QSBS Basics

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

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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.

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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.