Commentary-1

The aim of the Model Law is to allow a DAO that has not registered as a for-profit corporate entity or a non-profit entity to benefit from equivalent standing as a domestic limited liability company or limited liability cooperative. Most jurisdictions no longer require limited liability companies to have an object/purpose clause. Instead, many jurisdictions allow them to engage in any legal activity. The ultra vires doctrine has also fallen out of favor in several advanced corporate law jurisdictions.[^8] A common exception to this trend is charitable organisations, which is regularly explained by their special tax status. The Model Law does not aim to secure any special tax status for DAOs and accordingly has not taken into account the prevailing requirement for charitable organisations to have an object/purpose clause. As such, this Article does not preclude DAOs from engaging in social, environmental or philanthropic activities alongside its economic activities. Specifically, the Model Law acknowledges that a DAO may not only be a for-profit entity but may be used for multiple non-commercial purposes. DAOs have already been used for non-commercial purposes.[^9]