A BILL to amend the Code of Virginia by adding in Title 13.1 a chapter numbered 15, containing articles numbered 1 through 5, consisting of sections numbered § 13.1-1300 through § 13.1-1318, relating to corporations; limited liability decentralized autonomous organizations.
HB293 creates a new chapter in Title 13.1 of the Virginia Code establishing the “Limited Liability Decentralized Autonomous Organization Act.” The bill authorizes the formation of a new legal entity called a limited liability decentralized autonomous organization, or LLD, which operates through decentralized governance using blockchain technology and smart contracts. It sets out how an LLD is formed, named, governed, amended, managed, and dissolved, and requires filings with the State Corporation Commission, including articles of organization, annual reports, and cancellation documents.
The bill also defines key terms such as blockchain, governance token, smart contract, hard fork, participant, and participant interest, and it requires LLD bylaws to address governance rights, voting, dispute resolution, smart contract upgrades, and procedures for forks. It provides that LLDs are separate legal entities with limited liability for participants, subject to certain exceptions, and it specifies how participant interests, withdrawals, and distributions are handled. The bill further addresses transparency and recordkeeping, including public filing requirements and internal records of proposals, votes, token holdings, and asset transfers, and it states that LLDs are subject to the same state and federal tax treatment as limited liability companies.
In terms of state law impact, HB293 would add a new business-entity framework alongside the Virginia Limited Liability Company Act, while incorporating many LLC filing and fee provisions by reference. It would give the State Corporation Commission authority over LLD formation, amendments, annual reports, and cancellation, and it would establish default rules for liability, governance, dissolution, and taxation of blockchain-based entities. The act is set to become effective January 1, 2028.
The general sentiment reflected in the available history is not strongly documented in transcript form, but the committee outcome suggests the bill did not advance: it was passed by indefinitely in Commerce and Labor on a 15-0 vote. That result indicates unanimous committee opposition or at least a decision not to move the measure forward, despite no recorded dissenting votes in the available history.
The main points of contention appear to be the legal and practical implications of recognizing decentralized autonomous organizations as formal Virginia entities. Likely areas of concern include how smart contracts interact with bylaws and operating agreements, the scope of participant liability, the treatment of dissenting participants, and whether blockchain-based governance can be adequately regulated and administered through existing state filing and enforcement systems. The bill’s detailed rules on token-based voting, hard forks, and recordkeeping suggest an attempt to address those issues, but the committee disposition indicates unresolved concerns about adopting this new entity form.
HB293 would add a new chapter to Title 13.1 of the Virginia Code creating a statutory framework for limited liability decentralized autonomous organizations (LLDs). It would affect the Virginia State Corporation Commission by requiring it to accept and process LLD formation, amendment, annual report, and cancellation filings, and it would extend many LLC-related filing, fee, merger, and conversion provisions to LLDs. The bill would also establish new rules governing participant rights, liability, governance by smart contracts, dissolution, and tax treatment for blockchain-based entities and their participants.
The available voting history suggests the bill did not receive support to advance out of committee, as it was passed by indefinitely in Commerce and Labor on a unanimous 15-0 vote. With no committee transcript available, there is no recorded floor or committee debate to show affirmative support or opposition in detail, but the final action indicates the measure was not favored for further consideration in its introduced form.
The likely areas of contention are the bill’s treatment of decentralized governance as a legally recognized business structure and the extent to which smart contracts can define or override traditional entity rules. Potential concerns include participant liability, especially the provision allowing liability for dissenting participants if the LLD cannot satisfy a judgment, the enforceability and auditability of smart contracts, the handling of hard forks and blockchain protocol changes, and whether the State Corporation Commission and existing Virginia business law are equipped to regulate such entities. These issues would most directly concern lawmakers focused on corporate law, consumer protection, and administrative feasibility.