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Comment by quizotic | Hacker News Reader

Is there any protection to be had by a corporate shell game? Suppose I put my technology assets in one corporation, my revenue and monetary assets in a 2nd corporation, and my customer facing presence in a 3rd corporation. The patent trolls descend on the customer facing presence, which has no substantial technology or monetary assets. If it goes into bankruptcy, I lose brand, but can restart elsewhere and preserve my tech and monetary assets ?

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That is genius and exactly what real estate developers do in Philadelphia. They have one shell company for their brand and a separate shell company for each development. If they have 100 separate houses to develop, they may have 100 separate shell companies. This way they close the shell company as soon as they finish a project so that any lingering issues in the community have no recourse.

Say they build a house next to yours and tear up your roof in the process causing it to leak. You need to sue them ASAP or their company will no longer exist in a month or two so you have nothing to sue.

I’d love to hear why LLC’s are a good idea; for the most part they seem like a scheme to avoid responsibility and evade taxes for rich people.

I can’t comment on the balance of LLC use, but the good idea is that someone who cannot afford large personal losses can start a business that won’t ruin them if it fails. Additionally, the personal tax and business paperwork is simpler than with a corporation.

A bunch of the small businesses that sell at local city markets are LLCs, for example.

Not sure about LLCs but to my understanding its common to have an umbrella LLP encompassing all the LLCs

The patent laws contemplate indirect or joint infringement, that could hold multiple entities liable if there is sufficient coordination. What you propose is an interesting investigation, but would quickly run into these issues of multi-party infringement.

Also possible alter ego issues.

Answer is that it depends. Investors will want protections that would render some of that separation moot.

Often those separations are more productive for tax purposes. For example, you can avoid up to 90% of many taxes with a presence in the US Virgin Islands.

Interesting. So you would have one person with 3 business entities; one for the “mode of production” (technology assets), one for the “means of production” (revenue and monetary assets), and one for the “relations of production” (customer facing presence). Having studied a little bit of Karl Marx in school, I just can’t help but recognize the congruencies between your solution and his theory of Modes, Means, and Relations of Production. It’s quite profound in the context of high-tech modes and patents as an override for securing them. The “modes” are one of the hardest to grasp. He asserted they are the exterior elements like lifestyles, infrastructure, and processes that capitalism would depend on but not account for, and conveniently replace at will, at an accelerating rate. Orthogonality certainly sounds like the way to go if you can manage it.

Anyhow, sorry I don’t have the legal info you’re after. I wishe you luck.

What work are you referring to?

Yeah fair question; hopefully my answer suffices. These three concepts are kind of a constant in his later economic work. I don’t know if he ever presented them in such a succinct way himself; I think listing them like I did was done by somebody else later on. I could be wrong.

I am most familiar with Das Kapital. The ‘means’ are a big part of Volume I, more so as it progresses if I remember right, and his main focus in that volume is the capitalist mode, which prioritizes the means. Volume III (written by Engels) goes deeper into the wider system of modes; elaborating on how modes function in general, and this is where the acceleration concept is asserted more formally.

I am no economist and maybe that’s why but I find the modes discussion in Volume III the most interesting, whether his economic stuff is correct or not, his breakdown of modes seems almost more like anthropology. I mean, I don’t know how people would ever understand us in the future without understanding this in some form or another.

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