A statute was established by the Republic of the Marshall Islands recognizing DAOs as limited liability businesses (LLCs)
According to a report, the island country in the Pacific enacted the Decentralized Autonomous Organizations Act of 2022 on Thursday, expanding the legitimacy of DAOs. The Marshall Islands were the first nation to recognize DAOs as legal organizations earlier this year.
The new law will permit the incorporation of DAOs in the Marshall Islands, the decentralized communities that drive cryptocurrency and blockchain initiatives. As long as they identify as DAO LLCs, it will give these decentralized crypto communities a globally recognized LLC structure, according to the announcement.
This implies that such companies must include DAO LLC in their name.
Both for-profit and non-profit DAOs are covered by the new law in the Marshall Islands. The legal framework also acknowledges the internal governance procedures used by these entities, such as tokenization and voting on ideas.
DAO Marshall Islands
The government has also established a registration procedure for these crypto communities as part of the recently enacted law. The statement states that the Marshall Islands DAO, or MIDAO, will run this register. MIDAO will be in charge of integrating blockchain and cryptocurrency groups that want to set up LLCs on the island state.
According to Finance Minister Brensen Wase, the DAO law is a continuation of the island nation’s expertise in international business registration and compliance.
According to Wase, “The Marshall Island commits its courts and its resources to the burgeoning decentralization world with this adoption of the DAO Act of 2022 and recognizes the unique position that decentralized autonomous organizations can hold not only in the blockchain space but in the broader economy as well.”