Can a Decentralized Autonomous Organization (DAO) LLC qualify to issue QSBS stock?

A Decentralized Autonomous Organization (DAO) is a type of Limited Liability Company (LLC) in which there is no leading member of the organization that has majority rule.

In a typical LLC, there are members who make the core decisions for the business. A DAO is different as it essentially runs autonomously through a series of “smart contracts”. This means the business can run without a traditional business structure.

DAO LLCs are now recognized in Wyoming.

Can securities in a DAO LLC qualify for QSBS tax treatment per IRC Section 1202? If you have thoughts on this or further comments/questions, please write [email protected]

This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.

About QSBS Expert

QSBS Expert was founded by a group of entrepreneurs, investors, accountants and lawyers who came together when trying to navigate a QSBS situation of their own. We quickly realized that the regulations left a lot of open questions and the publicly available information was confusing to sift through…so we thought that others may also benefit from having a “go to” resource for all things QSBS.