On January 25th, the Liberal Democratic Party’s Policy Research Council approved the “Proposals for DAO Rulemaking – What a new organization should be like in our country” compiled by the web3 project team (web3PT) of the Liberal Democratic Party’s Digital Society Promotion Headquarters, and it became the final version. . web3PT will now apply to relevant ministries and agencies, including the Financial Services Agency.
The recommendations were compiled after discussions at four “DAO rulemaking hackathons” held inviting businesses that are actually involved in DAOs from all over Japan.
Regarding the direction of the proposal, the web3PT chairperson, Congressman Masaaki Taira, and the secretary general, Congressman Hideto Kawasaki, discuss the following article.
Related article: Cases that will shock the world will emerge – Tax reform and DAO regulatory improvements will keep the Web3 ecosystem running: Liberal Democratic Party web3PT
Furthermore, regarding his proposal on his official website, Representative Taira said, “DAOs (autonomous decentralized organizations), backed by blockchain technology, are beginning to produce results across Japan as an organizational form that contributes to regional revitalization and solving social issues. “This is a proposal to resolve deficiencies in laws, taxes, accounting, etc., and promote the spread of DAOs.”
Regarding the basic policy of the proposal,
– Immediately implement measures that can be addressed by amending or implementing ministerial ordinances.
・Other matters will be further considered and implemented sequentially.
It is written as follows.
To introduce some of the specific contents of the proposal, “Proposal 1: Rulemaking to realize a limited liability company type DAO.”
Among the opinions from organizations participating in the DAO Rulemaking Hackathon, there were many requests to establish and operate a DAO by giving it legal personality. When considering granting corporate status to a DAO, among the various existing corporate forms, a limited liability company is one that assumes unity of ownership and management, and has relatively wide recognition of autonomy in its articles of incorporation. relatively high affinity with
We believe that by establishing and operating a DAO as a limited liability company (hereinafter referred to as a “limited liability company type DAO”), we will be able to achieve at least the following points from the opinions of participating organizations in the DAO rulemaking hackathon: It will be done.
・Granting corporate status to DAO (it will be possible to conclude contracts, open bank accounts, etc. with DAO as a party)
・Clarification of limited liability of DAO members
・Relatively flexible organizational management due to autonomy in the articles of incorporation
・Clarification of tax treatment for DAOs and DAO members
When a limited liability company type DAO issues a token representing the status of a member of the limited liability company (member rights token), under current law, it falls under the right to transfer electronic records and is considered a Section 1 security under the Financial Instruments and Exchange Act. will be subject to strict business regulations and disclosure regulations.
If certain requirements are met, the right to transfer electronic records does not apply, and the Cabinet Office Ordinance should be amended to immediately allow an exception that would allow it to be subject to relatively loose regulations as a category 2 security. (Parts beyond the scope that can be quickly addressed by amending the Cabinet Office Ordinance will be described in 5. Recommendation ② below.)
As “Recommendation ②: Matters for continued consideration in the future”,
The obligation to write employee names, etc. in the articles of incorporation is not compatible with DAO’s anonymity.
In order to ensure anonymity in the DAO, consideration should be given to allowing a KYC-completed wallet that meets certain requirements to be written in the electronic articles of incorporation instead of stating the name or name and address (Article 576 1 of the Companies Act). Special provisions in Section 4). Additionally, measures should be taken to deal with the use of wallets by persons other than the person in question.
In the existing legal form, the existence of a person who plays a certain central role
Because it is assumed that
Due to the development of technology, there may be organizations that can be recognized as transaction entities even if no one plays a central role, so we should consider creating a new legal form that is consistent with the decentralization and autonomy that are the characteristics of DAOs. Should.
etc. are listed. For recommendations and a summary version of the recommendations, a link is posted on Representative Taira’s official website under “Recommendations regarding DAO rulemaking.”
｜Text: CoinDesk JAPAN Editorial Department
｜Image: From the 1st “DAO Rule Make Hackathon”. From left: Representative Taira, Representative Hirai, and Representative Kawasaki (CoinDesk JAPAN Editorial Department)