Incorporation of DAO in Wyoming on basis of a factual scenario:

Incorporation of DAO in Wyoming on basis of a factual scenario:

Case Facts:

Client being an Indian Private Limited Company namely Kyrotron Pvt. Ltd., is into the business of providing financial services similar to online banking and wallet companies in India. It is planning to open a subsidiary in US particularly in a State which is inherently business friendly. The client has been recommended the state of Wyoming as a viable destination for setting up a LLC and incorporating Decentralized autonomous Organization in the future.

Constitutional documents required to incorporate a DAO in Wyoming?

Statute Ref:

Title – 17 (Corporation, Partnership and Association)

Chapter – 29 – Wyoming Limited Liability Company Act

Chapter – 31 – Decentralized Autonomous Organization Supplement

Article – 1 – Provision

Section – 105 (Dealing in Formation); 106 (Dealing in Article of Organization)

Wyoming is the first state to pass legislation to recognize a Decentralized Autonomous Organization, often called a DAO. A DAO is a form of an LLC that uses a block chain and has the ability to conduct management activities algorithmically using smart contracts. A DAO’s Articles of Organization and Smart Contracts govern the activities of the DAO and its rights and duties while an operating agreement may be used to supplement to the extent the articles or smart contract do not otherwise provide for a matter. While a DAO can to some extent conduct its management activities algorithmically, it also has members. Thus, the key Constitutional Document/s required for its incorporation would be Articles of Organization; the content of the same along with instructions to fill up can be obtained from the website of Secretary of State, Wyoming and Operating Agreement.

The Article of Organization is a legal document that must be filed with Wyoming Secretary of State. This defines DAO as either member - managed or algorithmically managed. If the type of DAO is not specified, the LLC is presumed to be member – managed. An algorithmically managed DAO may only be formed if the underlying smart contracts can be updated, modified or upgraded. Article of Organization must include following details:

• A Statement that Organization is a DAO,
• The Registered name of DAO LLC, along with wording or abbreviation, such as “DAO”, “LAO” or “DAO LLC” to denote its status as a decentralized autonomous organization,
• Street Address of LLC’s initial registered office and name of its initial registered agent at that office. The articles must be accompanied by a signed written consent to appoint registered agent,
• A “Notice of Restriction on Duties and Transfers” stating that DAO Supplement, underlying smart contracts, articles, and operating agreement, if applicable, of a DAO may define, reduce or eliminate fiduciary duties and may restrict transfer of ownership interest, withdrawal or resignation from DAO, return of capital contribution and dissolution of DAO,
• A Publicly available identifier of any smart contract directly used to manage, facilitate or operate the DAO,
• Type of management (member managed or algorithmically managed). A member-managed DAO is managed by members, who have voting rights and decision making power. If the type of management Structure is not specified in Articles of Organization, the LLC will be presumed to be member-managed. An algorithmically managed DAO, on the other hand is managed by code, specifically smart contracts.

Operating Agreement outlines the internal workings and guidelines for DAO, including voting procedures, management structures, decision making procedure, rights & responsibilities of members and procedure for transferring Profit & Losses. Registration of operating agreement with Wyoming Secretary of State is not required since it is an internal document.

Why should Kryroton incorporate its DAO LLC in Wyoming?

Wyoming is the first state to pass legislation to recognize a Decentralized Autonomous Organization, often called a DAO and no other states in US has provisions to incorporate the same. Thus if Kyrotron Pvt. Ltd. wants to incorporate a DAO LLC, state of Wyoming is the only choice.

There are several reasons why someone may choose to incorporate a Decentralized Autonomous Organization (DAO) in Wyoming, some of the key benefits are:

• Favorable regulatory environment – Wyoming has a business friendly regulatory environment and has taken steps to encourage block chain and crypto currency innovation. For example, Wyoming has exempted certain types of digital assets from the state securities law and has created a regulatory sandbox for block chain startups,
• Protection of member’s personal assets – One of the main benefits of forming a DAO as a limited liability entity is that it protects the personal assets of the members in the event of lawsuits or other liabilities. In Wyoming the personal asset of members are generally shielded from liability related to DAO.
• Tax Advantages – Wyoming has no Corporate Income Tax, no personal income tax and no franchise tax. This makes Wyoming an attractive location for business looking to minimize tax burden,
• Privacy - Wyoming has strong privacy laws that protect personal information of its residents. This can be important consideration for DAO that prioritize privacy and anonymity.

Now Kyrotron Pvt. Ltd. is expanding its business by incorporating an LLC in the state of Wyoming; the founders are seeking assistance from you to ensure that all legal formalities for the purpose of registration and licensing their business are followed through. The registered office address of Kyrotron Pvt. Ltd. is 200 WYOMING ST, LANDER WY 82520-3922, USA, and the Incorporator of the Company is Mr. Avery John, who resides at 100 BROWNFIELD RD DOUGLAS WY 82633-2556 USA.

Incorporating Kyrotron Pvt. Ltd. in Wyoming as a DAO LLC in order to receive the Certificate of Incorporation with the above-mentioned details.

Information Required (Excluding Optional Provision) to Incorporate DAO LLC & Steps involved:

• Name of the Limited Liability Company – Kyrotron, “DAO LLC”
• Physical / Mailing & Principal Office Address - 200 WYOMING ST, LANDER WY 82520-3922, USA

·???????? Public identifier of any smart contract directly used to manage, facilitate or operate the decentralized autonomous organization –?

·???????? Will the Notice of Restrictions on Duties and Transfers pursuant to W.S. 17-31-104(c) appear in the operating agreement? – Yes

·???????? Name of the Organizer - Avery John

·???????? Phone Number –

·???????? Email Id –

·???????? Signature of the Organizer –

Steps involved: (Copying the Respective URL in Seriatim)

• https://wyobiz.wyo.gov/Business/RegistrationInstr.aspx
• https://wyobiz.wyo.gov/Business/RegistrationType.aspx
• https://wyobiz.wyo.gov/Business/RegistrationLLC.aspx
• https://wyobiz.wyo.gov/Business/RegistrationLLC.aspx
• https://wyobiz.wyo.gov/Business/RegistrationLLC.aspx
• https://wyobiz.wyo.gov/Business/RegistrationLLC.aspx