1/ Most crypto founders are operating with ZERO legal protection. No entity. No bank. Personal assets on the line if anything goes wrong. Here’s how to fix that in a weekend — fully onchain 🧵

1/ WORLD FIRST! Witness the future: A Based AI Agent Creating an LLC in Delaware Today, we show how a Based AI agent autonomously decides to create an LLC in Delaware, fully onchain, for its own needs. (Using @CoinbaseDev, @Replit, @otoco_io, and @OpenAI)

Season 1 of the OtoCo Points campaign is OPEN! 2 ways to earn points: ➡️ From activity on OtoCo ➡️ From talking about us on X or by referring friends.

Show your support for the OtoCo project by minting our Season 1 commemorative NFT on @base today!

2/ OtoCo’s smart contracts allow for instant legal entities in Delaware, Wyoming or the Marshall Islands. By simply connecting a wallet, anybody can create an instant, onchain LLC in one transaction on #Ethereum, #Base or #Polygon with zero paperwork.

We're joining our friends @1inch and @Uniswap on @gnosisSafe! You can now create an LLC that is owned by a multisig. All the speed and privacy of before, now with decentralized access to OtoCo based on your Gnosis Safe settings. This means your #DAO multisig can be an LLC!

OtoCo Points Season 1 has officially concluded! 🎉 A huge thank you to everyone who participated — this campaign was a major success thanks to you.

LIMITED TIME ONLY!  Login to OtoCo today with your wallet (@privy_io, @CoinbaseWallet, @MetaMask) email to start earning points. Your balance will be used to convert into OTOCO tokens on Settlement Day. 👀 Get started here: otoco.io/points

3/ By extension, an AI agent can use its wallet to autonomously form an instant onchain entity on @otoco_io if it needs legal personhood. Such legal envelope makes sense to cloak itself in limited liability e.g when pushing code or taking actions in the real world, such as driving the @Tesla robo taxi or doing household as your domestic robot.

1/ OtoCo's points campaign (season 1) ends soon! The snapshot happens on Monday, March 31, at 12 PM PST / 8 PM GMT. If you've earned points, make sure your entity is active so you can claim OtoCo tokens. Here's how to check 👇

4/ Operating with full autonomy, OtoCo enables Based AI Agents to: -Create LLCs in Delaware, Wyoming, or Marshall Islands. -Launch NFTs or Tokens -Run financial activities with limited liability -Accept grants as a legal person -Run any onchain action on behalf of the LLC The future of autonomous business is here!

2/ Why it’s needed: DUNAs offer the only U.S. legal structure that combines DAO recognition, member protection, and decentralized governance. Operating without legal status exposes DAOs to partnership liability risks, as demonstrated by the Ooki DAO case.

🎁 FREE gift: Existing users with active entities on 23 December 2024 will receive 200 points per entity. (Head over to @otoco_io and log in to check your POINTS balance) 💡Tip: Add automated renewal to your entity and receive an extra 150 points!

Gift points to your friends this Christmas: You both earn points when they sign up using your personal referral code. Simply connect to points.otoco.io and earn 10 points per friend.

Points Campaign Season 1 - Goes Live Monday 23 December at 9 a.m. PST! 🔔 🎁All users of OtoCo who created an entity before the opening of our campaign get BONUS points per entity. Limited time only! Follow @otoco_io for updates.

6/ Shoutout to @jessepollak, @base, @brian_armstrong, @balajis, and @MurrLincoln for your insights on AI agents! Want to create a legal entity? -Head over to OtoCo.io. Want a @Replit link to the code? -Repost + comment “based” and we will DM you the URL.

3/ OtoCo’s protocol legally engineered an onchain UNA that automatically coverts into a DUNA. Here’s how it works: 1️⃣DAOs with 2+ members sign to create an UNA. 2️⃣OtoCo tracks the DAO's governance token. 3️⃣Once > 100 members, the UNA automatically converts into a DUNA.

5/ Use cases are limitless, expanding OtoCo’s Total Addressable Markets manifold: -Single-use legal envelopes for bots -Instantly deployable capital pools -Humanoids acting with legal personhood -Surgical robots protected by limited liability -Each self-driving car an LLC -Autonomous research entities -Automated tax-optimized crypto treasuries -“Impromptu” entities etc The potential for innovation and efficiency is exponential!

~3 days to go! Launch your legal entity within seconds at otoco.io/spinup

1/ Meet @otoco_io, the tool for web3 builders to instantly incorporate on-chain. OtoCo allows you to FORM, FUND, and GOVERN legal entities for your DAO or web3 project, all from the comfort of your wallet, within SECONDS. Let’s dive into OtoCo 👇

4/ Create your onchain UNA/DUNA today on @base, @ethereum, @0xPolygon using @otoco_io

Need to get your DUNS number for the App Store? The FIRST @DunBradstreet (DUNS) number has just been issued for an on-chain legal entity created using OtoCo!

Try it out for yourself: otoco.io

🎉 We just got a bank account open for one of our OtoCo crypto entities! 🎊 This means there is an LLC, owned by a crypto wallet, now with access to fiat banking. This is a collision of #TradFi, #DAOs and #DeFi DMs are open for anyone looking to find out more! 😁

~24 hours to go Create your entity now at OtoCo.io/spinup and start earning points. Already have an entity? Make sure it is in active status

Smart contracts as the natural evolution of analog contracts: The case for legal equivalence between offchain companies and blockchain-native organizations In this post, we examine how onchain companies can achieve legal equivalence with offchain registered ones. Companies are an invention, and as inventions go, they arguably rank equally with the printing press, the shipping container, and the micro-processor in how they impacted human progress. The key breakthrough lies in the acceptance of the legal fiction that a company has its own legal persona, separate from who owns it. Back in the Low Countries in the early 17th Century, the joint-stock company then contractually limited the liability of its owners to the capital they contributed. This resulted in a power-law proliferation of risk taking and private entrepreneurship which has continued up to the present day. Companies remain largely a matter of private contract law Though the State (as it did with currencies which were once issued privately too) eventually monopolized the chartering of companies, most matters related to the relationship between a company’s owners and its managers and how a company is generally governed remain a matter if private contract law. Private companies in particular remain in essence a bundle of private agreements between various stakeholders and are arguably one of the few playgrounds of free enterprise left. Predictably, lawyers became the self-appointed guardians of the key agreements governing the relationship between company owners, their managers and the outside world, building upon caselaw to crystalize a body of law referred to as corporate law. This has resulted in a more or stable set of constitutional documents across most commonly used company structures, such as the Operating Agreement for the U.S. Limited Liability Company, the Bylaws of a U.S. C-Corp, and the Memorandum and Articles for most non-U.S. limited companies. Legal parochialism When contracts in legal prose execute, it creates a binding relationship between the signing parties. However, legal agreements by their nature cannot self-enforce: Whilst lawyers go to great lengths to define what constitutes a breach of contract and the consequences of such breach, they cannot prevent a breach in itself. The above hints at a key vulnerability of analog legal arrangements: as in Gödel’s completeness theorem, analog legal clauses - no matter how neatly worded - ultimately rest on a principle of trust which exists outside of the narrow contractual context. Simply put: A legal agreement is always to some extent a leap of faith. Such leap of faith was easy to take when companies were setup from a coffeehouse in Amsterdam, where capital was pooled by confraters whose daughters had married each others sons, and the stock exchange was a club of cigar-smoking males agreeing a fair price over a jenever. Legal parochialism still characterizes most of how companies are formed, funded and governed today, but is patently inadequate for the digital economy where teams are distributed, stakeholders are contributors, and governance is independent of physical location. What’s needed is a new entity for the new economy. We had to wait for blockchains The key breakthrough from smart contracts on distributed computing is not only that they create binding legal agreements (because you agreeing to Apple’s new T&Cs served up via a centralized server also creates a binding legal agreement), they also make trustless contracting possible by embedding the contract terms in self-enforcing code which cannot be censored or changed by any of the contracting parties (or can only be changed by following pre-agreed protocols part of the code). Smart contracts are therefore deployed rather than executed, and thanks to this self-executing nature of smart contract, analog agreements when transposed into computer code can be made self-policing. In that sense, smart contracts are legally Turing complete. Applied to a company’s constitutional documents and its governance bylaws, most of the operational legal clauses break down into IF > THEN conditionality. For instance: A typical clause in a shareholder agreement may specify that IF any individual spend by management exceeds say US$100,000, THEN approval of a shareholders is required. Analog legal prose won’t prevent a rogue manager from buying a $110k diamond necklace with the company’s card. The only recourse is suing for restitution after the deed is done. In a digital context however, the company’s treasury is held in a wallet programmed to ping for a shareholder’s cryptographic signature IF any individual payment out of the wallet exceeds $100k. Only THEN can the transaction happen. The legal fiction of a company as a bundle (occasionally a spaghetti!) of legal agreements, combined with the IF > WHEN logic of most of a company’s constitutional agreements and bylaws, make it possible to systemically replace the analog mechanisms of checks and balances between the parties into computer code. If some of this code execution depends on external events, oracles can be used. As indicated in previous posts, nowhere is this more true than in Venture Capital deals: while smart contracts won’t (and were never meant to) replace human negotiation and consensus building, it is our believe that the key clauses related to the economics and control elements of an investment can be embedded in smart contracts. Programmable companies What emerges is a company in which all participants, rather than holding dumb tokens that simply represent their percentage ownership, own programmable shares that reflect each participant’s role and privileges in the organization. The system itself can then check if the conditions are met to see certain things happen. For instance, certain “reserved matters” which typically require the vote of a “qualifying shareholder” would simply not be adopted without such shareholder’s cryptographic signature. The same goes for rights of first refusal clauses, anti-dilution adjustments (which would be fully automated by the smart contract minting more ownership tokens), automatic conversion, etc. More generally, the mechanics of the governance of the future company and its business logic, including the myriad humdrum corporate secretarial actions, will likely be automated via smart contracts, in combination with AI. Other legal constructs such as trusts and investment funds too, when blockchainified, would see a lot of the maddening anachronisms that currently plague their running taken out of the equation. II. The legal equivalence of blockchain-native companies Programmable companies are exciting. However if all we do is transpose existing company forms to a new technology layer, we are doing nothing to broaden ownership and democratize participation. In what follows, we make a case for a new, digital entity for the digital economy, and further argue that the recognition of such entity is attainable by relying on accepted principles of international private law. Doubts about DAOs Much has been written about what has generally been referred to as Decentralized Autonomous Organizations (“DAOs”, originally called Decentralized Autonomous Corporation or “DACs” by Nick Szabo who in our knowledge used the term for the first time in 1994). In their purest form, DAOs aren’t “wrapped” - and in our view cannot conceptually be wrapped - in an existing legal entity such as the Wyoming DAO LLC or a Marshall Islands DAO LLC. Wrapping a DAO effectively means robbing it of its key benefit of being non-hierarchical and widely participatory. In addition, DAOs have been beleaguered both by the courts but also by investors who bought tokens from them: - The courts seem to pierce through a DAO and go after its members/token holders - going as far as serving notice via the DAO’s community forum on Telegram, and falling back on the default legal analysis of a DAO as an unlimited liability partnership, exposing DAO token holders to joint and several liability for the actions of the DAO. - Investors, including leading VCs, woke up in the middle of the night about the potential reputational risk from having bought tokens in DAOs at the height of the (last) crypto bull market, without clarity about their rights as investors and how the DAO would pay tax, etc., promoting entities such as U.S. Unincorporated Nonprofit Associations (“UNAs”) as wrappers. As a result as the above doubts about DAOs, they seem to have fallen out of favor. The birth of bottom-up companies However, it is our view that, as was the case with Limited Liability Companies in the U.S., which first gained recognition only in 1977 (by way of a Wyoming law written at the behest of a sole beneficiary, the Hamilton Brothers Oil Company), bottom-up demand from a whole community of builders will result in the eventual recognition of a new, fully digital company with legal persona and limited liability, with bylaws written as code and with blockchain itself as its jurisdiction. In addition, we believe (1) that such DAO-like onchain entity, without the need for any form of legal anchor in a state, has been a validly constituted company throughout - i.e. since Bitcoin as the first DAC - and (2) that its limited liability, as with the Dutch joint stock company of the early 17th century and the Series LLC in the U.S., can be a matter of private contact between all participants. In what follows we examine these two claims more closely. International private law to the rescue Our thesis is that the recognition of an onchain entity as a company sui genesis with limited liability is achievable if we rely on international private law and the freedom to contract. International private law, which is the body of law that fills the gaps when different jurisdictions are involved (hence “international”), has broadly settled on a cascading definition of what a “company” is. First, it asks if a company was validly constituted by pointing to the law of the state under which the company is organized. This test is generally passed when the formal publicity and registration requirements set out in the law according to which it is organized are met or, where such requirements do not exist, if it is correctly organized according to that same law. Second, absent proof of valid constitution, international private law looks for where the company is actually administered. This is typically the place where the fundamental decisions are made and where the company’s operational management is usually located, based on indicators such as the place where the company’s directors meet, the place where the general assemblies are held, the administrative centre where the accounts are kept, and the place where the company’s clients are residing. If the operations of the company are managed from a number of countries, the place where the head office is located, i.e. where the company’s headquarters are, is decisive. International private law also introduced an escape valve by generally giving a company that seemingly has no valid constitution nor a locus for its administration the benefit of the doubt: in order to protect the interests of third parties who rely on the appearance that a company has legal existence, it tends to automatically recognize foreign entities (the favor recognitionis principle), meaning foreign entities are generally ipso jure recognized. Onchain organizations are by their nature “international” in the above sense of the word, by virtue of living on decentralized ledgers which assumedly have participating nodes or validators in at least two or more jurisdictions. As a result, international private law has something to say about them. On the face of it, DAOs would not pass the first test as they are not “validly constituted” given they haven’t explicitly anchored themselves in a legacy jurisdiction. However, in our analysis it is just a matter of time before blockchains themselves gain recognition as a jurisdiction for onchain companies. We base this claim on an extrapolation of the existing legal definition used in international private law of what is a “state” and “law”, which in our analysis includes the blockchain and code upon which onchain entities chose to organize themselves. Onchain entities are organizing themselves such that they do not need to rely on a central government to provide them with the legal framework for their operations and the protections they seek: The fact that they have chosen to rely solely on the technology itself and accept that “code is law” does not make them an outlaw, but rather confirms their choice of code as the law governing their company or their lex societatis Such lex societatis, the laws companies choose to organize themselves and their assets, is a recognized legal principle. In the same way one can choose to organize one’s company under the laws of say Delaware, one has the choice to freely submit oneself to one’s own digital jurisdictional order on blockchain. On the basis that companies are legal fictions consisting essentially of a bundle of contracts, and that smart contracts are recognized as binding contracts written in code rather than analog prose, then (1) code can be the lex societatis of onchain companies, and (2) blockchains are a digital jurisdictions with functional equivalence to state jurisdictions for the valid constitution of onchain companies. Wannabee companies Even if the legacy world may not be quite ready yet to accept decentralized ledgers as new jurisdictions and onchain companies therefore fail the “validly constituted” test above, most projects will probably have some “actual center of administration” under the second test, and even if this is not the case, they would still be considered a company thanks to the favor recognitionis principle mentioned above. This leads to the inevitable conclusion that even anonymous or pseudonymous pure algorithmic protocols, including Bitcoin itself, are “companies” in international private law. Szabo was right calling them DACs rather than DAOs! But why would DAOs, who if anything try to escape the gravitational pull of legacy jurisdictions, want to be recognized as a company? What is in it for them? What’s in it for them is the ultimate prize: limited liability. It is much more favorable for even purely algorithmic DAOs to be recognized as companies sui generis than to be out there in legal limbo or worse: being treated as unlimited liability partnerships, in which each of the holders of the protocol’s native token could be held jointly and severally liable. Recognition as a new type of company, with code as its lex societatis, will allow onchain entities to gain separate personhood and attain limited liability. Contracted limited liability To secure such limited liability, the smart contract code that forms the bylaws of an onchain company would contain contractual references as to the status of token holders as benefiting from limited liability, in the same way that e.g. a Series LLC gains its limited liability by contracting with the Master LLC. Here again, as in our analysis of blockchains as new digital jurisdictions, we fall back on accepted legal practices, in this case the freedom to contract, which we extrapolate via the theory of functional equivalence. On this basis, we see no reason why onchain companies could not “contract in” limited liability. A new vehicle for human ingenuity The end state is a blockchain-native company in its own right, validly constituted on blockchains, with legal personhood and limited liability, without the need to tether itself to an analog jurisdiction. In other words: a digital entity for the digital economy. In the same way the Dutch joint-stock company mentioned earlier lead to a power-law proliferation of risk taking since the early 17th Century, the 21st Century digital company simply recognizes the new reality of how people associate and coordinate in the new economy: in a decentralized way, without hierarchies and headquarters, with users as stakeholders and co-governors. The recognition of onchain entities as companies sui generis validly constituted on blockchains as digital jurisdictions is not pie-in-the-sky but follows from a logical extrapolation of established legal principles, adapted for the new realities of how stuff gets built in today’s world. If we would not believe that onchain protocols built on smart contracts are set to become the new joint-stock companies, with functional equivalence to state-chartered legacy entities, we would not be doing OtoCo. Our mission is to engineer such new digital company for the digital economy, giving OtoCo users the choice of using our suite of smart contract to turn existing company forms such as LLCs into code, or incorporate and run their companies natively on blockchains as their chosen jurisdiction.

🔵 Onchain legal entity formation using @otoco_io is ready for the BASE community! Legal entities will be formed faster, cheaper, and better. Connect your wallet, select your jurisdiction, and incorporate within seconds.

1/8 Please meet @GencoAI, the world's first AI consigliere: an ever affable, always available and astonishingly affordable AI agent who you can instruct to operate directly on your company and its wallets.

Any wallet address (including @safe) can be used to create an onchain legal entity using OtoCo.io

📣 We just had a great chat with the team from @AragonProject about legal entities for DAOs. Check it out to learn more about how you can protect your internet friends (and yourself)! 🔐

Looking to create a legal entity? Head over to: otoco.io/spinup

🚨 Introducing OtoCo's Entity Formation Widget: The ultimate on-site legal entity creator 🌐 → Embeddable on any website → Instant legal entity formation in available jurisdictions → 2-step process → Entirely on-chain Legal entity formation made simple for everyone 🧵

📢GET AN OFFSHORE LLC! Now you can form a Marshall Islands LLC with OtoCo fully on-chain, just using your crypto wallet. Here's how it works: 🧵

📣 OtoCo is live with: > NFT LLCs > A legal template library 🚀 It's easier than ever to create a Delaware or Wyoming company on the blockchain! Gas fees to create an entity are down 90% 📉 and companies can be created in less than a minute for consistently under $20 📈

🚀 OtoCo x @SkylineOTC 🌐 Introducing the "Crypto to Fiat Payments" plugin: A Game-Changer for Legal Entities 🤝💼 Now, OtoCo users with legal entities can make global payments with ease, and all without the need for a traditional bank account. How, you ask?

1/ @otoco_io has rolled out a new onboarding experience through our partnership with @privy_io . 🎉 In addition to directly connecting your wallet, OtoCo now provides an additional way to create and manage on-chain legal entities simply by using your email.

We make this possible on OtoCo - Simply connect your wallet and create a company (instantly) onchain!

1/ Here is how you can get an LLC in Delaware or Wyoming fully on-chain using @otoco_io , from the comfort of your wallet. 👇

🎉 Exciting News! 🎉 The world's first blockchain-native Wyoming LLC on BASE (@base) has just been formed! Total cost: $49 (Incorporation Cost) + ~0.0004 ETH Check out the tx link here: basescan.org/tx/0xec2f865d02… Cheers to spontaneous entity formation! 🥂

Another day, another DUNA @milesjennings @lex_node @DKerr_Cowrie, natively onchain, now happening in America, on OtoCo! Soon you'll be able to prompt @GencoAI our AI consigliere to create a DUNA, issue its tokens and manage its treasury and much more nitter.app/otoco_io/status/193972…

#DevConBogota swag!

1/ OtoCo now lets you to easily obtain a Tax ID or EIN for your Delaware or Wyoming LLC created on OtoCo, straight from your crypto wallet. Here’s how it works 👇

Onchain offshore LLC in the Republic of the Marshall Islands If you are looking to diversify away from the U.S. whilst maintaining the flexibility of the U.S. Limited Liability Company structure, you can now instantly form a Marshall Islands LLC onchain using OtoCo's smart contracts. Simply connect your wallet and for the equivalent of only US$149 in Ether (+ gas fees) you can be the instant owner of a hyper-versatile offshore entity in the Republic of the Marshall Islands ("RMI"). When your Marshall Islands LLC is formed, an NFT is created as proof of its existence and you’ll be able to download your long-form operating agreement from within the OtoCo dash. You can be its sole owner/manager or have more than one member, add bolt-ons such as a digital asset wallet or fiat ramps, and manage your entity entirely from the comfort of your wallet. A carbon copy of the Delaware LLC For historical reasons, the Marshall Islands almost word for word copied Delaware's LLC laws, including the existence of Series LLCs in RMI. Though independent from the U.S., it still looks at Delaware case law if there is no statute or case law in the RMI. This means the legal OS of its LLC is identical to Delaware's: It has Members (owners) who can also be its Managers (directors), is recognized as an entity with its own legal persona e.g to sign agreements or hold assets, and Members are shielded from unlimited liability, which significantly improves their legal position compared to being a governance token holder in a DAO. Best of both worlds As an offshore LLC, the RMI LLC combines the best features of a partnership with those of an International Business Corporation (IBC) in places such as the Cayman Islands or the British Virgin Islands: - An LLC in RMI allows for tax optimization: Similar to the IBC, LLCs do not pay any taxes at the company level as long as they do not conduct business in the Marshall Islands itself. - Similar to a partnership, LLC members benefit from limited personal liability in excess of the assets they brought in and can allocate losses and gains with flexibility. - Privacy: Members' names are not part of any public records and ownership can be entirely foreign, either in personal name or in the name of a foreign entity. - The minimum number of members is one and the LLC's sole member can also be its manager. - There is no auditing or accounting required: LLC’s can adopt any accounting criteria and audits are not required. - English: As a former U.S. territory, English is the official second language in the Marshall Islands. - The U.S. Dollar is the official currency of the RMI. Benefits from OtoCo's blockchain-first approach As it did with the Delaware and Wyoming LLCs and the onchain Swiss Association, OtoCo's tech turns the analog RMI LLC blockchain-first whilst preserving offchain legal validity: - DeFi-style entity creation: The initiation of the creation of an LLC in RMI with OtoCo is by way of signing a transaction on blockchain from your connected wallet, which will be the first Members and Manager of your LLC. (If you want to try this out before forming an actual entity, you can connect via the Ethereum Sepolia or Polygon Mumbai testnet). - DAOs can be Members: As a result, not only can an individual wallet be used to form an LLC, you can also use a DAO multi-sig wallet by connecting to OtoCo via Safe's appstore. This means a DAO can effectively own and control an LLC via OtoCo and use it as an extension in the real world to hold real-world assets (RWAs) in addition to crypto, and engage in transactions the DAO itself cannot engage in. - Flash entities: In addition, formation is instant, allowing users to spin up flash entities with the speed of the Ethereum and Polygon chains. Such flash entities can be useful if e.g. you are set to receive a token airdrop but wish to hold the tokens in the name of an entity you control rather than in personal title. - Enhanced privacy: OtoCo acts like a VPN around your identity as a Member or Manager: since it is your (or your DAO's) wallet that is Member of the RMI LLC, an extra layer of privacy applies as to who owns and controls the entity. Only when you look to access legacy services such as fiat ramps and bank accounts will you be required to give up a degree of anonymity, but only bilaterally with the service provider you seek to engage with. - Entity management from the comfort of your wallet: OtoCo lets users manage their entire entity from within the OtoCo dashboard by simply connecting with their Member wallet. From renewals to add-ons such as asset wallets in the name of their LLC, to ultimately folding up their entity, every event is only a cryptographic signature away! A rainbow of use cases More than 1,150 users are currently using OtoCo to secure instant limited liability for their project or optimize the way they hold digital assets. We've seen 3 main categories of use cases: Holding entities We believe it never makes sense to hold anything in personal name. This applies doubly to crypto: - The OokiDAO case confirmed the status quo analysis that holders of a governance token in a DAO are considered unlimited partners and can be held jointly and severally liable for the actions of the DAO. This is the worst of all worlds but can easily be remediated by spawning a cheap and instant entity using OtoCo. Some of our users have one entity per governance token they hold! - Tax reporting is typically a lot more convoluted at the individual level, where every transaction needs to be accounted for, versus a holding company level, which can summarize its accounts by looking at the begin and end value of its holdings over the reporting period, and what distributions have been made to its Members in the case of an LLC. It then falls on those Members who receive distributions out of an LLC, including an RMI LLC, to comply with any applicable individual reporting requirements in the country they are tax resident. - OtoCo has a plug-in that lets the entity itself, once formed, control a multi-sig using Safe technology. This makes it unambiguous that the digital assets held in the wallet are assets of the company and not of the individual Member(s). In the case of the RMI entity, since it has its own legal personhood, it can hold assets that may otherwise not be available or may be considered securities in the jurisdiction where its Members reside. In this respect, the insertion of an offshore entity, in this case an RMI LLC, broadens the democratization of token holder participation. Operational entities The shortcomings of DAOs, in the current analysis, are well documented: they do not benefit from limited liability and are not considered legal persons separate from their members. As a result, there is a lot DAOs can't do: often, counterparties do not want to enter into agreements with them, and centralized exchanges, banks and tradfin service providers won't open an account for them. Building a project with a DAO as the operating entity is not only difficult, it is borderline foolish as you take entrepreneurial risks without limited liability protection. However, "wrapping" your DAO which is generally advocated by lawyers (who try to look cool using the word "legal wrapper") in our minds is also very unsatisfactory, as it essentially shoehorns the spontaneity and openness of a DAO community into the straightjacket of a traditional company structure. Much preferred is have your DAO control a legal entity. With this in mind, OtoCo has made sure its solution interfaces with Safe's multi-sig smart contracts, which means an entity, including the RMI LLC, can be owned by a multi-sig wallet. Such wallet can belong to a DAO or to a project's Foundation and its access privileges are set by your project's governance protocol. The end result is that an entity spun up using OtoCo's smart contracts can be owned and controlled by your DAO or decentralized Foundation and used as their operational extension in the real world, rather than the DAO itself being wrapped in an existing company form. This opens up a whole new world of legal configurability in which an RMI LLC can be the operating subsidiary of a decentralized project. Multi-member capital pools Then last prevalent use case for an onchain LLC, whether onshore or offshore, is to pool capital from multiple members and give each governance rights over how such capital is to be deployed. Such governance rights are granted by way of the issuance of a "mirror token" that reflects how much funds each Member has contributed. OtoCo's multi-member smart contract plugin lets users issue such token which can then also be used as a voting card to co-decide what the pool will be investing in. As a final note, and in anticipation of some questions we will no doubt get, the Marshall Islands LLC you form with OtoCo is not a Marshall Islands "DAO LLC" Such "DAO LLC" is in many ways a customized LLC meant to cater to the needs of DAOs and Web3 projects but differs in a number of significant ways from the main LLC, most crucially in that for-profit DAO LLCs are considered domestic Marshall Islands entities and hence attract a tax on their gross revenues, currently set at 3%. The main (Delaware-copy) LLC is not a domestic entity and hence no tax applies to its gross revenue nor its profits. Disclaimer: Not tax or legal advice.

👉Creating an entity itself will now be faster and cheaper too. OtoCo's new smart contract infrastructure will enable us to create entities in one transaction. Get an LLC for less than $30 USD! Do you want to know how? 👀Read more: otonomos.substack.com/p/a-re…

OtoCo creates on-chain legal companies for crypto freelancers, DAOs, and all of your web3 projects. ✅ Spin up an LLC using your favorite wallet and use that entity to protect your personal funds, limit your liability, and stay safe when agreeing to proposals or contracts! ⚖️

It is the last Thursday of the month which is when Otonomos pushed its monthly Otonomist otonomos.substack.com/p/the-…

We reached 500 on-chain entities opened through OtoCo. Very exciting number and this is just the beginning! 🎇✨🎉 Thanks to the community! Happy BUIDLing to everyone! 👉Looking for an on-chain LLC and other crypto native legal tools? Access: otoco.io/

Legal Lego: Why and how to stack entities on OtoCo When you build or invest, it's unlikely (and not very wise...) to do things in your own name. Most likely, you'll do stuff from an entity, and even more likely from a number of entities. Such entities are typically stacked, with one owning the other. In this post, we share some use cases for "nesting" entities and how this can be done using OtoCo. The use case we present in this blog is identical to a “holding” company with one or more subsidiaries, with both the holding and its subsidiaries formed natively on OtoCo. Chronologically, the holding needs to come first, as it will own its subsidiaries. How to do this on OtoCo? For holdings, a Limited Liability Company (LLC) of which OtoCo offers both an onshore version in both Delaware and Wyoming and an offshore version in the Republic of the Marshall Islands, is a good container to hold assets. Such assets typically include ownership of shares in other companies. The process to form a holding LLC is the same as any onchain LLC on OtoCo. You first decide which of your wallets you control you connect with on otoco.io, select the jurisdiction, and sign from your wallet paying the ETH equivalent of the one-time formation fee and the corresponding gas fees. Only seconds later, you will see your new LLC in your dash. To now make your entity a holding, it needs to own the shares of another LLC. Importantly, this subsidiary LLC cannot be created using the same wallet you used to create the holding with: this would just make it another of your entities directly controlled by you! Instead, you want the wallet of your new LLC to own the subsidiary LLC. This is easily done in OtoCo: Simply click on the “Entity wallet” plug-in from within your dash. This Entity wallet uses Safe multi-sig so it can be configured to have multiple signing parties, but it can also be just controlled by your individual wallet with 1 out of 1 signers. The analogy of this Entity Wallet in the legacy layer is a bank or brokerage account for your company, which will always need an authorized party to transact on behalf of the company. Using your individual wallet as the authorized signer over the new wallet belonging to your onchain LLC is analogous to you becoming the authorized person over a legacy company’s bank account. Using this Entity Wallet means all transactions from that wallet will now be done on behalf of your new onchain LLC, including… spinning up a new onchain LLC. To do this, go to app.safe.global/home and click on “Apps” in the left-hand panel menu. Search for “OtoCo” to access the OtoCo dApp from within @safe Connect with the wallet that controls your Entity Wallet on Safe and load it into Safe if it is not already showing. This means you will now be connected to OtoCo using your onchain LLCs wallet. From here on, all transactions you perform within OtoCO will be done from your entity’s wallet and not your individual wallet. Doing it any other way would mean you are making a fiat payment on behalf of your company from your personal bank account rather than the bank account you opened for the company itself! Spinning up your onchain subsidiary Now that you’re connected OtoCo with the wallet belonging to your onchain holding LLC, you will basically repeat the same steps as above to spin up a new LLC. Again, because it is the wallet of your holding LLC that becomes the first Member of your subsidiary LLC, this subsidiary is now an asset of your holding. Whatever the subsidiary LLC owns will indirectly be held by your onchain holding. Cascading down You can now repeat the above nesting process and spin up a wallet for the subsidiary LLC using the Entity Wallet plugin on OtoCo, and use that wallet to spin up another LLC, which would then be the subsidiary of a subsidiary, and repeat this process to layer as many entities you need. Helpfully, all of them will show up in your OtoCo dashboard with the date of their creation and their unique NFT as “birth certificate” of each entity. Cross-border setup A simple holding/subsidiary stack (often still referred to as a “mother/daughter” structure) can be made multi-jurisdictional of the holding is spun up in one jurisdiction and the subsidiaries in another. This can be particularly useful for US residents who have foreign holdings. You simply spin up a US LLC as the mother to foreign daughters, e.g. a wallet belonging to your Delaware LLC creating a Marshall Islands LLC on OtoCo. This will greatly reduce your reporting requirements as the holder of shares in a foreign entity vs. you holding the shares in personal name/from a personal wallet: The reporting of foreign holdings would be at the Delaware LLC level, rather than in your personal tax form (Taxation aspects are outside the scope of this post but suffice here to say that tax does not discriminate between offchain and onchain entities…). Since the onchain Marshall Islands LLC is a separate legal entity for all intents and purposes, i.e. it has its own legal personhood separate from its owners, the above setup allows US-based participants to gain access to investment opportunities that may not be available in the U.S. For instance, a SAFT can be signed by the Marshall Islands LLC that give rights to a token not offered in the U.S., or you can outright purchase tokens not offered in the U.S. by using your offshore subsidiary. DAO-controlled onchain entities and multi-member holdings or subsidiaries Another permutation is when the Entity Wallet is a genuine multi-sig which, by extension, can be a DAO wallet. This means that the holding itself can be controlled by a DAO wallet which sits on top of a cascade of onchain subsidiaries. A last permutation is to add more owners to the holding and/or its subsidiaries. Note that this use case is different from a DAO controlling an onchain entity: when a DAO controls an OtoCo entity, it still has only 1 owner, be it that the owning wallet can be controlled by multiple signing parties. To add owners, simply go to the “Add Members” plug-in within the OtoCO dash. - Add Plugin: Connect your wallet and access the OtoCo dashboard. From the left menu bar, select "Plugins." Click on "Add" to open the Add Members plugin. - Select Token Type: Choose between "New Transferable Token" or "New Consent Token" based on your entity's requirements. The former will allow any member in your entity to transfer their token to any wallet address, whilst the latter will require consent from a majority of the remaining owners before the smart contract can send the token out. - Token Settings: In this step, define the new token's fundamental details. Set a unique name, a symbol (ticker), and the total supply for the token. - Members and Membership Interest: Determine the initial members of your entity and allocate their membership interest in percentage points. By default, your connected wallet will be listed with 100% interest. Use the "+ Add Another Member" button to include additional members by providing their wallet addresses and corresponding allocation percentages. - Manager and Governance: Designate a Manager for your entity and set the duration of the voting period (in minutes or days) from the available options. - Review and Tokenize: Carefully review the entered information and initiate the tokenization process by clicking "Create Mirror Tokens." Confirm the transaction in your connected wallet (e.g., MetaMask) and cover the gas costs. The Entity Wallet you created for an entity you initially owned 100% and to which you then invited more owners will not change the Access privileges, which are set at the Safe level. To add the new owners to the Entity Wallet multi-sig, if desirable, you would simply paste in add them as signatures. Why multiple entities? Generally, it is a good idea to ring fence one's assets and exposure as much as feasible. Like bulkheads on boats, the idea is to prevent one flooded compartment from engulfing the rest of your assets. Limited liability vehicles help compartmentalize ownership. For instance, it makes sense to hold an equity stake you took in a company in a subsidiary that is specially created for this purpose: instead of transferring the underlying assets (the shares in another company) you can just transfer the entity that holds the shares upon sale of your stake. The holding of this special purpose entity then receives the proceeds of the transfer of the shares of the subsidiary. With OtoCo, such transfer is very easy to do by simply making a new wallet the controlling wallet of the onchain entity, which can be done from the “Manage Entity” section of your dash: Another reason why compartmentalization makes sense is to limit potential legal liability from owning governance tokens in DAOs. The current lay of the land is that DAOs are not benefiting from legal personhood and limited liability. As a result, DAO governance token holders may be held what is called jointly and severally liable for any liabilities incurred by the DAO, the worst of all worlds! For instance*: You hold a governance token in a DAO that is deemed to have offered futures on commodities (non-security tokens) without Commodities Futures Trading Commission (CFTC) registration in the U.S. By lack of identifiable persons upon whom to serve notice, all DAO governance token holders are sued by the CFTC (by message in the DAO’s Telegram group). This means each and every DAO token holder could be held liable for the entire amount the CFTC is seeking. The outcome of such action will be very different if you hold the governance token in a personal wallet (in the extreme, a bailiff appears on your doorstep and empties your house incl. your hardware wallets) vs. you holding the governance token in a single-assert vehicle (the liabilities of which cannot exceed whatever capital you used to purchase the token and which if they liabilities exceed its assets you can declare bankrupt. *Based on real events… Be your own family office Wealthy people have traditionally set up separate entities and convoluted, cross-jurisdictional cascades to shield themselves from potential liabilities, including creditors, frivolous litigation lawyers, envious competitors, etc. and to preserve their wealth. In our minds, the injustice is not in them having access to such wealth preservation tools, but to maintain legal cartels and erect analog barriers that prevent more people from benefiting from the tools to look after themselves. Thanks to the accessibility of crypto, most of us will hold multiple digital assets, from NFTs to governance tokens to various coins, however our fear is that many of us hold, stake, swap, trade, transfer, buy and sell their digital assets from wallet they hold personally, or at best from some omnibus legacy holding entity. With one-time setup costs starting at only US$49, and annual renewal at the same level, OtoCo now makes it easy and extremely affordable to replicate onchain what offchain would require a full family office setup to hold and manage multiple assets. Try it out for yourself by choosing one of the testnets after connecting your wallet on otoco.io.

Our Frame is trending on ⁦@farcaster_xyz⁩ and spawned a new onchain entity every hour of the day today. Welcome to instant limited liability containers on blockchain now also on ⁦@base⁩ from within DeSoc.

How we condensed speed of formation to seconds instead of days at OtoCo👇 Mickey Mouse Members In most jurisdictions, upfront Know-Your-Customer and Anti-Money Laundering checks are performed before a new company can be filed, either at the official Registry level or by licensed formation agents, making the whole process a stop-start event which is difficult to automate and optimize for speed. By contrast, it is effectively possible - be it not very useful - to form a new company in the United States with Mickey Mouse as its first Member, since identity checks are effectively pushed out and performed only when the need arises, e.g. when the LLC applies for a bank account. As with real birth, the company's birth certificate gets issued first, the passport follows later - and only if there's a need to travel! This lack of attestation of a Member's identity at the moment of birth of an US LLC helps enormously in condensing the due process of formation. However for every new LLC filed, there's still a wait of 12 to 48 hours until Registry stamps a new entity's "birth certificate". How did we remove this blocker? Enter Series LLC As a first way to increase our speed of formation, we had a closer look at a relatively new variant of the LLC: the Series LLCs. A Series has a Master and individual Series. Each Series is considered an LLCs in its own right, with its own name and its own Member(s) independent from the Members of the Master LLC and other Series' Members. 💡 An on-chain Series LLC has the exact same legal validity as a standalone LLC! 💡 Crucially, the assets and liabilities between the Series amongst themselves and between the individual Series and the Master are entirely firewalled (though there is not yet sufficient caselaw to confirm this firewall is 100% secure in all States). It is the Master that spawns the individual Series without the need for extra filing with State Registry: The Series' first Member simply signs an Operating Agreement and all that is required from the Master is to keep a record of each individual Series' chosen name and initial Member. In this legal construct, the time to spin up a new entity can be reduced to the speed by which a Series contracts with its Master. However, there's still a signature required, which introduces latency. To make this at the push of a button, as was our goal, we had to go a step further. A key discovery Individual Series need a first Member. In the analog world, this Member would either be a physical person or an official representing a company who contracts with the Master LLCs by signing the Series Operating Agreement. Even when digital signing is used, the Master still needs to create a record of the name of the Member of the Series for it to be validly activated. 💡 Our key discovery in this respect was that the first Member of a Series LLC can be a smart contract address. 💡 As a result, a new Series LLC could be formed by signing a cryptographic transaction on blockchain between the owner of a wallet and a Master smart contract that activates the Series Operating agreement. How is this legally valid? In this setup, the first Member of the Series LLC is whomever controls the wallet that sends Ether to the Master LLC smart contract address that spins-up the Series LLC. Proof of existence of the new LLC is the smart contract created to hold the Series LLC Operating Agreement. Proof of ownership comes from the public key that shows the address of the first Member who sent the transaction to the Master smart contract. How we removed the naming speedbump? With the filing itself now fully automated, the only other speed bump left was the name. When forming a new LLC, including a Series LLC, any name can be chosen (with some exceptions) provided it is not already taken. For instance, try filingGoldman Sachs LLC and the name will be rejected after a name check by the Registry. In the context of a Series LLC, there is no Certificate of Formation filed with Delaware hence no way for the Registry to perform a namecheck. Whilst trademark law provides a natural defense against anybody duplicating a registered name and risk legal action as a result, it would hence still be possible to register Goldman Sachs LLC as a Series LLC. The way some other U.S. States that have Series LLCs deal with this is by imposing naming restrictions. For instance, in Wyoming Goldman Sachs LLC could not be used as a standalone name and would have to be referred to as Goldman Sachs LLC, a Series of OtoCo LLC However, there seems to be no such naming restriction in Delaware, even though the above naming is typically adopted as a convention. Also, we did not want our users to have to adopt this naming convention and refer to their Series LLC as a "Series of OtoCo LLC". The solution was to use an API to perform a live namecheck as a first step in the online order process. Whilst Delaware is one of the many States in the US that does not have an API into its State Registry, there are third-party databases such as Open Corporates which provide a reasonable degree of accuracy. Thanks to this live namecheck, users can instantly spin up their LLC with the name of their choice. This prevents naming conflicts and possible lawsuits as a result. Soon, we will query all past entity formations on OtoCo to prevent users from registering their legal entity with a name that has already been taken.

You can create an instant Marshall Islands LLC on otoco.io using just your crypto wallet!

Do you need legal perks for your crypto project? Then you can create an #LLC Now, you want to maximize decentralization. How about having a #DAO multi-sig wallet control your LLC?

We’re now only 60k short of our US$ 1MM soft cap at which our launchpool will close on the 11th of March and tokens will be distributed to stakers. Thank you to the community!

Ever wanted to pool crypto with others to invest or buy an asset together? 1/12 With OtoCo’s onchain entity assembler, you’re not limited to single Member LLCs but can also have multiple members and use our built-in token foundry smart contract to issue a token that represents each member’s pro rata share. This thread shows how 🧵👇

📣BREAKING: OtoCo will be changing its LLCs from being "ownable" smart contracts to being NFTs according to the ERC-721 standard. 👀👉Check out the good news and OtoCo's improvements coming over the next month. otonomos.substack.com/p/a-re…

📣 For anyone else wondering, we had a great, hour-long AMA with Aragon last Friday! During this conversation, we spoke about legal entities, how to structure a DAO, and more. 🔥Check out the recording here:

Thanks to @base for the grant 💙

📣Another edition of The Otonomist newsletter has arrived! In this edition, you'll learn more about decentralized investment clubs, turning LLCs into NFTs, and the birth of crypto gossip! 😉 👀👉Read more: otonomos.substack.com/p/the-…

7/ OtoCo is community-governed and open-source and exists thanks to our initial supporters @Otonomos, @AragonProject, @rsivakov, @0xAlexander88, @kafcrypto, @curiosoacerca, @gabriel_o Our list of early supporters continues to expand as more people have been incredibly helpful!

We have quite a few users using us for this!

Today at 8 am PST, the pre-order stage of the OtoCo launchpool successfully closed with over 1.1 million USD in OTOCO tokens reserved by 107 OtoCo users and by the wider community.

Adam let's not patronize people I am surprised about how self-reliant our users are and how well they read up on OtoCo. They fully understand that an OtoCo LLC is not a Series "within someone else's LLC" as you call it, given there is no Membership from that "someone else's LLC" in theirs. What they do ask us a lot about is whether MIDAO's RMI "DAO" LLC levies the annual 3% tax on revenue or on profit, and whether they pay this 3% to MIDAO or to the RMI Registry. Perhaps you can help clarify.

Onchain offshore LLC in the Republic of the Marshall Islands being formed on OtoCo using just a wallet! Try it out now: otoco.io

4/ Can I still participate? Yes! You can earn and qualify for points until the snapshot on March 31. How? Create an entity using @otoco_io

@otoco_io on @base [🔵] ➡ 25 March Get your wallets ready! Legal entities will be formed faster, cheaper, and better

Pre-register here: app.deform.cc/form/9f6553e8-…

💙

4/8 See for yourself how you can prompt Genco to set up a Delaware LLC for you, open a company wallet and make a payment from it, in this case on @base and soon also on @ethereum and all other EVM chains.

Our March development sprint: 1. On the front-end, we created clear panels that let you select the entity for your needs, with two LLCs (Delaware and Wyoming) and an unincorporated DAO & soon (end Apr) our Swiss Association as our first non-U.S. instant legal container!

You can create on-chain LLCs in Delaware, Wyoming, Marshall Islands using otoco.io within seconds

Wyoming DAO LLC laws are tricky because the #DAOs have to identify who are members within the LLC. It's easier if the entire DAO is the only member of the LLC! otonomos.substack.com/p/have…

Join us at @labitconf in Buenos Aires 🇦🇷 for a discussion surrounding Onchain entity & capital formation! Come say hi if you're around! 👋

1/ Here's how you can instantly get a Swiss Association in the Canton of Zug fully on-chain using @otoco_io, for just $99 right from your wallet. Let's dive in! 👇

Hey Community! 😍 We welcome any input from you guys and invite anybody who wants to receive the first $OTOCO token option award by helping our coding effort. Do you want to learn more? 📌Please, check it out otonomos.substack.com/p/reac…

Companies created on OtoCo will now be represented by an NFT! 🤝 This NFT can be transferred and sold to easily transfer the ownership of the company it represents. 🔐 Think of this NFT as your company's fully digital ownership certificate 🎗

Thank you! 💙

To address the pains of integrating #crypto and the legacy world, OtoCo is pushing a new feature within our dashboard: on-chain document signing using your wallet, including a Gnosis multisig. 👉Check it out: otonomos.substack.com/p/otoc…

💭Are Investment Clubs different from a Decentralized Investment Pool? The Otonomist April Issue took a closer look at Decentralized Investment Pools (DIPs). You can have a closer look too. Shall we? 😊😉 🔴📌Here: otonomos.substack.com/p/can-…

#devcon2022 is an all-you-can eat buffet of food for the brain, an intellectual well that keeps springing. Kudos to @ethereum for superb organization after a 3 year hiatus!

We are glad about being listed amongst other great apps like @OpenZeppelin and @WalletConnect on @gnosisSafe. 👉You can easily create an LLC that is owned and operated by a multisig wallet, using OtoCo’s dedicated Gnosis Safe dApp.

📣 OTOCO IS LIVE ON @0xPolygon! 🚀 Deploying and managing your companies, DAOs, and projects will be cheaper and faster than ever! Try it for yourself today otoco.io/spinup/ ✅ Which network should we add next? 🤔

We went live with the DUNA as well today on OtoCo!

📣 August issue of the Otonomist is out! ⚖️ This issue goes deep into governance, discussing new ideas and OtoCo's roadmap for full decentralization There's also an OtoCo product update and an exciting Devcon Bogota announcement! 🎉 Read it all here 📌 otonomos.substack.com/p/the-…

Legal Lego: Why and how to stack entities on OtoCo Here's how to do it and the process involved in owning shares of another LLC: 🧵👇

We're super excited to announce we reached our funding soft cap! Now, we're getting back to building our decentralized marketplace for you to add the components you need to run your #crypto project. Friday is the last day to pre-order your #tokens at otoco.io/launchpool.

OtoCo's Document Signing feature allows you to -Link assets to an LLC by signing pledges and resolutions. -Sign invoices or other financial documents to keep relationships distinct. 👀Read more: otonomos.substack.com/p/otoc…

Have you heard about #governance mining? 👉The idea is that a set proportion of newly minted #tokens is distributed to those who contribute to a project’s governance. 💡What are your thoughts on that? otonomos.substack.com/p/reac…

This will complete the refactoring of the OtoCo smart contracts we started in April 🍾 📌 otonomos.substack.com/p/a-re…

3/ Partnering up with @Otonomos ensures a user-friendly experience—empowering you to swiftly acquire an EIN and streamline your business operations with no paperwork on your end.

Hey guys. Thanks for mentioning us! The team went through your post. Interesting stuff! A good review between Otoco and KaliDAO.

Dm’d

Spinning up an LLC in Delaware using a wallet!

5/ Early OtoCo users have used the platform to legally incorporate, hold digital assets, issue tokens, fundraise, and more. These entities have gone on to obtain EINs, bank accounts, and issue SAFTs, and more.

📣Popular demand requests are taken seriously: we’ll be implementing a document library with an initial drop of templates for the benefit of OtoCo users. What templates would you like to see first? otonomos.substack.com/p/a-re…

8/ As we expand, Join us in engineering a new entity for Web3 builders and investors. In 5-10 years, we'll look back and shake our heads at how we used to form companies. 🌐 otoco.io Follow us @otoco_io for updates on new features and announcements!

LLCs are considered “pass-through” entities and are taxed at the level of the individual owners. If those owners live in a low-tax country, tax on their #LLC income will be highly optimized. 👀See more: otonomos.substack.com/p/why-…

2/ How to ensure your points qualify for tokens: Check your entity's status: Log in to OtoCo and verify your Renewal Date. Turn on Auto-Renewal: This guarantees your entity stays active. Renew expired entities before the snapshot deadline.

💡Thinking about #DAOs'experiences so far, how can we get a subset of the community to commit to a specific project for the longer term? Some thoughts about that?💭 Have a look: otonomos.substack.com/p/reac…

Our OTOCO token pre-order window is open until March 11. Access otoco.io/launchpool/ to make sure you'll have a say in OtoCo's future direction. Check out how to stake here: