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How Is Liability Distributed among Members in a DAO versus Shareholders in a Corporation?

Corporate shareholders have limited liability, risking only their investment, while DAO members may face unlimited personal liability for the DAO's debts.
Greeks.Live05.11.25

How Is Liability Distributed among Members in a DAO versus Shareholders in a Corporation?

In a corporation, shareholders typically have limited liability, meaning they are not personally responsible for the company's debts and legal issues; their risk is limited to their investment. In contrast, for a DAO without a formal legal structure, members could be considered partners in a general partnership.

This means they could face unlimited joint and several liability for the actions and debts of the DAO. This fundamental difference in liability is a major legal risk for DAO participants and a key reason for the development of DAO-specific legal frameworks.

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