Dennis Wisnosky



Discussion items 20150714 FIBO-BE FCT.docx

20150714 FIBO-BE FCT


Ownership and Control


Question: what about when there is ownership with control as distinct form beneficial ownership?  This is covered in the intersection of ownership and control (meaning ownership with control)


JIRA Issues:


BE50 in progress


BE­49 Jacobus, Dean "stuff"


BE­47 removal of investment fund.  This is from last week.  To be covered today.


BE­46 ­ combined meeting of BE and FBC.  General FIBO methodology issue in co­ordinating between groups that have dependencies between them or a mutual interdependency.  Will walk through and review the concepts where there is interdependency. Takes place on Tue 21st.


BE­45 Natural person and legally capable person is on todays agenda.


Other issues have been addressed or may have fallen off as being not relevant.


Agenda: see slides (slide 2).  Issues to cover today:


Sole proprietorship, Natural persons and legally capable persons, Investment firm. Then we can shift over to ownership and control.


Any other items / comments to cover?


Review of recent changes in Protégé:


Business Entities: need to clarify whether we mean entities that exist to make a profit (commercial entities) or general entities that the business refers to which would include governmental entities, which are in scope but are not commercial firms.  Will also look at Juridical person versus formally constituted organization. it seems that now, all of the Juridical persons have also been sub classes of FCO.


 Also there are issues in reasoning between regional government entities, and the

geopolitical entities they administer. There seems to be a rogue object property called references somewhere.  References may belong to a general pattern so we should make any changes with caution ­ probably part of some established ontology design pattern.  This maybe due to the conflation between government, the governed entity and the geophysical or geopolitical reach of that government. As long as these remain conflated we are likely to see reasoning errors.


What is the meaning of Business entity?  These are taken from the types of business entity as defined in the wiki.  These are things formed in order to engage in business activities.  What is the organizing principle for these?  These are things that are formed under commercial law.


We are now using restrictions to describe categories rather than making those

categories explicit in the subsumption hierarchy as we had done previously


The central organizing principle is no longer legal personhood, it is the commercial law application.  Legal persons are re­introduced but not by name, in terms of applying restrictions about liability capability to certain kinds of business entity.


Investment Fund is a role or function not a discrete kind of legal form, and so this

needs to be removed from this hierarchy and re­framed as functional entities.  So the investment fun gets an LEI but it is the legal form which is given the LEI.


Comments from Jeff on this?  Investment firm or investment fund? Invetment Firm would be a corporation that has this as one of its lines of business which would be an independent thing?  Actually, Investment Firm and Investment Fund are both in the model, and Investment Firm is a Functional Entity.  Meanwhile there are legal forms which are set up as investment firms which are not necessarily corporations per se. A corporation may have a line of business or a branch or other business function which is an investment wing.


There may be distinct legal forms of investment funds which are not corporations, such as unit trusts, closed in funds that become traded on exchanges, or other things that have a different organization.  Also distinct from a normal organization with people, are trusts and funds, which exist on paper as legal creations but have no staff.  Often these don't file papers.  So you could treat an investment entity as a role of a corporation but there are also unique features of certain kinds of entities which are not roles of organizations.  There are references on the legal forms of funds.


Action:  Jeff can find some of these sources and David will take this back to their attorneys. 


Extensive review of legal forms by country, for funds.  Distinctions like managed versus unmanaged, which are properties of a fund.  There are unusual forms of legal form in some jurisdictions, which investment funds can take.  So the hasIdentity relation for investment fund should not be limited to Corporation ­ it needs to cover the broad range of kinds of physical entity that are the forms an investment fund may take.


Action:  Jeff will review the research and come back with what are the independent class characteristics we would need and the range of kinds of things that are the form an investment fund can take.  There may be categories of thing in the list of things an investment fund can be, that are not currently in FIBO­BE.  There is a wide variety of legal forms out there.


Next: persons, natural persons and legally capable persons. Legal Entity is as defined in ISO 17442 and so does not include individual persons. Natural Person as defined in the current terms, is defined as being a legally capable person.


Legally capable Person in FIBO-FND is a union of emancipated minor and legally capable adult, and this would be equivalent to NaturalPerson.  However, that concept in Foundations, including emancipated minors, does not include the capability for liability or the capability of entering into a contract.  So that needs to be fixed.


Legally capable is open to interpretation ­ there are different capabilities. Minors can enter into contracts, but are at liberty to disown those contracts.  Once they reach the age of majority they can formally ratify contracts or may be considered to have done so.  There are also limitations on what they can own, e.g. if they have purchased something.  "Legally Capable" is not just about liability capability, but also the ability to enter into contracts.


Do we need to segregate these capabilities?  Should Natural Person be left simply as a legally capable person?  We definitely need to identify the capability for liability and the capability to enter into contracts, both for people and for organizations. Capabilities may also vary over time.  Looking at the model, we already have those two capacities.


Should this be a relative thing, as it is relative to jurisdiction. Also it is temporal as

noted. Example from a contract: Dean Allemang, entering in a contract, he was labeled as "A Natural Person"/ This validates the previous assertion that the label "Natural Person" is a well attested label for a natural person who is also a legally capable person. Natural person as a label can be interpreted in 2 ways, so we need to be clear about which of those 2 things we mean ­ the legal definition or the natural language definition.  The Dean example, was used in the EU.   We should therefore not use Natural person as a label, but have it as a synonym for both of the concepts.


The concepts are:   1. A human who is also a legal person, that is, a person who is able to take on liabilities.  2. any human being.


We should not start with a term and then go around finding out what it means. We

should start with a concept and then go around finding a suitable name for it.  Ideally we would find a nice name that everyone uses for the concept if there is one.

We need the concept of legally capable person but we need to enhance it with descriptions of the capabilities that it has.  Pete suggests these should be modeled as a relative thing, since those capabilities can come and go.  Right now it is identified as a logical union of things that are independent.


If something comes and goes, does that imply that it is relative?  The category of person that can enter into a contract and assume liability.


MB questions why we want to bundle the two concept above. This definition

combines two capabilities.


Natural Person: David is using this as a label for the concept which refers to any human being. That is synonymous with "Person".  Except that "Person" is a widely attested label for anything with legal personhood, as per the federal regulations that we refer to in FIBO.   So using it as a label for Human Being would be misleading.  The restrictions that are associated with Natural person are appropriate to human beings with legal capability.  So we should not "get rid of" natural person, the meaning is clear, but the label needs to change since this can be interpreted in two ways.  Somehow, the same concept was introduced under a different label.


This raises questions of governance ­ how was someone able to introduce such a term without knowing what was already in the ontology?  We therefore need to go through this model with a fine toothed comb and make sure there are no other things that have been inadvertently introduced which have the same meaning as term that were in there all along.


Things to verify today:


1. identify if NaturalPerson and LegallyCapablePerson mean the same thing


2. If so, decide whether to assert an equivalence relation, or combine them

as one class.


3. We have agreed there is a concept we need to define to represent a person who

can enter into contracts and assume liability.


There is a class in Foundations called LegallyCapablePerson.  Possible solution: add these restrictions to LegallyCapablePerson


We agree that we have one concept.  Pete recommends we use the label NaturalPerson for this.  David disagrees with this proposal for the label.


How this is done mechanically: there maybe a difference between UML based and

textual models,, in terms of whether existing relationships that referred to NaturalPerson, should refer to the SAME CLASS but that class should have a different RDF label and a different URI (which is also a label), so that all the restrictions that once referred to NaturalPerson, will now refer to LegallyCapablePerson


Properties that very over time ­ we could legitimately model these as a relative thing, but there is really a temporal aspect to this ­ it's a state change of an independent thing.


Review of the proposals:


We merge NaturalPerson and LegallyCapablePErson, and then NaturalPerson goes

away, as a label or URI.  Then we add to LegallyCapablePerson the restrictions it needs to enter into contract. Add an annotation for the synonyms


We are proposing the label Person for a human being.  However, Person is also used legitimately as the label for anything with legal personhood.  Person, is used as a label for Human Being in the published FIBO.  So we are stuck with that usage, although it is homonymous with legally capable entity of any sort.


Legally Capable Adult? So we need that?  This doesn't hurt so we will not propose removing this from FIBO Foundations.  So no action on the Foundations FCT on this.




1. Intended meaning of NaturalPerson was the same as LegallyCapablePerson, but they had different definitions.


2. Merge their definitions by adding axioms from NaturalPersons to LegallyCapablePerson


3. Get rid of NaturalPerson class


4. Meaning of Person remains unchanged: a human being with flesh and blood


5. A better name for Person would be NaturalPerson due to ambiguity of Person, but too much bother to change it.


6. Add NaturalPerson as synonym for Person.


Jeff Braswell completed his action: Regarding distinguishing differences among legal forms:


1. The WM Date LEI registrar classified entities into three high­level classes:

a. Public corporations

b. Private Companies

c. Funds

2. The authoritative sources that establish the legal existence of funds as opposed to corporations are themselves quite distinct.

Action items

  • Dave Newman 

    1. Intended meaning of NaturalPerson was the same as LegallyCapablePerson, but they had different definitions.

    2. Merge their definitions by adding axioms from NaturalPersons to LegallyCapablePerson

    3. Get rid of NaturalPerson class

    4. Meaning of Person remains unchanged: a human being with flesh and blood

    5. A better name for Person would be NaturalPerson due to ambiguity of Person, but too much bother to change it.

    6. Add NaturalPerson as synonym for Person BE-51 - Getting issue details... STATUS .