Commentary-2

The core public policy goal of legal personality is entity shielding. Attaining legal personality allows an entity to operate as a single contracting party distinct from those owning or managing the firm, with a single pool of assets distinct from the other assets of those owning and managing the firm.[^10] The entity's pool of assets may not be attached by the personal creditors of those owning or managing the firm, but only by the creditors of the entity itself. The latter are usually granted priority over the owners of the firm to the entity's assets. To protect the entity from forced liquidation, entity shielding usually also entails rules that prevent the owners of the entity from withdrawing their share of assets at will.[^11] Through this Article, the same rationale is extended to DAOs, so as to separate the assets and liabilities of Members and Participants from that of the DAO.

The Model Law stipulates that jurisdictions should recognize a DAO to have legal personality so long as they are able to meet the same policy goals underlying corporate law, as reflected in this Model Law. In order for this principle to stand, all jurisdictions should adopt the same criteria for legal personality as prescribed in the Model Law, otherwise the legal scope of a particular DAO could be fragmented and unpredictable.