Can a DAO Enter into Legally Binding Contracts with Traditional Entities?

A DAO without a recognized legal structure generally cannot enter into legally binding contracts with traditional entities because it is not considered a legal person. To bridge this gap, DAOs often use "legal wrappers," such as an LLC or a foundation, which acts as a legal representative for the DAO.

This legal entity can then sign contracts, open bank accounts, and interact with the traditional legal and financial systems on behalf of the DAO and its members, while governance remains decentralized within the DAO itself.