- Hi, my name is Garrett Sutton.
I'm a corporate attorney. I'm a Rich Dad Advisor.
I wrote these books in the Rich Dad Advisor series,
including Loopholes of Real Estate.
And we set up a lot of entities around the country,
but one of our favorite states is Wyoming.
Wyoming for an LLC -
They don't list your name on the state database.
It's very affordable.
It's only $62 a year for the filing fee.
And they provide the best asset protection for LLCs
along with Delaware and Nevada.
But with the privacy and the cost,
the very low cost for Wyoming, we really like that state.
In fact, my son is at the University of Wyoming law school
so he can be a Wyoming lawyer.
It's such a great state.
Now, Wyoming has been really great in coming forward
with new legislation.
And Wyoming has taken the lead in blockchain legislation.
They've passed 13 laws that facilitate the protection
and banking of Bitcoin and other cryptocurrencies. As well,
they are adopting blockchain technology,
which has all sorts of applications
as we're gonna see in the next 20 years.
One of the more interesting Wyoming laws
is called the Wyoming Decentralized Autonomous Organization.
And this is an organization that allows you
to operate essentially virtually.
And it started out where people could be general partners
and operate virtually.
But a general partnership provides no asset protection.
So Wyoming decided to do
the Decentralized Autonomous Organization,
and have it organized as an LLC.
And so we have what's called the Wyoming DAO, D-A-O,
Decentralized Autonomous Organization.
The Wyoming DAO LLC.
And you can set up an LLC that can operate virtually.
One of the key benefits of the Wyoming DAO
is it can be governed by smart contracts.
So you can have a blockchain computer code,
and the LLC
can operate according to the blockchain technology.
It can be operated with self-executing contracts,
self-executing transactions.
When things happen, according to the blockchain technology,
the Wyoming DAO allows the blockchain to engage
or to carry forward these transactions.
So it's very fascinating what this DAO LLC can do.
Let's look at the next chart.
We have a Wyoming DAO LLC,
and the members are Carl and Mary.
Members being owners.
Now the manager is the person or organization
that manages
the LLC.
In LLC context, it's really the president,
secretary, treasurer and board of directors.
So the managers take care of the day-to-day activities.
The members are the owners.
Now, members, owners can be managers.
In many cases, when we set up Wyoming LLCs,
they are.
The members are the managers.
But with the DAO LLC,
we have a first.
Not only can humans be managers,
but the DAO LLC allows for management
by an algorithm.
You could be managed by artificial intelligence.
You could be managed by a blockchain computer code.
And so talk about sci-fi, we have an entity
that can now be managed by a non-human.
It's really fascinating where this could go.
The one problem with the DAO LLC
is that the operating agreement, which is the key roadmap
for how the LLC operates, if it's algorithmically managed,
if it's managed by a non-human, that operating agreement
needs to be part of the blockchain.
And the blockchain is open source.
It's public record, which means that if someone knows
the name of your DAO LLC, they can go on the blockchain
and find your operating agreement
and see how you are governed.
And I'm not so sure this is a good idea.
I prefer to have the operating agreement be private.
When you set up an LLC, you're gonna put forward
the articles of organization with the state,
with the secretary of state's office,
and people can see what's in that document,
which is why we put very little in that document.
The operating agreement, on the other hand,
is how the organization is run.
Who owns what percentage?
Who has the right to do this or that?
The operating agreement is a contract between the members.
Well, you don't want that to be a matter of public record.
With these DAO LLCs however,
the operating agreement is part of the blockchain,
and it can be learned by other people.
So that's the one downside of the Wyoming DAO LLC.
And when I explain this to clients who are interested in it,
they really don't like the idea of their operating agreement
being a matter of public record.
So we haven't had much call for it.
It's interesting to know that it exists,
but you gotta give the state of Wyoming credit.
They're trying to be on the forefront of new laws.
They've taken a step forward ahead of any other state
in terms of advancing blockchain technology,
laws that benefit the blockchain,
for Bitcoin holders, for cryptocurrency holders.
By setting up the Wyoming DAO LLC,
they're taking a step to see if they can engage
in forward-thinking, entity structuring.
So you gotta give the state of Wyoming credit.
I'm not gonna be setting up too many
of these Wyoming DAO LLCs,
but it's interesting to note that when the state of Wyoming,
when the legislature put this forward,
in the comments on the legislation, they said,
"You know, maybe this doesn't work,
but we're open to other opportunities
for flexible entities."
So Wyoming is on your side.
They're looking forward to coming up with new ways
to handle things in the new age.
So this is another step that Wyoming has taken.
It's interesting to know about.
And maybe you want a Wyoming DAO LLC,
and you're okay with having your operating agreement
be part of the public record.
If that's the case, the Wyoming DAO LLC is for you.