The INC DAO is represented in the real world by the company Incentive Token, LLC. located in the state of Delaware in the Mid-Atlantic region of the United States. This page describes why it is useful and what rights and responsibilities exist between the company and the DAO.
Why have a legal entity?
Having a legal entity that represents the DAO in the "real world" is valuable for a number of reasons:
- It provides limited liability to DAO participants for the actions of the DAO. Without a legal entity, participants may be individually held liable for anything the DAO as a whole does.
- It is capable of complying with taxation requirements - without a legal entity, DAO participants may be held liable for a proportion of the DAO's income, even if they are not able to access these funds.
- It is capable of entering into contracts with other "real world" entities, of holding assets (including IP rights), and so forth.
For a more detailed discussion of this topic, see this excellent blog post.
How can the DAO influence the Company?
Although not directly specified in the Bylaws, the DAO may instruct directors to take action on behalf of the company, such as signing a contract, hiring a service required by the DAO, or delegating some of the directors' powers to a DAO working group.
Running a business is not free and comes with real costs. The directors may request the DAO to reimburse the expenses incurred and the financing necessary for the company to continue operating.