Benefits
The Marshall Islands have emerged as a leading jurisdiction for DAO establishment, providing the perfect balance of legal flexibility and convenience. With just three founding members needed to set up your entity - whether individuals or entities - plus only two weeks to obtain a license, it's easy to see why this is becoming an increasingly popular choice by many looking to incorporate their DAOs. Furthermore, unlike other jurisdictions such as Swiss foundations, you can access these benefits at an affordable price point, making it one of the most attractive alternatives today.
Legal form
The Marshall Islands have proposed a unique legal entity form for DAOs - the non-profit corporation (limited liability company). This groundbreaking move seeks to provide further flexibility and control, allowing members' ownership of such an organization to be specified in traditional documentation and their blockchain-based smart contracts. At its core lies the need for clarity over purpose: all companies must clearly state how they will connect with any potential non-profit activity through their Certificate of Incorporation submitted at set up.
How does it work
A Decentralized Autonomous Organization (DAO) is a type of limited liability company that grants members specific control over the management. The three key documents are the Certificate of Incorporation, the Operating Agreement, and the Charter. These documents dictate how a company operates, outlining everything from voting procedures to treasury creation & management. All these matters can be amended by members' decisions while adhering to past versions outlined in an operating agreement.
Registration procedure
Establishing a DAO requires careful preparation - from defining the name and purpose of your organization to completing KYC for all founding members, as well as any other person with 10% or more governance rights. To expedite this process, it is strongly recommended that the Operating Agreement be based on an appropriate template which can then be amended upon incorporation. Subsequently, signatures must be affixed to the Certificate of Incorporation, as well as to the Foreign Business Investment License form, before filing these documents, along with a signed operating agreement at the regulator's office. Upon the regulator's approval of all documents, founders receive their Charter to bring a limited liability company into existence.
How can we help?
We can simplify the process for you to the maximum extent. While you manage your new exciting project, we cover all legal issues and provide comprehensive legal support. If you have doubts, we can offer first free legal advice to you.
DISCLAIMER: The information provided is not legal, tax, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. The information provided is for general educational purposes only and is not investment advice. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information. Any action taken based on the information discussed should be reviewed with a professional. The author is not liable for any loss from acting on the information discussed.
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