Modular Legal Personhood for AI Use Cases

Abstract

As Artificial Intelligence (AI) systems expand into high-impact domains such as autonomous robotics, mobility, healthcare, and scientific discovery, the demand for scalable, legally enforceable governance is growing. The limited liability company (LLC) framework provides legal personhood and contractual autonomy, enabling AI use cases organized as LLCs to benefit from risk-based compliance and enforceable ethical safeguards. This paper introduces an adapted legal framework based on the Series LLC—a modular business structure recognized in several U.S. states. In this model, a master LLC manages a shared AI foundation model or large language model, while each use case operates within a legally distinct "series," capable of holding assets, assuming liability, and being governed by its own Operating Agreement. This structure enables modular legal personhood, proportional oversight, and enforceable governance-by-design, aligning with global AI governance trends such as the EU AI Act and the General Purpose AI Code of Practice (GPAI-CoP). High-risk applications, such as autonomous mobility systems, may require external audits and human override, while low-risk internal tools can adopt streamlined controls. The paper also addresses practical challenges, including inconsistent legal recognition, fiduciary ambiguity, and the need for operational separation. Despite these limitations, the Series LLC offers a practical mechanism for embedding compliance not only in policy or code, but also in enforceable legal form.

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