[tlp-interest] Deleware corporation

[John C Klensin <[e-mail]>]

Hi.

I hope this will be addressed on the call, but just to get it in
queue...

The proposal to move from a Trust to a Corporation seems
entirely sensible given the liability situation and ownership of
trademarks, etc., issues already explained.  The materials that
have been distributed claim that, other than that change of
legal organizational arrangements, minimal changes are being
made.

However to me as a layperson and observer, it would appear that
the minimal change would be to move from a Virginia Trust to a
Virginia Corporation.  IANAL, but I believe that the shield of
the leadership/ Trustees/ Board Members from personal liability
and ability to own assorted things, trademarks included, would
accrue to an Corporation, at least in the US and any of the
several states where I have some small familiarity with the
rules.

So, why Delaware other than that they seem to go out of their
way to solicit this type of activity and whatever revenues go
with it?  I note that the draft bylaws still call out ISOC and
CNRI as "Settlors" and that both are, AFAIK, organized in
Virginia.  While I understand that, to at least some attorneys,
Delaware is the default for these sorts of things, the only
rationale for the choice in the documents I've read is that it
is where the IETF LLC is incorporated.  To the extent to which
the community wishes to continue to keep a clear dividing line
between the LLC and the Trust, that co-location of the corporate
structures is not an obvious asset.

The co-location issue is trivial as long as neither the  Trust
nor the LLC get itself in trouble or decide they need to close
down but, should either occur, one can imagine it would not be
an asset.  And, of course, if someone could promise that the
Trust would never get into difficulty that would raise liability
issues, I assume (again from the distributed materials) that we
would not be doing this.

It also occurs to me that Delaware might be more flexible about
where offices, officers, directors, etc., are located than
Virginia, but I have no idea whether that is the case.  Unless
it is and unless there is some strong positive reason for having
both the Trust and the LLC incorporated in the same state, I
don't understand the reason for the change in jurisdiction/venue
and, given the statements about minimal change, would appreciate
a clear (to a layperson) explanation.

thanks,
   john