OtoCo Documentation
  • Hello to Automated Company Assembly on Blockchain
  • Updates
    • Oct 2022
    • Sep 2022
    • Aug 2022
    • Jun 2022
  • A. OtoCo: Instant Real-World Entities on Ethereum
    • Part I. How OtoCo Came About
      • 1. The legacy process
      • 2. How we condensed speed of formation to seconds instead of days
        • a. Introducing the Series LLC
        • b. How we removed the naming speedbump
        • c. Why blockchains?
  • Part II. The OtoCo Ethereum smart contracts
  • Part III. The Legal Nexus
    • 1. Delaware
      • Delaware: Certificate of Formation
      • Delaware: OtoCo DE Master LLC Operating Agreement
      • Delaware: OtoCo DE Series LLC Agreement
    • 2. Wyoming
      • Wyoming: Certificate of Formation
      • Wyoming: OtoCo WY Master Operating Agreement
      • Wyoming Series LLC Operating Agreement
  • B. Where We Go From Here: Introducing the OtoCo token
    • Part I. Our Vision for OtoCo: From Product to Platform
      • 1. The Anachronism of Analog Company Formation
        • A Wordpress for companies?
        • Why is nobody doing this?
        • Enter blockchains
      • 2. From Product to Platform: An Onchain Venture Building Marketplace
  • Part II. The OtoCo Token: A Loyalty Scheme, Developer Reward and Voting Card - All in One
    • 1. A tokenized points-system
    • 2. “Proof of sale” rewards
    • 3. A voting card
    • OTOCO Issuance
  • Part III. A New Smart Contract Solution to Building a Pre-Order Book and Automating Token Issuance
    • 1. The idea behind our design
    • 2. Our proposed staking smart contract
    • 3. The OtoCo token sale process
    • 4. Funding update
  • Part IV. Proposed OtoCo Governance and Exit to the Community
  • C. User Guides and FAQs
    • Taxes and reporting
    • Independently verify a blockchain-signed document
    • Create a funding launchpool using OtoGO
    • Prove ownership of your on-chain LLC
    • Multisig LLCs for DAOs
      • Setting up a Gnosis Safe and an OtoCo LLC
    • FAQs
      • About the Series LLC
      • The role of the Master LLC
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  1. A. OtoCo: Instant Real-World Entities on Ethereum
  2. Part I. How OtoCo Came About
  3. 2. How we condensed speed of formation to seconds instead of days

a. Introducing the Series LLC

As a first way to increase our speed of formation, we had a closer look at a relatively new variant of the LLC: the Series LLCs.

A Series has a Master and individual Series. Each Series is considered an LLCs in its own right, with its own name and its own Member(s) independent from the Members of the Master LLC and other Series' Members.

An on-chain Series LLC has the exact same legal validity as any other LLC!

Crucially, the assets and liabilities between the Series amongst themselves and between the individual Series and the Master are entirely firewall-ed (though there is not yet sufficient caselaw to confirm this firewall is 100% secure in all States).

It is the Master that spawns the individual Series without the need for extra filing with State Registry: The Series' first Member simply signs an Operating Agreement and all that is required from the Master is to keep a record of each individual Series' chosen name and initial Member.

In this legal construct, the time to spin up a new entity can be reduced to the speed by which a Series contracts with its Master.

However, there's still a signature required, which introduces latency.

To make this at the push of a button, as was our goal, we had to go a step further.

A key discovery

Individual Series need a first Member.

In the analog world, this Member would either be a physical person or an official representing a company who contracts with the Master LLCs by signing the Series Operating Agreement.

Even when digital signing is used, the Master still needs to create a record of the name of the Member of the Series for it to be validly activated.

Our key discovery in this respect was that the first Member of a Series LLC can be a smart contract address.

As a result, a new Series LLC could be formed by signing a cryptographic transaction on blockchain between the owner of a wallet and a Master smart contract that activates the Series Operating agreement.

In this setup, the first Member of the Series LLC is whomever controls the wallet that sends Ether to the Master LLC smart contract address that spins-up the Series LLC.

Proof of existence of the new LLC is the smart contract created to hold the Series LLC Operating Agreement. Proof of ownership comes from the public key that shows the address of the first Member who sent the transaction to the Master smart contract.

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Last updated 2 years ago

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