January 3, 2024
SALT LAKE CITY – The Utah Department of Commerce’s Division of Corporations and Commercial Code now accepts registrations for Limited Liability Decentralized Autonomous Organizations (LLD or DAOs). This groundbreaking law, which took effect on January 1, 2024, recognizes DAOs that meet the requirements of the DAO Act as legal entities that operate through smart contracts and blockchain technology without a centralized authority or intermediaries.
“This is a first-of-its-kind law nationally, with DAOs becoming their own legal entity rather than a type of Limited Liability Company (LLC). Utah is at the forefront of enabling innovative organizations to have legal recognition and limited liability,” said Margaret Busse, Executive Director of the Utah Department of Commerce.
DAOs are intended to be autonomous, transparent, and governed by the consensus of their participants. They operate based on predefined rules and algorithms encoded in smart contracts, which are self-executing agreements with the terms of the agreement directly written into code. In contrast, in a traditional organization, a central governing body, such as a board of directors or managers, makes the decisions.
The Utah legislature passed HB 357, Decentralized Autonomous Organizations Amendments, during the 2023 General Session, codified as Utah Code Title 48, Chapter 5. The Utah Department of Commerce worked with legislators to balance public disclosure with the generally anonymous nature of DAOs. The division will register the entity type after ensuring it meets legal requirements. The result is a unique approach to DAOs that serves the business community and the public. Registration is not an endorsement or an assurance of a risk-free business venture.
“Utah is leading the way when it comes to different ways to do business,” said Leigh Veillette, Director of the Division of Corporations and Commercial Code. “We’re excited to have the opportunity to offer this registration option to the businesses we serve.”
Businesses may register using the application found on the division’s website at https://corporations.utah.gov/business-entities/dao/. The division processes regular (non-expedited) work in the order they receive it. Processing times may vary.
Questions about DAO registrations can also be answered by email at corpucc@utah.gov.
Potential DAO participants and investors should thoroughly vet any potential opportunity. No business venture or activity is without risk.
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About the Utah Division of Corporations and Commercial Code: The Division of Corporations and Commercial Code is one of nine divisions within the Utah Department of Commerce. The Division’s mission is to strengthen trust in Utah’s marketplace by facilitating corporate and commercial code filings and providing reliable information to the public. The Division is the central authority for registering statutory business entities, trademarks, and for Uniform Commercial Code filings in Utah. More information can be found at https://corporations.utah.gov/.
Media Contact:
Melanie Hall
Communications Director
Utah Department of Commerce
melaniehall@utah.gov
Office: (801) 530-6646
Cell: (385) 290-0719