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What Is the Role of “Legal Wrappers” (E.g. Incorporating a DAO as an LLC) in Shielding Participants from Liability?

A legal wrapper like an LLC creates a corporate veil, shielding members' personal assets from the DAO's legal liabilities.
Greeks.Live21.11.25

What Is the Role of “Legal Wrappers” (E.g. Incorporating a DAO as an LLC) in Shielding Participants from Liability?

A "legal wrapper" provides a recognized legal entity for a DAO, creating a corporate veil that separates the DAO's legal liabilities from the personal assets of its members (token holders). By incorporating as an LLC, foundation, or other legal form, the DAO itself can enter into contracts, own property, and be held liable for its actions.

This structure is crucial for shielding individual participants from being treated as partners in a general partnership, where they would face unlimited joint and several liability for the DAO's debts and legal judgments.

What Is the Role of a ‘Wrapper’ Legal Entity for a DAO?
How Is Liability Distributed among Members in a DAO versus Shareholders in a Corporation?
What Are the Characteristics of a ‘General Partnership’ That Might Apply to a DAO?
How Does a DAO Differ from a Traditional ‘Limited Liability Company’ (LLC)?

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