A reference document.
Not legal advice.
This page is written for general counsel, tax attorneys, and compliance officers performing diligence on autonomous organizations. Every assertion here is a starting point; confirm with your own counsel before filing.
Statutory basis
The Wyoming Decentralized Autonomous Organization Supplement (W.S. 17-31-101 through 17-31-116) was signed July 1, 2021 by Governor Mark Gordon. It operates as a supplement to the Wyoming LLC Act (W.S. 17-29-101 et seq.). A DAO LLC formation requires the standard Articles of Organization plus a statement under § 17-31-104 that the entity is a decentralized autonomous organization.
Management & liability
Under § 17-31-109, a DAO LLC may be member-managed, manager-managed, or algorithmically managed. The statute is explicit that smart contracts and autonomous systems are recognized management mechanisms. Liability protection is identical to a standard LLC: members are shielded from entity obligations except through standard piercing doctrines (undercapitalization, commingling, fraud, alter ego). No Wyoming case has yet pierced a DAO LLC specifically; piercing case law from standard LLCs controls.
Operating Agreement
Under § 17-31-105, the Operating Agreement is the supreme governance document of the entity. It may reference a smart contract or code artifact as controlling for specific decisions. We draft OAs that (a) embed the SHA-256 hash of the Constitution YAML, (b) grant full authority to the governance engine to enforce it, (c) specify the arbitration venue and governing law, and (d) include a fallback escalation chain naming a human for statutorily-reserved actions (dissolution, material amendment).
Tax classification
By default, a single-member DAO LLC is disregarded for federal tax purposes (IRC § 7701). Multi-member is a partnership unless election is made. Corporate election via Form 8832 is commonly advisable for entities with autonomous-agent members — it gives the entity independent tax identity. Wyoming has no state income tax. Always engage a tax attorney for state-level analysis if members reside outside Wyoming.
Securities considerations
Membership interests in a DAO LLC are securities under Howey if sold as investment contracts. Most founder-formed Orgs entities issue interests only to the founder and autonomous agent systems; these are not sales under § 2(a)(1). Entities that intend to raise from third parties should consult securities counsel before issuing membership interests or governance tokens. We strongly recommend Reg D 506(c) or Reg S offerings for token-based interests.
Banking & BSA/AML
Banks KYC the DAO LLC like any LLC: EIN, Articles, Operating Agreement, beneficial owner identification. If your agent is a beneficial owner (>25% interest), the bank will want to understand its governance model. Our partner banks (Mercury, Relay, Meow) have playbooks for this. Unlimited autonomous-agent disbursements above $10K/day fall under BSA §5313 CTR reporting; we file these automatically when triggered.
BOI reporting under the Corporate Transparency Act
CTA requires beneficial owner reporting to FinCEN. A DAO LLC reports its human beneficial owners — agents are not reportable because they lack natural-person status. Changes to beneficial ownership must be reported within 30 days. Our compliance engine watches your membership roster and triggers BOI filings automatically, with a required human-signature step.
Dissolution & merger
Dissolution requires at minimum 51% supermajority (§ 17-31-114), regardless of Constitution settings. This is a statutory floor we cannot waive. Mergers follow standard LLC-to-LLC or LLC-to-C-corp procedures under Title 17 Ch. 29. We generate conversion paperwork for entities migrating to Delaware C-corp before a priced venture round.
Dispute resolution
The Operating Agreement names Wyoming as governing law and the Laramie County District Court as primary venue. For smaller disputes, we recommend JAMS arbitration under its Streamlined Rules — Wyoming-based arbitrators available. Our Operating Agreement template is compatible with the American Arbitration Association's commercial rules. For crypto-native disputes, the Kleros Court is an optional fallback, though not binding in US courts.
Partner counsel directory
We do not provide legal advice. When our customers need counsel, we refer to a vetted list of attorneys with specific DAO LLC experience. Starting points: Wright & Tallman (Cheyenne), Cowan Liebowitz & Latman (NY, tax), Morrison Cohen (NY, securities), and a dozen others. Available on request to enterprise plan customers.
This page is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this document or using the Orgs platform. Statutes change; case law develops; federal regulators periodically issue guidance that materially shifts the analysis. Consult qualified counsel in your jurisdiction before forming an entity, amending its operating agreement, or relying on any representation made herein. Orgs Wyoming, LLC is a commercial registered agent and is not authorized to provide legal advice.