Utah LLD: what the DAO Act says, section by section

What a Utah DAO (LLD) is

• A new entity, defined by its smart contracts. 16-22-101(6): '"Decentralized autonomous organization" means an organization: (a) created by one or more smart contracts; (b) that implements rules enabling individuals to coordinate for decentralized governance of an organization; and (c) that is an entity formed under this chapter.' 'Decentralized' 'means that decision-making is distributed among multiple persons' (16-22-101(5)).
• Legal personality. 16-22-104: a DAO 'that meets the requirements of this act: (1) shall be deemed a legal entity separate and distinct from the decentralized autonomous organization's members; (2) has the capacity to sue and be sued in the decentralized autonomous organization's own name and the power to do all things necessary or convenient to carry on the decentralized autonomous organization's activities and affairs; (3) shall meet the decentralized autonomous organization's liabilities through the decentralized autonomous organization's assets; (4) may have any lawful purpose; and (5) has perpetual duration.'
• Hierarchy of rules. 16-22-102: a DAO 'shall be governed by the following, listed in order of primacy: (1) this act; (2) the by-laws of the decentralized autonomous organization; (3) if this act and a decentralized autonomous organization's by-laws are silent, the provisions of Chapter 20, Utah Revised Uniform Limited Liability Company Act; and (4) principles of law and equity.' The LLC Act is a fallback, not the frame.
• The general business-entity chapter applies. 16-22-110, added in 2026: 'Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.' Chapter 1a lists 'a decentralized autonomous organization' among the entities it covers (16-1a-101(41)(a)(iv)).
• The regulator. 'Division' means the Division of Corporations and Commercial Code (16-22-101(9)), which 'may make, amend, or rescind a rule, form, or order when necessary to carry out this chapter' and may by rule set the registration form, 'the method of determining whether formation requirements described in Section 16-22-201 have been met and when to file a certificate of organization', and the 'industry standards' for the security review (16-22-103).
• No minimum capital. 16-22-401(1): 'No minimum capital requirements may apply to a decentralized autonomous organization recognized by this act.'

Where the law is now: 48-5 became 16-22

Most references, including the bill everyone links to, cite Utah Code 48-5. On le.utah.gov today, the 48-5 section pages (for example 48-5-S101) load an empty version list and no text, and the Title 48 index lists only chapters 1d, 2e and 3a. The Act now lives in Title 16, Chapter 22, whose current version is labelled "effective 10/1/2026", and every one of its sections carries the history note 'Renumbered and Amended by Chapter 92, 2026 General Session' (16-22-110: 'Enacted by Chapter 93, 2026 General Session').

The substance of the 2023 Act survives the move: comparing the enrolled H.B. 357 with today's Chapter 22, the definitions, formation requirements, liability, by-laws, members, legal representation, forks, restructuring, failure-event and tax sections read the same apart from numbering, cross-references and the two 2024 changes above. The 16-22 numbers are used below, with the 48-5 equivalent where it helps: 16-22-101 to 104 = 48-5-101 to 104; 16-22-105 = 48-5-106; 16-22-106 = 48-5-109; Parts 2, 3 and 4 keep their numbers (16-22-201 = 48-5-201, and so on), except that 48-5-204 has no successor.

Key definitions

16-22-101 defines 31 terms. The ones the rest of the Act turns on:

• Member. (16)(a) 'a person who has governance rights in a decentralized autonomous organization'; (16)(b) it 'does not include an individual that has involuntarily received a token with governance rights, unless that person has chosen to participate in governance by undertaking a governance behavior, on-chain or off-chain'. An airdropped token does not make you a member until you use it.
• Participant. (22) a person that 'is not a member' and 'holds or interacts with a token of a decentralized autonomous organization'.
• Smart contract. (29) software code that 'is deployed on a permissionless blockchain', 'consists of a set of predefined instructions executed in a distributed manner by the nodes of an underlying blockchain network' and 'produces a change on the blockchain network'.
• Permissionless blockchain. (23) 'a publicly distributed ledger that allows a person to transact and produce blocks in accordance with the blockchain protocol, in which the validity of the block is independent of the identity of the user'.
• Token. (30) 'a record on a permissionless blockchain that represents an asset, participation right, or other entitlement'.
• On-chain contribution. (20) 'any token segregated and locked in one of the decentralized autonomous organization's smart contracts for the purpose of member buy-in to the decentralized autonomous organization and the provision of withdrawable capital'. It is the measure of a member's liability (16-22-202(1)(a)).
• Legal representative. (13) '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 a decentralized autonomous organization'.
• Administrator. (1) 'a person that is appointed in a manner specified in the by-laws to make decisions for specific, predefined operations'.
• Developer. (7) 'a person involved in the development or maintenance' of the DAO, including one that provides 'software code' or 'design, business, legal, or ancillary support'.
• Quality assurance. (27) 'a security review of the software code of the decentralized autonomous organization in accordance with industry standards'.
• Dispute resolution mechanism. (8) 'an on-chain alternative dispute resolution system', including 'arbitration', 'expert determination' or 'an on-chain alternative court system'.
• Failure event. (10) 'an error in the decentralized autonomous organization's software code or an exploit that: (a) renders the decentralized autonomous organization inoperative; or (b) fundamentally changes the expected operation'.
• Hard fork, majority chain, minority chain, public signal. (12), (14), (17), (26): a hard fork is an incompatible upgrade that 'requires all users to upgrade'; the majority chain is the version 'accepted by more than half of the blockchain's validators'; a public signal is 'a declaration authorized by the decentralized autonomous organization in a public forum'.

Formation: the certificate and the nine technical requirements

Who files. 16-22-201(1): '(a) One or more persons may act as organizers to form a decentralized autonomous organization by delivering to the division for filing a certificate of organization. (b) At least one of the organizers of a decentralized autonomous organization shall be an individual.'

What the certificate says. 16-22-201(2)(a): '(i) the name of the decentralized autonomous organization, which shall comply with Sections 16-1a-302 and 16-1a-303; (ii) the name of an organizer that is an individual; (iii) the street and mailing address of the organizer described in Subsection (2)(a)(ii); (iv) the name and address of the legal representative; and (v) the information required by Section 16-1a-404' (the registered agent). Under (2)(b), the organizer 'may request that the information provided in Subsections (2)(a)(ii) and (iii) is redacted by the division before any public disclosure of the filing'.

The evidence. 16-22-201(3): the DAO 'shall submit evidence to the division in a form required by the division' that:

1. it 'is deployed on a permissionless blockchain' (a);
2. it 'has a unique public address through which an individual can review and monitor' its transactions (b);
3. its 'software code … is available in a public forum for any person to review' (c);
4. its software code 'has undergone quality assurance' (d);
5. it 'has a graphical user interface' that lets a person read 'the value of the key variables' of its smart contracts, 'monitor all transactions originating from, or addressed to' them, and that 'specifies the restrictions on a member's ability to redeem tokens', 'makes available the decentralized autonomous organization's by-laws' and 'displays the mechanism to contact the administrator' (e);
6. its 'governance system … is decentralized' (f);
7. it 'has at least one member' (g);
8. 'there is a publicly specified communication mechanism that allows a person to contact the registered agent … and provide legally recognized service', whose contents a member or administrator can access (h);
9. it 'describes or provides a dispute resolution mechanism' that is 'binding on the decentralized autonomous organization, the members, and participants' and 'able to resolve disputes with third parties capable of settlement by alternative dispute resolution' (i).

By-laws may be published with redactions 'necessary to protect the privacy of individual members or participants' (16-22-201(4)).

When it exists. 16-22-201(5): the DAO 'is formed when the decentralized autonomous organization's certificate of organization becomes effective and the decentralized autonomous organization submits the evidence required in Subsection (3).' (6): 'Upon formation, the decentralized autonomous organization shall have limited liability, subject to the provisions of Section 16-22-202.'

Filing fees, the Division's forms and the industry standards for quality assurance are left to rules (16-22-103); we did not read the Division's rules or fee schedule for this guide.

Name, registered agent and annual report

Until 30 September 2026 these were in the DAO chapter itself (48-5-105, 106 and 204). S.B. 40 moved them to Chapter 1a, which 16-22-110 makes applicable.

• Name. 16-1a-303(9)(a): 'The name of a limited liability decentralized autonomous organization shall contain: (i) the term: (A) "limited liability decentralized autonomous organization"; or (B) "limited decentralized autonomous organization"; or (ii) the abbreviation: (A) "L.L.D."; (B) "LLD"; (C) "L.D."; or (D) "LD."' Under (9)(b), '"limited" may be abbreviated as "Ltd."' and '"decentralized autonomous organization" may be abbreviated as "DAO."' Under (9)(c) the name may not contain 'association', 'corporation', 'incorporated', 'partnership', 'limited liability company', 'limited partnership' or 'L.P.', or 'a word or abbreviation that is of similar import'. Under (9)(d), only 'a decentralized autonomous organization formed or registered in accordance with this title' may use those LLD terms or 'L.L.DAO', 'L.L.D.', 'L.DAO' or 'L.D.' in its name in Utah. The name must also be distinguishable on the Division's records (16-1a-302).
• Registered agent. 16-22-105: 'Each decentralized autonomous organization shall designate a registered agent in this state in accordance with Section 16-1a-404 and maintain a registered agent in the state.' 16-1a-404(1) requires the filing to include 'the name of the represented entity's commercial registered agent' or, failing one, 'the name and address of the represented entity's noncommercial registered agent' or the title of an office within the entity whose holder 'may accept service of process, notice, or demand', with its mailing address; designating an agent 'affirms that the designated registered agent consents to serve' (16-1a-404(2)). On top of that, the DAO's own formation evidence must include a public channel to reach the agent and serve it (16-22-201(3)(h)).
• Annual report. The DAO-specific rule (48-5-204: a report with the name and registered-agent information 'every 12 months after' the certificate) was repealed by S.B. 40. From 1 October 2026, 16-1a-212(2) requires 'each domestic filing entity and registered foreign entity' to file an annual report with its name, jurisdiction, registered-agent information, 'the street address of the domestic filing entity's … principal office' and 'the name and address of each director and principal officer', by default 'each calendar year on the last day of the anniversary month' (16-1a-212(5)(a)). Chapter 1a lists the 'certificate of organization for a decentralized autonomous organization' among public organic records (16-1a-101(88)(b)(v)); how the Division applies the director-and-officer line to a DAO with no administrator is not stated in the text we read.

By-laws, members, voting and administrators

Utah's Act leaves almost everything internal to the by-laws, but tells them what they must cover.

• By-laws are mandatory, and in plain terms. 16-22-203: a DAO 'shall adopt by-laws that establish internal organization and procedures'; '(2) The by-laws shall be set out in plain terms'; '(3) The by-laws … may contain any provision for managing the entity and regulating the affairs of the decentralized autonomous organization that is not inconsistent with law.' They must be reachable through the DAO's user interface (16-22-201(3)(e)(iv)).
• Who is a member. 16-22-301: the by-laws 'may create multiple classes of member participation rights'; where tokens carry governance powers, the holder is a member 'from the time the ownership of the tokens is established to be in the possession of an address' or 'from the time when ownership is first acknowledged by the token holder through an on-chain interaction'; the section 'does not apply in the event of a hard fork'.
• Voting. 16-22-302: 'The by-laws shall set out the distribution of voting rights for the classes of member participation rights' and 'the method by which these voting rights are computed and distributed'. There is no statutory default formula.
• Proxies. 16-22-303: 'A member may be represented by a proxy'; the by-laws may set the requirements; 'A proxy may exercise all rights of a member.'
• Minority protection: a mandatory disclosure, not a mandatory right. 16-22-304: the DAO 'shall state in the by-laws whether the decentralized autonomous organization provides minority rights protection.'
• Administrators are optional. 16-22-305: 'Unless mandated in the decentralized autonomous organization's by-laws, a decentralized autonomous organization is not required to have an administrator, including a board of directors or a trustee'; without one, 'all the powers and tasks of an administrator shall be vested in the decentralized autonomous organization members as a class'; the voting mechanism to appoint one goes in the by-laws.
• Meetings. 16-22-402: meetings are held 'as provided in the … by-laws'; 'Unless explicitly specified in the by-laws, meetings are not required to be in person'; if the by-laws require meetings they must include 'an explicit and transparent mechanism of giving notice' and 'a defined time period for deliberating upon proposals'; notice 'shall be communicated through a graphical user interface'; quorum and majorities 'shall be specified in the by-laws'.
• Capital and exit. 16-22-401: a DAO that wants minimum capital must set subscription and payment rules in the by-laws (2); the by-laws 'shall provide the rules for exiting' that address 'voluntary and involuntary member and participant exit' (3); and 'No member may compel the dissolution of the decentralized autonomous organization for failure to return the member's on-chain contribution' (4).

Member liability and fiduciary status

16-22-202, in full:

'(1) Except as set forth in Subsections (2) and (3), a member: (a) may only be liable for the on-chain contributions that the member has committed to the decentralized autonomous organization; (b) may not be held personally liable for any excess liability after the decentralized autonomous organization's assets have been exhausted; (c) may not be held personally liable for any obligation incurred by the decentralized autonomous organization; and (d) may not be held personally liable, in the member's capacity as a member, for the wrongful act or omission of any other member of the decentralized autonomous organization. (2) If a decentralized autonomous organization refuses to comply with an enforceable judgment, order, or award entered against the decentralized autonomous organization, the 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 in the decentralized autonomous organization. (3) Subsections (1) and (2) do not affect the personal liability of a member in tort for a member's own wrongful act or omission.'

Two features stand out. The cap is defined on-chain: what a member risks is the tokens locked as an on-chain contribution (16-22-101(20)). And subsection (2) attaches personal liability to a vote — the governance act of refusing to pay a judgment — in proportion to governance weight, which only works because the votes are recorded on-chain. On top of the member shield, the legal representative 'may not be personally liable for acts performed on behalf of' the DAO (16-22-306(5)), and a failure event keeps the shield 'to the extent necessary to protect … members and participants from personal liability' (16-22-405(1)).

No implicit fiduciaries. 16-22-307: 'A developer, member, participant, or legal representative of a decentralized autonomous organization may not be imputed to have fiduciary duties towards each other or third parties solely on account of their role, unless the developer, member, participant, or legal representative: (1) explicitly holds themselves out as a fiduciary; or (2) stipulates to assume a fiduciary status as provided in the decentralized autonomous organization's by-laws.' The rule reaches developers and the legal representative, not just members. How the general Argentine and US rules on harm caused by software play out is in our liability guide.

The legal representative

This is Utah's answer to "who signs for the DAO". 16-22-306:

1. 'A decentralized autonomous organization shall retain a legal representative to undertake tasks that cannot be achieved on-chain.'
2. 'Legal representation of the decentralized autonomous organization shall be carried out by the legal representative in the manner provided in the by-laws, as evidenced by an authorization displayed on a public forum, and verifiable by cryptographic proof.'
3. 'The legal representative may undertake and execute any and all acts and contracts included within the scope of such authorization.'
4. 'The legal representative may not be required to reside in Utah.'
5. 'A legal representative may not be personally liable for acts performed on behalf of the decentralized autonomous organization.'

The legal representative is a different role from the registered agent (16-22-105, for service of process in Utah) and from an administrator (16-22-305, optional). The representative must be an individual (16-22-101(13)) and is named in the certificate of organization (16-22-201(2)(a)(iv)); the scope of their power is whatever the publicly displayed, cryptographically verifiable authorization says. After a hard fork, 'the legal representation … remains on the majority chain' unless the DAO signals otherwise (16-22-403(1)(a)).

DAOs that do not register

The Act does not confer any status on a DAO that skips registration. Three provisions settle it:

• The statutory definition of a decentralized autonomous organization includes being 'an entity formed under this chapter' (16-22-101(6)(c)).
• Legal personality is for a DAO 'that meets the requirements of this act' (16-22-104).
• Limited liability arrives '[u]pon formation' (16-22-201(6)), and formation requires both the effective certificate and the submitted evidence (16-22-201(5)).

One line causes confusion. The long title of the 2023 bill, a summary that precedes the enacted text, says: 'This bill allows a decentralized autonomous organization that has not registered as a for-profit corporate entity or a non-profit entity to be treated as the legal equivalent of a domestic limited liability company.' None of the 26 enacted sections of H.B. 357, and nothing in today's Chapter 22, contains an operative rule to that effect; read with the sections above, the Act's benefits are reserved to DAOs formed under it. The name rule also restricts the LLD labels to DAOs 'formed or registered in accordance with this title' (16-1a-303(9)(d)). What general Utah law — partnership or association rules, for example — makes of an unregistered DAO is outside the Act, and we did not verify it for this guide.

Forks, restructuring, failure events and tax

• Contentious forks. 16-22-403: by default the legal representation 'remains on the majority chain' and 'any off-chain assets shall belong to the decentralized autonomous organization on the majority chain' (1); the DAO 'may choose to maintain legal presence on a minority chain' by public signal, and then the off-chain assets follow it there (2); it may liquidate on-chain assets 'to move those assets to the chosen chain' (3); and it 'may split into multiple legal entities after a hard fork, each on a separate chain, after public signal of an intent to do so, provided there is a definitive distribution of off-chain assets' (4).
• Upgrades and migrations. 16-22-404(1): when a DAO is restructured 'through modification, upgrade, or migration', its legal personality and limited liability are 'retained only to the extent that: (a) the new software code … fulfills all the formation requirements of Section 16-22-201; and (b) where the decentralized autonomous organization has to be associated with a new unique public address, proper notice is provided by way of public signal.' A compliant successor 'inherits the rights and obligations of the original' (2).
• Hacks and bugs. 16-22-405: '(1) In the case of a failure event, legal personality and limited liability are maintained to the extent necessary to protect decentralized autonomous organization members and participants from personal liability. (2) A failure event may trigger liability on the person deploying or upgrading the decentralized autonomous organization if that person: (a) acted in bad faith; or (b) engaged in gross negligence.'
• Tax. 16-22-406: if the DAO 'is eligible to elect to be classified as a corporation for federal tax purposes' and does so, it is subject to Utah's corporate franchise and income tax (Title 59, Chapter 7); otherwise it 'shall be classified as a partnership for tax purposes' under the pass-through entity rules (Title 59, Chapter 10, Part 14), allocating income, gain, loss, deduction and credit to each member 'in proportion to the member's membership interest'. Federal classification itself is not governed by this Act and we did not review it.
• Dissolution. Chapter 22 contains no dissolution grounds of its own (only the rule that a member cannot compel dissolution to recover an on-chain contribution, 16-22-401(4)). Where the Act and the by-laws are silent the LLC Act applies (16-22-102(3)); we did not read the LLC Act's dissolution provisions or Chapter 1a's for this guide.

Utah LLD vs. Wyoming DAO LLC

The Wyoming column uses only text already quoted, with its section numbers, in our Wyoming DAO LLC profile (verified 19 Sep 2026). Where that profile quotes nothing on a point, the cell says so rather than guessing.

In one line: Wyoming bolts a DAO onto the LLC and trusts the smart contract; Utah builds a separate entity and trusts the by-laws, but makes transparency (public code, audit, user interface) a condition of existence and ties member liability to on-chain facts — locked contributions and recorded votes. Both need a human somewhere: Wyoming a natural person in control, Utah an individual organizer and a legal representative.

And Argentina? The Argentine bill's DAO (file PE-193/26, arts. 258-265, not law) shares Utah's choice of a separate company type with human representation — legal representation 'must be vested in ONE (1) or more natural persons', registered with the Public Registry (art. 260, our translation) — but goes the other way on liability and identity: the DAO 'is liable with its assets for the obligations and damage caused in the course of its activity, including those executed automatically by the protocol' (art. 262), and registration requires that 'only previously identified members' may acquire or transfer interests (art. 261 para. 7). Those quotations are as transcribed on this site on 17 Sep 2026; the full chapter is in our DAO guide, and the six-vehicle table with Tennessee is in the comparison.