Legal Entity


The entity has not been incorporated as of yet.

The Kyōdō DAO LLC

Kyōdō DAO plans to establish a physical representation in the form of a for-profit DAO LLC, incorporated in the Republic of the Marshall Islands.

A legal entity to represent the DAO in the "real world" is essential due to the following reasons:

  • It provides liability protection for individuals, shielding them from personal liability for the DAO's actions. In the absence of a legal entity, members could be held personally responsible for the activities of the DAO.
  • Allows compliance with tax regulations. Without a legal entity, DAO members may be liable for a percentage of DAO revenue even if they cannot access those funds.
  • It allows the DAO to enter into contracts with other "real world" entities, own assets (including intellectual property rights), and much more.

For an in-depth analysis on this subject, please refer to this insightful blog postopen in new window.

Solution Provided by RMI DAO LLC

Much like a traditional company, the LLC has standing to sign contracts and engage with third parties. It is managed by directors who oversee DAO operations. However, it differs from a typical company as RMI DAO LLC can be structured without any shareholders.

In essence, it can operate without owners, mirroring the DAO it symbolizes. Instead of shareholders, the DAO can be regulated by a supervisor (or multiple supervisors, if necessary).

A supervisor has no ownership or financial claim to the LLC, but acts as a trustee, ensuring that the LLC's directors fulfill their responsibilities to the DAO as outlined in the company's governing documents. Consequently, without shareholders, all of the officers from the foundation company primarily focus on achieving the DAO's goals – analogous to the trustees and enforcers who fulfill the objectives of a trust.

Advantages of RMI DAO LLC

  • No trustees, directors, officers, or managers with additional liability or responsibility.
  • All documents and records can be stored on the blockchain.
  • Most members can remain anonymous.
  • Smart contract governance allowed by law.

US & Marshall Islands Relations

The Republic of the Marshall Islands (RMI) is a sovereign nation and does not fall under the jurisdiction of the United States. A significant portion of its laws, such as those relating to corporations, are based on the laws of Delaware. When there is no specific RMI statute or case law to refer to, RMI courts often turn to Delaware case law for guidance.

Regulation of Digital Assets

Currently, there are no specific laws or regulations in the RMI relating to digital assets, tokens or protocols, except for companies that take custody of digital assets on behalf of others. The intention, however, is to gradually introduce innovative technology legislation and regulations that apply to digital assets, tokens and protocols.

Why the Marshall Islands?

The Republic of the Marshall Islands boasts a long-standing history as a leading jurisdiction for the registration of shipping companies, spanning over half a century. More than 40 publicly traded companies on the NASDAQ and NYSE, along with entities representing more than 20% of the global shipping capacity, are incorporated in the RMI. Leveraging its extensive experience in the shipping industry, the RMI is now aiming to become the leading global jurisdiction for Decentralized Autonomous Organizations (DAOs).

Commitment to Compliance

The RMI is committed to upholding international standards on issues such as beneficial ownership. DAO members who hold 25% or more governance rights in DAO LLCs, and any Managing Members, are required to complete Know Your Customer (KYC) procedures, including disclosure of their real name, address, and passport details. In addition, on-chain activities will be monitored for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) purposes. The RMI takes pride in not featuring on any international blacklists.


For-profit DAO LLCs will be subject to a 3% Gross Revenue Tax (GRT) on their generated revenue. This includes interest payments but excludes capital gains and dividends. DAO members may be subject to additional taxes in their respective local jurisdictions, depending on local laws.


Last Updated:
Contributors: Daniel Cukier