Online Collaboration goes legit

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David Bollier writes:

It is one thing to talk about the “virtual corporation” and online commons as new organizational forms. It’s quite another to have those forms be legally recognized. Yet in a little-noticed law enacted in June 2008, the State of Vermont has formally conferred “legal personhood” on online communities that wish to form limited-liability partnerships.


The Vermont law strikes me as an ambitious next stage in the evolution of tech and legal infrastructure that started with free software and Creative Commons. The General Public License (for free software) and CC licenses authorize new forms of sharing and collaboration, and have the force of law. We’ve seen the explosion of new online creativity and collaboration that has resulted. The new Vermont law has the potential to authorize all sorts of interesting new collaborative organizations that would have the full legal standing to “compete” with conventional corporations.

My friend John Clippinger of the Berkman Center has described the virtual corporations law as the first step toward imagining a new type of “cloud law.” He is referring to “cloud computing,” the next generation of computing that will locate software systems in the “cloud” – remote server-farms that are accessible from anywhere, through one’s iPhone, laptop or other portable device. Cloud computing will be sold as a utility – like electricity or phone service – and will enable even more powerful modes of Web 2.0 collaboration. For economic reasons, tech experts regard the Cloud as the virtually inevitable next stage of computing.

So Vermont’s first step toward developing “cloud law” is a welcome development. It will make it easier for online enterprises to be highly flexible in their operations; to leverage digital technologies as they evolve; and to scale effectively while creating the usual benefits of new businesses – jobs, tax revenues, innovation. Already a few other states — New Hampshire and Washington — have expressed an interest in possibly emulating the Vermont law.

As far as I can understand, there remains lots to be defined (e.g. terms of what makes decisions legally binding, how task are distributed and accounted for), but like Bollier, I think the general direction this is moving is great. What it does, in fact, it recognize that there are lot of ways to organize work, beyond forming a hierachical company (or ngo) with a board of directors centralizing decision making locally.