Overview - This is a draft proposal to be submitted to Builder DAO by Zora to revoke David Kerr and Kyler Wandler’s administrative authority granted under Proposal 25 and assign Zora (via a representative) and Patti Hauseman as replacement administrators. This authorization will also provide for:
1. Authorization to file notice for service of process in WY
2. Zora to cover de minimis payments to maintain the UNA until such time a banking relationship has been established
3. Zora (represented by Shahab) to manually attempt to collect and store W8/W9s for funds recipients until a service provider is onboarded.
4. The administrators’ engagement with a potential Ops Working Group that, subject to DAO approval, will be responsible for engaging service providers, setting up bank accounts, making payments etc.
***
Summary
This proposal revokes administrative authorizations granted under Proposal 25 to obtain or provide legal, tax, and other services for or to the DAO from certain prior administrators, reassigns the authorizations to new administrators, and adds new authorization for certain information collection activities.
Issue
Proposal 25 granted David Kerr, Kyler Wandler, and Zora limited administrative authorization to research and recommend legal and tax service providers to address the DAO’s compliance needs, and to enact necessary steps to formalize the UNA. The need for this authorization arose due to the DAO’s acceptance and distribution of funds, which create tax and informational reporting obligations for the DAO.
David and Kyler have communicated their desire to resign from their roles as administrators. Replacement administrators are needed to take on their responsibilities and to help the DAO meet its information collection obligations.
Context & Work Completed
Proposal 25 was approved by the DAO on January 23, 2023. Since then, the administrators have analyzed the DAOs operational needs, spoken with and vetted potential service providers to address those needs, and provided updates on their efforts as described in this Discourse update.
David and Kyler had also taken the following steps to finalize the establishment of the UNA in Wyoming:
- Attained an EIN
- Attained a registered agent for service of process in Wyoming
- Acted as contacts for the DAO for service of process.
- Submitted an election to be taxed as a corporation (Form 8832)
- Obtained a contact phone number, email, and local Wyoming address (via a virtual office lease) as required for local registration
A few steps, noted in detail below, remain outstanding.
Proposal
1) Revoke prior administrative authorization granted to: a) David Kerr to engage legal and tax advisors for the DAO; and b) David Kerr and Kyler Wandler to take necessary steps to finalize the establishment of the UNA in Wyoming and allow it to perform its core compliance and reporting functions.
Upon this revocation, David and Kyler will no longer be authorized to act on behalf of the DAO except solely to facilitate the transition of their administrator responsibilities to the new administrators identified below.
2) Authorize Zora, via a representative employee of its choosing (the “Zora Administrator) and Patti Hauseman as administrators to continue engaging legal and tax advisors for the DAO
Under this authorization, the Zora administrator and Patti are authorized to take the following actions on behalf of the DAO:
- Recommend legal and tax service providers (including outside counsel, tax preparers, and bookkeepers) to the DAO and, following the DAO’s approval of service provider compensation via proposal vote, enter into engagement letters with such service providers.
- Engage in confidential discussions with legal and tax service providers to obtain guidance regarding key compliance issues impacting the DAO, including required information collection and reporting.
- Make administrative decisions regarding the form of guidance to be provided (e.g. determining work product format, frequency of calls, agendas for meetings)
- Review and summarize all material guidance for other DAO members and propose strategies to achieve legal and tax compliance goals.
- Prepare the DAO to receive certain Builder Protocol IP from Zora
- Execute required filings and reports, including to sign, file, and pay taxes
- Propose a framework for an Operations Working Group to ultimately take on the above responsibilities and the underlying engagement and payment of service providers.
Commitment - This is intended to be a limited commitment. Authorization will last until these responsibilities are delegated to a working group or committee by proposal vote, the DAO removes the authorization, an administrator’s authorization expires, or the administrator resigns.
3) Authorize the Zora Administrator and Patti Hauseman to take necessary steps to finalize the establishment of the UNA in Wyoming and allow it to perform its core compliance and reporting functions.
Under this authorization, the Zora administrator and Patti are authorized to take, or sign documentation allowing the DAO to take, the following actions on behalf of the DAO:
- File service of process with the Secretary of State of Wyoming
- Attain a service provider capable of remitting tax payments
- Take any other action to maintain the UNA in good standing
- Zora to make de minimis payments (i.e. less than $500) solely in furtherance of these listed goals, and shall not seek reimbursement from the DAO for these costs.
Commitment
- Contact for Registered Agent and UNA Maintenance - These are intended to be ongoing commitments. Authorization will last until the DAO removes the authorization, an administrator’s authorization expires, or the administrator resigns.
- Other Authorizations - These are intended to be limited commitments. The authorization will end as soon as the tasks required to accomplish these listed goals above are completed.
4) Authorize the Zora representative as administrator to manually collect and store information required for tax reporting purposes from recipients of BuilderDAO funds.
As described in detail here, BuilderDAO is required to collect certain information from service providers it pays and report that information to the IRS to help ensure the service providers pay their share in taxes. If the DAO fails to do this, the DAO may be required to pay the service provider’s taxes itself, and may also be subject to penalties. This would result in more Treasury funds being spent on taxes rather than in furtherance of the DAO’s mission.
Under this authorization, the Zora representative is authorized to manually reach out to DAO funds recipients to collect and store the necessary information to allow the DAO to meet its obligations and issue 1099 forms to funds recipients. Access to this information shall be limited only to Zora personnel necessary to meet the DAO’s tax reporting obligations. Once the DAO approves and onboards a service provider to handle the information collection and reporting process, Zora shall transfer all of the collected information to the service provider.
Commitment - This is intended to be a limited commitment. Authorization will end once a service provider is onboarded to take over this responsibility and the information has been transferred. The authorization may also end if the DAO removes the authorization or the administrator resigns.
North Star Check
This proposal supports the DAO’s mission by ensuring the DAO has the appropriate operational and administrative infrastructure to operate safely and compliantly in furtherance of the mission as a nonprofit enterprise supporting public good DAO infrastructure.
Compensation/Treasury Impact
Zora shall provide services under this proposal without compensation.
While this role generally deserves compensation due to the administrator’s scope of responsibilities and the sensitivity of the work, Patti agrees to waive compensation for the time being in order to limit impact on the DAO’s treasury.
Disclosures
The Zora Representative will be an active US-based employee of Zora Labs.
Patti provides consulting services to Zora under a short term contract. She is also the former Operations Lead at FWB tasked with oversight of people ops, compliance, legal, treasury, and general operations.
Proposer
zora.eth