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How are DAOs Created?

The formation of a DAO is not all that different from forming any other kind of business. Legally compliant DAOs are LLCs, which means they are a limited liability company. A limited liability company means that the company is considered its own legal entity, regardless of how it pays taxes through the owner’s tax return. This also means that members are not personally liable for any legal actions against the entity, but does not prevent the company itself from facing legal proceedings.