Overview
The first DAO Regulation was passed last month in the Marshall Islands, complementing the three DAO-specific laws passed since 2021. The Regulation accelerates the application process, provides more clarity to DAO LLCs, and introduces improved compliance measures.
Why a new regulation? MIDAO regularly collaborates with the government on new laws and regulations to clarify and improve the DAO LLC legal entity. This new Regulation enhances the registration and annual filing process for both existing DAO LLCs and new registrants.
The Regulation is meant to be easy enough for anyone to read and understand, so we encourage you to read it in its entirety:
Highlights for Existing DAO LLCs
- Annual Filing changes and updates:
- New Beneficial Owner Information Report (BOIR) with updated KYC requirements (see the form for details)
- Note: in most cases, this new form will require the same or fewer DAO LLC Members to perform KYC than was required previously
- Updated Annual Filing Form
- Updated Intent to Dissolve Form
- Updated Representative Agent Form
- Technology improvements:
- Stipulation to build a public-facing registry (target date - end of 2024)
- Stipulation to create a customer-facing MIDAO portal for annual filings and amendments (target date - end of 2024)
- Sanctions for non-compliance:
- Anyone failing to comply with the regulation will be subject to have their entity dissolved or/and be charged $5,000 for certain violations
Highlights for New DAO LLC Applicants
- Two forms will now be included during the registration process:
- Representative Agent Form to identify a DAO member responsible for receiving official notices from MIDAO
- New Beneficial Owner Information Report (BOIR) to identify Ultimate Beneficial Owners and those who must do KYC at the time of registration (see the form for details)
- Note: in most cases, this new form will require the same or fewer DAO LLC Members to perform KYC than was required previously
- Updated Certificate of Formation (CF) and Operating Agreement (OA) template:
- CF: Enhanced clarity and added Exhibit A, requiring DAO LLCs to list all relevant smart contracts
- OA: Just one template for all situations, so new applicants don’t need to view and choose between several different templates
- Accelerated application review process:
- A new, more digitized government registration process will accelerate applications and reduce delays
