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Legal Information
General information about legal entities for Squads is outlined here.
Whether or not you need a legal entity for your Squad is ultimately determined by you and your Squad members. Please note that creating a legal entity is not required in order to create a Squad.

Use Cases

Here are the use cases to operate your Squad as an LLC:
  • Limits Squad members' legal and financial liability
  • Supports tax filings
  • Form multiple LLCs with different operating agreements
  • Instant, no-cost creation of different legal entities for different Squads

Delaware LLC

A Delaware Limited Liability Cooperation ("LLC") is one of the most widely-used legal entities in the US. The LLC structure limits its members' legal and financial liability, and is generally very flexible, with little governance and administrative paperwork.
You can learn more about the Delaware LLC entity structure here.
In partnership with Doola, Prysm can help you create a Delaware LLC for your Squad. Pricing is $199/month or $1989/year.
You can also email [email protected] for a more white-glove experience, or schedule a free consultation through this link and selecting "DAO LLC" in the flow.

Taxes

Buying or selling NFTs is treated as a capital gain/loss taxable event. For NFTs you have bought, you will be taxed on how much the price has appreciated since when you first bought ETH to when you used it to buy the NFT. For NFTs you have sold, you will be taxed on how much the ETH price appreciated from the time you first bought the NFT to the time you sold it.

K-1s

For help with filing taxes or other tax-related support, please consult with your tax advisor. If you set up a legal entity through Doola and paid for tax assistance, they will be able to help you. Please contact them at [email protected]