Abstract

Four American states have enacted statutes that grant legal personality to decentralized autonomous organizations, and every one of them conditions that recognition on a minimum threshold of human governance. Wyoming, Tennessee, Utah, and New Hampshire each take a different structural approach to the DAO, with two wrapping the DAO in a limited liability company and two creating freestanding entity types, yet all four require identified natural persons, mandate that smart contracts remain amendable by human decision, and provide for dissolution when human control lapses. This Article presents the first systematic comparative analysis to incorporate New Hampshire’s 2024 statute alongside the three earlier frameworks, organized around a five-dimension analytical approach that identifies the convergent “human governance floor.” The Article examines each statute’s treatment of management structure, fiduciary duties, liability protection, information rights, and dissolution. Across these five dimensions, a consistent pattern emerges: each statute establishes what this Article terms a “human governance floor,” an irreducible set of human-governance requirements below which no DAO may operate as a recognized legal entity. Identifying and mapping this floor clarifies the design space available to DAO organizers, reveals significant divergences in how states balance autonomy against accountability, and provides a factual foundation for the federal regulatory and judicial actors who will inevitably confront these entities.

Introduction

When the Commodity Futures Trading Commission sought to hold Ooki DAO liable for operating an unregistered trading platform, the Commission could not identify any person to serve with process.¹ Ooki DAO had no officers, no registered agent, and no physical address; its governance protocol operated through token-holder voting on a blockchain. A federal court permitted service by posting in Ooki DAO’s online help chat and forum, and subsequently entered a default judgment confirming substantive jurisdiction over the entity.² The underlying problem, however, was structural: the entity lacked the human governance infrastructure that legal process presupposes. Similar difficulties have arisen in private litigation. In Sarcuni v. bZx DAO, a California federal court held that a DAO could be treated as a general partnership, exposing individual token holders to personal liability for the organization’s losses.³ In Samuels v. Lido DAO, the court denied the defendants’ motion to dismiss, rejecting arguments that a DAO was too decentralized to be sued as an unincorporated association and reasoning that “decentralization” did not immunize an entity from the obligations that attend collective economic activity.⁴

These cases expose a tension that state legislatures have begun to address. Decentralized autonomous organizations operate through smart contracts on blockchains, and their proponents value precisely the qualities that create legal difficulty: pseudonymous participation, algorithmic execution, and resistance to centralized control. Granting legal personality to such organizations requires determining what minimum institutional structure the law will demand in exchange for the benefits of entity status: limited liability, capacity to contract, and standing to sue and be sued.

This determination takes on particular urgency in light of Shawn Bayern’s demonstration that existing LLC law may already permit zero-member entities managed entirely by software.⁵ Bayern showed that the Revised Uniform Limited Liability Company Act permits a sole human member to assign management authority to an algorithm and then withdraw, creating a perpetual entity with no human governance at all.⁶ Lynn LoPucki subsequently warned that such “algorithmic entities” could facilitate regulatory arbitrage and criminal exploitation by creating organizations with no identifiable human accountable for the entity’s conduct.⁷ The state DAO statutes examined in this Article respond directly to this doctrinal baseline. Each legislature, confronting the possibility that existing law permitted fully autonomous entities, chose to establish affirmative requirements for human governance as a condition of DAO recognition. The statutes do not merely accommodate DAOs within existing frameworks; they impose floors that existing LLC law did not itself provide.

Between 2021 and 2024, four states enacted purpose-built DAO statutes: Wyoming in 2021 (substantially amended in 2022), Tennessee in 2022, Utah in 2023 (effective January 1, 2024), and New Hampshire in 2024 (effective July 1, 2025).⁸ Each statute takes a different approach to the foundational question of how to fit a blockchain-native organization into existing legal architecture. Wyoming and Tennessee wrap the DAO in a limited liability company; Utah creates a freestanding “limited liability decentralized autonomous organization” (LLD); New Hampshire establishes a blockchain-native registry for an entirely new entity type.⁹ Despite these structural differences, all four statutes share a common feature: every one conditions legal recognition on a minimum threshold of human governance. No state has created a pathway for a fully autonomous, human-free organization to obtain legal personality.

This Article identifies and maps what it calls the “human governance floor,” the irreducible minimum of human-governance requirements that each state imposes as the price of DAO recognition. Across all four statutes, the floor has three consistent elements: an identified natural person associated with the entity’s formation or ongoing operation, a requirement that smart contracts remain amendable through processes that humans can initiate, and a dissolution mechanism triggered when human governance lapses.¹⁰ Beyond these shared elements, the statutes diverge significantly in how they structure the floor’s specific requirements, and these divergences have practical consequences for DAO organizers choosing a jurisdiction, for courts adjudicating disputes involving DAOs, and for federal regulators assessing whether state-recognized DAOs satisfy federal legal prerequisites.

A note on scope. Vermont enacted a blockchain-based limited liability company (BBLLC) statute in 2018, creating the first state-level business entity statute to reference blockchain technology.¹¹ Vermont’s BBLLC is a standard LLC that “operates, in whole or in part, through blockchain technology.”¹² The BBLLC statute imposes no DAO-specific governance requirements and presupposes the full apparatus of traditional LLC governance. Because the BBLLC statute neither targets DAOs specifically nor addresses the governance challenges unique to them, this Article excludes it from the primary comparative analysis. The four statutes examined here are the ones that grapple directly with the question of how much human governance a decentralized autonomous organization must maintain. Prior comparative work has examined subsets of these statutes, principally Wyoming and Tennessee, and in some instances Utah.¹³ This Article’s contribution is the first comparative analysis to incorporate New Hampshire’s 2024 statute alongside the three earlier frameworks, using a systematic five-dimension approach to identify the convergent human governance floor.

Part I describes the four statutory frameworks, identifying each statute’s entity structure, relationship to background law, and distinctive features. Part II conducts a comparative analysis across five governance dimensions: management structure and smart contract amendability, fiduciary duties and standards of conduct, liability protection and its boundaries, information rights and transparency, and dissolution triggers and failure mechanisms. Part III synthesizes these comparisons to identify the human governance floor, describing what every statute requires, what those requirements address, and where the statutes diverge in ways that matter for organizers and courts.

I. The Four Frameworks

A. Wyoming: The LLC Wrapper and Its Reversal

Wyoming enacted the first American DAO statute in 2021, structuring the decentralized autonomous organization as a species of limited liability company governed by a supplement to the Wyoming Limited Liability Company Act.¹⁴ A DAO organizes by filing articles of organization with the secretary of state that include a statement identifying the entity as a decentralized autonomous organization and a publicly available identifier for any smart contract directly used to manage the organization.¹⁵ The LLC Act applies to DAOs except where the supplement’s provisions are inconsistent.¹⁶

As originally enacted, the 2021 statute permitted DAOs to be either “member managed” or “algorithmically managed,” with the latter category permitting governance by smart contract with no human management intermediary.¹⁷ Wyoming reversed course one year later. In the 2022 amendments, the legislature repealed the “algorithmically managed” category entirely, replacing the binary classification with a single management structure: DAOs “shall be managed by the members.”¹⁸ Articles of organization must now “establish how” the DAO will be managed, “including to what extent the management will be conducted” algorithmically, but management authority vests in members, that is, natural or legal persons, not autonomous code.¹⁹

Three additional changes in the 2022 amendments reinforced the turn toward human control. First, the legislature made smart contract upgradeability universal: “All smart contracts utilized by a decentralized autonomous organization shall be capable of being updated, modified or otherwise upgraded.”²⁰ Under the original statute, only algorithmically managed DAOs needed upgradeable contracts; the 2022 amendments applied this requirement to every DAO regardless of how the DAO distributes management authority. Second, the legislature added a dissolution trigger tied to human control: a DAO “shall be dissolved” if the DAO “is no longer under the control of at least one (1) natural person.”²¹ No other dissolution trigger in the statute is as stark. Third, the amendments added a thirty-day deadline for newly formed DAOs to provide a publicly available identifier to the secretary of state, with automatic dissolution as the penalty for noncompliance.²²

A critical ambiguity remains in the 2022 amendments. The statute does not define “control” for purposes of the natural-person dissolution trigger. Whether a DAO with one nominal human signer and thousands of pseudonymous token holders satisfies the requirement that the DAO remain “under the control of at least one (1) natural person” is an open question with no judicial precedent.²³ The gap illuminates the difference between formal compliance with the floor’s letter and substantive compliance with the floor’s purpose. A DAO that designates a natural person as a nominal member but vests all practical decision-making authority in smart contracts may satisfy the statute’s text while frustrating the legislature’s evident intent to ensure meaningful human governance. Courts confronting this provision will need to determine whether “control” requires operational authority over the organization’s affairs or merely formal association with the entity. That determination will shape the practical reach of Wyoming’s human governance floor.

Wyoming’s trajectory, from accommodating fully algorithmic governance in 2021 to mandating human control in 2022, is itself significant. Within a single year, the first-mover legislature concluded that entity recognition without human governance was unworkable.

B. Tennessee: The Two-Track LLC

Tennessee’s 2022 statute follows Wyoming’s LLC-wrapper approach but retains the dual management structure that Wyoming abandoned.²⁴ A Tennessee decentralized organization is a limited liability company whose articles of organization contain a statement identifying the entity as such, and the Tennessee Revised Limited Liability Company Act applies to the extent not inconsistent with the DAO supplement.²⁵ Organizers elect between two tracks: member-managed, in which the DAO’s members direct its affairs, or smart contract-managed, in which the smart contract governs.²⁶

Tennessee placed a critical constraint on the smart contract-managed track. A smart contract-managed decentralized organization “may only form under this chapter if the underlying smart contracts are able to be amended.”²⁷ This provision ensures that even where code manages the organization’s affairs, human intervention remains structurally possible. Smart contract-managed does not mean unalterable.

Like Wyoming, Tennessee requires articles of organization to include a publicly available identifier for the smart contract directly used to manage, facilitate, or operate the organization.²⁸ Formation requires at least one member to sign and deliver the articles, ensuring a natural person is associated with the entity’s creation.²⁹ Registered names must include “DO,” “DAO,” “DO LLC,” or “DAO LLC,” making DAO status publicly visible.³⁰

Tennessee’s treatment of fiduciary duties and dissolution tracks Wyoming’s structure closely but with distinctive terms. Members of a decentralized organization owe no fiduciary duty to the organization or to one another by default, though members remain subject to the implied contractual covenant of good faith and fair dealing.³¹ Dissolution occurs upon events including majority member vote, failure to approve proposals or take actions for one year, and order of the secretary of state if the organization is deemed to no longer perform a lawful purpose.³² Tennessee does not include Wyoming’s explicit “natural person control” dissolution trigger. Tennessee’s one-year inactivity provision reaches the same outcome as Wyoming’s natural-person trigger in the specific case where loss of human governance produces organizational inaction, but the two triggers diverge in their doctrinal structure and may produce different outcomes in cases where automated systems continue functioning after human control lapses. A DAO whose smart contracts continue executing transactions automatically, without any human member approving proposals or taking governance actions, would eventually trigger Tennessee’s inactivity provision only if the smart contracts’ execution does not constitute “actions” within the meaning of the statute. Wyoming’s trigger, by contrast, operates categorically: loss of natural-person control mandates dissolution regardless of whether the DAO remains operationally active.

C. Utah: The Freestanding LLD

Utah departed from the LLC-wrapper model in 2023 (effective January 1, 2024), creating a “limited liability decentralized autonomous organization” (LLD) as a freestanding entity type under a dedicated chapter of the Utah Code.³³ Where the background LLC act fills gaps in Wyoming and Tennessee, Utah’s DAO Act establishes an independent governance hierarchy: the statute takes primacy, followed by the organization’s by-laws, then the Utah Revised Uniform Limited Liability Company Act as a residual gap-filler, and finally principles of law and equity.³⁴

Utah’s formation requirements are the most demanding of the four statutes. At least one organizer must be an individual, a natural person, not a juridical entity.³⁵ The organization must submit evidence that it meets nine substantive requirements, including deployment on a permissionless blockchain, a unique public address for monitoring transactions, publicly available source code that has undergone quality assurance, a graphical user interface displaying key smart contract variables and by-laws, decentralized governance, at least one member, a publicly specified communication mechanism for contacting the registered agent, and a binding dispute resolution mechanism.³⁶ By-laws must be “set out in plain terms.”³⁷

Utah introduced two concepts absent from the earlier statutes. First, the “legal representative”: “an individual appointed in the manner specified in the by-laws of a decentralized autonomous organization to perform procedural functions off-chain on behalf of” the organization.³⁸ Every LLD must retain a legal representative for tasks that cannot be achieved on-chain, creating a mandatory human agent for the entity’s interactions with the legal system.³⁹ Second, the statute defines “failure event” as a software error or exploit that either renders the organization inoperative or fundamentally changes its expected operation.⁴⁰ A failure event may trigger personal liability on the person deploying or upgrading the organization if that person acted in bad faith or engaged in gross negligence.⁴¹

Utah also addresses blockchain forks and organizational restructuring in detail, providing rules for asset allocation between majority and minority chains after a contentious hard fork and preserving legal personality through restructuring if the reconstituted organization satisfies formation requirements.⁴²

D. New Hampshire: The Blockchain-Native Registry

New Hampshire’s 2024 statute (effective July 1, 2025) represents the most structurally distinctive approach.⁴³ Like Utah, New Hampshire creates a freestanding entity type, a “decentralized autonomous organization,” rather than wrapping the DAO in an LLC.⁴⁴ Unlike any other state, New Hampshire mandates that the state’s DAO registry itself operate on a blockchain. The Secretary of State must establish and administer the registry as “a blockchain system,” and that system must be “a permissionless and open-source Free and Open-Source Software” blockchain.⁴⁵

New Hampshire’s gap-filler statute is RSA 304-C, a general provision for miscellaneous business associations, rather than the state’s LLC act.⁴⁶ Registration requires filing a registration statement that includes, among other items, governance documents “written in plain language comprehensible by a layperson.”⁴⁷ The statute requires every New Hampshire DAO to maintain a registered agent who is an individual residing in the state, establishing a natural-person nexus at the point of legal process.⁴⁸ This requirement addresses the precise problem the Ooki DAO litigation exposed: an entity that cannot be served because no identifiable person stands behind the organization. New Hampshire does not, however, independently require that the entity’s organizer be a natural person, distinguishing the state’s approach from Utah’s unambiguous individual-organizer mandate.⁴⁹

New Hampshire tracks Utah in requiring a “legal representative” but defines the term differently. Where Utah specifies that the legal representative must be “an individual,” unambiguously a natural person, New Hampshire defines the legal representative as “a person appointed in the manner specified in the governance documents of a decentralized autonomous organization to perform procedural functions off-chain.”⁵⁰ Because “person” in New Hampshire statutory usage includes entities, an LLD or corporation could potentially serve as legal representative, whereas Utah requires a flesh-and-blood human.

New Hampshire’s statute is the most detailed of the four on several governance dimensions. The statute requires open-source and publicly accessible software and monitoring tools, mandating transparency that goes beyond the blockchain-readability provisions of other states.⁵¹ New Hampshire addresses contentious blockchain forks with provisions similar to Utah’s, establishing default rules for asset allocation between majority and minority chains.⁵² Annual renewal is required rather than the perpetual existence that LLC-based DAOs enjoy, creating an ongoing compliance checkpoint.⁵³ The Attorney General may initiate deregistration through judicial proceedings, and the statute requires the registry vendor to provide technical assistance in such proceedings.⁵⁴

Ii. Comparative Analysis

A. Management Structure and Smart Contract Amendability

All four statutes address the same structural question, who or what manages the DAO, but the answers vary in form and implication. Wyoming now requires member management, with flexibility to define the extent of algorithmic involvement in articles of organization.⁵⁵ Tennessee preserves the choice between member management and smart contract management.⁵⁶ Utah vests governance in members as a class by default (if by-laws do not mandate administrators), with an optional administrator structure specified in by-laws.⁵⁷ New Hampshire’s statute does not mandate a specific management structure but requires governance documents to establish the procedures for organizational decision-making.⁵⁸

On smart contract amendability, the statutes converge. Wyoming mandates that “all smart contracts” utilized by a DAO be “capable of being updated, modified or otherwise upgraded.”⁵⁹ Tennessee conditions smart contract-managed formation on the underlying contracts being “able to be amended.”⁶⁰ Utah’s formation requirements, including quality assurance, GUI access to key variables, and publicly available code, presuppose a software architecture that permits human review and modification, even without a single amendability sentence.⁶¹ New Hampshire requires governance documents to specify procedures for amending smart contracts and organizational rules.⁶²

The convergence on amendability reflects a shared legislative judgment: immutable code is incompatible with legal entity status. If a smart contract cannot be changed, no human decision can correct errors, respond to changed circumstances, or comply with legal obligations. Amendability is not merely a technical preference; amendability is the mechanism through which human governance maintains authority over algorithmic execution.

B. Fiduciary Duties and Standards of Conduct

Fiduciary duties, the obligations of loyalty, care, and good faith that traditionally bind those who manage other people’s assets, receive strikingly different treatment across the four statutes. Wyoming allows fiduciary duties to be “define[d], reduce[d], or eliminate[d]” in the articles of organization, smart contracts, or operating agreement, as stated in the mandatory disclosure notice required at formation.⁶³ Because Wyoming DAOs are LLCs, the default duties of Wyoming LLC law apply unless modified, and the extent of permissible modification follows the Wyoming LLC Act’s parameters.

Tennessee’s mandatory disclosure notice is nearly identical to Wyoming’s, permitting the articles, smart contracts, and operating agreement to “define, reduce, or eliminate fiduciary duties.”⁶⁴ Critically, Tennessee provides that members of a decentralized organization do not owe fiduciary duties by default but remain subject to the implied contractual covenant of good faith and fair dealing.⁶⁵ This provision establishes a statutory floor: whatever the governing documents say about fiduciary duties, the duty of good faith survives.

Utah goes further in limiting fiduciary obligations. No “developer, member, participant, or legal representative” may have fiduciary duties imputed toward each other or third parties “solely on account of their role,” unless the person explicitly holds out as a fiduciary or stipulates to fiduciary status in the by-laws.⁶⁶ No implied covenant of good faith appears as a statutory backstop; Utah’s RULLCA gap-filler presumably supplies one, but the statute does not make this explicit.

New Hampshire does not address fiduciary duties in its DAO statute, leaving the question to RSA 304-C gap-filler provisions and common law.⁶⁷ This silence may reflect confidence in background law or an intentional decision to leave the question to judicial development.

C. Liability Protection and Its Boundaries

Limited liability is the primary incentive for DAO organizers to seek state recognition, and all four statutes provide limited liability, but with meaningfully different boundaries.

Wyoming and Tennessee, as LLC wrappers, provide limited liability through their respective LLC acts. Members are not personally liable for the organization’s obligations, though the standard conditions for piercing the LLC veil presumably apply.⁶⁸ Neither statute explicitly addresses the liability consequences of software failures.

Utah provides limited liability through its dedicated statute, with three distinctive features. First, a member “may only be liable for the on-chain contributions that the member has committed to the decentralized autonomous organization.”⁶⁹ This provision raises an interpretive ambiguity that warrants close attention. Read as a ceiling on member exposure, the provision affirmatively caps liability at committed on-chain contributions rather than shielding against entity obligations generally, a narrower protection than a standard LLC liability shield. Read as a floor, the provision establishes minimum liability, the member is at least liable for committed contributions, while leaving open the possibility that additional liability attaches under other provisions. The Utah RULLCA gap-filler in section 48-5-102(3) complicates the analysis: if the standard LLC liability shield supplements the DAO-specific provision, members would enjoy both the general LLC shield and the on-chain-contribution limitation; if the DAO-specific provision displaces the general shield, members face a different liability profile than traditional LLC members. Until a court interprets section 48-5-202(1)(a) in conjunction with the gap-filler hierarchy, organizers should assume the more restrictive reading and structure contributions accordingly.

Second, if a DAO refuses to comply with an enforceable judgment, order, or award, members who voted against compliance “may be liable for any monetary payments ordered in the judgment, order, or award in proportion to the member’s share of governance rights.”⁷⁰ This provision, unique among the four statutes, creates personal liability for governance decisions, specifically the decision to defy a legal obligation. The provision is the most direct example of a state linking liability to the exercise (or refusal) of human governance. Third, personal liability for torts is unaffected: members remain liable for their own wrongful acts or omissions.⁷¹

Utah’s failure-event liability is also distinctive. When a software error or exploit renders the organization inoperative or fundamentally changes its expected operation, the person who deployed or upgraded the software may face personal liability if that person “acted in bad faith” or “engaged in gross negligence.”⁷² This provision creates a liability channel that runs not from members through the entity, but from users back to developers, a reversal of the traditional principal-agent direction.

New Hampshire provides limited liability through its statute, with the legal representative shielded from personal liability for acts performed on behalf of the organization.⁷³ As with Utah, the details of member liability protection depend on the gap-filler statute (RSA 304-C) and the governance documents.

D. Information Rights and Transparency

Information rights, the ability of members to inspect organizational records and demand financial disclosures, represent a tension between blockchain transparency and traditional governance expectations. All four statutes address this tension, and all four resolve the tension the same way: where information is available on a public blockchain, the traditional right to inspect books and records does not apply.

Wyoming provides that, to the extent information is available on an open blockchain, members and dissociated members have no right to separately inspect or copy records, and the organization has no obligation to furnish information about its activities, financial condition, or other circumstances.⁷⁴ Tennessee’s language is nearly identical, substituting “publicly available distributed ledger technology” for “open blockchain.”⁷⁵

Utah imposes transparency requirements through formation conditions rather than through member inspection rights. Every LLD must provide a graphical user interface that allows any person, not just members, to read key smart contract variables, monitor all transactions, view by-laws, and access restrictions on token redemption.⁷⁶ By-laws must be set out in plain terms.⁷⁷ Source code must be publicly available and must have undergone quality assurance.⁷⁸ Utah’s approach substitutes universal public transparency for the member-specific inspection rights found in traditional entity law.

New Hampshire requires governance documents to be “written in plain language comprehensible by a layperson” and mandates open-source, publicly accessible software and monitoring tools.⁷⁹ Like Utah, New Hampshire shifts the transparency model from private inspection rights to public accessibility, and New Hampshire’s blockchain-native registry ensures that registration data itself resides on a publicly verifiable ledger.

Dimension Wyoming Tennessee Utah New Hampshire ——————————- ————————————— —————————————— ———————————————————————– ——————————————————— Entity type LLC wrapper LLC wrapper Freestanding LLD Freestanding DAO

Gap-filler law Wyoming LLC Act Tennessee RLLCA Utah RULLCA (residual) RSA 304-C

Natural-person organizer Not explicit (members sign articles) Not explicit (member signs articles) Yes (individual organizer required) Not required (natural-person registered agent required)

Management structure Member-managed only (2022) Member-managed or smart contract-managed Members as class; optional administrator Per governance documents

Smart contract amendability Universal mandate Condition of SC-managed formation Presupposed by formation conditions Per governance documents

Fiduciary duties Modifiable per LLC Act No default duties; good faith survives No imputed duties; opt-in only Silent (gap-filler)

Liability shield Standard LLC Standard LLC On-chain contributions ceiling; deployer liability for failure events Per statute and gap-filler

Information rights Blockchain substitutes for inspection Blockchain substitutes for inspection Universal GUI transparency Open-source mandate

Dissolution trigger Loss of natural-person control One year of inactivity Failure event (liability, not dissolution) AG deregistration; annual renewal

—————————————————————————————————————————————————————————————————————————————————-

. Comparative Summary of State DAO Statutes Across Five Governance Dimensions.

E. Dissolution, Failure, and the Limits of Autonomy

Dissolution provisions reveal how each state defines the boundaries of permissible autonomy, the point at which the legal system reclaims authority over an entity that has ceased to function as the statute intends.

Wyoming provides five dissolution triggers: expiration of a fixed duration, majority member vote, events specified in the articles or smart contracts, the organization ceasing to perform a lawful purpose or ceasing to be “under the control of at least one (1) natural person,” and withdrawal of all members.⁸⁰ The natural-person-control trigger, added in 2022, is the most direct legislative statement that a DAO without human governance forfeits entity status. A court may also order dissolution upon finding that any of these events has occurred.⁸¹

Tennessee provides five dissolution triggers: expiration of fixed duration, majority vote of a member-managed organization’s members, events specified in the smart contracts, articles, or operating agreement, failure to approve proposals or take actions for one year, and order of the secretary of state if the organization is deemed to no longer perform a lawful purpose.⁸² Tennessee lacks Wyoming’s explicit natural-person trigger, but Tennessee’s one-year inactivity provision serves an overlapping function in the specific case where loss of human governance produces organizational inaction. An organization incapable of human decision-making will fail to approve proposals or take actions within twelve months, triggering dissolution by operation of statute.

Utah does not include a dissolution section per se, but Utah’s failure-event and restructuring provisions serve an analogous function. A “failure event,” a software error or exploit that renders the organization inoperative or fundamentally changes its expected operation, does not automatically dissolve the entity; instead, legal personality and limited liability are “maintained to the extent necessary to protect decentralized autonomous organization members and participants from personal liability.”⁸³ Utah also prohibits members from compelling dissolution for failure to return on-chain contributions, channeling exit through the by-laws’ exit rules rather than judicial dissolution.⁸⁴ The practical effect is that Utah LLDs are harder to dissolve involuntarily than their Wyoming and Tennessee counterparts, but the failure-event liability provisions ensure that software failures have consequences for the humans responsible.

New Hampshire authorizes deregistration through judicial proceedings initiated by the Attorney General, with the registry vendor required to provide technical assistance.⁸⁵ Annual renewal operates as an additional check: an organization that fails to renew its registration loses its registered status. New Hampshire also addresses contentious blockchain forks, providing that the legal representative remains on the majority chain by default and establishing rules for organizations that choose to maintain presence on a minority chain.⁸⁶

Iii. The Human Governance Floor

A. What Every Statute Requires

Across all four statutes, three requirements recur without exception. First, each statute requires at least one identified natural person at or near the point of formation. Wyoming requires “one or more members” to sign and deliver articles of organization, with a registered agent reachable through standard legal channels.⁸⁷ Tennessee requires at least one member to sign and deliver the articles.⁸⁸ Utah mandates that at least one organizer be “an individual.”⁸⁹ New Hampshire requires a registered agent who is an individual residing in the state, establishing a natural-person nexus at the entity’s point of contact with the legal system.⁹⁰ The four statutes converge on the principle that a flesh-and-blood human must be identifiable in connection with the entity’s creation or legal presence, but the statutes diverge on the precise role that natural person must fill. Utah’s requirement is the most exacting: the organizer, the person who forms the entity, must be an individual. Wyoming and Tennessee require a member to sign formation documents. New Hampshire requires a natural-person registered agent but does not independently require a natural-person organizer, a distinction that matters because an organizer bears formation responsibility while a registered agent serves as the entity’s recipient of legal process. New Hampshire’s approach ensures that the problem in Ooki DAO, an entity with no identifiable person to receive service, cannot arise for a registered New Hampshire DAO, but the state does not require human involvement at the formation-decision level with the same specificity as Utah.

Second, each statute requires that the organization’s smart contracts remain amendable by human decision. Wyoming mandates universal upgradeability.⁹¹ Tennessee conditions smart contract-managed formation on amendability.⁹² Utah’s formation conditions, requiring quality assurance, public code, and a GUI for monitoring key variables, presuppose amendable architecture.⁹³ New Hampshire requires governance documents to specify amendment procedures.⁹⁴ No state permits an organization to lock its code beyond human alteration and still claim legal personality.

Third, each statute provides a mechanism for dissolution or deregistration when human governance fails. Wyoming’s trigger is explicit: loss of natural-person control.⁹⁵ Tennessee’s trigger is functional: one year without proposals or actions.⁹⁶ Utah channels failure through liability rather than dissolution, holding deployers personally accountable when software errors or exploits cause harm.⁹⁷ New Hampshire combines annual renewal with Attorney General-initiated deregistration.⁹⁸ The mechanisms differ, but the principle is uniform: an entity that ceases to be subject to human governance cannot persist indefinitely as a legal person.

B. What the Floor Addresses

These requirements respond to identifiable problems that arise when organizations lack human governance infrastructure. Federal courts have already encountered each of these problems.

Service of process requires a person or agent capable of receiving legal notice. Ooki DAO had none, and the court improvised a solution that would not generalize.⁹⁹ Every state statute addresses this by requiring a registered agent (Wyoming, Tennessee) or legal representative with a publicly specified communication mechanism (Utah, New Hampshire). An identifiable human at formation addresses the minimum institutional requirement for legal process.

Remediation of errors requires the ability to alter code. Smart contracts, once deployed, execute deterministically; a coding error in a deployed contract cannot be corrected unless the architecture permits modification. The 2022 Beanstalk exploit demonstrated the consequences of governance structures that could not respond quickly to exploit conditions: an attacker used a flash-loan governance attack to drain approximately $182 million from a DeFi protocol by temporarily acquiring a controlling governance stake, proposing and executing a malicious governance proposal, and withdrawing the funds in a single transaction block.¹⁰⁰ Every state statute addresses this by requiring smart contract amendability, ensuring that human decision-making can override algorithmic execution when circumstances demand it.

Accountability for collective action requires identifying who bears responsibility when an organization causes harm. The Sarcuni court’s general-partnership holding, imposing joint and several liability on individual token holders, was a blunt response to the absence of any governance structure that could channel liability in a more calibrated way.¹⁰¹ LoPucki warned in 2018 that autonomous entities without human governance would create precisely this accountability gap, enabling organizations to cause harm with no identifiable person answerable for the entity’s conduct.¹⁰² State DAO statutes address this by providing limited liability in exchange for minimum governance requirements, creating an incentive structure that favors formal organization over legal limbo.

C. Where the Statutes Diverge

Beyond the shared floor, the four statutes diverge in ways that create meaningfully different governance regimes. Three divergences are particularly significant.

First, the statutes differ on the entity’s relationship to background law. Wyoming and Tennessee DAOs are LLCs, and the full apparatus of LLC law, including judicial dissolution, derivative actions, and the implied covenant of good faith, applies as a gap-filler. Utah’s LLD draws on the RULLCA but establishes an independent governance hierarchy in which the statute takes primacy over the LLC act. New Hampshire uses RSA 304-C, a general business-association statute with less developed case law, as its gap-filler.¹⁰³ For organizers and their counsel, the choice of background law is a choice about the body of precedent and statutory default rules that will fill gaps in the governing documents.

Second, the statutes differ on whether the mandatory human agent must be a natural person. Utah requires the legal representative to be “an individual,” unambiguously a natural person.¹⁰⁴ New Hampshire defines its legal representative as “a person,” which under New Hampshire statutory construction includes entities.¹⁰⁵ Wyoming and Tennessee do not use the “legal representative” concept, relying instead on registered agents and member management. An organizer concerned about ensuring continuous human oversight would find Utah’s requirement most exacting; an organizer seeking flexibility might prefer New Hampshire’s broader definition.

Third, the statutes differ on the consequences of technological failure. Wyoming and Tennessee rely on dissolution as the primary remedy when governance breaks down. Utah preserves entity status through failure events but channels consequences to the deployer through a bad-faith or gross-negligence liability standard.¹⁰⁶ New Hampshire combines deregistration with annual renewal, creating an administrative rather than judicial mechanism for removing non-compliant organizations from the registry. These are not merely procedural differences; they reflect different judgments about whether the primary risk of DAO failure is entity persistence (addressed by dissolution), developer accountability (addressed by deployer liability), or regulatory oversight (addressed by administrative deregistration).

Conclusion

Every state that has enacted a purpose-built DAO statute has required, as a condition of legal recognition, a minimum threshold of human governance. No legislature has created a pathway for a fully autonomous entity, one with no identified human at formation, no mechanism for human amendment of its governing code, and no dissolution trigger for loss of human control. This convergence is not the product of coordination; the four statutes were enacted by different legislatures, in different years, with different structural approaches. Wyoming wraps the DAO in an LLC and reversed its initial accommodation of algorithmic management within a year. Tennessee retains the dual-track structure but constrains smart contract management through an amendability requirement. Utah creates a freestanding entity with the most demanding formation conditions and channels failure consequences to developers. New Hampshire establishes a blockchain-native registry with annual renewal and attorney-general enforcement.

What remains open is substantial. The definition of “control” in Wyoming’s natural-person dissolution trigger has not been judicially tested. Utah’s deployer-liability provision for failure events has no federal analogue and no interpretive precedent. The interpretive ambiguity in Utah’s on-chain-contribution liability provision remains unresolved. New Hampshire’s statute has not yet taken effect.

Equally open is the interface between these state frameworks and federal law. No state has yet confronted, through case law, how these DAO statutes interact with federal securities regulation under the Securities Exchange Act, commodity regulation under the Commodity Exchange Act, bank regulation under 12 U.S.C. section 1813, or anti-money-laundering requirements under the Bank Secrecy Act (31 U.S.C. section 5312). Whether a state-recognized DAO satisfies federal prerequisites for standing to sue in federal court, capacity to hold a federal license, eligibility for bankruptcy protection, or treatment under federal tax law depends on whether federal law recognizes the state entity status. The CFTC’s successful prosecution of Ooki DAO and the SEC’s 2017 DAO Report both demonstrate that federal regulators will assert jurisdiction over decentralized organizations regardless of state-law entity status.¹⁰⁷ The interaction between these four state frameworks and the federal regulatory apparatus is a priority for future scholarship.

What is established is the floor itself. State legislatures have concluded that legal personality requires human governance, not total human control, but a minimum: an identifiable person, amendable code, and a mechanism for reclaiming authority when human governance disappears. The variation above the floor is substantial and consequential, but the floor itself is consistent. For DAO organizers, the practical implication is that any entity seeking state recognition must build human governance into its structure from the outset. For courts, the implication is that state-recognized DAOs have, by definition, human actors who can be identified, served, and held accountable within the constraints of the applicable statute. For federal regulators and legislators, the implication is that the states have already answered the threshold question, DAOs that want legal personality must have people, and the remaining questions concern how much human governance is enough, and for what purposes.