Wyoming DAO LLC vs. LLC: What Is Different?

• Formation. Both are formed by delivering articles of organization to the Wyoming Secretary of State (W.S. § 17-29-201(a); W.S. § 17-31-105(a)).
• Registered agent. A DAO LLC must “have and continuously maintain in this state a registered agent” (W.S. § 17-31-105(b)), as every Wyoming LLC does.
• Liability. Under the LLC Act the debts of the company “are solely the debts, obligations or other liabilities of the company” (W.S. § 17-29-304(a)). The DAO Supplement contains no different rule.
• Purpose. A DAO LLC “may form and operate for any lawful purpose, regardless of whether for profit” (W.S. § 17-31-105(c)).

An existing Wyoming LLC can become a DAO LLC by amending its articles to add the required statement (W.S. § 17-31-104(b)).

• Name. The registered name must include “DAO”, “LAO” or “DAO LLC” (W.S. § 17-31-104(d)).
• Articles of organization. The articles must state that the company is a decentralized autonomous organization, state how the members manage it, “including to what extent the management will be conducted algorithmically”, and include “a publicly available identifier of any smart contract directly used to manage, facilitate or operate” the company (W.S. § 17-31-104(e); W.S. § 17-31-106). If the identifier is missing, the filer has thirty days to supply it, and after that the Secretary of State dissolves the company (W.S. § 17-31-105(e)).
• Notice to members. A notice of restrictions on duties and transfers must appear conspicuously in the articles or the operating agreement. It warns that members’ rights “may differ materially from the rights of members in other limited liability companies” (W.S. § 17-31-104(c)).
• Management. An ordinary LLC is member-managed unless its articles or operating agreement make it manager-managed (W.S. § 17-29-407(a)). Management of a DAO LLC is vested “in its members or the members and any applicable smart contracts”, and every smart contract it uses must be “capable of being updated, modified or otherwise upgraded” (W.S. § 17-31-109).
• Duties of members. A member of a member-managed LLC owes the company fiduciary duties of loyalty and care (W.S. § 17-29-409(a)). A member of a DAO LLC has no fiduciary duty to the company or to another member unless the articles or operating agreement provide for one. The implied covenant of good faith and fair dealing still applies (W.S. § 17-31-110).
• Records. Members of a member-managed LLC may inspect and copy company records that are material to their rights and duties (W.S. § 17-29-410(a)). In a DAO LLC, to the extent the information is available on an open blockchain, members have no separate right to inspect or copy records (W.S. § 17-31-112).
• Dissolution. A DAO LLC is dissolved by events an ordinary LLC does not face. Two of them: the company “has failed to approve any proposals or take any actions for a period of one (1) year”, or it “is no longer under the control of at least one (1) natural person” (W.S. § 17-31-114(a)).
• Order of authority. Where the articles and the operating agreement conflict, the articles control. Where the articles and a smart contract conflict, the smart contract controls, except on the matters the statute requires the articles to state (W.S. § 17-31-115).

In an ordinary LLC, a statement in the articles “is not effective as a statement of authority” (W.S. § 17-29-201(d)). The company may file a separate statement of authority with the Secretary of State to tell outsiders who can sign (W.S. § 17-29-302(a)).

In a DAO LLC, “the articles of organization and the operating agreement of a decentralized autonomous organization are effective as statements of authority” (W.S. § 17-31-115). A buyer, lender or bank looks to those two documents to learn who signs for the company. See Who Can Sign for a Wyoming DAO LLC?

A DAO LLC can decide by vote or by smart contract. A deed, a lease or an account agreement still needs a signature from a person with authority, and the law of membership is the same in both forms: “a member is not an agent of a limited liability company solely by reason of being a member” (W.S. § 17-29-301(a)).

Wyoming Execution Agents is a Wyoming limited liability company organized for one purpose: to act as the named authorized signer for Wyoming DAO LLCs. A company names the office in its operating agreement. The office then signs a deed, a contract or a banking instrument for that company only upon a valid attestation from the Vaulnox SENTINEL Trusted Execution Environment, confirming that the company’s own governance approved that instrument. The office does not manage, advise or decide.