One of the most frequent debates that legal professionals have when it comes to studying the legal aspects of all kinds of projects blockchain It is to understand towards what pre-existing figure of the regulation we could redirect said project to offer a more or less solvent legal coverage.
Among all the various possibilities, on more than one occasion, the suitability of the old participation account contract as an instrument to provide projects has been assessed blockchain with a viable legal framework. In this article we will make a brief reflection on its suitability for such a task, as well as some practical appreciation from the perspective of Spanish law.
From the conceptual point of view, through the participation account contract, the account-participant is interested in the business of another - the manager - for which he gives him an amount of money or goods in exchange for receiving a part of the profits . Said contract has as its legal background the commenda medieval by which a commendator provided money or goods to a tractator so that they could make purchases or sales with them. In Spain, its limited legal regulation is contained in arts. 239 - 243 of the Commercial Code of 1885.
It is a contract not submitted to any solemnity that can be contracted verbally or in writing, although the written form is always recommended in order to have proof of the agreed conditions.
We can distinguish it from several related figures: the commercial loan, the community of property and the partnership contract. The difference with the mercantile loan is that in the participation account contract, both profits and losses of the business are shared, that is, the participant account assumes the risk of losing all or part of the money or goods delivered.
On the other hand, the difference with the community of property is that in the community of property, each party holds the ownership of its share of participation with its own entity and purpose, while in the accounts there will only be a community of interests or purposes and the assets pass to the manager's domain. As for the partnership contract, through it a new legal person with a common fund is constituted. In the account contract there is no common equity other than that of the parties involved.
From the point of view of the economic function of said contract, it is a business financing instrument essentially conceptualized to finance current assets, but without being limited to such uses. We can also highlight the associative function of the same without the establishment of a new legal entity, without patrimonial autonomy and keeping the identity of the account-participants secret since they are not the object of registration in any registry. It is a relationship that will not transcend the outside or influence the manager's relationships or responsibilities vis-à-vis third parties, establishing itself as a very flexible and less rigid form of collaboration.
The Supreme Court explained in its judgment of December 4, 1992 that the joint accounts contract “relies on the real existence of an owner-manager who receives capital contributions from others and makes them his own to dedicate them to the business in which said third parties are interested, those who do not have any intervention in it, except those derived from the profit they intend to obtain with the capital contribution they make”. Therefore, what is contributed by the participant-account passes into the domain of the manager, but without generating a common equity link between manager and participant. The manager will be the one who must make the settlement after the operations and will render a justified account of its results.
Therefore, it is a legal business with bilateral and synalagmatic obligations. Among its main characteristics we can highlight that it is a typical contract as it is regulated in our Commercial Code and a consensual contract that is perfected by the mere agreement of wills. Its commercial or civil nature was debated since its incorporation into the Commercial Code may lead to think that it would only be an instrument available to merchants. The jurisprudence of the Supreme Court has clarified that it is sufficient that only the manager is a merchant and that the operations to which the capital is destined have a commercial nature (STS May 22, 1987 and STS of November 24, 1987). In any case, the possibility of a civil participation account contract is not excluded.
Regarding its legal regime with regard to termination, the Commercial Code has not provided for any specific regulation, so the corporate nature of joint ventures will imply the application of the general rules on dissolution of companies: by mutual dissent, due to unilateral complaint, due to the expiration of the term indicated in the contract, due to the termination of the company for which the accounts were established, due to the death or incapacity of the managing partner or due to the competition of the managing partner.
Thus, some jurists consider the participation account contract as a real possibility when legally configuring an issuance of Tokens. In fact, some national projects have availed themselves of this legal regime to propose their issuance of tokens. It is not the object of this article to enter to assess the benefits or errors of these projects, we will only highlight the viability of the legal technique used. Therefore, we can conclude that, indeed, the participation account contract is one of the possible modalities to configure a project for the issuance of Tokens, but we will have to assess several aspects that we will address below.
First of all, the suitability of this legal figure will depend on the legal nature of the issued digital asset. In that sense, if we can incardinate the token issued by its nature within the category of movable value (security token) the project would be subject to the corresponding financial regulation and the corresponding securities issuance regime. On the other hand, if the issued digital asset falls into the category of token useful (utility token), Yes, it would be feasible to use the joint accounts contract to regulate the legal relationships between the parties.
When using the participation account contract for a tokenization process, it is important to note that the lack of regulatory regulation of said figure in our legal system imposes the need to make a meticulous regulation of the corresponding rights and obligations of the parties to avoid conflicts, presumptions, misunderstandings and, ultimately, lawsuits. The contract that is formalized between the issuer of Tokens who will act as manager and the tokenholder who will act as account-participant must detail in the maximum detail the respective obligations of the parties: what business is being financed, how the profit obtained from this business is valued, how and when the rendering of accounts and its corresponding settlement is carried out, etc. .
The very operating dynamics of this class of operations means that it is unlikely that individualized participation account contracts will be signed. Surely the issuer will post some general conditions contained in the white paper of the project. It is important to remember that the fact of presenting this contract as a mass adhesion contract means that it will be subject to the general contracting conditions regime. The submission of said regime derived from contracting with general conditions supposes a protection of the tokenholder against abusive clauses. The issuer of Tokens care must be taken to create a contract in which the balance between the rights and obligations of the parties is seriously infringed to the detriment of the legal position of the tokenholder to avoid the invalidity of said clauses as abusive.
On the other hand, it is also necessary to assess the impact that the regulations on the defense of consumers and users would have since it is to be assumed that the majority of tokenholders fit the definition of "consumer" and are covered by those regulations. It is important to note that the legal position of the account-participant /tokenholder It means assuming the risk of total loss of the amounts delivered if the business does not go out, but, instead, it also means giving you the possibility of claiming against the manager / issuer in the event of a flagrant lack of diligence when disposing and using the funds .
The flexibility of this legal figure is interesting for both parties. From the issuer's point of view, it is a form of fundraising with the obligation to return those amounts in the event of favorable business results. Unlike the loan, the amounts paid do not have to be repaid in the event that the initiative fails. Nor does it mean delivering part of the capital of the entity. For account-participants /tokenholders It means being legally protected and having mechanisms for the exercise and defense of their corresponding rights. Unlike other tokenization structures, such as, for example, when the delivery is conceived as a donation, in the joint venture agreement the tokenholder It does have the right to demand that the issuer comply with the terms and conditions that led to such disbursement.
In short, the joint account contract can be a valid legal instrument for tokenization projects as long as it is done in writing with exhaustive development of the project conditions without infringement of the regulations on contracting with general conditions and consumer protection and users.
*The opinions expressed in this article are those of the author and do not necessarily reflect the views of the administrators of The Crypto Legal blog or the Lawgic Tec association.