Kaido Künnapas, our partner and attorney at law, discussed in his article whether DAOs still live in a legal vacuum and what the legal and tax rules applicable to distributed autonomous organizations (DAOs) actually are.
DAO is a type of online cooperation that seeks to provide a flexible alternative to rigid corporate rules. They can be used as a technical framework for connecting investors to coordinating political parties and popular initiatives. DAOs do not exist in a legal vacuum. On the contrary, every DAO fits into existing legal categories in one way or another, be it minority member protection, unlimited or limited liability, consumer protection, and more. The purest DAO qualifies as a partnership in Estonia, which inevitably entails unlimited liability and tax transparency for members. If one wants to enjoy the limited liability shield offered by associations, they should rather take a look at NGO. Kaido also discusses what challenges and opportunities DAO offers to the Estonian legislator, who has to bring this issue to the table one day.