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Is it possible to create a trust without any beneficiaries or one in which the beneficiaries could not 1) change the terms of the trust, and 2) retrieve anything from the trust?

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    So what is the trust supposed to do with its assets or income, if not give them to a beneficiary? – Nate Eldredge Apr 12 '17 at 15:19
  • Operate under a very strict set of predefined conditions – Anon Apr 12 '17 at 15:19
  • Currently it is possible to set up a trustless ownerless coop using blockchain technology that can do a number of things, I am looking for a way to create one that could own property and/or run businesses – Anon Apr 12 '17 at 15:20
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    Can you elaborate on how it should operate, and what those conditions would be? I don't think you can have a trust that is required to just sit on its assets in perpetuity. – Nate Eldredge Apr 12 '17 at 15:21
  • There would be a number of tokens that would have voting rights on anything submitted to the trust, for example the appointment and pay of a CEO of a company that the trust owns controlling share. – Anon Apr 12 '17 at 15:23
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Non-Profits Need Not Have Owners But Must Have A Lawful Purpose

Any non-profit company, for example, a 501(c)(3), is ownerless and can be run by a self-perpetuating board if desired, rather than having delegates that provide an outside source for new board members. In that case you have to set forth a purpose of the company or trust, to which its assets and profits must be used, and it must be managed in accordance with that purpose. You can also have a "private foundation" that is effectively ownerless, again with a designated charitable purpose.

Generally speaking, the law limits how much compensation can be paid to officers and employees of such a company and restricts self-dealing transactions by such a company.

You probably cannot create a valid trust or business with no beneficiaries and no designated charitable purpose which is supposed to merely accumulate its profits and assets.

Ownerless Cooperatives Are An Oxymoron

Your reference in this and other posts to an "ownerless cooperative" is basically an oxymoron.

A cooperative is an entity owned by a class of people who have a contractual relationship with the entity (usually consumers or producers) who are the owners of the company with voting control and who are entitled to an adjustment of their transaction prices with the cooperative via a rebate or surplus check proportionate to the dollar volume of their dealings with the cooperative (Northwest Mutual, must rural electric companies, and most credit unions would be examples of consumer cooperatives, Ocean Spray is a good example of a producers cooperative).

An ownerless entity is pretty much by definition not a cooperative.

An excellent overview of forms of entity organization other than investor owned stock corporations can be found in The Ownership of Enterprise by Henry Hansmann.

The Life Of The Law Is Not Math Or Logic

Honestly, it sounds like, in your several posts on the subject, that you are attempting the hide the ball of an ulterior purposes which is material to the legality and organization of an entity.

The law is not like science or mathematics. You can't prove a bunch of isolated propositions and then string them together logically. The law operates on an entire comprehensive "fact pattern" and even if every step of your chain of reasoning to an ultimately result is supported by legal authority, this does not mean that this will be the result you get when you put all of the pieces together. That kind of logical reasoning doesn't work in a legal context. The heading of this section is a paraphrase of a famous statement about the law by Oliver Wendell Holmes, Jr.:

The life of the law has not been logic; it has been experience... The law embodies the story of a nation's development through many centuries, and it cannot be dealt with as if it contained only the axioms and corollaries of a book of mathematics.

from "The Common Law" (1881) at page 1.

Blockchains Are Not The Legal Innovation That They Claim To Be

Using blockchain technology to manage "tokens" of voting control in an entity is ultimately completely irrelevant. Blockchain technology is just another alternative to certificated shares, shares kept on an ownership ledger, or shares kept through secondary shareholding intermediaries or brokers. The technology used to keep track of voting control or economic ownership is irrelevant, and some common entities (e.g. homeowner's associations) have ownership that is basically determined via a crude public blockchain called the county clerk and recorder's records.

People who think that blockchains provide any significant legal innovation into anything (e.g. here) are fundamentally misguided and typically are not people familiar with the law who have misconceptions about how the law works.

Also, contrary to the hype, blockchains are not fraud-proof and indeed, involve serious systemic risks of instability because an error in an old transaction can disrupt lots of current claims. Claims such as those made here that blockchain transactions are irrefutable are naive and basically false. A block chain is a bit like a real property record system without an adverse possession rule to make ancient glitches irrelevant.

Moreover, blockchains are a solution to a non-problem. Authenticating ownership and voting rights, economic entitlements, and corporate actions is something that has never posed a very significant economic problem ever since writing was invented. These are economic problems that were already effectively solved in the days of the Minoans, and widespread ownership of well authenticated entities by numerous ever shifting groups of owners was a problem well in hand by the days of the British East India Company.

Anonymous Ownership Or Contribution Records Are Illegal

Truly anonymous ownership, however, is legally prohibited, even though ownership need not be made a matter of public record.

  • In the case of for profit entities, by securities regulation which requires disclosure for purposes of exercising voting rights and for disclosing large blocks of ownership as required by law, and for purposes of tax law.

  • In the case of non-profit entities, it is prohibited by virtue of laws regulating private foundations that impose tax requirements when certain concentrations of contributions come from a small, related group of people.

  • In the case of political organizations, campaign finance laws require disclosure.

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    "Claims such as those made here that blockchain transactions are irrefutable are naive and basically false." -- For instance, the DAO (an Ethereum-based project) turned out to have a "bug" that allowed someone to withdraw arbitrary amounts of money, and someone did. Despite pre-exploit claims that "the code is the authoritative set of rules," this was considered a bug and Ethereum hard-forked to reverse the withdrawals. – cpast Apr 12 '17 at 23:02
  • I never claimed that blockchains are irrefutable, obviously they are only as good as they are programmed. An ownerless cooperative is basically an organization that owes no rights to it's members. Confidence and trust is placed in the blockchain rather than the law. For example there is no recourse for stolen bitcoins or failed ICO's. It is a system that works quite well for network based projects allowing them to raise funds, self govern and trade their digital assets - I would like to see this at work for brick and mortar businesses. – Anon Apr 13 '17 at 0:47
  • @Anon If an organization owes no rights to its members it isn't a cooperative from a legal perspective under either securities law, or tax law, or corporate law, although it might be a non-profit. The notion that an organization can deny legal recourse for stolen bitcoins or failed ICO's is doubtful - this isn't something private parties can due unilaterally. If it is used to raise funds, it is very likely illegal. If it is used to govern anonymously, it is likewise very likely illegal. Bitcoin itself hovers on the edge of money laundering liability exposure when used to trade digital assets. – ohwilleke Apr 13 '17 at 6:56
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    +1 for subheadings that, when read together, are a summary of the whole text. Reminds me of a Government Accountability Office report I once read. Good memories. Thanks. – Patrick Conheady Apr 16 '17 at 14:56
  • @PatrickConheady That particular style in legal writing is almost entirely the work of dedicated legal writing scholar and advocate Bryan Garner. – ohwilleke Apr 17 '17 at 2:38
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The legal concept of a trust originates in English trust law. Virtually all common law jurisdictions have varied or added to this body of law, but I will refer to English law as a useful starting point. A full answer to your question is impossible without specifying a particular transaction involving particular property and people in a particular jurisdiction.

A trust without beneficiaries?

The three certainties are a necessary condition for the validity of a trust. The third certainty is the certainty of object or beneficiaries. Generally, a trust which has no beneficiaries at all must be a charitable trust – a trust for the public benefit, which can be enforced by a public officer.

Certainty of beneficiaries no longer requires that it is possible to enumerate a complete list of the beneficiaries. It is sufficient to satisfy the 'in or out' test, meaning that it must be possible to say whether any given person is 'in or out' of the class of beneficiaries: McPhail v Doulton [1971] AC 424. So, a non-charitable trust must have beneficiaries, but it need not have a fixed list of named beneficiaries. A trust where the beneficiaries are the class of people holding particular tokens or units is known as a unit trust.

A trust the terms of which the beneficiaries cannot change?

The beneficiaries of a trust are generally not entitled to change its terms. Modern trusts are usually governed by the terms of a deed of trust, which will frequently make provision for its own amendment. Often, it is possible for the trustees to amend the trust deed without the consent of the beneficiaries – perhaps subject to the approval of an 'appointor' or 'guardian.'

The lack of an express power to amend the trust deed may render the trust unworkable in unforeseen situations. Many jurisdictions have a statute conferring power on a court to modify the terms of a trust in these circumstances, such as the Variation of Trusts Act 1958 (UK).

A trust the property of which cannot be demanded by the beneficiaries?

A discretionary trust is a trust in which the distribution of the trust property is left to the discretion of the trustees. The trustees may be required to exercise their discretion according to rules set out in the deed of trust. Subject to any such rules, the beneficiary of a discretionary trust has no fixed interest in the trust property and is therefore not entitled to demand it.

However, the terms of a discretionary trust can go only so far. Where all beneficiaries agree, the rule in Saunders v Vautier allows the beneficiaries to demand the distribution of the trust property, bringing the trust to an end. By terminating the trust and establishing a new trust, the terms of a trust can effectively be amended by the agreement of all beneficiaries. So, while it is possible to prevent any one beneficiary from accessing trust property, it is not generally possible to prevent all beneficiaries from acting together to terminate or vary a trust.

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