosystem.

The legal structure is part of the organizational structure. It must be considered at the same time with other structural elements such as culture and ethosmethodologies, infrastructure because all these elements are interrelated and form a holistic system. In other words, it cannot be considered in abstraction of these other structural elements.

We must note that the OVN model is not yet codified by nation states, i.e. open networks and network-type socioeconomic activity are not specified in legal code, they are not regulated. As such, OVNs are not illegal entities, they are alegal, i.e. operate in absence of legal code. The 4th Sector initiative undertaken by Sensorica aims at working with governments to create a legal framework for OVNs and regulate network-type activity. This task is very difficult, as the 4th Sector develops outside of the market and beyond the reach of nation states (transnational). Nowadays, most nation states take an antagonist position with respect to 4th Sector entities and activities.

This page discusses possible legal structures for OVNs, which is mostly a legal hack, using a set of existing legal structures to take on certain functions. These traditional / existing legal structures are created at the periphery of the network as interfaces between the OVN and pother organizations and institutions. More below...

Main constraints

The OVN can take many forms and can serve many purposes. In order to conduct commercial operations in most parts of the world, some legal formalization is required. Other approaches may stick with strictly peer-to-peer transactions and liability, avoiding many of these legal considerations. See also: What is a value network?

A global large-scale dynamics value network

advocated by Tibi for high tech innovation

Characteristics of open networks

  • a global organization, involving individuals from different countries that are submitted to different laws.
  • a very dynamic organization, operating at large scale, taking in large, as well as micro-contributions
  • rely on the NRP-CAS for redistribution of revenue
  • open / permissionless (access to processes of value creation and distribution)
  • transparent (access to information)
  • decentralized (bottom-up allocation of resources)
  • meritocratic

Legal framework

In Canada the non-registered association is used by Sensorica to represent the network to existing institutions. Thus, Affiliates form a non-registered association, which is constituted either by a written agreement, or by a verbal agreement, or by the intentions that emanate from practices. The use of shared methods, rules (governance]] and tools (infrastructure) by affiliates is enough to determine the intent to associate and collaborate on various projects and ventures. In the US the non-registered association is replaced with a general partnership.

One problem with using an association is that liability rests with associates, which are the network affiliates. The types of liability within the association can be:

  • liability related to the use of material resources (ex. spaces, equipment or tools, in the context of projects or ventures).
  • liability related to the behavior of affiliates, which may lead to causing injury to other affiliates.
  • ...

Affiliates can be relieved of the liability associated with playing within the organization by transferring it to an existing legal structure that we call the Custodian. Thus, all shared assets (pool of shareables, commons) are legally owned and managed by the custodian, or multiple Custodians. A Custodian is essentially a Trust. For example, a shared physical space, like the Sensorica lab can be put under the mane of the Custodian, who pays the rent and insurance to cover accidents within the lab, while manipulating any tool or equipment in the lab.

The Custodian can also be used to interface with government, governmental institutions and other type of organizations. For example, a venture can use the Custodian's bank account to perform financial transactions, or to sign a deal with another organization, to get a grant, etc.

When it comes to interfacing with the market, an Exchange firm can be used to absorb liability related to commercial activities. Thus, the Exchange firm, which can be a limited liability corporation, acts as interfaces with the market.

A local, small scale OVN

Advocated by Steve, to be applied on local food systems, local food production and distribution.

An informal OVN

advocated by Ben, for a transparent trust-based p2p "gift ecology" that avoids legal formalities

  • based around a shared database and accounting / evaluation system
  • may connect to other networks via common languages and maths
  • membership is collectively managed through demonstrated achievement and peer review
  • credit is based on trust, an individuals extrapolation of a peer's reputation data
  • currency is shared via gift / donation, with a record of related or reciprocal flows
  • ownership of assets and resources is independently arranged
  • collective branding is tied to the individuals who make use of it

A global large-scale OVN that only allows control of production at the edges

Advocated by Apostolis X.

  • Allows control of production by workers-consumers (amount of control based on the percentage of work they do, or the percentage of commodities they consume)
  • Use of a universal template for the creation of multiple currencies that allows money to control production only on the edges. (Only the issuer of a currency(worker) and the consumer of a currency influences its price, not intermediaries)
  • Intermediaries(investors) invest on projects but do not take part in the decision making.
  • Use of Social contracts and algorithms that protect the network without the support of the Legal System.
  • Creation of a global non-profit organization that will protect the values of the network and which will provide a central currency exchange system.
  • All the properties of tibi's network with some possible changes, using the erp system as a tool of coordination and optionally as a tool of redistribution of revenue.

Network of networks

Legal structure must be designed to allow federation with other OVNs or other type of networks-type organizations.

Think in terms of protocols that can be adopted by similar organizations, or that can be easily adopted.

This is part of the growth strategy and mechanisms of the p2p economy.

See more on Networks of networks.


See this topic on Sensorica's document.


Some (Tiberius Brastaviceanu, add your name here) maintain that the OVN needs to stay informal, with legal structures at the periphery of the network. These legal structures are seen as service providers to the network, which means that they are part of the network as long as they provide an essential function with a sustainable level of satisfaction (for network affiliates). For example, the role of the Exchange firm is to act as an interfaced between the market and the OVN (to assume legal liability for products that the OVN produces to exchange on the market, conduct transactions, etc.). The Custodian is another legal entity that acts as a recipient for funds, and/or as a legal owner of material (lab space, equipment, ...) and/or immaterial assets (logo/brand, virtual infrastructure like websites, social media channels, etc.).

Sensorica has remained informal since its inception in early 2010. Tactus Scientific Inc. was created in very early as an Exchange firm. In 2014 a non-for-profit was created to mediate relations between the network and academic and governmental institutions.

NOTE: migrate content from Legal framework here.

External links