Decentralized Autonomous Organizations (DAOs) are digital entities operating on decentralized ledger technology, where code, rather than humans, makes decisions. Linking a DAO to a legal entity provides legal status and liability protection, crucial for contracts, employment and financial operations. Without this linkage, DAO-members risk personal liability for the DAO’s debts. Therefore, DAO-entrepreneurs are advised to incorporate legal entities and include clear legal frameworks in their smart contract to ensure secure and legally sound operations.

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