DUNA

For your group of 101 art collectors, considering a DUNA (Decentralized Unincorporated Non-Profit Association) structure could be a strategic move:

Decentralization and On-Chain Governance

The DUNA structure supports decentralization without needing a traditional corporate hierarchy, such as directors or a board. This is ideal for a decentralized organization like a DAO because it allows governance to be fully on-chain, aligning with the ethos of your group, where decisions can be made collectively and transparently by the members.

Limited Liability

A DUNA provides limited liability protection, which is crucial for reducing personal risk for your members. In contrast to entityless structures, where members could be personally liable for any legal or financial issues, a DUNA ensures that the organization itself is the legal entity, protecting individual members from direct liability.

Taxation Benefits

The DUNA offers a more predictable tax regime, including the option to elect to pay a 21% corporate tax on profits. This is simpler and less risky compared to the uncertain and potentially punitive tax treatment of foreign foundations, particularly for organizations with ties to the U.S., where tax liabilities could be substantial and unclear.

Simplicity and Cost-Effectiveness

Setting up a DUNA is relatively fast, simple, and cost-effective because there is no mandatory filing required, unlike with more complex structures like foreign foundations, which require significant administrative effort and legal expertise to establish and maintain.

Flexibility in Governance

The DUNA allows for maximum flexibility in defining governance rules, which can be tailored to your group's specific needs. The use of smart contracts and blockchain-based governance mechanisms is legally recognized, ensuring that your governance decisions are binding and enforceable.

Member Anonymity

DUNAs are expected to avoid the reporting requirements of the Corporate Transparency Act (CTA) because they do not require filing with the state, which helps preserve the anonymity of your members. This is a significant advantage over other structures that might require disclosing member information.

Stability and U.S. Regulation

Since the DUNA is based in the U.S., it may face less aggressive regulatory challenges compared to foreign entities. This stability can be beneficial, particularly if your group is considering involvement with U.S.-based investments or collaborations, making it easier to navigate the regulatory landscape.

Profit Generation and Distribution

Although the DUNA is a non-profit structure, it does not preclude the generation of profits. It can compensate members for their services, including governance participation, which provides a way to reward active contributors without violating its non-profit status.

Potential Drawbacks:

Membership Requirement: The DUNA requires at least 100 members, which your group meets, but this could be a hurdle for smaller DAOs.
Profit Distribution Limitations: The inability to distribute profits as dividends might limit the financial incentives for some members, especially if your group is focused on profit maximization.
Regulatory Scrutiny: While the DUNA offers some protection, the U.S. regulatory environment remains challenging, especially if your DAO engages in activities that might attract scrutiny from bodies like the SEC.

Conclusion:

A DUNA structure could be a strong fit for your group of 101 art collectors, offering a balance between decentralization, legal protection, and operational flexibility. However, it's important to weigh the profit distribution limitations and potential regulatory scrutiny against the benefits, particularly if your DAO has complex international operations or seeks to maintain a high level of anonymity.