Reorganize brain: projects/ top level, rename filenames, update homepage

- Moved everything from ideas/passepartout/ to projects/passepartout/
- Moved legal structures to projects/flags/
- Created missing _index.org files for all subdirectories
- Stripped redundant passepartout- prefix from filenames
- Rewrote root _index.org as generalized brain index (projects + concepts)
- Updated Hugo nav to Projects/Concepts
- Updated build script section descriptions
- Deleted stale ideas/passepartout-economics.md orphan

projects/flags/_index.org

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+:PROPERTIES:
+:CREATED:  [2026-05-24 Sun]
+:ID:       1e5f6a7b-8c9d-0e1f-2a3b-4c5d6e7f8a9b
+:END:
+#+title: Flags — Legal Structures
+#+filetags: :index:
+
+Legal structure analysis for the Passepartout project — entity types, jurisdictional considerations, asset protection, practical setup guides.

projects/flags/asset-protection-structures.org

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+:PROPERTIES:
+:ID:       0a4e0b8f-25e0-4b78-9633-fc37d03cefe9
+:ID:       asset-protection-structures
+:CREATED:  [2026-05-23 Sat]
+:END:
+#+title: Asset Protection & Corporate Structure — Research
+#+filetags: :passepartout:legal:corporate:asset-protection:research:
+
+Research on corporate structures for a US-incorporated tech company with offshore holdings. This is preliminary research, not legal advice. Every structure needs a qualified lawyer and accountant to execute.
+
+* The Assets to Protect
+
+Passepartout has three distinct asset classes, each with different protection needs:
+
+1. /IP (verification subsystem):/ [[id:28c46769-c14b-42aa-ac7a-69d310157f8f][Passepartout]] codebase, gate rules, ACL2 proof libraries, the [[id:827bc546-e887-5b7c-9b65-6392beaf0920][verification monopoly]]. This is the core defensible IP. Needs to be owned separately from the operating company so that if the operating company is sued, the IP is not reachable.
+
+2. /Platform ([[id:1d074690-a279-59cb-b91d-e9a22ae104ad][the social protocol]]):/ The network itself — user base, reputation graph, contract history, protocol specification.
+
+3. /[[id:ed05cab4-88e9-4e25-b7c9-346fa39c69a0][Revenue streams]]:/ Enterprise compliance contracts, transaction fees, PDS hosting subscriptions. These flow through the operating company. A judgment against the operating company attaches to the revenue in that entity.
+
+* Common Structures
+
+** Structure A: Standard Delaware C-Corp (no offshore)
+
+- Delaware C-Corp owns everything: IP, platform, operations
+- Founders hold common stock
+- Investors hold preferred stock
+
+Pros: Simplest, most familiar to investors, standard for venture fundraising
+Cons: All assets in one basket. A judgment against the operating company attaches to everything, including the IP. No asset protection beyond the corporate veil (which is thin for a single-member/controlled startup).
+
+Assessment: Fine for Phase 0. Upgrade when revenue exceeds liability risk tolerance.
+
+** Structure B: Delaware C-Corp + Offshore IP Holding Company
+
+- Delaware C-Corp is the operating company (sells verification, runs the social protocol PDS infrastructure)
+- A separate IP holding company in BVI, Cayman, or Nevis owns the Passepartout code, gate rules, ACL2 libraries, and the social protocol spec
+- The operating company licenses the IP from the holding company at arm's-length royalty rates
+- The holding company accumulates IP [[id:67faf52f-9126-50a7-b87e-2bedc610dac7][licensing]] revenue in the offshore jurisdiction
+
+Pros: Strong IP protection — a judgment against the operating company cannot reach the IP (the operating company doesn't own it). Profits from licensing are outside US tax jurisdiction until repatriated.
+Cons: US tax reform (TCJA 2017) introduced GILTI (Global Intangible Low-Taxed Income) — this structure is less tax-effective than pre-2017. Transfer pricing documentation required. Increases administrative complexity.
+
+** Structure C: Offshore IP Co + US OpCo + Offshore Trust
+
+- Same as B, but the IP holding company is owned by an irrevocable offshore trust (Cook Islands, Nevis) rather than by the founders directly
+- The trust has a corporate trustee and the founders are discretionary beneficiaries
+- The trust also owns the founder's equity in the US operating company
+
+Pros: Maximum asset protection. The trust is beyond the reach of US courts (Cook Islands trusts have the strongest asset protection laws — they do not recognize US judgments and require creditors to litigate in Cook Islands under Cook Islands law).
+Cons: Complex, expensive to set up and maintain. Many investors are uncomfortable with trust-held equity (loss of control). Triggers PFIC (Passive Foreign Investment Company) tax issues.
+
+** Structure D: Delaware C-Corp + Delaware LLC Series + Offshore
+
+- Delaware C-Corp as parent
+- Each business line (verification, social protocol network, [[id:3c6b0449-a8fb-5b89-b82a-34efb21ef5b5][compute marketplace]], PDS hosting) is a separate Delaware series LLC
+- IP held in an offshore company, licensed to each series LLC
+- Series LLCs protect assets within each series from liabilities arising in other series
+
+Pros: Good liability separation between business lines. If the social network (the social protocol) generates liability, the verification business assets are in a separate series.
+Cons: Series LLC is legally untested in many jurisdictions. Some states don't recognize them. Tax complexity.
+
+* Key Considerations for This Specific Venture
+
+** The IP is the crown jewel
+
+[[id:827bc546-e887-5b7c-9b65-6392beaf0920][The verification monopoly]] /is/ the moat. The ACL2 proof libraries, gate rule library, and regression suite are accumulated over years and cannot be recreated quickly. These must be owned by a separate entity from the operating company. If the operating company is sued, the IP survives.
+
+** The social protocol network is harder to protect**
+
+The social protocol's value is partly in its decentralized architecture (no central entity controls the network) and partly in the code that runs the PDS infrastructure and protocol. The AGPL license means anyone can run the code — the network value is in the user base, not the software. This is a structural asset protection advantage: even if the operating company fails, the network continues.
+
+** Revenue splits suggest separate entities**
+
+Enterprise compliance revenue ($2-12M/year) is high-margin, low-volume, and comes from a small number of customers. Social protocol transaction fees (0.5-2%) are low-margin, high-volume, and come from millions of users.
+
+** Jurisdiction for the IP company**
+
+| Jurisdiction | Asset protection | Tax treatment | Cost | Reputation |
+|--------------+-----------------+---------------+------+------------|
+| BVI | Strong | No corporate tax, but GILTI limits benefit | Moderate | Standard, well-understood |
+| Cayman | Strong | Same as BVI | High | Well-understood by investors |
+| Nevis | Very strong | Same as BVI | Moderate | Less common, stronger AP laws |
+| Cook Islands | Strongest (no US judgment recognition) | Same as BVI | High | Niche, but gold standard for AP |
+
+For a venture-funded tech company: BVI or Cayman is the standard choice. Cook Islands is overkill unless there is a specific high-risk profile. Nevis is a middle ground.
+
+* Recommended Path
+
+** Phase 0: Delaware C-Corp (simplest, standard)
+
+Single Delaware C-Corp. IP is owned by the corporation. Founders hold common stock. This is what every seed-stage investor expects. The IP protection is minimal (all eggs in one basket), but the liability risk in Phase 0 is also minimal — you have zero revenue, zero users, zero contracts.
+
+Action items for Phase 0:
+1. Incorporate in Delaware (legalzoom, clerky, or a startup lawyer)
+2. Assign all IP to the corporation via a standard IP assignment agreement from founders
+3. Set up standard corporate records (board minutes, cap table)
+
+** Phase 1: Separate IP + OpCo (before significant revenue)
+
+Before enterprise compliance revenue exceeds $5M cumulative or social protocol users exceed 10K, establish the IP holding company structure.
+
+Structure: Delaware C-Corp (OpCo) + BVI IP Co
+- OpCo licenses verification IP from BVI Co
+- OpCo licenses social protocol IP from BVI Co
+- Founders own both entities (same cap table or mirror ownership)
+
+Timing: The IP transfer is a taxable event if the IP has appreciated. Transfer early, when the IP has minimal appraised value (before the verification monopoly exists), to avoid a tax hit.
+
+** Phase 2: Series Separation (when the social protocol has significant users or revenue)
+
+If the social protocol has 100K+ users and payment volume, separate the business lines into different entities under the same parent:
+- Verification LLC (verification, enterprise compliance)
+- Social Protocol LLC (social network, transactions, PDS hosting)
+- Compute LLC (marketplace operations)
+- BVI IP Co (owns all IP, licenses to all three)
+
+** Phase 3: Trust Structure (if wealth preservation becomes primary concern)
+
+When the cumulative value justifies the cost and complexity: move the BVI IP Co ownership into an irrevocable offshore trust with the founders as beneficiaries.
+
+* What This Means for the [[id:d28adac8-08a1-40c4-ae43-b5d8d7b1743f][Growth Strategy]]
+
+The institution-first path (enterprise compliance) and the social-first path (social protocol communities) have /different liability profiles/ that push toward different structures:
+
+Enterprise compliance: Higher liability per contract. A single compliance engagement gone wrong could be a $1M+ claim. The IP separation in Phase 1 is /more urgent/ for the verification revenue stream.
+
+Social protocol network: Lower liability per user but higher aggregate surface. Payment processing regulations, content liability, data protection.
+
+The combined strategy (both engines) makes the Phase 1 structure (Delaware OpCo + BVI IP Co) more important rather than less — the diversification of revenue streams also diversifies liability sources, and the IP needs to be protected from /both/.
+
+* References
+
+This is preliminary research. Specific recommendations require a US corporate lawyer (incorporation), an international tax lawyer (offshore structure), and an asset protection specialist (trust/AP structure). The right order: incorporate in Delaware when ready, then hire a lawyer to plan the offshore structure before significant revenue or users accumulate.
+
+- [[id:d28adac8-08a1-40c4-ae43-b5d8d7b1743f][Combined growth strategy]]
+- [[id:1bc22b89-d3eb-4f6d-bcfc-2b0c19c8ed8f][Social protocol competitive landscape]]
+- [[id:8c7b9812-f8d6-4347-8915-ce8e520b7914][Entry strategy — organized communities]]
+- [[id:98364e9d-a8a9-42b7-a9dc-b643fd2ccc4b][Outbound sales compliance framework]]

projects/flags/legal-structure-alternatives.org

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+:PROPERTIES:
+:ID:       5ac2f037-fc3c-45ac-a6e8-acc20e005cb0
+:ID:       legal-structure-alternatives
+:CREATED:  [2026-05-23 Sat]
+:END:
+#+title: Legal Structure — Alternatives & Refinements
+#+filetags: :passepartout:legal:corporate:research:alternatives:
+
+This page explores alternatives and additions to the base structure (Delaware C-Corp + BVI IP Co): Texas vs Delaware, Wyoming DAO LLC, Panama LLC, and trust layering. Each has tradeoffs — some strengthen asset protection, some reduce cost, some add complexity. The right choice depends on the specific business model, risk profile, and timeline.
+
+* Texas vs Delaware for the OpCo
+
+** The Trend
+
+Several prominent companies have redomesticated from Delaware to Texas: Tesla (2024), Oracle, Hewlett Packard Enterprise, Charles Schwab, CBRE. The reasons are cost-driven: Texas franchise tax is based on margin (revenue minus costs, capped), while Delaware's franchise tax is based on authorized shares and can be significantly higher for companies with large authorized share pools.
+
+** Comparison
+
+| Dimension | Delaware | Texas |
+|-----------+----------+-------|
+| Filing fee | $89 (standard) | $300 |
+| Annual franchise tax | $175-225,000 (depends on authorized shares — can be very high for VC-funded corps) | $0 if no Texas revenue. If taxable: 0.375-0.75% of margin (with $1M revenue exemption) |
+| Corporate law sophistication | Gold standard. Chancery Court, 100+ years of precedent, specialized corporate judges | Also good. Texas Business Organizations Code (TBOC) is well-developed. Less precedent than Delaware for contested M&A |
+| Registered agent | $50-300/year | $50-300/year |
+| Investor familiarity | Universal. Every VC/Bank knows Delaware | Less common for venture-backed startups. Some investors require Delaware |
+| Court system | Court of Chancery (corporate law specialists, no juries) | Regular state courts with business courts in major counties |
+| Flexibility | Extremely flexible charter provisions | Good, but less tested at the edges |
+
+** Analysis for This Venture
+
+Delaware wins /if/ you plan to raise VC. Investors prefer Delaware and some require it. The Chancery Court's expertise in corporate governance disputes and M&A is unmatched.
+
+Texas wins /if/ the plan is to stay bootstrapped with limited equity structure. The annual franchise tax savings can be significant: Delaware charges minimum $175 but can charge $10K+/year for corps with large authorized share pools. Texas charges nothing if your revenue is under $1M or your margin is zero.
+
+For this venture /without VC/: Texas is competitive. The lack of corporate income tax and the franchise tax exemption under $1M revenue mean year 1-2 costs are near zero. Delaware's legal sophistication only matters if you expect governance disputes or M&A, which are unlikely in the early years.
+
+Recommendation: If no VC and staying under $1M revenue in year 1, Texas is a viable alternative to Delaware for the OpCo. The BVI IP Co structure works identically regardless of which state the OpCo is in. Redomestication from Delaware to Texas later is possible but costs a few thousand.
+
+* Wyoming DAO LLC
+
+** What It Is
+
+Wyoming passed HB 185 in 2025 creating the "Decentralized Autonomous Organization Limited Liability Company" (DAO LLC). It's an LLC variant that recognizes decentralized governance — the members vote on-chain (or via cryptographic consensus) rather than through traditional board resolutions. The DAO LLC is a separate legal entity that can hold assets, sign contracts, and sue/be sued — the DAO governance is the decision-making mechanism.
+
+** Relevance to This Venture
+
+The [[id:1d074690-a279-59cb-b91d-e9a22ae104ad][social protocol]]'s governance modules (liquid democracy, Collective Personas, GEM) map /directly/ onto the DAO LLC concept. If a community on the social protocol wants to be a legal entity — own a shared website domain, hold a pooled treasury, sign a contract with a vendor — they could incorporate as a Wyoming DAO LLC. The social protocol's existing governance infrastructure (voting, constitutions, role management) becomes the DAO LLC's management mechanism.
+
+** This Is Not the OpCo or IP Co Structure
+
+The Wyoming DAO LLC is not a replacement for the Delaware/Texas OpCo or the BVI IP Co. It is an offering /for social protocol communities/. The communities themselves become legal entities, not just digital spaces. This creates a product feature:
+
+- Community in the social protocol hits 25 members who pool $5K in dues
+- Community clicks "Incorporate as Wyoming DAO LLC"
+- The social protocol generates the filing (name, registered agent, governance document mapping)
+- The community's voting modules become the LLC's management structure
+- The community now holds assets, signs contracts, and has liability protection
+
+** Practical Considerations
+
+Wyoming DAO LLCs are new (2025). Case law is essentially nonexistent. Banks may not open accounts for them. Tax treatment is unclear. But for social protocol communities that need legal entity status, it's the least friction option.
+
+* Panama LLC (Sociedad de Responsabilidad Limitada / SRL)
+
+** What It Is
+
+A Panama LLC — bearer shares, no corporate tax on foreign-source income, no reporting of beneficial owners to the government (private registry), no requirement to file financial statements publicly. Popular for asset protection because Panama has no tax treaty with the US that allows US tax authorities to automatically obtain information (though this changed somewhat under FATCA/CRS).
+
+** As a Replacement for the BVI IP Co
+
+| Dimension | BVI IP Co | Panama LLC |
+|-----------+-----------+------------|
+| Setup cost | $2,500-8,000 | $2,000-5,000 |
+| Annual cost | $1,300-3,100 | $500-1,500 |
+| Tax on IP royalties (US perspective) | Same — US taxes the OpCo on a net basis; BVI/Panama tax the IP Co at 0% (foreign-source income) | Same |
+| US tax information exchange | Yes — BVI has signed CRS/MCAA. Automatic exchange with US under FATCA Intergovernmental Agreement | Yes — Panama signed CRS and has FATCA IGA. But historically less compliant |
+| Banking | BVI banks generally easier to open accounts | Panama banks are under scrutiny after Mossack Fonseca |
+| Reputation | Clean — BVI removed from EU greylist 2024 | Stigma from Panama Papers (2016). Some counterparties will ask questions |
+| Bearer shares | BVI eliminated bearer shares in 2020 | Panama still allows bearer shares (strong anonymity, but banks reject them) |
+
+** Analysis
+
+Panama is not clearly better than BVI for this structure. The cost is slightly lower but the stigma from the Panama Papers means some US banks and counterparties will scrutinize transactions from Panama more heavily. BVI is the standard choice for a reason — it's well-understood, clean reputation post-greylist removal, and adequate for the IP holding function.
+
+Panama makes sense /only/ if anonymity is the primary goal. For this venture — which may eventually seek regulatory compliance, sell to enterprise CISOs, or onboard institutional investors — anonymity is a liability, not an asset. The BVI route is cleaner.
+
+* Trusts: Jurisdictions and Downsides
+
+** The Trust Types
+
+For asset protection, two types matter:
+
+/Revocable trust:/ The settlor (you) can change or dissolve it. Assets in it are still reachable by creditors. Not useful for asset protection — it's primarily for estate planning.
+
+/Irrevocable trust:/ The settlor gives up control permanently. A trustee manages the assets. The settlor cannot dissolve it. Creditors cannot reach the assets (if set up before the liability arose). This is the asset protection tool.
+
+** Trust Jurisdictions
+
+| Jurisdiction | Strength | Cost | Key Feature | Key Downside |
+|-------------+----------+------+-------------+--------------|
+| Cook Islands | Strongest | $15-30K setup, $5-10K/yr | /Does not recognize US court judgments/. Creditor must litigate in Cook Islands under Cook Islands law. 1-year statute of limitations. Debtor-friendly fraud rules (proving fraudulent conveyance is very hard). | Distant, expensive, small professional services ecosystem. Trust company availability limited |
+| Nevis | Very strong | $10-20K setup, $3-7K/yr | Similar to Cook Islands: no US judgment recognition. Same legal tradition (English common law). Close to US (EST time zone). | Smaller, less established trust industry |
+| Belize | Strong | $5-10K setup, $2-4K/yr | Lower cost. Strong confidentiality laws. No mandatory reporting. | Less tested in court. Smaller trust company ecosystem |
+| Niue | Strongest on paper | $8-15K setup, $3-5K/yr | Extremely debtor-friendly laws. Shortest statute of limitations (6 months in some cases). | Very small jurisdiction. Tiny trust industry. Reputational risk (some association with dubious schemes) |
+| South Dakota (US) | Moderate | $3-8K setup, $2-5K/yr | Strongest US domestic trust law. No state income tax. Dynasty trusts (no rule against perpetuities). Asset protection trust statute. | /US jurisdiction/ — US courts have jurisdiction. Not as strong as Cook Islands for protecting against US creditors |
+| Nevada (US) | Moderate | $2-5K setup, $1-3K/yr | Strong US domestic trust law. No state income tax. Shorter statute of limitations for fraudulent conveyance challenges. | Same limitation as South Dakota — US jurisdiction |
+
+** The Key Question: Foreign Trust vs Domestic Trust
+
+The core distinction:
+
+A /foreign/ trust (Cook Islands, Nevis) is offshore from US courts. A US creditor who obtains a judgment against you cannot simply reach the trust assets. They must litigate /again/ in the foreign jurisdiction, under that jurisdiction's debtor-friendly laws. This is a massive practical barrier — few creditors will pay for two lawsuits in two countries.
+
+A /domestic/ trust (South Dakota, Nevada) is under US court jurisdiction. A US creditor can get a court order directly against the trust. The domestic AP trust statutes provide some protection (shorter fraudulent conveyance lookback, higher burden of proof for creditors), but a sufficiently determined creditor can eventually reach the assets.
+
+** The Downsides of an Extremely Strong Structure
+
+/1. Loss of Control./ An irrevocable trust means the assets are gone. You cannot change your mind. You cannot dissolve the trust. You cannot redirect the assets. This is the /price/ of asset protection. If the trust owns the BVI IP Co (which owns the [[id:28c46769-c14b-42aa-ac7a-69d310157f8f][Passepartout]] IP), you are a discretionary beneficiary of the trust, not the owner of the IP. The trustee makes decisions about the IP — not you.
+
+/2. Banking and Financing Difficulty./ Banks scrutinize trust-owned structures. The BVI IP Co owned by a Cook Islands trust will require extensive KYC across four layers: you → trust → BVI Co → OpCo. Some US banks will refuse to open accounts. International banking is possible but time-consuming (3-6 months).
+
+/3. Transaction Complexity./ Selling the company becomes harder. A buyer is not acquiring shares from you — they are negotiating with a foreign trustee. Every M&A lawyer will charge extra for this complexity.
+
+/4. Fraudulent Conveyance Risk./ If the trust is set up after a liability has already arisen (or even after a threat of litigation), a court can void the entire structure as a fraudulent conveyance. The structure only protects against /future/ liabilities. Setting it up early (before any revenue, before any contracts, before any users) is essential — but even then, a court could look back if the timing is suspicious.
+
+/5. Cost./ Annual costs of $10-20K for the trust alone, plus the BVI Co and OpCo costs. This is significant before you have revenue.
+
+/6. Perceived Illegitimacy./ Counterparties — especially enterprise CISOs buying verification services — may ask questions about why the company is structured this way. A company that sells trust and verification services should look trustworthy. An extremely aggressive AP structure may undermine that perception.
+
+* The Combined Structure Map
+
+Option A (recommended baseline):
+Founders → Delaware OpCo + BVI IP Co (same ownership)
+IP owned by BVI Co. OpCo licenses it. Simple, clean, effective for business liability protection.
+
+Option B (founders' personal AP, trust layer):
+Founders → Irrevocable Cook Islands Trust → owns BVI IP Co → licenses to Delaware OpCo
+Also: Trust is named beneficiary of OpCo equity (this is complex — often structured as a separate trust holding the OpCo shares)
+This protects the IP from both /business/ liability (via the OpCo/IP separation) and /personal/ liability (via the trust owning the IP Co). A personal judgment against you cannot reach the trust assets.
+
+Option C (full stack, extreme protection):
+Founders → Irrevocable Cook Islands Trust → owns BVI IP Co + owns beneficial interest in Panama LLC
+Panama LLC → holds OpCo shares
+OpCo uses IP under license from BVI Co
+This is the maximum: three layers between any creditor and the IP. But the cost, complexity, and counterparty friction make it appropriate only for very high net worth individuals facing specific litigation risk.
+
+* The Honest Assessment
+
+For the first phase of this venture (pre-revenue, pre-product, zero users), even a plain Delaware C-Corp is overengineering. The BVI IP Co is a modest step that costs a few thousand and protects the most valuable asset (the IP) from potential business liability. It should be set up early.
+
+The trust layer is genuinely unnecessary until one of these triggers:
+- You have personal net worth above $2-5M that you want to protect
+- The BVI IP Co's IP is appraised at $5M+
+- You are in a profession with high personal liability (you're not — you're building software)
+- A specific liability event is imminent (lawsuit filed, regulatory action)
+
+Adding the trust earlier /does/ improve protection (the fraudulent conveyance lookback clock starts earlier) but the cost, complexity, and operational friction of running the business through a foreign trust outweigh the benefit at this stage.
+
+* References
+
+- [[id:433236a2-e5ad-41d4-a27e-4682f8bbc207][Practical setup guide — Delaware C-Corp + BVI IP Co]]
+- [[id:0a4e0b8f-25e0-4b78-9633-fc37d03cefe9][Asset protection structures overview]]
+- [[id:d28adac8-08a1-40c4-ae43-b5d8d7b1743f][Combined growth strategy]]

projects/flags/legal-structure-practical-setup.org

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+:PROPERTIES:
+:ID:       433236a2-e5ad-41d4-a27e-4682f8bbc207
+:ID:       legal-structure-practical-setup
+:CREATED:  [2026-05-23 Sat]
+:END:
+#+title: Legal Structure — Practical Setup Guide
+#+filetags: :passepartout:legal:corporate:setup:action:
+
+Recommended structure: Delaware C-Corp (US OpCo) + BVI Business Company (IP Co). Trust layer deferred until significant personal wealth accumulates. This is a research document — exact costs and forms should be confirmed with a lawyer.
+
+* The Structure
+
+[Founders] → own equity in → [Delaware C-Corp (OpCo)]
+                                      │
+                            license to use IP
+                                      │
+                                      ▼
+                          [BVI Business Company (IP Co)]
+                                      │
+                            owns the IP assets
+                            ([[id:28c46769-c14b-42aa-ac7a-69d310157f8f][Passepartout]] code, gate rules,
+                             ACL2 libraries, [[id:1d074690-a279-59cb-b91d-e9a22ae104ad][social protocol]] protocol
+                             spec, trademarks, domain names)
+
+The OpCo pays the IP Co an arm's-length royalty for the right to use the IP in its business (compliance sales, PDS hosting, marketplace operations). The IP Co accumulates royalty income in a tax-neutral jurisdiction (BVI has 0% corporate tax). The founders own both entities under the same cap table.
+
+* Layer 1: Delaware C-Corp (OpCo)
+
+** What It Is
+
+A Delaware stock corporation — standard C-Corp for tax purposes. The entity that signs contracts, employs people (eventually), earns revenue, and holds liability.
+
+** Paperwork
+
+- /Certificate of Incorporation:/ Filed with Delaware Division of Corporations. Specifies the corporation's name, registered agent, authorized shares, and incorporator.
+- /Bylaws:/ Internal governance rules (board structure, meeting procedures, officer roles). Not filed with the state but must exist.
+- /Stock issuance:/ Founders purchase common stock via a stock purchase agreement. An 83(b) election must be filed within 30 days if shares are subject to vesting.
+- /Initial board resolution:/ Documents the first board meeting (elect officers, authorize stock issuance, approve bank account opening).
+
+** Forms
+
+| Form | Purpose | Where | Cost |
+|------+---------+-------+------|
+| Certificate of Incorporation | Creates the corporation | Filed with DE Division of Corps | $89 (standard, up to 5K shares). $189 for expedited 24hr processing |
+| Franchise Tax Report | Annual filing | DE Division of Corps | $225 minimum/year (based on authorized shares). Can be $175+ for small corps |
+| Registered Agent | Accepts legal service in DE | Private service (CSC, Registered Agents Inc, legalzoom) | $50-300/year |
+| 83(b) election | Tax treatment of restricted stock | Filed with IRS within 30 days of purchase | $0 (paper filing) |
+| IRS SS-4 | Employer ID Number (EIN) | IRS | Free |
+| BOI Report | Beneficial Ownership Information | FinCEN | Free (new requirement, 2024) |
+
+** Steps
+
+1. Choose a corporate name (must be unique in Delaware, include "Inc." or "Corp.")
+2. Reserve the name (optional, $75, holds for 120 days)
+3. Select a registered agent
+4. File the Certificate of Incorporation online or by mail
+5. Draft bylaws (template from your incorporation service)
+6. Issue founder shares and file 83(b) election
+7. Apply for EIN (SS-4)
+8. Open a US bank account (requires EIN + Certificate of Incorporation)
+9. File the BOI report with FinCEN within 90 days of formation
+
+** Timeline
+
+| Step | Time | Note |
+|------+------+------|
+| Order incorporation | 1-2 hours online | Via legalzoom, clerky, or direct with DE |
+| State processing | 24 hours (expedited) to 2 weeks (standard) | |
+| EIN from IRS | Same day (phone) to 2 weeks (mail) | Call IRS and get it same-day |
+| Bank account | 1-2 weeks | Requires physical presence or remote onboarding |
+| Total | 1-3 weeks | Can be done entirely remotely |
+
+** Costs
+
+| Item | One-time | Annual |
+|------+----------+--------|
+| Certificate of Incorporation (standard) | $89 | — |
+| Name reservation (optional) | $75 | — |
+| Registered agent | — | $50-300 |
+| Franchise tax | — | $175-225 |
+| Bylaws (template) | $0-100 | — |
+| Total year 1 | $164-264 | $225-525 |
+| Total year 2+ | $0 | $225-525 |
+
+Using a formation service like clerky or legalzoom adds $100-300 but includes document templates, registered agent for the first year, and step-by-step guidance.
+
+* Layer 2: BVI IP Co
+
+** What It Is
+
+A BVI Business Company (IBC) incorporated under the BVI Business Companies Act (2004). The entity that owns the IP assets and licenses them to the OpCo. BVI has no corporate tax, no capital gains tax, no withholding tax on dividends or royalties. The BVI is not on the EU blacklist or greylist as of 2026 (it was greylisted 2022-2024 and was removed after reforms).
+
+** Paperwork
+
+- /Memorandum and Articles of Association:/ The constitutional document. Filed with the BVI Registry of Corporate Affairs. Similar to a DE Certificate of Incorporation.
+- /Register of Directors:/ Names and addresses of directors. Filed with the BVI Registry. /Not public/ — BVI maintains a private register.
+- /Register of Members:/ Shareholder information. Kept at the registered office. Not public.
+- /Licence Agreement:/ The agreement between the OpCo and the IP Co granting the OpCo a license to use the IP in exchange for royalty payments. This is the critical document for transfer pricing compliance.
+- /Corporate resolutions:/ Appointing directors, issuing shares, authorizing the license agreement.
+
+** Forms and Steps
+
+| Step | Where | Cost | Time |
+|------+-------+------+------|
+| Choose BVI registered agent | Private service (Harneys, Ogier, Maples, or low-cost providers) | $500-1,500/year | 1 day to choose |
+| Due diligence (KYC) | Registered agent requires passport, proof of address, source of funds | $0 | 1-5 days |
+| Name approval | BVI Registry | $0 | 1-2 days |
+| File M&A + register | BVI Registry via registered agent | $350-750 (govt fee) | 1-3 days |
+| Issue shares | Internal | $0 | 1 day |
+| Appoint director/officer | Internal | $0 | 1 day |
+| Draft IP license agreement | Lawyer | $1,500-5,000 | 1-2 weeks |
+| BVI bank account | BVI or international bank | $0-500 (account fees) | 2-6 weeks |
+| Total setup | | $2,500-8,000 | 2-5 weeks |
+
+** Annual Costs
+
+| Item | Cost |
+|------+------|
+| Registered agent fee | $500-1,500 |
+| BVI government fee | $450-1,100 (depends on authorized share capital) |
+| BVI financial statement filing | $350-500 (simple, no audit required — just a declaration) |
+| Total annual | $1,300-3,100 |
+
+** The IP License Agreement
+
+This is the most important document. It must:
+
+1. /Define the IP:/ List every asset being licensed — the Passepartout source code, gate rules, ACL2 proof libraries, social protocol specification, trademarks, domain names, trade secrets.
+
+2. /Set the royalty rate:/ Must be at arm's-length. For software/tech IP, typical royalty rates are 2-10% of gross revenue, depending on how central the IP is to the business. Verification IP is 100% central to the business (the product /is/ the IP) — rates at the higher end are defensible.
+
+3. /Transfer pricing documentation:/ Required under US tax law (IRC Section 482). A transfer pricing study documents that the royalty rate is consistent with what unrelated parties would agree to. Cost: $5,000-15,000 for a professional study. /Alternative:/ Use an industry benchmarking report from a database like RoyaltyStat or ktMINE. The documentation must exist in case of IRS audit.
+
+4. /Territory:/ Global license, exclusive or non-exclusive.
+
+5. /Sub-[[id:67faf52f-9126-50a7-b87e-2bedc610dac7][licensing]]:/ Whether the OpCo can sub-license. Typically no — the IP Co controls sub-licensing.
+
+* Layer 3: Founders' Ownership
+
+Both the OpCo and the IP Co must be owned by the same people to avoid attribution issues.
+
+** Mirror Ownership
+
+- OpCo founders own 100% of OpCo common stock
+- Same individuals own 100% of IP Co shares (same percentages)
+- Documented in both entities' records
+
+The two entities are related parties. The IRS will scrutinize transactions between them. Mirror ownership is standard and expected — the key is the documentation of the license agreement and the arm's-length royalty.
+
+** Individual Asset Protection
+
+The founders' personal assets are protected by the corporate veil of both entities. This is /not/ the trust-level protection of Structure D — if both entities are owned by the founders directly, a judgment against the founders (personal liability) could reach the shares in both entities. But a judgment against the OpCo (business liability) cannot reach the IP in the IP Co — that's the point.
+
+* Layer 4: Trust (Deferred)
+
+Not set up now. The trust adds $15-30K setup + $5-10K/year and makes investor fundraising nearly impossible. Defer until:
+
+- Personal wealth (across all assets) exceeds $2-5M, /or/
+- The IP Co's accumulated value (IP appraisal) exceeds $5M, /or/
+- A specific liability risk emerges (lawsuit filed, regulatory investigation)
+
+When the threshold is reached, the structure becomes: Founders → Irrevocable Cook Islands Trust → owns BVI IP Co → licenses to Delaware OpCo.
+
+* Complete Timeline and Cost Summary (Year 1)
+
+| Item | Timeline | One-time | Annual |
+|------+----------+----------+--------|
+| Delaware C-Corp | Week 1-2 | $200-500 | $225-525 |
+| BVI IP Co | Week 2-5 | $2,500-8,000 | $1,300-3,100 |
+| IP License Agreement | Week 3-6 | $1,500-5,000 | — |
+| Transfer pricing documentation | Week 4-8 | $0-15,000 | $2,000-5,000 (update) |
+| US bank account (OpCo) | Week 2-4 | $0 | $0-200 |
+| BVI bank account (IP Co) | Week 4-10 | $0-500 | $0-500 |
+| Total year 1 | 4-10 weeks | $4,200-29,000 | $1,525-4,325 |
+| Total year 2+ | — | $0 | $1,525-4,325 |
+
+The wide range depends on whether you use a DIY formation service ($400 Delware + $2,500 BVI) or a full-service law firm ($5,000 Delaware + $8,000 BVI + $15,000 transfer pricing study).
+
+* What Must Be Done by a Professional
+
+Some things can be DIY'd, some cannot:
+
+| Task | DIY possible? | Recommendation |
+|------+---------------|---------------|
+| DE Certificate of Incorporation | Yes (clerky, legalzoom, or direct filing) | DIY ($100-300) |
+| DE Bylaws | Yes (template available) | DIY or included with service |
+| 83(b) election | Yes (one-page IRS form) | DIY |
+| BVI incorporation | Via registered agent | Agent handles government filing |
+| IP License Agreement | /No/ | Must be a lawyer (transfer pricing + IP specialist) |
+| Transfer pricing study | /No/ | Must be a tax professional |
+| BVI bank account | Can apply remotely | Some agents offer bank introduction |
+
+* The Bottom Line
+
+Minimum viable setup (DIY Delaware, basic BVI, lawyer for license agreement): ~$5,000 one-time, ~$1,500/year ongoing. Timeline: 4-6 weeks from start to both entities operational.
+
+Full professional setup (law firm for everything + transfer pricing study): ~$25,000 one-time, ~$4,000/year ongoing. Timeline: 6-10 weeks.
+
+The IP transfer must happen /before/ the IP has significant value. Incorporating both entities now (before the first compliance sale) means the IP assigned to the BVI Co has negligible appraised value. Waiting until Phase 1 means the IP may have significant value and the transfer triggers a taxable gain.
+
+* References
+
+- [[id:0a4e0b8f-25e0-4b78-9633-fc37d03cefe9][Asset protection structures — options analysis]]
+- [[id:98364e9d-a8a9-42b7-a9dc-b643fd2ccc4b][Outbound sales compliance — data protection law]]
+- [[id:d28adac8-08a1-40c4-ae43-b5d8d7b1743f][Combined growth strategy — Passepartout]]