Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 318 (2024GS)

Sponsor

Rep. Teuscher, J.

Final action

Governor Signed 3/13/2024

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• clarifies that the Division of Corporations and Commercial Code files a decentralized autonomous organization's certificate of organization and does not issue a certificate of organization;
• makes modifications to the permitted names of a decentralized autonomous organization to align with permitted names for other entities formed in the state; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

DECENTRALIZED AUTONOMOUS ORGANIZATION ACT
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jordan D. Teuscher
Senate Sponsor: 
 Kirk A. Cullimore
LONG TITLE
General Description:
This bill makes changes to the Decentralized Autonomous Organization Act.
Highlighted Provisions:
This bill:
▸ clarifies that the Division of Corporations and Commercial Code files a
decentralized autonomous organization's certificate of organization and does not
issue a certificate of organization;
▸ makes modifications to the permitted names of a decentralized autonomous
organization to align with permitted names for other entities formed in the state; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
48-5-103
, as enacted by Laws of Utah 2023, Chapter 85
48-5-105
, as enacted by Laws of Utah 2023, Chapter 85
48-5-201
, as enacted by Laws of Utah 2023, Chapter 85
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
48-5-103
 is amended to read:
48-5-103.
Powers of the division.
(1) (a) The division may make, amend, or rescind a rule, form, or order when necessary
to carry out this chapter.
(b) The division shall make rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(2) The division may by rule:
(a) provide the form and content of a registration requirement required under this
chapter;
(b) provide the method of determining whether formation requirements described in
Section 
48-5-201
 have been met and when to [
issue
] 
file
 a certificate of organization; and
(c) identify industry standards for determining whether the decentralized autonomous
organization has undergone security review for quality assurance.
Section 2. Section 
48-5-105
 is amended to read:
48-5-105.
Permitted names.
(1) (a) The name of a limited liability decentralized autonomous organization shall
contain the words limited liability decentralized autonomous organization or limited
decentralized autonomous organization or the abbreviation L.L.D., LLD, L.D., or LD.
(b) Limited may be abbreviated as Ltd., and decentralized autonomous organization
may be abbreviated as DAO.
(2) Except as authorized by Subsection (3), the name of a decentralized autonomous
organization shall be distinguishable as defined in Subsection (4) upon the records of the
division from:
(a) the actual name, reserved name, or fictitious or assumed name of any entity
registered with the division; or
(b) any tradename, trademark, or service mark registered with the division.
(3) (a) A decentralized autonomous organization may apply to the division for approval
to reserve a name that is not distinguishable upon the division's records from one or more of
the names described in Subsection (2).
(b) The division shall approve the name for which the decentralized autonomous
organization applies under Subsection (3)(a) if:
(i) the other person with a name that is not distinguishable from the name under which
the applicant desires to file:
(A) consents to the filing in writing; and
(B) files a form approved by the division to change the person's name to a name that is
distinguishable from the name of the applicant; or
(ii) the applicant delivers to the division a certified copy of the final judgment of a
court of competent jurisdiction establishing the applicant's right to use the name in this state.
(4) A name is distinguishable from other names, trademarks, and service marks
registered with the division if the name contains one or more different words, letters, or
numerals from other names upon the division's records.
(5) The following differences are not distinguishing:
(a) the term:
(i) decentralized autonomous organization;
(ii) DAO;
(iii) limited liability decentralized autonomous organization;
(iv) L.L.D. or L.L.DAO; or
(v) L.D. or L.DAO;
(b) an abbreviation of a word listed in Subsection (5)(a);
(c) the presence or absence of the words or symbols of the words "the," "and," "a," or
"plus";
(d) differences in punctuation and special characters;
(e) differences in capitalization; or
(f) differences in singular and plural forms of words.
(6) The division may not approve for filing a name that implies that a decentralized
autonomous organization is an agency of this state or any of the state's political subdivisions, if
the decentralized autonomous organization is not actually such a legally established agency or
subdivision.
(7) The authorization to reserve or register a decentralized autonomous organization
name as granted by the division does not:
(a) abrogate or limit the law governing unfair competition or unfair trade practices;
(b) derogate from the common law, the principles of equity, or the statutes of this state
or of the United States with respect to the right to acquire and protect names and trademarks; or
(c) create an exclusive right in geographic or generic terms contained within a name.
(8) The name of a decentralized autonomous organization may not contain:
(a) the term:
(i) association;
(ii) corporation;
(iii) incorporated;
(iv) partnership;
(v) limited liability company;
(vi) limited partnership; or
(vii) L.P.;
(b) any word or abbreviation that is of like import to the terms listed in Subsection
(8)(a);
(c) without the written consent of the United States Olympic Committee, the words:
(i) Olympic;
(ii) Olympiad; or
(iii) Citius Altius Fortius; 
or
[
(d) without the written consent of the Division of Consumer Protection issued in
accordance with Section 
13-34-114
, the terms:
]
[
(i) university;
]
[
(ii) college; or
]
[
(iii) institute or institution; or
]
[
(e)
] 
(d)
 the number sequence 911.
(9) A person, other than a decentralized autonomous organization formed under this
chapter or another decentralized autonomous organization that is authorized to transact
business in this state, may not use in the person's name in this state the term:
(a) limited liability decentralized autonomous organization;
(b) limited decentralized autonomous organization;
(c) L.L.DAO or L.L.D; or
(d) L.DAO or L.D.
Section 3. Section 
48-5-201
 is amended to read:
48-5-201.
Formation requirements.
(1) (a) One or more persons may act as organizers to form a decentralized autonomous
organization by delivering to the division for filing a certificate of organization.
(b) At least one of the organizers of a decentralized autonomous organization shall be
an individual.
(2) (a) A certificate of organization shall provide:
(i) the name of the decentralized autonomous organization, which shall comply with
Section [
48-3a-108
] 
48-5-105
;
(ii) the name of an organizer that is an individual;
(iii) the street and mailing address of the organizer described in Subsection (2)(a)(ii);
(iv) the name and address of the legal representative; and
(v) the information required by Subsection 
16-17-203
(1).
(b) An organizer may request that the information provided in Subsections (2)(a)(ii)
and (iii) is redacted by the division before any public disclosure of the filing.
(3) A decentralized autonomous organization shall submit evidence to the division 
in a
form required by the division
 that the decentralized autonomous organization has complied
with the following requirements:
(a) the decentralized autonomous organization is deployed on a permissionless
blockchain;
(b) the decentralized autonomous organization has a unique public address through
which an individual can review and monitor the decentralized autonomous organization's
transactions;
(c) the software code of the decentralized autonomous organization is available in a
public forum for any person to review;
(d) the software code of the decentralized autonomous organization has undergone
quality assurance;
(e) the decentralized autonomous organization has a graphical user interface that:
(i) allows a person to read the value of the key variables of the decentralized
autonomous organization's smart contracts;
(ii) allows a person to monitor all transactions originating from, or addressed to, the
decentralized autonomous organization's smart contracts;
(iii) specifies the restrictions on a member's ability to redeem tokens;
(iv) makes available the decentralized autonomous organization's by-laws; and
(v) displays the mechanism to contact the administrator of the decentralized
autonomous organization;
(f) the governance system of the decentralized autonomous organization is
decentralized;
(g) the decentralized autonomous organization has at least one member;
(h) (i) there is a publicly specified communication mechanism that allows a person to
contact the registered agent of the decentralized autonomous organization and provide legally
recognized service; and
(ii) a member or administrator of the decentralized autonomous organization is able to
access the contents of this communication mechanism; and
(i) the decentralized autonomous organization describes or provides a dispute
resolution mechanism that is:
(i) binding on the decentralized autonomous organization, the members, and
participants of the decentralized autonomous organization; and
(ii) able to resolve disputes with third parties capable of settlement by alternative
dispute resolution.
(4) Notwithstanding the requirements of Subsection (3)(e)(iv), a decentralized
autonomous organization may redact sensitive information from the by-laws before making the
by-laws available, if those redactions are necessary to protect the privacy of individual
members or participants in the decentralized autonomous organization.
(5) A decentralized autonomous organization is formed when the decentralized
autonomous organization's certificate of organization becomes effective and the decentralized
autonomous organization submits the evidence required in Subsection (3).
(6) Upon formation, the decentralized autonomous organization shall have limited
liability, subject to the provisions of Section 
48-5-202
.
[
(7) A decentralized autonomous organization may request a certificate of organization
from the division to signify that the decentralized autonomous organization has complied with
the requirements for legal personality under this act.
]
Section 4. 
Effective date.
This bill takes effect on May 1, 2024.