Wyoming DAO LLC Explained

What Is a Wyoming DAO LLC?

A Wyoming DAO LLC is a limited liability company that can be managed algorithmically—through smart contracts instead of (or in addition to) human managers.

In 2021, Wyoming became the first US state to legally recognize Decentralized Autonomous Organizations (DAOs) as a type of LLC. This means DAOs can:

Own property and assets
Enter into contracts
Sue and be sued
Open bank accounts
Interact with traditional legal systems

Without this recognition, DAOs exist in legal limbo—potentially exposing members to unlimited personal liability.

The key innovation: Wyoming law explicitly allows smart contracts to serve as the operating agreement and decision-making mechanism for an LLC. Code can be law—legally.

Why Wyoming?

Wyoming has systematically positioned itself as the most crypto-friendly jurisdiction in the United States:

Legislative Leadership

2018: First state to define digital assets as property
2019: Created SPDI charter for crypto custody banks
2021: DAO LLC recognition statute
2022-present: Continued refinement and industry support

Business-Friendly Environment

No state corporate income tax
No personal income tax
Strong asset protection laws
Privacy-respecting registration (no public member disclosure)
Responsive Secretary of State office

Legal Clarity

While other states are still debating what DAOs are, Wyoming provides clear answers. This certainty reduces legal risk and makes compliance straightforward.

The Delaware Analogy

Just as Delaware became the default choice for corporations due to its Chancery Court and developed case law, Wyoming is becoming the default for blockchain entities. Companies like Kraken and Avanti have chosen Wyoming for their banking charters.

The Series LLC Advantage

A Series LLC is a special type of LLC that can create unlimited "series" (sub-LLCs), each with its own assets, liabilities, and members—all under one parent entity.

Sails.to Series LLC Structure

Sails.to DAO Series LLC
(Parent Entity)

↓

Series A
Real Estate Fund

Series B
Tech Startup

Series C
Renewable Project

Why This Matters

Liability Isolation

If Series A has legal issues, Series B and C are protected. Each series' liabilities cannot reach the others—or the parent LLC. This is crucial for a platform hosting multiple offerings.

Operational Efficiency

Instead of forming a new LLC for every offering (with separate registrations, registered agents, filings), series can be created quickly through the operating agreement.

Cost Savings

One filing fee for the parent; no separate fees per series. One registered agent. One annual report. Significant savings at scale.

Clean Separation

Each offering is its own series with:

Its own bank account
Its own assets and liabilities
Its own members (token holders)
Its own governance rules

How It Works at Sails.to

The Parent Entity

Sails.to DAO Series LLC is the master entity, formed in Wyoming. It:

Provides the legal framework for all offerings
Maintains the registered agent and state filings
Establishes the master operating agreement template
Does NOT hold issuer assets or investor funds

Series Creation

When an issuer launches an offering, we create a new series:

Series designation registered with parent LLC
Series-specific operating agreement executed
Dedicated accounts and wallets created
Tokens deployed representing membership interests in the series

Token = Membership Interest

When you purchase tokens, you're acquiring membership interests in a specific series. The security tokens represent:

Pro-rata economic rights (distributions, liquidation proceeds)
Governance rights as specified in operating agreement
Information rights (access to financials, reports)
Transfer rights (subject to compliance restrictions)

Smart Contract Integration

The token smart contract on Solana enforces:

Transfer restrictions (KYC/eligibility whitelist)
Distribution automation
Voting mechanisms
Supply management

Investor Rights & Protections

Limited Liability

As a member of a Wyoming LLC, your liability is limited to your investment. You cannot be personally sued for series debts or obligations—just like a corporation shareholder.

Economic Rights

Specified in each series' operating agreement:

Distribution rights (dividends, income distributions)
Liquidation priority
Anti-dilution protections (if applicable)

Information Rights

Members are entitled to:

Annual financial statements
Access to books and records
Material updates on offering progress

Governance Rights

Typically includes voting on:

Major decisions (sale of assets, dissolution)
Changes to operating agreement
Selection of managers (in managed LLCs)

Smart Contract ≠ No Legal Rights

Your rights exist in the operating agreement—a legally enforceable contract. The smart contract automates execution but doesn't replace your legal protections. If there's a conflict, the operating agreement governs.

Governance & Voting

Member-Managed vs. Manager-Managed

Wyoming law allows two governance models:

Aspect	Member-Managed	Manager-Managed
Day-to-day decisions	All members vote	Manager decides
Major decisions	Member vote	Member vote
Typical use	Small groups, pure DAOs	Passive investments, larger groups

Most Sails.to offerings are manager-managed—the issuer/sponsor handles operations while investors receive passive economic returns. Major decisions still require member approval.

On-Chain Voting

For member votes, we use token-weighted on-chain governance:

Proposal submitted
Notice period (typically 7 days)
Voting window opens
Members vote with their tokens
Results recorded on blockchain
Outcome executed (automatically if possible)

Quorum & Thresholds

Specified in each operating agreement. Common structures:

Ordinary matters: Majority of votes cast
Major matters: 2/3 of outstanding membership interests
Amendments: May require higher threshold

DAO LLC vs. Traditional Structures

Feature	Wyoming DAO LLC	Delaware LLC	C-Corp
Token representation	Native support	Requires workarounds	Not designed for it
Smart contract governance	Explicitly recognized	Uncertain	No
Series capability	Yes	Yes (but less developed)	No
Pass-through taxation	Yes	Yes	No (double taxation)
State income tax	None	Franchise tax	Varies
Digital asset clarity	Comprehensive	Limited	Limited

When DAO LLC Makes Sense

Tokenized securities offerings
DAO treasury management
Token-gated access/membership organizations
Investment clubs with token governance
Any structure needing smart contract integration

When Traditional May Be Better

Planning for VC funding → IPO path
Need established case law (though this is developing)
Operating primarily outside digital assets