An unincorporated association is a group of individuals who have joined together for a common purpose without formally registering as a corporation or other recognized legal entity. These associations typically lack legal personhood distinct from their members. Their legal standing and member liabilities can be complex and jurisdiction-dependent.
Context
Many early decentralized autonomous organizations (DAOs) and informal crypto communities may inadvertently be classified as unincorporated associations under existing legal frameworks. This classification can lead to significant legal exposure for individual members, including unlimited personal liability for the association’s debts or actions. The legal uncertainty surrounding these structures highlights a pressing need for tailored regulatory solutions or clear guidance for decentralized groups.
The judicial classification of a DAO as a general partnership fundamentally re-architects DeFi legal risk, imposing joint and several liability on participants.
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