Adopting a separate legal entity allows a DAO to manage risk for its members and conduct business with non-crypto entities.
- What is the purpose of the DAO?
- Will the DAO generate and distribute profits?
- Where are DAO members located?
- How many DAO members are involved?
- Risk Management
- Limits liability of members - keeping shareholder assets away from company creditors
- Entity shielding - keeping company assets away from shareholder creditors.
- Pay taxes
- Enter in contracts. Hire contractors
- Own Intellectual Property
- Get a bank account. Managing payments to non-web3 entities
- Own assets. E.G Property
Kali DAO has pioneered the deployment of DAOs with a legal entity. Using their product, founders can deploy a DAO on any of the most used EVM chains and adopt a legal entity of their choosing.
Sporos DAO has built a sweat equity management system on top of the kali framework, to allow early stage projects to distribute ownership of their on-chain LLC in a meritocratic and transparent way. Using Sporos, projects can maintain a dynamic cap table which accurately reflects who has contributed the most value.
How Blockchain ledgers could help protect assets within a Delaware Series LLC