No company, no shield.

We hear the same sentence every week: "It is only a small launch, we will set up a company later." Sometimes it is a meme coin. Sometimes it is a protocol token with a few hundred thousand dollars of liquidity behind it. The reasoning is always that the project is too small, too early or too decentralised for a company to matter. The law does not work that way. It does not ask how big a project is before deciding who is responsible for it. It asks who did it, and without a company the answer is you.

What happens when there is no company

A company is a separate legal person. It can own assets, sign contracts, receive funds, be sued and owe tax in its own name, and its shareholders are not liable for its debts beyond what they put in. Take the company away and every one of those functions falls back on the individuals behind the project.

You become the issuer

Someone has to be the issuer of a token. If no entity exists, that is whoever deployed the contract, controlled the mint, wrote the whitepaper and promoted the sale. Every statement about supply, utility, roadmap, liquidity or lock-ups is then a representation made by you personally, and every purchaser who says they relied on it has a potential claim against you personally.

Your co-founders become your partners

In most common law systems, two or more people carrying on a business in common with a view to profit are a partnership whether they intend to be or not. No document is needed. Partners in a general partnership are jointly and severally liable for the partnership's obligations, which means a claimant can pursue any one of you for the whole amount, regardless of who made the mistake.

This is not theory. In the United States, courts have now applied it directly to token projects:

• In Sarcuni v bZx DAO (2023), a federal court in California allowed claims to proceed on the basis that a DAO and its token holders could be a general partnership, exposing members personally to losses from a protocol exploit.
• In CFTC v Ooki DAO (2023), a federal court held that a DAO was an unincorporated association that could be held liable for breaches of the Commodity Exchange Act, and entered a default judgment and civil penalty against it.
• In Samuels v Lido DAO (2024), a federal court in California held that the Lido DAO could plausibly be a general partnership and allowed claims to continue against venture investors as potential general partners.

Founders in Dubai, Singapore or London should not assume these cases are a US curiosity. The partnership principle they rest on is common to most common law jurisdictions, and US purchasers buy tokens wherever they are launched.

Your personal assets are on the line

Personal liability has no ceiling. A judgment, a regulatory penalty or a tax assessment against an individual can be enforced against savings, property and personal wallets. A company's creditors are, in the ordinary course, limited to the company's assets.

The market will not deal with you

Exchanges, launchpads, market makers, auditors, custodians and banks run know your business checks on an entity. Most will not list, provide liquidity for, audit or bank a token issued by an individual or an unwrapped group of individuals. Launching without a company does not only increase risk; it closes doors you will need within months.

The tax lands on you

Token sale proceeds and treasury allocations received by individuals are generally taxed in each founder's country of residence, often as income and often at the top marginal rate. Raise funds into personal wallets and you may also trigger anti-money laundering reviews at every bank and exchange those funds later touch.

Nobody owns the project

Without a company there is no clear owner of the code, the brand, the domain, the treasury multisig or the unsold token supply. When co-founders fall out, which they do, there is no shareholders' agreement, no vesting and no mechanism to resolve it, only competing claims to the same assets.

"But it is only a meme coin"

The size of a launch is no defence. Liability claims arise when prices fall, and the projects whose prices fall fastest are often the smallest and most speculative. Meme coins attract more rug-pull allegations, more angry holders and more regulatory attention per dollar raised than almost any other category. The type of token changes what else you need, but never whether you need a company.

• Meme coins. A simple company is the minimum. It owns the contract deployment, the liquidity, the brand and the community channels, and it is the party that makes, and limits, the statements holders rely on.
• Utility tokens. The issuer is the counterparty to the utility. Someone has to stand behind access rights, platform terms and the token sale terms, and that should be a company, not a founder.
• Governance tokens and DAOs. These are exactly the structures the DAO cases above caught. A company or a foundation gives the DAO a legal wrapper so that token holders voting on proposals are not partners in an unlimited liability business.
• L1 native tokens. A new chain usually needs a foundation to steward the protocol and the ecosystem fund, and an issuing entity for the genesis allocation, validator incentives and token sales. Large sums, long timelines and many contributors make the absence of a company especially dangerous.
• L2 tokens. The same applies, with the added complication that sequencer revenue, bridge risk and grants to builders all need a legal home. Operating these through individuals invites the partnership analysis.
• NFT, GameFi and community tokens. Intellectual property licences, in-game economies and creator payments all need a contracting party.
• Stablecoins and real-world asset tokens. A company is only the starting point. These almost always need licensing or regulated structures on top, and launching them without either is the highest-risk position of all.

What a company does, and what it does not

A properly formed company ring-fences the project's contracts, assets, debts and tax position from the founders' own. That is the shield. It is not invisible armour, and founders should understand its limits:

• It does not protect anyone from liability for their own fraud or deliberate misstatements.
• Directors still owe duties, and can be personally liable for breaching them or for trading while insolvent.
• Securities laws in many countries can reach individuals who control an issuer or promote an unregistered offering, whether or not a company exists.
• A company run from a founder's home country can be taxed and regulated there, wherever it is incorporated.

That is why the company is the first step rather than the whole answer. The token has to be classified correctly, the sale documents have to match its real economics, and the team's own location has to be planned for. But without the company, none of the rest has anything to attach to.

Why the BVI is the place to do it right now

For most token projects in 2026, a BVI Business Company is the strongest default issuer. The reasons are specific:

• Issuing your own token is outside the VASP Act. Issuing your own token does not require VASP registration, because the Virtual Assets Service Providers Act 2022 regulates virtual asset services carried on for or on behalf of another person. A company limited to creating and distributing its own token does not need a licence to exist or to issue.
• Speed. A BVI company can be formed within a few business days of complete KYC.
• No travel. Formation is handled by a licensed BVI registered agent. Directors and shareholders can be anywhere in the world and never visit. Our guide to incorporating offshore without travelling explains the process.
• Tax neutrality. There is no corporate income tax or capital gains tax in the BVI, so the issuer itself does not add a layer of tax.
• A flexible statute. The BVI Business Companies Act 2004 allows a memorandum and articles that carry token issuance authorities, treasury controls and governance mechanics without fighting the law.
• Courts the market trusts. English-derived common law, a specialist Commercial Court and final appeals to the Privy Council in London.
• The market already knows BVI paper. Exchanges, launchpads, investors and their counsel see BVI token issuers every week, so diligence and listing move faster.

The BVI is not a regulation-free zone, and we do not present it as one. A token with profit rights or redemption features can be an investment under the Securities and Investment Business Act. A stablecoin raises money services and deposit-taking questions, and promised yield can turn a treasury into a fund. Where the team is based, and where the buyers are, matter as much as the place of incorporation. Our legal case for launching from the BVI and guide to whether you need a licence go through those limits. For a DAO or an L1 foundation, the BVI issuer is often paired with a Cayman foundation company.

Company first, token second

The order matters. The company should exist before the first public statement, the first wallet, the first presale allocation and the contract deployment, so that every one of those acts is the company's and not yours. In practice that means:

1. Incorporate the issuer, with a constitution drafted for token issuance.
2. Assign the code, brand, domains and social accounts to the company.
3. Put contributors on written agreements with vesting, so the company owns their work.
4. Settle the token's classification before the whitepaper is published.
5. Run the sale, airdrop or listing through the company, on terms that limit what it promises.

If you have already launched without a company, it is not too late, but it is a repair rather than a set-up. A company can be formed and the project's assets moved into it, but liabilities already incurred by individuals generally stay with them. The sooner it is done, the less there is to repair.

Our experience

Neo Legal's lawyers have been in the digital asset space since 2015. Over that time we have guided projects from zero to billions of dollars in market capitalisation, and the first conversation with almost every one of them was the same: what entity issues the token, where, and how it is protected. We incorporate BVI token issuers remotely and handle the legal work around them, from the constitution and token classification to the sale documents and exchange listing opinions, as one engagement. See our token issuance practice or start with incorporating your token issuer.

Frequently asked questions

Do I need a company to launch a token?

Legally you can deploy a token as an individual, but you should not. Without a company the founders are treated as the issuer and are personally liable to purchasers, counterparties, regulators and tax authorities, and founders acting together can be treated as a general partnership with joint and several, unlimited liability.

Do I need a company for a meme coin?

Yes. A meme coin raises the same issuer questions as any other token, and meme coins attract more rug-pull allegations and holder complaints than most categories. A simple company to own the deployment, the liquidity, the brand and the community channels is the minimum.

Can a DAO be treated as a partnership?

Yes. US federal courts have allowed claims to proceed on the basis that a DAO and its participants can be a general partnership, in Sarcuni v bZx DAO (2023) and Samuels v Lido DAO (2024), and held in CFTC v Ooki DAO (2023) that a DAO could be liable as an unincorporated association. A company or foundation wrapper is the usual answer.

Does a company fully protect token founders from personal liability?

No. A company ring-fences the project's contracts, assets and debts, but it does not protect anyone from their own fraud or misstatements, directors still owe duties, and some securities laws reach the individuals who control an issuer. The company is the first step, alongside correct classification and proper sale documents.

Why is the BVI the best place to incorporate a token issuer?

Issuing your own token does not require VASP registration in the BVI, because the VASP Act 2022 regulates services carried on for or on behalf of another person. A BVI company can be formed in days without travel, has no BVI corporate income tax, is governed by English-derived common law and is familiar to exchanges and investors.

Can I set up a company after I have already launched my token?

Yes, but it is a repair. The company can be formed and the code, brand, treasury and unsold supply transferred into it, but liabilities already incurred by the founders generally stay with them. The earlier it is done, the less exposure there is to unwind.

This article is general information on the position at the date shown and is not legal advice. Token classification and licensing turn on the specific facts of each project; speak to us before relying on it.