Close Menu
  • Homepage
  • News
  • Cloud & AI
  • ECommerce
  • Entertainment
  • Finance
  • Opinion
  • Podcast
  • Contact

Subscribe to Updates

Get the latest technology news from TechFinancials News about FinTech, Tech, Business, Telecoms and Connected Life.

What's Hot

Pepe Coin Price Forecasts; Floki Inu Latest News & Top Crypto Investment To Make In 2025

2025-08-31

BNB Hits $900 In August As Analysts Give Their Latest Binance Coin Price Predictions

2025-08-31

SUI Price Prediction: Remittix Expected To Rise Over 4,000% This Year After Winning Top Crypto Presale Award

2025-08-31
Facebook X (Twitter) Instagram
Trending
  • Pepe Coin Price Forecasts; Floki Inu Latest News & Top Crypto Investment To Make In 2025
Facebook X (Twitter) Instagram YouTube LinkedIn WhatsApp RSS
TechFinancials
  • Homepage
  • News
  • Cloud & AI
  • ECommerce
  • Entertainment
  • Finance
  • Opinion
  • Podcast
  • Contact
TechFinancials
Home»Opinion»AIs Could Soon Run Businesses –It’s An Opportunity To Ensure These ‘Artificial Persons’ Follow The Law
Opinion

AIs Could Soon Run Businesses –It’s An Opportunity To Ensure These ‘Artificial Persons’ Follow The Law

The incentives to establish AI-operated LLCs are there.
The ConversationBy The Conversation2023-10-31No Comments5 Mins Read
Share Facebook Twitter Pinterest LinkedIn Tumblr Email
AI
If AIs are going to play a role in society, they’ll need to understand the law. PhonlamaiPhoto/iStock via Getty Images
Share
Facebook Twitter LinkedIn Pinterest Email Copy Link

by Daniel Gervais, Vanderbilt University and John Nay, Stanford University

Only “persons” can engage with the legal system – for example, by signing contracts or filing lawsuits. There are two main categories of persons: humans, termed “natural persons,” and creations of the law, termed “artificial persons.” These include corporations, nonprofit organizations and limited liability companies (LLCs).

Up to now, artificial persons have served the purpose of helping humans achieve certain goals. For example, people can pool assets in a corporation and limit their liability vis-à-vis customers or other persons who interact with the corporation. But a new type of artificial person is poised to enter the scene – artificial intelligence systems, and they won’t necessarily serve human interests.

As scholars who study AI and law we believe that this moment presents a significant challenge to the legal system: how to regulate AI within existing legal frameworks to reduce undesirable behaviors, and how to assign legal responsibility for autonomous actions of AIs.

One solution is teaching AIs to be law-abiding entities.

This is far from a philosophical question. The laws governing LLCs in several U.S. states do not require that humans oversee the operations of an LLC. In fact, in some states it is possible to have an LLC with no human owner, or “member” – for example, in cases where all of the partners have died. Though legislators probably weren’t thinking of AI when they crafted the LLC laws, the possibility for zero-member LLCs opens the door to creating LLCs operated by AIs.

Many functions inside small and large companies have already been delegated to AI in part, including financial operations, human resources and network management, to name just three. AIs can now perform many tasks as well as humans do. For example, AIs can read medical X-rays and do other medical tasks, and carry out tasks that require legal reasoning. This process is likely to accelerate due to innovation and economic interests.

A different kind of person

Humans have occasionally included nonhuman entities like animals, lakes and rivers, as well as corporations, as legal subjects. Though in some cases these entities can be held liable for their actions, the law only allows humans to fully participate in the legal system.

One major barrier to full access to the legal system by nonhuman entities has been the role of language as a uniquely human invention and a vital element in the legal system. Language enables humans to understand norms and institutions that constitute the legal framework. But humans are no longer the only entities using human language.

The recent development of AI’s ability to understand human language unlocks its potential to interact with the legal system. AI has demonstrated proficiency in various legal tasks, such as tax law advice, lobbying, contract drafting and legal reasoning.

A humanoid robot and a man in a business suit shake hands while standing on an industrial waterfront
Would you do business with an AI that didn’t know the law?
SM/AIUEO/The Image Bank via Getty Images

An LLC established in a jurisdiction that allows it to operate without human members could trade in digital currencies settled on blockchains, allowing the AI running the LLC to operate autonomously and in a decentralized manner that makes it challenging to regulate. Under a legal principle known as the internal affairs doctrine, even if only one U.S. state allowed AI-operated LLCs, that entity could operate nationwide – and possibly worldwide. This is because courts look to the law of the state of incorporation for rules governing the internal affairs of a corporate entity.

We believe the best path forward, therefore, is aligning AI with existing laws, instead of creating a separate set of rules for AI. Additional law can be layered on top for artificial agents, but AI should be subject to at least all the laws a human is subject to.

Building the law into AI

We suggest a research direction of integrating law into AI agents to help ensure adherence to legal standards. Researchers could train AI systems to learn methods for internalizing the spirit of the law. The training would use data generated by legal processes and tools of law, including methods of lawmaking, statutory interpretation, contract drafting, applications of legal standards and legal reasoning.

In addition to embedding law into AI agents, researchers can develop AI compliance agents – AIs designed to help an organization automatically follow the law. These specialized AI systems would provide third-party legal guardrails.

Researchers can develop better AI legal compliance by fine-tuning large language models with supervised learning on labeled legal task completions. Another approach is reinforcement learning, which uses feedback to tell an AI if it’s doing a good or bad job – in this case, attorneys interacting with language models. And legal experts could design prompting schemes – ways of interacting with a language model – to elicit better responses from language models that are more consistent with legal standards.

Law-abiding (artificial) business owners

If an LLC were operated by an AI, it would have to obey the law like any other LLC, and courts could order it to pay damages, or stop doing something by issuing an injunction. An AI tasked with operating the LLC and, among other things, maintaining proper business insurance would have an incentive to understand applicable laws and comply. Having minimum business liability insurance policies is a standard requirement that most businesses impose on one another to engage in commercial relationships.

The incentives to establish AI-operated LLCs are there. Fortunately, we believe it is possible and desirable to do the work to embed the law – what has until now been human law – into AI, and AI-powered automated compliance guardrails.The Conversation

Daniel Gervais, Professor of Law, Vanderbilt University and John Nay, Fellow at CodeX – Stanford Center for Legal Informatics, Stanford University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

‌ ‌artificial‌ ‌intelligence AI Artificial Persons Large Language Models legal personhood
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
The Conversation
  • Website

Related Posts

Building Intelligent Support Systems: The Architecture Behind AI-Powered Customer Service Agents

2025-08-29

Amid Uncertainty, Navigating The AI transition, A Roadmap For Africa

2025-08-26

Where Are The Black Investors And VCs?

2025-08-25

Why South Africa Is The Hidden Powerhouse For Global Executive Search

2025-08-25

Unilabs Finance (UNIL) AI Hedge Fund Crosses $14 Million After Announcing Mining Fund Beta Launch

2025-08-23

BNB Momentum Slows—Now Analysts Back This Low-Cap Altcoin for 50x in 2025

2025-08-21

Your WiFi Router Is About To Start Watching You

2025-08-21

Scaling Vision: How AI is Advancing Image Intelligence from Smartphones to Self-Driving Cars

2025-08-21

The AI-Powered Future of Work: Achraf Golli on Education, Workforce Readiness, and the Role of AI

2025-08-21
Leave A Reply Cancel Reply

DON'T MISS
Breaking News

BankservAfrica Rebrands As PayInc

The financial market infrastructure giant BankservAfrica has officially been rebranded to PayInc. The launch, held…

KZN’s First Supercar-Centric Luxury Residential Development Unveiled

2025-08-27

Government Pensions Administration Agency CEO Placed On Precautionary Suspension

2025-08-26

Airtel Africa & Vodacom Forge Landmark Infrastructure Partnership

2025-08-12
Stay In Touch
  • Facebook
  • Twitter
  • YouTube
  • LinkedIn
OUR PICKS

SA’s Skhokho 2.0 Puts Enterprise AI In SME Hands

2025-08-28

Please Call Me: After 25 Years, Will SCA’s New Bench Silence ConCourt?

2025-08-26

Vodacom Invests R400M To Expand Network In Free State And Northern Cape

2025-08-26

Elon Musk’s Starlink Backs BEE Equity Equivalents, Not 30% Ownership

2025-08-18

Subscribe to Updates

Get the latest tech news from TechFinancials about telecoms, fintech and connected life.

About Us

TechFinancials delivers in-depth analysis of tech, digital revolution, fintech, e-commerce, digital banking and breaking tech news.

Facebook X (Twitter) Instagram YouTube LinkedIn WhatsApp Reddit RSS
Our Picks

Pepe Coin Price Forecasts; Floki Inu Latest News & Top Crypto Investment To Make In 2025

2025-08-31

BNB Hits $900 In August As Analysts Give Their Latest Binance Coin Price Predictions

2025-08-31

SUI Price Prediction: Remittix Expected To Rise Over 4,000% This Year After Winning Top Crypto Presale Award

2025-08-31
Recent Posts
  • Pepe Coin Price Forecasts; Floki Inu Latest News & Top Crypto Investment To Make In 2025
  • BNB Hits $900 In August As Analysts Give Their Latest Binance Coin Price Predictions
  • SUI Price Prediction: Remittix Expected To Rise Over 4,000% This Year After Winning Top Crypto Presale Award
  • Ethereum Price Heading Towards $4,000 As Crypto Markets Drop But This Altcoin Continues To Surge
  • XLM Price Prediction In September & Which Altcoins Could Rise Over 25x Next Month
TechFinancials
RSS Facebook X (Twitter) LinkedIn YouTube WhatsApp
  • Homepage
  • Newsletter
  • Contact
  • Advertise
  • Privacy Policy
  • About
© 2025 TechFinancials. Designed by TFS Media.

Type above and press Enter to search. Press Esc to cancel.

Ad Blocker Enabled!
Ad Blocker Enabled!
Our website is made possible by displaying online advertisements to our visitors. Please support us by disabling your Ad Blocker.