Blockchain Technology – A Guide for Legal and Business Professionals

Blockchain Technology – A Guide for Legal and Business Professionals

How did this new technology evolve?

A digital ledger that can record financial transactions, blockchain promises revolutionary changes in the financial field. It is often described as a democratised technology because it is not run by any centralised management and it is free for everyone. 

Blockchain, which consists of a series of records that cannot be copied, functions through a cluster of computers.

Initially, this technology has been used with bitcoins and other cryptocurrencies, but it has evolved into something more diverse.  Now, it can be used in other virtual transactions.

When should you proceed with establishing a blockchain company?

As in any other organisation, a series of use cases are required before you can establish a blockchain company.

Compelling situations must be analysed and taken into consideration to determine whether or not this type of business is really needed as a solution to a problem or if it is the most practical approach to complicated business situations.

The strengths, weaknesses, opportunities, and threats in establishing a blockchain company also require in-depth evaluation to ensure its appropriateness in other industries.

What about its organisation and structure?

After establishing the need for the blockchain technology, its internal operations and state dealings must also be set up.

The necessary compliance documents, such as registration requirements, should be processed and filed to formalize the company’s structure and to determine the laws that would apply to it.

In addition, the required permission, accreditation, and certification should be obtained for the smooth operations of the company.

Who should run the company?

A group of competent, innovative, and competitive people must be tapped to run the company. While a blockchain company is primarily virtual, it is also an organisation where a group of people should be in charge of its organizational and managerial functions.

Planning, organising, staffing, directing, coordinating, reporting, and budgeting are integral parts of getting into a blockchain company. Hence, the following are needed:

1. The Finance Team

The blockchain company, just like any other company or business, needs to have a strong treasury, accounting, and disbursement team. This team will be in charge of handling the company’s capital, along with its profits and expenses.

This team is presumably the strongest in a blockchain company, as it originates from a technology that manages financial transactions.

2. The Taxation Unit

Blockchain companies, though virtual, are not exempted from taxes. Thus, the services that this type of company provides must be imposed with a reasonable amount to help fuel the lifeblood of the state.

The people that comprise this unit must not only be accountants but also technology-savvy professionals who have a firm grasp of taxes. This ensures that the company is protected from being taxed too much, yet remain compliant.

3. Bank Relations People

As the blockchain technology is relatively new, many people are still not confident about it. While many jurisdictions have regulated it, others still prohibit it.

Since banks are accorded higher confidence as they handle people’s money, they are not likely to easily buy this technology.

Thus, a set of bank relations people must be hired to monitor the bank transactions of the blockchain company, while giving assurance to the banks that the blockchain currency does not run contrary to the bank rules and the currencies determined by the banks.

4. A Dynamic Legal Team

With its virtual characteristic, it is hard to identify which country, bank, or court has the authority over blockchain companies. Thus, a team of lawyers who have a firm grasp of cyberlaw, banking, taxation, and political law should be invited to join a blockchain company.

5. Customer Relations Team

This team would include the marketing, advertising, and customer service professionals. As this type of company faces various issues, the Customer Relations team is responsible for advancing not only the interests of the company owners but also those of the clients.

Likewise, this team must ensure that the business is marketed in a manner that complies with the legal and regulatory requirements of both the virtual and physical world.

Other Things to Keep in Mind

When establishing a blockchain business, just like any other organisation, the rationale behind it must be stated to ensure its legality and propriety.

Identifying the specific issue that the company seeks to address and how it would address it are essential factors in entering this industry.

The source of capital must also be laid out clearly, as well as when and how to generate additional capital, if needed.

Finally, a tangible business outcome must be shown to prove that there is an imminent need to shift to this technology from the ordinary physical exchange of goods and money.

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