The Marshall Islands Recognize DAOs as Legal Entities
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.