Hey everyone, Lonser here!
There he outlined the differences, Pros and Cons of the possible legal entities and the conclusion there was that from a cost/benefits point of view the “MiDao Marshall Islands Non-profit DAO LLC” legal entity is the best offer. After some own research, chat and talk with MiDao I would agree to that.
“Marshall Islands Non-profit DAO LLC
Description: The Marshall Islands has passed legislation encouraging DAOs to register (with a non-profit option that fits PoolTogether’s circumstances). Registration does require a few members to KYC, but otherwise treasury operation can remain largely on-chain and as it functions today.”
This structure has multiple benefits:
- The non-profit model aligns with the protocols social good purpose and stated mission
- The structure a flexible membership model allowing for anonymous members and the ability for people to seamlessly transition in and out (up to 25% of token ownership)
- The protocol’s token holders and contributors are not predominantly located in the United States
- While relatively new, we like that the Marshall Islands has created a registration process expressly for on-chain entities indicating a willingness to evolve with the industry.
- People contributing to the protocol will benefit from structural and regulatory clarity
- The LLC can enter into contracts and mitigate concerns around tax treatment for treasury funds.
- Makes applying for incentives easier
- Legal entity can hold IP, we could in theory transfer rights from PT Inc. to the new entity.
In the previous Gov Post the Community largely approved the formation in an informal poll vote but since then the discussion has mostly paused.
As outlined there the next steps would be:
"If there appears to be alignment, we would recommend the following next steps:
- A token holder vote to provisionally approve adopting the entity for the treasury subject to further research, delegation of the authority to certain community members to confirm tax analyses and interface with MIDAO to form the entity 3 and other independent lawyers to confirm the analysis.
- These delegates will continue to provide updates on research and the rapidly changing legal treatment of DAOs/protocol entities as we move towards a final structure.
- A final vote ratify the outcome of step 1."
In this proposal I request approval from PT Governance to proceed with the formation of the legal entity and request the needed budget for it.
As stated in the MiDao pricing, the formation costs are 9,500$ and the yearly costs are 5000$ with a first year discount of 50%, so 12,500$ in the first year (MIDAO LLC Package Pricing). In addition I would suggest budgeting 5,000$ for independent legal counsel.