Decentralized Autonomous Organizations (DAOs) can now be registered as formal legal entities.
The Marshall Islands Parliament formally approved an amendment to the Non-Profit Entities Act in late 2021, which allows DAOs to obtain formal legal entity status. This is the first jurisdiction to take such a step.
It is common practice that DAOs must register as limited liability companies to be legalized, making it impossible to fully decentralize management. However, DAOs registered in the Marshall Islands can create non-profit LLCs with statutes and membership recorded in blockchain under the updated law.
Shipyard Software, a company specializing in DEX software development, has already taken advantage of the opportunity. They have established a DAO Admiralty LLC to manage one of their products, the next-generation decentralized exchange Clipper. In addition, Shipyard Software created the MIDAO service in conjunction with the government to help the state design other decentralized organizations.
