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How much does it cost to form a Wyoming DAO LLC?

State fees are $100 to file the articles of organization plus the $60 annual report license tax — $160 for the first 12 months, the same as a plain Wyoming LLC.

How does voting work in a Wyoming DAO LLC?

By default, a membership interest is a member's contribution of digital assets divided by the total contributed at the time of a vote, and a majority means more than 50 percent of the membership interests eligible to vote — not just those cast.

Does a Wyoming DAO LLC avoid securities law?

No. The SEC's 2017 DAO Report concluded DAO Tokens were securities under the Howey test, and Wyoming's statute does not answer the securities question — get a written securities opinion before distributing tokens.

How is a Wyoming DAO LLC taxed?

By default like any LLC under Treas. Reg. § 301.7701-3: partnership taxation with two or more members, disregarded with a single owner, unless it elects association treatment on Form 8832. No IRS guidance addresses a DAO LLC by name.

Can a DAO LLC dissolve itself by going quiet?

Yes. Under W.S. § 17-31-114(a), a DAO that fails to approve any proposals or take any actions for one year dissolves, as does one no longer under the control of at least one natural person.

Business • 12 min read

Wyoming DAO LLC Playbook: Forming a Decentralized Autonomous Organization Under W.S. § 17-31

Wyoming lets an LLC elect DAO status and be governed by smart contracts. This playbook covers the statute, the formation filings, the quorum math, the first-year costs, the tax defaults, and the risks no filing can remove.

By Enow A. Jovial • Published 2026-11-12

Wyoming DAO LLC Playbook: Forming a Decentralized Autonomous Organization Under W.S. § 17-31

Wyoming wrote the first DAO LLC statute in the United States: effective July 1, 2021, the Wyoming DAO Supplement (W.S. § 17-31-101 through § 17-31-116) lets an LLC elect DAO status and be governed, in whole or in part, by a smart contract. The filing costs the same $100 as a plain Wyoming LLC; the securities analysis and the smart-contract build cost far more — and no Wyoming court has yet tested the liability veil when code makes the decisions.

A Wyoming DAO LLC is an ordinary Wyoming LLC with a DAO election in its articles. The election buys on-chain governance and a statutory home for it — not a securities exemption, a tax ruling, or a tested liability shield. Budget $160 in state fees for the first 12 months; spend the real money on a smart-contract audit and a securities opinion before a single token moves.

What the statute actually creates

W.S. § 17-31-104(a) defines a decentralized autonomous organization as "a limited liability company whose articles of organization contain a statement that the company is a decentralized autonomous organization." W.S. § 17-31-103 applies the Wyoming LLC Act to the DAO LLC "to the extent not inconsistent" with the supplement. The DAO layer sits on top of the LLC, so the filing fee, annual report, and registered-agent rule are the LLC's. The name must include "DAO", "LAO", or "DAO LLC" under W.S. § 17-31-104(d), and W.S. § 17-31-104(c) requires this notice to appear conspicuously in the articles or the operating agreement:

NOTICE OF RESTRICTIONS ON DUTIES AND TRANSFERS

The rights of members in a decentralized autonomous organization may differ materially from the rights of members in other limited liability companies. The Wyoming Decentralized Autonomous Organization Supplement, underlying smart contracts, articles of organization and operating agreement, if applicable, of a decentralized autonomous organization may define, reduce or eliminate fiduciary duties and may restrict transfer of ownership interests, withdrawal or resignation from the decentralized autonomous organization, return of capital contributions and dissolution of the decentralized autonomous organization.

Two definitions carry the structure: a "smart contract" (§ 17-31-102(a)(ix)) is blockchain code executing agreement terms, including asset custody and transfer or administering votes; a "membership interest" (§ 17-31-102(a)(vi)) may be designated a digital security or a digital consumer asset under W.S. § 34-29-101. One hard boundary: W.S. § 17-31-116 bars the SOS from issuing a certificate of authority for a foreign DAO. A series LLC is a different tool — see our Delaware registered series vs protected series LLC guide.

The 2022 rewrite: management is a spectrum, not a switch

The original 2021 law described two types — member-managed and algorithmically managed. SF0068, enacted March 9, 2022 and effective immediately, struck the binary. W.S. § 17-31-104(e) now requires the articles to "establish how the decentralized autonomous organization shall be managed by the members, including to what extent the management will be conducted algorithmically." The drafter must now place the DAO on a spectrum in the articles: on-chain treasury votes with human signatories at one end, member votes on everything with the contract only counting at the other. Either is lawful if the articles say so — silence is not. W.S. § 17-31-109 sets the floor: "Management of a decentralized autonomous organization shall be vested in its members or the members and any applicable smart contracts. All smart contracts utilized by a decentralized autonomous organization shall be capable of being updated, modified or otherwise upgraded."

Formation: the articles carry the weight

W.S. § 17-31-105(a) allows any person to form a DAO LLC with one or more members (the person forming it need not be a member); § 17-31-105(c) allows any lawful purpose, "regardless of whether for profit." The articles must contain the DAO statement under W.S. § 17-31-106(a) plus the matters required by W.S. § 17-29-201, and under § 17-31-106(b) "a publicly available identifier of any smart contract directly used to manage, facilitate or operate the decentralized autonomous organization" — a contract address on a public chain. W.S. § 17-31-105(e) gives thirty days to supply a missing identifier — otherwise "the secretary of state shall dissolve the decentralized autonomous organization." W.S. § 17-31-106(c) requires the articles and the smart contracts to govern twelve matters, from voting rights to transferability, withdrawal, distributions, contract revision, and dispute resolution. W.S. § 17-31-105(b) requires a continuously maintained Wyoming registered agent (W.S. § 17-28-101 through § 17-28-111). W.S. § 17-31-115 resolves paper-versus-code conflicts: "the smart contract shall preempt any conflicting provisions of the articles of organization, except as it relates to W.S. 17-31-104 and 17-31-106(a) and (b)." Check the name first with our LLC and brand name search tool.

Do not file until the smart contract has a public identifier: the thirty-day clock in W.S. § 17-31-105(e) starts at filing, and a contract still private on day thirty ends the company by statute.

Voting and quorum math: the turnout trap

W.S. § 17-31-111(a)(i) provides that, unless the articles, smart contract, or operating agreement provide otherwise, a membership interest "shall be calculated by dividing a member's contribution of digital assets to the organization by the total amount of digital assets contributed to the organization at the time of a vote." W.S. § 17-31-111(a)(ii) provides the alternative default: if contributing digital assets is not a prerequisite to membership, "each member shall possess one (1) membership interest and be entitled to one (1) vote."

\text{Membership interest}_i = \frac{\text{Digital assets contributed by member } i}{\text{Total digital assets contributed}}

The pass threshold surprises founders: W.S. § 17-31-102(a)(v) defines "majority of the members" as "more than fifty percent (50%) of the membership interests eligible to participate in a vote" — eligible, not cast:

\text{Yes votes required} = \left\lfloor \frac{\text{Total eligible interests}}{2} \right\rfloor + 1

With 1,000,000 eligible units, a proposal needs 500,001 yes units — so if 600,000 units participate, 83.3 percent of the votes cast must be yes. If only 400,000 units participate, the proposal cannot pass at all. Every default here is overridable — each provision begins "unless otherwise provided for in the articles of organization, smart contract or operating agreement." Replace the majority definition with a quorum-of-participation rule before the first proposal.

What it costs

The Wyoming SOS fee schedule, effective July 1, 2026, lists no separate DAO LLC fee: a DAO LLC files as an LLC — articles of organization $100, annual report license tax $60 or $0.0002 per dollar of Wyoming assets, whichever is greater. Other filings are $60; reinstatement is $100 for tax and $350 for a missing registered agent.

Wyoming SOS fee schedule: $100 articles of organization, $60 annual report license tax

The table assumes a November 2026 formation, state fees only: first annual report November 1, 2027 (W.S. § 17-29-209), Delaware's $400 tax June 1, 2027. Check your own timing with our break-even calculator.

State cost	Wyoming DAO LLC	Plain Wyoming LLC	Delaware LLC
Formation filing	$100	$100	$110
Recurring annual state charge	$60/yr license tax	$60/yr license tax	$400/yr annual tax
First 12 months, state fees only	$160	$160	$510
Five years, state fees only	$400	$400	$2,110

\text{Wyoming, 5 years} = \$100 + 5 \times \$60 = \$400; \quad \text{Delaware, 5 years} = \$110 + 5 \times \$400 = \$2{,}110; \quad \text{Saving} = \$1{,}710

Delaware's figures come from its fee schedule revised August 1, 2026 ($110 formation) and its annual tax page ($400 due June 1; $200 late penalty plus 1.5 percent monthly interest). The license tax scales with Wyoming assets:

\text{Annual report license tax} = \max(\$60,\ \$0.0002 \times \text{Wyoming assets})

The $60 minimum covers Wyoming assets up to $300,000 ($60 ÷ 0.0002); at $1,000,000 the tax is $200, at $5,000,000 it is $1,000. An all-on-chain treasury still pays the $60 minimum and still files the annual report (W.S. § 17-29-209). Beyond state fees, budget three operator lines: a commercial registered agent service (confirm the price in writing), a CPA review of the tax election, and a professional smart-contract audit — the largest first-year line after formation. Get a written audit quote before filing.

The decision table

Question	Wyoming DAO LLC	Plain Wyoming LLC	Delaware LLC	Authority
On-chain voting in the statute	Yes	No	No	W.S. § 17-31-106(c)(v)
Formation filing fee	$100	$100	$110	WY + DE fee schedules
Annual state charge	$60 license tax	$60 license tax	$400 annual tax, due June 1	W.S. § 17-29-209; corp.delaware.gov
Member withdrawal	Only as governing documents allow; withdrawn member forfeits interests	Per operating agreement	Per operating agreement	W.S. § 17-31-113
Liability veil tested in court	No published decision found	Decades of case law	Decades of case law	Editorial analysis, Nov. 2026

If the endgame is venture capital, compare the entity choice first: our LLC vs. Delaware C-Corp guide for venture startups.

Tax treatment: the default is a partnership

Under Treas. Reg. § 301.7701-3(b)(1), a domestic eligible entity that does not file an election "is — (i) A partnership if it has two or more members; or (ii) Disregarded as an entity separate from its owner if it has a single owner." Two or more token-holder members means partnership taxation: Form 1065 and a Schedule K-1 for each member — including one known only by a wallet address. Form 8832 elects association (corporate) treatment under § 301.7701-3(c)(1)(i), and an S corporation election is a deemed association election under § 301.7701-3(c)(1)(v)(C). Under § 301.7701-3(c)(1)(iv), once an entity changes classification by election, it generally cannot change it again by election for sixty months. Make the choice with a CPA before the first token distribution. Our editorial analysis found no IRS revenue ruling, regulation, or published guidance that addresses a DAO LLC by name. This is the general LLC rule applied to a DAO LLC — no DAO-specific authority exists. Wyoming levies no state income tax on the LLC itself.

The securities question is the largest risk here, and Wyoming's statute does not answer it. In its Report of Investigation on The DAO, Release No. 81207 (July 25, 2017), the SEC concluded that DAO Tokens were securities under the Howey test — an investment of money in a common enterprise with a reasonable expectation of profits from the efforts of others, per SEC v. W.J. Howey Co., 328 U.S. 293 (1946) — and stated that automation through smart contracts "does not remove conduct from the purview of the U.S. federal securities laws." The SEC declined enforcement in that matter, but the report stands as the Commission's warning to every DAO raising funds from token buyers. Separately, the liability veil is untested: our editorial analysis found no published Wyoming court decision applying the DAO LLC shield, and W.S. § 17-31-110 eliminates member fiduciary duties by default. Get a written securities opinion and a written tax opinion before distributing tokens to anyone in the United States.

Dissolution: the statute dissolves quiet DAOs by itself

W.S. § 17-31-114(a) lists six dissolution events: fixed duration expires; a majority votes to dissolve; an event specified in the governing documents occurs; the DAO "has failed to approve any proposals or take any actions for a period of one (1) year"; the DAO no longer performs a lawful purpose or is "no longer under the control of at least one (1) natural person"; or all members have withdrawn. After any of these, § 17-31-114(b) requires a statement of intent to dissolve. The one-year inactivity trigger dissolves a DAO whose treasury is untouched for twelve months, with no proposal approved and no action taken. The natural-person trigger dissolves a DAO whose last human operator walks away, leaving only autonomous code. Under W.S. § 17-31-113, a member may withdraw only as the governing documents allow and forfeits all membership interests on withdrawal unless the documents provide otherwise.

Who should NOT form a DAO LLC

You are raising money from United States investors without a securities opinion. A Wyoming filing does not answer the SEC's DAO Report.
No one on the team can maintain the smart contract. Section 17-31-109 requires every governing contract to be updatable, and § 17-31-107(a)(iii) requires an articles amendment on every change.
The project has one founder and no token holders. A single-owner DAO LLC defaults to disregarded tax status and buys nothing a plain Wyoming LLC does not already provide. Wyoming's charging-order protection — see our single-member LLC charging-order protection guide — needs no DAO election.
You expect anonymity to defeat reporting. Partnership K-1s, an EIN, and federal beneficial-ownership reporting all assume identifiable humans.

Founder & CEO Insight — Enow A. Jovial

"The filing is the easy part. The friction starts the day after, when the smart contract, the member roll, and the tax file have to agree — and the members are wallet addresses. A DAO LLC is cheap to form and expensive to run. If you cannot name the person who maintains the contract, files the annual report, and signs the tax return, you do not have a company yet."

— Enow A. Jovial, Founder & Chief Executive Officer

Execution checklist

[x] Name: pick a name containing DAO, LAO, or DAO LLC; verify it with the name search tool.
[x] Articles: draft the DAO statement, NOTICE OF RESTRICTIONS, and § 17-31-104(e) management statement.
[x] Smart contract: deploy with an upgrade path and a public identifier in the articles — or file it within thirty days.
[x] Registered agent: appoint and continuously maintain a Wyoming agent (W.S. § 17-28-101 through § 17-28-111).
[x] File and EIN: submit the articles to the SOS ($100), then apply for the EIN on Form SS-4.
[x] Tax election: decide the Form 8832 question with a CPA before the first distribution (sixty-month lock).
[x] Securities opinion: obtain it before distributing tokens in the United States.
[x] Voting override: replace the eligible-interest majority with a quorum-of-participation rule.
[x] Calendar: annual report due the first day of the anniversary month ($60), articles amendment on every smart-contract change, and at least one proposal per year.

File the election, then run the company like one.