Summary

This proposal authorizes certain DAO members to act as administrators to obtain or provide legal, tax, and other services to the DAO.

Issue

Builder DAO has had a successful first few months. The DAO is operating as an Unincorporated Nonprofit Entity (“UNA”) and has been generating revenues through auction sales since its launch on November 15, 2022. Builder DAO has also begun funding Prop House grants and other proposals and projects directly from the DAO Treasury.

As has been discussed in the town halls and discord conversations, the acceptance and distribution of funds does create tax and informational reporting obligations for the DAO. In all those conversations, one commonality shared amongst the community is alignment on the need to onboard accountants and other advisors to assist the DAO with developing a legal and tax compliance strategy while maintaining operational flexibility.

The DAO can address this issue by voting yes on this proposal authorizing administrators to take certain delegated actions in furtherance of these goals.

As established in the DAO’s Association Agreement, administrators have limited authority and are narrowly empowered to perform specific tasks delegated by the DAO. They do not have the independent authority to bind the DAO to contracts without specific authorization or utilize broad discretion in their decision making. So, by design, follow-up proposals will be necessary to authorize DAO members to execute specific real-world activities to complete operational actions on behalf of the DAO.

Over time, the frequency of such proposals should decrease but the nature of authority being delegated for the performance of particular tasks will always require authorization from a validly executed governance proposal.

History

The Builder DAO Launch and UNA Formation Proposal was passed on November 17, 2022, provided authorization to the Founders to take steps to form and operate the UNA. This proposal withdraws and replaces that authorization with more specific authorizations outlined below.

Proposal

1) Authorize DAO members David Kerr and Zora as administrators to engage legal and tax advisors for the DAO

Under this authorization, David and Zora are authorized to take the following actions on behalf of the DAO:

• Recommend legal and tax service providers (including outside counsel, tax preparers, and bookkeepers) to the DAO and, following the DAO’s approval of service provider compensation via proposal vote, enter into engagement letters with such service providers.
• Engage in confidential discussions with legal and tax service providers to obtain guidance regarding key compliance issues impacting the DAO
• Make administrative decisions regarding the form of guidance to be provided (e.g. determining work product format, frequency of calls, agendas for meetings)
• Review and summarize all material guidance for other DAO members, and propose strategies to achieve legal and tax compliance goals.
• Execute required filings and reports, including to elect corporate taxation and sign, file, and pay taxes

Commitment - This is intended to be an ongoing commitment. Authorization will last until the DAO removes the authorization or the administrators resign.

2) Authorize DAO members David Kerr and Kyler Wandler to take necessary steps to finalize the establishment of the UNA in Wyoming and allow it to perform its core compliance and reporting functions.

Under this authorization, David and Kyler are authorized to take, or sign documentation allowing the DAO to take, the following actions on behalf of the DAO:

• Attain an Employer Identification Number (“EIN”)
• Attain a registered agent for service of process and serve as contacts for the DAO for service of process.
• File service of process with the Secretary of State of Wyoming
• Attain a service provider capable of remitting tax payments
• Make de minimis payments (i.e. less than $500) solely in furtherance of these listed goals, to be reimbursed by the DAO following submission of expenses by the administrator.

Commitment

• Contact for Registered Agent - This is intended to be an ongoing commitment. Authorization will last until the DAO removes the authorization.
• Other Authorizations - These are intended to be limited commitments. The authorization will end as soon as the tasks required to accomplish these listed goals above are completed.

Compensation

All administrators named in this proposal are willing to provide these services without compensation, so no payments are required for the time being (in the future, administrator compensation should be considered in relation to the time commitment on the part of administrators).

My motivation in this project is not to carve out a compensated role within the community for myself, but to assist in the utilization of an entity form that can be essential to reducing the risks around DAOs and allowing the community to pursue its objective of creating a public good within the space. Accordingly, it is my intention to serve as an administrator until the necessary requirements are functioning such that other members of the community would be able to step in and continue to perform tasks as needed with compensation being considered at that time.

My relevant writings on DAOs can be found here:

DAO Entity Features & Entity Selection | Andreessen Horowitz (a16z.com)