Protect your DAO
Your DAO needs a legal structure, often called a "DAO Legal Wrapper" to hold the treasury, protect DAO members from unlimited liability, and allow DAO members to take part in decision making processes (like voting). Legal Nodes offers a single platform where you can sort out all DAO legal matters in one place.
We are grateful to be partnering with Legal Nodes on all legal matters for Web3 projects going through the Interchain Builders Program as they always have the latest legal frameworks.
How to build your DAO legal wrapper
Find the best country
to register your DAO
Prepare your DAO to interact with the off-chain world
Implement governance mechanisms in accordance with the law
How Legal Nodes helps
Start by submitting a request to Legal Nodes. We’ll assess your Web3 project and help you figure out everything you need to do to wrap your DAO.
Identify the best country and most suitable entity for registering your DAO. With our help you can make a plan to build your DAO’s legal structure.
Using locally-based lawyers, bring your DAO’s legal wrapper to life, and build your bridge to safely connect your DAO to off-chain world.
We've found Legal Nodes to be most useful for founders who face the complex task of creating legal frameworks for their international projects.
Protect members from unlimited liability and free your DAO to operate autonomously, hand-in-hand with the off-chain world.GET STARTED
Legal task management, simplified.
DAO launch legal tasks that we help with
From Cayman Islands to Singapore, we work with legal experts, tax advisors, and compliance specialists in 10+ crypto-friendly countries to help wrap your DAO.
Here’s how we help Web3 founders to set up DAO legal wrappers.
Register a Foundation / LLC legal entity to keep liability off founders & members and hold a governance wrapper for members of your DAO
Obtain specific licenses (e.g. the Virtual Asset Service Provider in Cayman Islands) to operate your DAO
Develop a decentralised governance model and incorporate it into constitutional documents of the DAO company (Articles of Association, Bylaws, etc.)
Incorporate KYC & AML verification procedures for receiving grants for DAO and spending funds from DAO Treasury
Frequently asked questions
A DAO legal wrapper is a legal entity registered specifically for a DAO and aimed to help limit the liability of DAO members for the DAO actions and facilitate some of the DAO's interactions with the off-chain world actors (investors, exchanges, contractors, etc.).
DAOs can be incorporated as different entities: foundations, associations, non-profit or for-profit LLCs. The actual choice of entity and jurisdiction depends on the DAO type (community/protocol, service, investment), business model, token utilities, and other factors.
An unregistered DAO can lead to multiple risks and barriers to a DAO’s optimal performance. Primarily, unregistered DAOs will struggle to form the relationships they want with investors, cryptocurrency exchanges, contractors, and other business and legal entities. There are also prominent legal risks associated with unregistered DAOs:
- Judicial liability, whereby a non-incorporated DAO is recognised as a General Partnership, placing liability on every single member of the DAO, and putting them and their assets—at risk of legal proceedings.
- Tax liability, whereby DAO members can face fines and penalties in the event of the non-incorporated DAO failing to pay the correct income taxes.
- Financial (and even criminal) liability, whereby the routine procedure of attracting funds from new DAO members without following the required verification procedures, including checking the sources of the funds, could result in criminal investigations for financial crimes.
The most popular, and therefore most common, means of DAO registration is a foundation, a self-owning entity, which allows members to make contributions to fund the DAO. The foundation does not have any owners (ie, members are not equivalent to shareholders of a company).
That being said, members of the DAO foundation can vote on governance proposals and can elect a trusted person to act as Guardian or Supervisor. This special role ensures proper organisation and implementation of voted-on decisions. The DAO foundation owns the Treasury (the virtual assets that are to be used for foundation purposes only). The DAO members are entitled to vote on how the assets are used.
The foundation operates via statute, which sets goals on how the DAO can spend its funds, how members are to be accepted into the organisation, and the DAO governance rules, such as voting procedures.
There are lots of options for DAO registrations, and usually we can provide very rough cost (and time) estimates for registering a DAO in a particular country. However, it’s important to note that Pricing really varies from project to project, and even with rough estimations for simply registering a company in a particular country, you may not be getting a full scope of costs to build your legal wrapper. This is because pricing varies for each jurisdiction you operate in, and also changes depending on what tasks you’re doing, such as obtaining licensing, obtaining legal opinion, and performing KYC checks, etc. You can look at rough estimates on our pricing page or to help you get a better idea of pricing for your project, speak to us.