In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy.
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Imagine that your ICO raised $50 mln and your cryptocurrency is trading at 100x from where you launched. Everyone loves your project, your friends and family are impressed, and you’re the darling of Blockchain. Congratulations and welcome to the big leagues! You now have a significant enterprise to protect, demanding stakeholders to satisfy, and a challenging product roadmap to deliver on. Besides talented engineers and marketers, you need a in-house lawyer on your team. Here are some reasons why.
Corporate Governance: There’s no such thing as a project when it comes to corporate law. Don’t accidentally leave yourself open to unlimited personal liability by failing to create an appropriate entity. Whether you’re a non-profit foundation or a for-profit corporation, you’ll need to observe proper corporate formalities. This means having your paperwork in order, filing with the appropriate federal and state governments, holding proper meetings, and maintaining good business practices. Observing corporate formalities is not something that’s done once and forgotten about. It’s a never-ending process that requires constant time and attention.
Non-profit organizations are highly regulated entities: You can’t just snap your fingers and become a non-profit. Assuming you consulted with legal experts and properly filed your paperwork, there are still many hurdles you’ll need to satisfy to achieve and maintain tax-free status. For starters, a non-profit organization must pursue charitable purposes, like relieving poverty, educating people, advancing religion, or some other purpose that benefits society. Can a Blockchain project meet these requirements? Sure. But having founders walk away with huge windfall gains after an ICO won’t help your cause. Be very careful here, as the Internal Revenue Service