Memberless Legal Entities Operated by Autonomous Systems - Some Thoughts on Shawn Bayern's Article 'The Implications of Modern Business-Entity Law for the Regulation of Autonomous Systems' from a Swiss Law Perspective

Abstract

Shawn Bayern recently argued that it is possible in certain U.S. states to give de facto legal personhood to an autonomous system (i.e., a computer system that is capable of operating a legal entity without human intervention) using a permanently memberless limited liability company (LLC) that owns the autonomous system (“The Implications of Modern Business-Entity Law for the Regulation of Autonomous Systems,” 19 Stan. Tech. L. Rev. 93 (2015), working paper available at http://ssrn.com/abstract=2758222). The author reacts to this proposition from a Swiss law perspective.

While Swiss private legal entities may have their activities managed by an autonomous system, any such entity must have a supreme governing body (e.g., a board of directors or a board of trustees) comprising at one or several humans. Moreover, memberless stock corporations and limited liability companies are not permitted in Switzerland. What should be possible, though, is to form a not-for-profit foundation (Stiftung) that owns the autonomous system and whose purpose is to engage in the activities that the autonomous system is programmed to engage in.

However, if and when autonomous systems become sophisticated enough to operate a legal entity, the demand for autonomously operated entities that do have human beneficial owners (who will want to have a say in the entity) might be greater than the demand for entities that are owned by no-one.

Keywords: Corporate Law, Switzerland, Autonomous Systems, Foundations, Beneficial Ownership

JEL Classification: G32, G34, K22