dOrg, a firm that develops DAO-related software founded by Asgeir Sognefest, Jordan Ellis, and Ori Shimony, has established what it dubs as the first Limited Liability Decentralized Autonomous Organization or DAO.
According to the company, this is an authorized way to “reference blockchain code (smart contracts in our case) as the legitimate source of authority for their company’s operations and governance.”
The method combines the intricacies of a DAO with the legal protections given to limited liability firms.
In a press release, the founders wrote:
“After deploying its DAO to the Ethereum blockchain, dOrg formed a Blockchain-Based Limited Liability Company (BBLLC) in Vermont, dOrg LLC. By linking the DAO to this BBLLC, the DAO has official legal status, allowing it to enter contractual agreements and offer participants liability protections.”
The firm is a community of blockchain developers that create DAO-related software. They assert that with this new formal framework, users can develop a formally registered DAO as simple as registering a “social media account.”
“We realized that Vermont’s BBLLC law was unique in carving out the option for companies to reference blockchain code (smart contracts in our case) as the legitimate source of authority for their company’s operations and governance,” Shimony said. “The Operating Agreement establishes that the Company will only accept requests to perform services for Clients, allocate work and remuneration to Participants, add new Participants, and distribute voting rights through the DAO’s decision-making engine.”
“We worked extra diligently to make sure that all legal agreements were very lightweight yet created no backdoors or special privileges that could short-circuit the authority of the DAO,” he added.
The team considers sharing the process so anyone can develop legally registered DAOs.