Solid incorporation

Although most aspects of our lives keep liquifying, some still rely exclusively on solid standards. In order to invoice others for our work, liqueed needs some kind of legal incorporation. We live (and mostly work) in Argentina now, so we are bound by its laws. There aren’t too many options here when incorporating.

The first option we considered is the work co-op ("cooperativa de trabajo"). Conceptually it’s a natural fit. Legally it’s not bad. On the minus side one needs to spend considerably more time dealing with red tape. But there’s more bad news for co-ops in Argentina. We were told that many big corporations have a “no co-op providers” policy. Apparently some people have committed some kind of tax-related fraud with co-ops, which has unleashed a co-op ban. Sad. And it gets worse. I was told that you cannot form a co-op in Argentina with less than 10 members. To make the nightmare complete, rumor has it that no new co-op submissions have been accepted for months now. Farewell co-op. For now.

Second option was a general partnership ("sociedad civil"). On the plus side, its conditions are completely open. Its rules could be as fluid as you wish. Even better, incorporating one is blazingly fast. The negative side? If the partnership gets sued, all the members instantly get into trouble. I’m quite naive in this respect, but the other guys didn’t want to worry about serial suers, so goodbye general partnership. Fluidity also has its operational hazards. Because your rules are unique, big corporations (who serially love singularity) might take forever to confirm they are ok working with you. Farewell general partnership.

The last remaining options are practically indistinguishable from each other, at least to my skeptical eyes. LLC ("sociedad de responsabilidad limitada") or joint-stock company ("sociedad anónima"), both have the concepts of capital and profit embedded in their DNA. Our accountant suggested we chose the latter, for reasons I have already forgotten. And so today we signed some stuff to have “liqueed Sociedad Anónima” operational soon. Sigh.

Is there any (more liquid) alternative to formal incorporation? I first heard about smart contracts from Diego Gutiérrez Zaldívar years ago, when I described to him the initial ideas behind liqueed. He has now formed with some friends a startup on the subject called RootStock. I got to better understand the topic before getting too excited, but it looks good. Thinking about the potential of smart contracts to form international working groups might even help me go past my co-op blues…