2021 SF 38 (SEA 73, Ch. 162) — Decentralized autonomous organizations (W.S. 17-31)
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ORIGINAL SENATE ENGROSSED
FILE NO. SF0038
ENROLLED ACT NO. 73, SENATE
SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
AN ACT relating to corporations; providing for the
formation and management of decentralized autonomous
organizations; providing definitions; and providing for an
effective date.
Be It Enacted by the Legislature of the State of Wyoming:
Section 1. W.S. 17-31-101 through 17-31-116 are
created to read:
CHAPTER 31
DECENTRALIZED AUTONOMOUS ORGANIZATION SUPPLEMENT
ARTICLE 1
PROVISIONS
17-31-101. Short title.
This chapter shall be known and may be cited as the
"Wyoming Decentralized Autonomous Organization Supplement."
17-31-102. Definitions.
(a) As used in this chapter:
(i) "Blockchain" means as defined in W.S.
34-29-106(g)(i);
(ii) "Decentralized autonomous organization"
means a limited liability company organized under this
chapter;
(iii) "Digital asset" means as defined in W.S.
34-29-101(a)(i);
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2021 GENERAL SESSION
(iv) "Limited liability autonomous organization"
or "LAO" means a decentralized autonomous organization;
(v) "Majority of the members," means the
approval of more than fifty percent (50%) of participating
membership interests in a vote for which a quorum of
members is participating. A person dissociated as a member
as set forth in W.S. 17-29-602 shall not be included for
the purposes of calculating the majority of the members;
(vi) "Membership interest" means a member's
ownership share in a member managed decentralized
autonomous organization, which may be defined in the
entity's articles of organization, smart contract or
operating agreement. A membership interest may also be
characterized as either a digital security or a digital
consumer asset as defined in W.S. 34-29-101, if designated
as such in the organization's articles of organization or
operating agreement;
(vii) "Open blockchain" means a blockchain as
defined in W.S. 34-29-106(g)(i) that is publicly accessible
and its ledger of transactions is transparent;
(viii) "Quorum" means a minimum requirement on
the sum of membership interests participating in a vote for
that vote to be valid;
(ix) "Smart contract" means an automated
transaction, as defined in W.S. 40‑21‑102(a)(ii), or any
substantially similar analogue, which is comprised of code,
script or programming language that executes the terms of
an agreement and which may include taking custody of and
transferring an asset, administrating membership interest
votes with respect to a decentralized autonomous
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SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
organization or issuing executable instructions for these
actions, based on the occurrence or nonoccurrence of
specified conditions.
17-31-103. Application of Wyoming Limited Liability
Company Act.
(a) The Wyoming Limited Liability Company Act applies
to decentralized autonomous organizations to the extent not
inconsistent with the provisions of this chapter and the
powers provided to the secretary of state by W.S.
17-29-1102 shall apply to this chapter.
(b) This chapter does not repeal or modify any
statute or rule of law that applies to a limited liability
company that is organized under the Wyoming Limited
Liability Company Act that does not elect to become a
decentralized autonomous organization.
17-31-104. Definition and election of decentralized
autonomous organization status.
(a) A decentralized autonomous organization is a
limited liability company whose articles of organization
contain a statement that the company is a decentralized
autonomous organization as described in subsection (c) of
this section.
(b) A limited liability company formed under the
Wyoming Limited Liability Company Act, W.S. 17-29-101
through 17-29-1102, may convert to a decentralized
autonomous organization by amending its articles of
organization to include the statement required by
subsections (a) and (c) of this section and W.S. 17-31-106.
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ENROLLED ACT NO. 73, SENATE
SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
(c) A statement in substantially the following form
shall appear conspicuously in the articles of organization
or operating agreement, if applicable, in a decentralized
autonomous organization:
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.
(d) The registered name for a decentralized
autonomous organization shall include wording or
abbreviation to denote its status as a decentralized
autonomous organization, specifically "DAO", "LAO", or "DAO
LLC."
(e) A statement in the articles of organization may
define the decentralized autonomous organization as either
a member managed decentralized autonomous organization or
an algorithmically managed decentralized autonomous
organization. If the type of decentralized autonomous
organization is not otherwise provided for, the limited
liability company will be presumed to be a member managed
decentralized autonomous organization.
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SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
17-31-105. Formation.
(a) Any person may form a decentralized autonomous
organization which shall have one (1) or more members by
signing and delivering one (1) original and one (1) exact
or conformed copy of the articles of organization to the
secretary of state for filing. The person forming the
decentralized autonomous organization need not be a member
of the organization.
(b) Each decentralized autonomous organization shall
have and continuously maintain in this state a registered
agent as provided in W.S. 17-28-101 through 17-28-111.
(c) A decentralized autonomous organization may form
and operate for any lawful purpose, regardless of whether
for profit.
(d) An algorithmically managed decentralized
autonomous organization may only form under this chapter if
the underlying smart contracts are able to be updated,
modified or otherwise upgraded.
17-31-106. Articles of organization.
(a) The articles of organization of a decentralized
autonomous organization shall include a statement that the
organization is a decentralized autonomous organization,
pursuant to W.S. 17-31-104, and shall set forth the matters
required by W.S. 17-29-201.
(b) In addition to the requirements of subsection (a)
of this section the articles of organization shall include
a publicly available identifier of any smart contract
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2021 GENERAL SESSION
directly used to manage, facilitate or operate the
decentralized autonomous organization.
(c) Except as otherwise provided in this chapter, the
articles of organization and the smart contracts for a
decentralized autonomous organization shall govern all of
the following:
(i) Relations among the members and between the
members and the decentralized autonomous organization;
(ii) Rights and duties under this chapter of a
person in their capacity as a member;
(iii) Activities of the decentralized autonomous
organization and the conduct of those activities;
(iv) Means and conditions for amending the
operating agreement;
(v) Rights and voting rights of members;
(vi) Transferability of membership interests;
(vii) Withdrawal of membership;
(viii) Distributions to members prior to
dissolution;
(ix) Amendment of the articles of organization;
(x) Procedures for amending, updating, editing
or changing applicable smart contracts;
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2021 GENERAL SESSION
(xi) All other aspects of the decentralized
autonomous organization.
17-31-107. Amendment or restatement of articles of
organization.
(a) Articles of organization shall be amended when:
(i) There is a change in the name of the
decentralized autonomous organization;
(ii) There is a false or erroneous statement in
the articles of organization; or
(iii) The decentralized autonomous
organization's smart contracts have been updated or
changed.
17-31-108. Operating agreement.
To the extent the articles of organization or smart
contract do not otherwise provide for a matter described in
W.S. 17-31-106, the operation of a decentralized autonomous
organization may be supplemented by an operating agreement.
17-31-109. Management.
Management of a decentralized autonomous organization shall
be vested in its members, if member managed, or the smart
contract, if algorithmically managed, unless otherwise
provided in the articles of organization or operating
agreement.
17-31-110. Standards of conduct for members.
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ORIGINAL SENATE ENGROSSED
FILE NO. SF0038
ENROLLED ACT NO. 73, SENATE
SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
Unless otherwise provided for in the articles of
organization or operating agreement, no member of a
decentralized autonomous organization shall have any
fiduciary duty to the organization or any member except
that the members shall be subject to the implied
contractual covenant of good faith and fair dealing.
17-31-111. Membership interests for member managed
decentralized autonomous organizations; voting.
(a) For purposes of W.S. 17-31-113 and 17-31-114 and
unless otherwise provided for in the articles of
organization, smart contract or operating agreement:
(i) Membership interests in a member managed
decentralized autonomous organization shall be calculated
by dividing a member's contribution of digital assets to
the organization divided by the total amount of digital
assets contributed to the organization at the time of a
vote;
(ii) If members do not contribute digital assets
to an organization as a prerequisite to becoming a member,
each member shall possess one (1) membership interest and
be entitled to one (1) vote;
(iii) A quorum shall require not less than a
majority of membership interests entitled to vote.
17-31-112. Right of members, managers and dissociated
members to information.
Members shall have no right under W.S. 17-29-410 to
separately inspect or copy records of a decentralized
autonomous organization and the organization shall have no
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SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
obligation to furnish any information concerning the
organization’s activities, financial condition or other
circumstances to the extent the information is available on
an open blockchain.
17-31-113. Withdrawal of members.
(a) A member may only withdraw from a decentralized
autonomous organization in accordance with the terms set
forth in the articles of organization, the smart contracts
or, if applicable, the operating agreement.
(b) A member of a decentralized autonomous
organization may not have the organization dissolved for a
failure to return the members' contribution to capital.
(c) Unless the organization's articles of
organization, smart contracts or operating agreement
provide otherwise, a withdrawn member forfeits all
membership interests in the decentralized autonomous
organization, including any governance or economic rights.
17-31-114. Dissolution.
(a) A decentralized autonomous organization organized
under this chapter shall be dissolved upon the occurrence
of any of the following events:
(i) The period fixed for the duration of the
organization expires;
(ii) By vote of the majority of members of a
member managed decentralized autonomous organization;
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ORIGINAL SENATE ENGROSSED
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ENROLLED ACT NO. 73, SENATE
SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
(iii) At the time or upon the occurrence of
events specified in the underlying smart contracts or as
specified in the articles of organization or operating
agreement;
(iv) The decentralized autonomous organization
has failed to approve any proposals or take any actions for
a period of one (1) year;
(v) By order of the secretary of state if the
decentralized autonomous organization is deemed to no
longer perform a lawful purpose.
(b) As soon as possible following the occurrence of
any of the events specified in subsection (a) of this
section causing the dissolution of a decentralized
autonomous organization, the organization shall execute a
statement of intent to dissolve in the form prescribed by
the secretary of state.
17-31-115. Miscellaneous.
The articles of organization and the operating agreement of
a decentralized autonomous organization are effective as
statements of authority. Where the underlying articles of
organization and operating agreement are in conflict, the
articles of organization shall preempt any conflicting
provisions. Where the underlying articles of organization
and smart contract are in conflict, 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).
17-31-116. Foreign decentralized autonomous
organization.
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ORIGINAL SENATE ENGROSSED
FILE NO. SF0038
ENROLLED ACT NO. 73, SENATE
SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 GENERAL SESSION
The secretary of state shall not issue a certificate of
authority for a foreign decentralized autonomous
organization.
Section 2. This act is effective July 1, 2021.
(END)
Speaker of the House President of the Senate
Governor
TIME APPROVED: _________
DATE APPROVED: _________
I hereby certify that this act originated in the Senate.
Chief Clerk
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