KEY Decisions to be made to incorporate a Marshall Islands LLC to act as our DAO

Governance
1

Taken from: https://www.lpoandlaw.com/post/is-your-dao-legally-protected-why-the-marshall-islands-could-be-the-best-jurisdiction-for-you

Setting up a DAO LLC in the Republic of the Marshall Islands (RMI) is a straightforward yet strategic process. By ensuring legal clarity, governance structure, and compliance, DAOs can operate securely and scale sustainably.

1. Define Your DAO’s Purpose and Structure

The first decision is whether your DAO will operate as a:

  • For-Profit DAO LLC (generating revenue, paying a 3% gross revenue tax).

  • Non-Profit DAO LLC (public-good focus, tax-exempt, no economic owners).

You also need to define how governance is structured:

  • Member-Managed DAO: Governance decisions are made by members who actively vote on proposals.

  • Algorithmic (Smart Contract-Managed) DAO: Smart contracts automate governance functions, reducing human discretion.

2. Draft Your DAO’s Governing Documents

To be legally recognized, your DAO must submit:

  • Operating Agreement – Defines roles, management, and liability protections.

  • Certificate of Formation – Proves that the entity exists and is legally recognized.

  • Foreign Investment Business License – Certifies that a DAO will not be conducting business in the Marshall Islands.

  • Consent to Act as Representative Agent - Clarifies a point of contact for the DAO LLC.

3. Prepare for Compliance

RMI offers a favorable regulatory environment, but DAOs must still adhere to:

  • KYC for Significant Governance Holders – Verify members with 25%+ governance rights.

  • Beneficial Owner Information Report – A document that identifies Ultimate Beneficial Owners; completed annually.

  • Annual Filing Form – Certifies the RMI has current information on file for the DAO LLC.

  • Token Compliance – Assess whether governance tokens trigger securities laws.

  • Additionally, DAOs should consider performing AML/CFT Risk Assessment to establish compliance controls proportionate to the nature, scale and complexity of the business. Although its not required by RMI DAO LLC, we still recommend it as a best practice for global scaling.

2

Decisions can always be changed subject to vote and agreement

Personally my decisions would be:

structure: for profit;

governance: member managed

initial roles and management: only those defined in current RAC; paid roles to be determined on a case by case basis by RPF and subsequent vote

representative agent: a member of the RAC - voted by RAC members

kyc: holdings of >25% - self explanatory

beneficial owners - this would presumably be of the llc - i would say this was the members but presumably RMI authorities would accept kyc confirmations above.

token compliance in reliance with recent us determination: ie tokens are “crypto commodities” not securities

3

for me, governance should be member managed and members could be dao and community members, where the differences could be like this

Also, we can use the muanprotocol available in stokenet to create test DAO and have a look at all the possibilities.

DAO Members:

Anyone holding more than XY XRD/LSULP/LSU that has partecipated in at least 51% consultation in the last 6 months.
DAO Member does not receive any badge but calculation is scheduled off-chain every 6 months using on-chain data.
At DAO Start, anyone holding more than XY XRD/LSULP/LSU is automatically considered a DAO Member.
DAO Members review happens each 6 months: A DAO Member whose XRD/LSU/LSULP balance falls below the threshold or if does not partecipate in enough consultation vote loses the DAO member title.
Can propose and vote proposal (sentiment and execution vote).

Community Members:
Anyone partecipating in Discord, Telegram holding XRD or not.
Can vote proposal.