Legal Structure of Sponsorship Tokens
Why Legal Structure Matters
A sponsorship token without legal backing is just a digital receipt. Boss Tag wraps every deal in a Series LLC that gives token holders enforceable rights. Your revenue share is a legal obligation of the issuing entity, not just a number in a smart contract.
The Series LLC Model
Series LLCs (Wyoming) allow multiple deals under a single umbrella, each as a separate series with its own assets, liabilities, and members. Deal A's problems cannot affect Deal B's holders. The deal creator is the managing member; token holders are passive members with economic and governance rights.
Securities Compliance
Sponsorship tokens are likely securities under the Howey Test. Boss Tag uses Regulation D 506(c) initially (accredited investors, KYC-verified) with plans for Regulation CF (open to all). All compliance is enforced at the token level through ERC-3643 — non-verified wallets cannot hold the tokens.
Revenue Distribution Enforcement
The smart contract is the primary enforcement mechanism. The operating agreement is the secondary mechanism — if the deal creator fails to distribute, token holders can invoke the dispute resolution clause. Dual enforcement (technical + legal) is stronger than either alone.
What Happens When a Deal Ends
At the defined end date, the deal enters settlement. Final revenue is tallied, last distribution is made, and the creator files a closing report. Tokens become fully transferable with no lock-up. The deal can be renewed with updated terms (requiring a token holder vote if financial terms change), or the LLC can be dissolved and remaining assets distributed.
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