Situation: A Web3 startup with a distributed team targeting customers globally.

 

Challenge: Needed to decide where to incorporate, which legal structure to adopt, and how to align this with their tokenomics and governance model.

 

Solution

 

Conducted a Multi-Jurisdictional Review to Identify the Best Place for Incorporation

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• Tax Benefits: Analyzed the tax implications of incorporating in various jurisdictions, including corporate tax rates, capital gains, and how these would impact both the startup and its investors.

• Legal Frameworks: Assessed the compatibility of the startup's business model with existing regulations and legal frameworks, including intellectual property protections and contract enforceability.

• Additional Regulations: Reviewed other compliance obligations like reporting requirements, employment laws, and financial regulations that could affect the day-to-day operations.

• Outcome: Narrowed down to a jurisdiction that aligned best with the startup's long-term strategy and provided a friendly ecosystem for Web3 businesses.

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Advised on the Optimal Entity Type That Would Offer Flexibility, Risk Mitigation, and Future Growth

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• Risk Mitigation: Considered how each entity type would limit liability and protect personal assets, particularly in a decentralized setup.

• Future Growth: Examined how the chosen entity would affect the startup's ability to raise future capital, including traditional investment and token sales.

• Outcome: Selected an entity type that accommodated the startup's governance structure while offering legal protection and growth opportunities.

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Crafted a Governance Model Aligned with Their Decentralized Ethos but Also in Compliance with the Chosen Jurisdiction

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• Decentralized Governance: Worked on integrating decentralized decision-making processes like community voting and decentralized autonomous organizations (DAOs).

• Legal Compliance: Ensured the decentralized governance structures were also compliant with the laws of the jurisdiction in which the startup was incorporated. This involved crafting legal documentation that effectively translated decentralized processes into legally binding contracts.

• Stakeholder Alignment: Ensured that the governance model was designed to align stakeholders' interests, whether they were team members, token holders, or outside investors.

• Outcome: Developed a governance model that struck a balance between decentralization and legal compliance, setting the startup on a path of transparent and effective governance.

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Results

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• Reduced tax liability

• Established governance model

• Smooth navigation through regulatory hurdles, saving months of potential delays

• Mitigated Legal Risks

• Built a Robust Compliance Framework

• Facilitated Global Expansion

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