Solutions: is the DAO LLC Only for DAOs?

Last updated 6 months ago

Was this helpful?

Do I need to be a DAO to incorporate as a DAO LLC?

No! While the term "DAO" is used in the name of the "DAO LLC" legal entity, many DAO LLCs are not "DAOs" in the traditional sense of the word. They're just taking advantage of the unique benefits and flexibility of the DAO LLC, such as anonymity for most members, having no managers required, and the crypto-friendly nature of the Marshall Islands.
Almost every crypto project - just like in Web2, TradFi, etc. - should seriously consider creating a legal structure that includes a legal entity. Read more about the benefits for non-DAOs below.

The RMI DAO LLC provides explicit legal separation between a protocol (or other open-source software used on blockchains) and the DAO LLC.
You will not be considered a VASP just because you launch and use tokens in your protocol, or because your protocol engages in DeFi etc, unlike in other jurisdictions.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

Launch your token using an RMI DAO LLC for access to the compelling Marshall Islands legal framework for tokens:
- You will not be considered a VASP just because you launch and sell tokens.
- Clear securities law treatment, including no local securities laws that apply as long as you don't sell your token in the RMI.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

Launch your token using an RMI DAO LLC for access to the compelling Marshall Islands legal framework for tokens:
- You will not be considered a VASP just because you launch and sell tokens.
- Clear securities law treatment, including no local securities laws that apply as long as you don't sell your token in the RMI.

The For-Profit RMI DAO LLC allows for the same pass-through tax treatment as a US-based LLC, which can be optimal for investment companies.
The 3% Gross Revenue Tax (GRT) in the RMI does not apply to capital gains or dividends, so there is no double taxation on investment income.

RMI DAO LLCs can track membership on paper, like a regular LLC, or using a multi-sig, and have no minimum membership size.
RMI DAO LLCs can have Managing Members, like regular LLCs.
RMI DAO LLCs can track the names and addresses of their members, like regular LLCs.
When the project is ready, or at your discretion, you can start using a token to track membership, remove the Managing Members, and/or allow anonymous membership.'

Even if you don't think of your organization as a DAO, leverage the DAO LLC to be able to do membership tracking, governance, etc., on-chain rather than using traditional paper-based or transfer agent methods.

RMI DAO LLCs can help you interface with the physical world, allowing you to own property and contract with traditional organizations, while having as decentralized of a governance structure as you'd like.

Last updated 6 months ago

Was this helpful?

No! While the term "DAO" is used in the name of the "DAO LLC" legal entity, many DAO LLCs are not "DAOs" in the traditional sense of the word. They're just taking advantage of the unique benefits and flexibility of the DAO LLC, such as anonymity for most members, having no managers required, and the crypto-friendly nature of the Marshall Islands.
Almost every crypto project - just like in Web2, TradFi, etc. - should seriously consider creating a legal structure that includes a legal entity. Read more about the benefits for non-DAOs below.

The RMI DAO LLC provides explicit legal separation between a protocol (or other open-source software used on blockchains) and the DAO LLC.
You will not be considered a VASP just because you launch and use tokens in your protocol, or because your protocol engages in DeFi etc, unlike in other jurisdictions.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

Launch your token using an RMI DAO LLC for access to the compelling Marshall Islands legal framework for tokens:
- You will not be considered a VASP just because you launch and sell tokens.
- Clear securities law treatment, including no local securities laws that apply as long as you don't sell your token in the RMI.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

Launch your token using an RMI DAO LLC for access to the compelling Marshall Islands legal framework for tokens:
- You will not be considered a VASP just because you launch and sell tokens.
- Clear securities law treatment, including no local securities laws that apply as long as you don't sell your token in the RMI.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

The For-Profit RMI DAO LLC allows for the same pass-through tax treatment as a US-based LLC, which can be optimal for investment companies.
The 3% Gross Revenue Tax (GRT) in the RMI does not apply to capital gains or dividends, so there is no double taxation on investment income.
Allows for most company members (anyone who is not a ) to remain pseudonymous, using only their token address, not their real name and address.

RMI DAO LLCs can track membership on paper, like a regular LLC, or using a multi-sig, and have no minimum membership size.
RMI DAO LLCs can have Managing Members, like regular LLCs.
RMI DAO LLCs can track the names and addresses of their members, like regular LLCs.
When the project is ready, or at your discretion, you can start using a token to track membership, remove the Managing Members, and/or allow anonymous membership.'

Even if you don't think of your organization as a DAO, leverage the DAO LLC to be able to do membership tracking, governance, etc., on-chain rather than using traditional paper-based or transfer agent methods.

RMI DAO LLCs can help you interface with the physical world, allowing you to own property and contract with traditional organizations, while having as decentralized of a governance structure as you'd like.