Legal
At Decentralized Real Estate (DeRE), we prioritize transparency and compliance with all applicable laws and regulations. Below, we outline the key legal aspects of our platform, including its structure, tax implications, fund management, and securities considerations.
1. Legal Structure
Each real estate asset on the DeRE platform is owned by a Wyoming DAO LLC. This structure ensures that:
Single-Asset Ownership: Each Wyoming DAO LLC owns only one property, providing clear separation of assets and liabilities.
Legal Rights: A Wyoming DAO LLC has the same rights as any other company or natural person, allowing it to engage in real estate investment activities.
Operating Agreement: Each DAO LLC is governed by its operating agreement, which outlines the rules, responsibilities, and eligibility requirements for members.
By using the Wyoming DAO LLC structure, we provide a legally sound and transparent framework for real estate co-ownership.
2. Tax Implications
The Wyoming DAO LLCs on the DeRE platform are taxed as partnerships, which has the following implications for members:
Pass-Through Taxation: Profits and losses are passed through to members, who report them on their individual tax returns.
Schedule K-1: Each member receives a Schedule K-1 annually, detailing their share of the partnership's income, deductions, and credits.
Income and Capital Gains Reporting: Members are responsible for reporting income and capital gains from their investments in accordance with federal and state tax laws.
To ensure compliance, we recommend consulting a tax professional for guidance on your specific tax obligations.
3. Fund Movement
Funds raised on the DeRE platform are managed with the highest level of security and transparency:
DAO Treasury Wallets: Each property has a dedicated multi-signature DAO Treasury wallet. These wallets require multiple approvals for any transaction, ensuring that funds are securely managed.
Direct Transfers to Title Companies: When funds are ready to close on the first-time purchase of a property, they are sent directly to the title company. This ensures that funds are used exclusively for their intended purpose.
This approach minimizes risk and ensures that all transactions are conducted in a secure and transparent manner.
4. Securities Considerations
The DeRE platform adheres to all applicable securities laws and regulations:
Ownership Interests: Users on the platform are purchasing ownership interests in the underlying Wyoming DAO LLCs, not in the DeRE platform itself.
Active Participation: Token holders are required to participate in the management of the LLC, which distinguishes our platform from traditional securities offerings.
Accredited Investor Requirements: Members are required to actively participate in the management decisions of the LLC. However, this requirement is waived for members who qualify as accredited investors, as defined by applicable securities laws. Accredited investors may choose to take a more passive role while still enjoying the benefits of ownership.
By ensuring compliance with securities laws, we provide a legally sound and transparent investment platform for our users.
5. Regulatory Compliance
The DeRE platform complies with all Wyoming state and federal laws regarding real estate investing, including:
KYC and AML Checks: All members must pass identity verification and anti-money laundering checks through our third-party provider, Veriff.
Prohibited Activities: Members must not engage in money laundering, fraud, or other prohibited activities.
Confidentiality and Information Rights: Members have access to relevant company information but are required to maintain confidentiality.
Our commitment to compliance ensures that the platform operates within the bounds of the law while protecting the interests of our users.
6. Key Legal Protections
No Personal Liability: Members are not personally liable for the debts or obligations of the DAO LLC, except in cases of fraud or misconduct.
Force Majeure: The company is not liable for delays or failures caused by events beyond its control.
Dispute Resolution: All disputes are resolved through arbitration, as outlined in the operating agreement.
These protections provide peace of mind for members and ensure that the platform operates in a fair and transparent manner.
The Decentralized Real Estate platform is built on a foundation of legal compliance, transparency, and user protection. By combining the benefits of blockchain technology with a robust legal framework, we provide a secure and innovative way to invest in real estate.
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