A legal wrapper is an off-chain legal entity, such as a foundation, LLC, or association, established to give a DAO or on-chain protocol recognised legal personality. It enables the organisation to enter contracts, hold assets, limit member liability, and interface with regulators while preserving on-chain governance. Jurisdictions like Wyoming (DAO LLC), the Marshall Islands, and the Cayman Islands offer purpose-built wrapper forms.
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- Without a wrapper, DAO members may face unlimited partnership liability and cannot easily contract with off-chain counterparties. Choices among foundation, LLC, and association forms trade off tax treatment, disclosure, and the degree to which token-holder governance is mirrored in legal control.