We trawled our OtoCo chat group
for some initial FAQs about the workings and use of the onchain Delaware LLC we launched last month:
Can my LLC open a bank account?
Yes, two of our US banking partners, Keybank
have indicated they will open fiat accounts for your onchain LLC, subject to their inhouse onboarding policies. You will however need an Entity Identification Number (EIN) from the US Internal Revenue Service (IRS) before you apply.
Do I have to have an EIN for my onchain LLC?
This has proven a surprisingly difficult question to answer. The consensus seems to be that as long as your entity is not generating revenue from a US activity (i.e. you physically working from the U.S.), it can go without an EIN.
How private is my onchain LLC?
At formation, there is no filing with the State Registry and no public record of your ownership of the LLC. Your Operating Agreement is private too. Only if and when you link your wallet that holds the initial Membership with your real-world identity (e.g. when applying for a bank account) will the other party you deal with learn that you are the owner of the LLC.
Are my assets entirely separate from the Master LLC and the other Series?
Yes. We have made sure the wording of both the Master and the Series Operating Agreement is such that assets (and liabilities) in any Series are firewalled from the Master and from the other Series. Also, the OtoCo Master entities are not a Member in any Series. You can find the Operating Agreements in our documentation
together with more legal detail.
What use cases have you seen so far?
- Some users just park a brand name or a trademark in their LLC.
- Some hold a single asset e.g. real estate or IP (or non-fungible tokens!).
- Some use it as an investment vehicle for their crypto to secure access to the U.S. infrastructure of exchanges and crypto-to-fiat off-ramps or payment solutions.
- Foreign Members use the LLC to book revenue from non-U.S. activities from e-commerce or from selling digital goods or services.
- Some want to turn their LLC into a Multi-Member LLC and eventually run it as a tokenized fund or use it for capital formation purposes. Both functionalities are on our roadmap.
By early September, LLC owners will be able to tokenize their Membership interest as ERC20 tokens with a ticker name of their choice. Our September sprint will then make token transfer easier so users can invite more Members. Later in the Fall, we will work on capital formation functionality so the LLC can be used to pool funds, together with advanced governance features.
Will this be free forever ;-) ?
When we set out developing OtoCo, we wanted company formation to be cheaper, faster and better. We believe users see the value in this and will be willing to pay the right price for instant onchain real-world entities. We want to continue to offer value in a freemium model once we make more features available. Till then, you can spin up your LLC entirely for free and only pay for the transaction fees on Ethereum!
> More FAQs are available on our Gitbook
together with all legal document templates.
> Please join our Telegram group to chat and ask any questions you may have.