Authorities in the U.S. state of Wyoming passed a law granting official legal status to decentralized autonomous organizations (DAO).
Mark Gordon, Governor of Wyoming, signed a bill establishing a legal framework for forming and managing decentralized autonomous organizations. According to the document, DAOs incorporated in the state can obtain legal status as Decentralized Unincorporated Nonprofit Associations (DUNA).
The law describes the role of smart contracts in organizing the management and activities of DAOs. The DUNA can enter legal contracts with third parties, open bank accounts, and pay taxes. In addition, this legal status allows for the separation of the legal entity from the direct members of the DAO so that the decentralized organization can be held liable without the individual members being held liable, thus ensuring their legal protection in case of litigation involving the organization.
Despite the name, DUNAs may engage in commercial activities. This is stated in the text of the bill drafted by the state Select Committee on Blockchain, Financial Technology, and Digital Innovation. Miles Jennings and David Kerr also reported this in the analytical report “The DUNA: An Oasis For DAOs,” prepared for a16z crypto. The researchers noted that despite the non-commercial status of DUNAs, they’ll be able to conduct commercial activities as decentralized protocols that provide exchange transactions with digital assets, supporting the work of SocialFi projects and others. Besides, DAO participants can officially receive dividends due to successful commercial activities.
In late 2022, decentralized autonomous organizations already had the opportunity to be legally registered as commercial LLCs in the Marshall Islands. Shortly thereafter, experts from the World Economic Forum presented the “Decentralized Autonomous Organization Toolkit,” a detailed guide to DAOs’ work in terms of theory and practice.
