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Vermont OKs the Creation of Virtual Corporations


<http://gigaom.com/author/wjamesau/>Wagner James 
Au, Tuesday, June 17, 2008at 12:30 PM 
PT<http://gigaom.com/2008/06/17/vermont-oks-the-creation-of-virtual-corporations/#comments>Comments<http://gigaom.com/2008/06/17/vermont-oks-the-creation-of-virtual-corporations/#comments> 
(15)

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Ah Vermont, that lovely New England state known 
for its maple syrup, Ben & Jerry?s ice cream?and 
now, limited liability corporations that only exist online.

On June 6th, Gov. Jim Douglas signed an 
inauspicious-sounding bill entitled 
?<http://www.leg.state.vt.us/database/status/summary.cfm?Bill=H%2E0888&Session=2008>H.0888, 
Miscellaneous Tax Documents? that could revolutionize the way startup 
companies are formed and run. As New York Law School professor 
<http://www.nyls.edu/pages/2726.asp>David Johnson 
explained to me, up until now, U.S. law required 
LLCs to have physical headquarters, in-person 
board meetings and other regulations that have 
little relevance in the digital age.

No longer. Under the new law, for example, a 
board meeting may be conducted ?in person or 
through the use of [an] electronic or 
telecommunications medium.? A ??virtual company? 
will be, as a legal matter, a Vermont limited 
liability company,? said Johnson. And other 
states are required to recognize the corporation 
as a legitimate LLC. So while in the past many 
companies 
<http://en.wikipedia.org/wiki/Delaware_corporation>registered 
in Delaware to take advantage of that state?s 
business-friendly policies, with this law, 
Internet-driven startups may find Vermont even more ideal.

Johnson was instrumental to crafting the bill?s 
language; he, along with his NYLS students and a 
couple of professors at Vermont Law School, spent 
the last two years putting it together. He 
foresees virtual companies launched for countless 
reasons, such as the production of software or 
publications written by people across the 
country, even for corporations that exist only in Second Life.

As you may have guessed, this isn?t just an 
academic exercise for Johnson; he?s also 
developing software to manage virtual 
corporations through 
<http://dotank.nyls.edu/VisualCorporation.html>NYLS? 
DoTank project. Since word of the Vermont bill?s 
passing got out, he said, ?I?ve had two people 
beg me to be the first to get on the list? to 
start filing virtual incorporation papers. 
Indeed, it?s easy to see this becoming standard 
practice in coming years, with traditional office 
buildings being abandoned for dynamic companies 
that exist wherever its employees happen to crack open their computers.


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