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VIRTUAL LIMITED LIABILITY COMPANY
The Legal Entity Becomes Virtual. Again.
SHARED CAPITAL legal fiction of the 19th century. VALUABLE PAPERS One and only valid copy 200 years of evolution created a monopoly of trade
VIRTUAL LIMITED LIABILITY COMPANY The Legal Entity Becomes Virtual. - - PowerPoint PPT Presentation
VIRTUAL LIMITED LIABILITY COMPANY The Legal Entity Becomes Virtual. - - PowerPoint PPT Presentation
VIRTUAL LIMITED LIABILITY COMPANY The Legal Entity Becomes Virtual. Again. SHARED CAPITAL legal fiction of the 19th century. VALUABLE PAPERS One and only valid copy 200 years of evolution created a monopoly of trade CAN A VALUABLE PAPER BE
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SLIDE 3
CAN A VALUABLE PAPER BE A DIGITAL DOCUMENT?
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SHARES IN A LIMITED LIABILITY COMPANY
CLOSED LLC
(2500 euro)
PUBLIC LLC
(25 000 euro)
- Paper shares
- Record in shares account
- Share certificate
- Record in shares account
- Accounted in depository
- Publicly tradable, if listed
- FMI required
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TRANSFER AND ACCOUNTING OF SHARES
(closed LLC)
TRANSFER:
- Written contract
- Priority for purchase for
- ther shareholders
ACCOUNTING:
- CEO responsibility
- No direct control
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DAILY PROBLEMS
- Non - compliance with reporting rules
- Transfer by retrospective date
- Stealing of shares
- Dumping of shares
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BLOCKCHAIN ERA PROBLEMS
- No way of issuing compliant
securities on the blockchain
- No way of tokenizing assets
CLASSICAL SHARED CAPITAL THEORY BECAME OUTDATED
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INNOVATION
DIGITAL SHARE CERTIFICATE
- Exist on the blockchain
- Controllable only by the owner
- Easily transferable
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Digital Share Certificate
Public data:
- Company name and code,
- No of shares represented, capital, value,
- Restrictions.
Encrypted data:
- Owner’s personal data
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Digital Share Certificate
OWNER
- Has access to all his
shares
- Can transfer whole/part
- f DSC
- Can mortgage all/part of
the shares
COMPANY
- Knows its shareholders
and their rights in real time
- Has access to restrictions
set, if any
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THE BENEFITS
- Transfer contracts digitally signed and time stamped
- True composition of shareholders is clear at all
times
- Stealing or dumping shares made impossible
- Different/new classes of shares made possible
- New kinds of Valuable Papers could be issued (ICO)
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IMPLEMENTATION ROADMAP
DEFINING A CONCEPT SELECTION OF TECHNOLOGY SANDBOX TRIALS DRAFT LAW APPROVAL IMPLEMEN- TATION
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MAJOR STAKEHOLDERS
CENTRE OF REGISTERS MINISTRY OF ECONOMY MINISTRY OF FINANCE BANK OF LITHUANIA Management of the Registry of Legal entities Technology provider Drafting the required laws: New law/ Amendments to the existing regulation Drafting the required laws: New law/ Amendments to the existing regulation Regulatory authority for banks and other financial institutions Oversees the turnover of financial instruments
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CHALLENGES
- Selection of fast, cheap and opensource
technology
- Fit the legal framework (especially related to VP
trade)
- International trade of DSCs - identification issues
SLIDE 15
THE END
Jonas Udris jonas.udris@registrucentras.lt https://www.linkedin.com/in/jonasudris/