# Tornado Fund Organization
# How is Tornado Fund structured?
Tornado Fund is organized as a Delaware limited liability company.
The rights and obligations of Tornado Fund members are set forth in an operating agreement (which will be provided when you are verified to contribute to Tornado Fund) and are supplemented by the Delaware Limited Liability Company Act. YOU SHOULD RETAIN YOUR OWN COUNSEL FOR PURPOSES OF EVALUATING WHETHER TO JOIN TORNADO FUND AS A MEMBER.
At its core, Tornado Fund is member-managed and relies on a DApp and related smart contracts to facilitate investments into the Software Company.
Unlike The DAO or other DAOs, which are arguably implied partnership that provided members with limited legal protection, Tornado Fund's operating agreement expressly limits the members' liability and limits any fiduciary obligations amongst members, in each case, to the extent permitted by applicable law.
Tornado Fund will rely on a service provider (initially, OpenLaw the project that put together The LAO to facilitate various administrative functions on behalf of the members, including preparing and sending annual K-1 tax forms, updating and maintaining the DApp, validating information related to projects selected for investment, and handling other interactions that may come up during the lifetime of Tornado Fund (e.g., receiving the proceeds from the sale of securities in fiat and converting them to a digital asset for distribution to members). For these services, the service provider will receive a fee, pursuant to a schedule outlined here.
Tornado Fund's operating agreement was prepared by OpenLaw's outside counsel.
# Will members enjoy limited liability?
As set forth in the operating agreement, and except as otherwise provided under Delaware law, no member (or former member) of Tornado Fund will be liable for the obligations of Tornado Fund for any amounts in excess of the amount of the member's contributions to Tornado Fund, plus:
the member's share of the undistributed profits of Tornado Fund, if any; and
any amounts distributed by Tornado Fund to such member.
# What are the fiduciary obligations between members?
To the fullest extent permitted by applicable law, members shall not have any fiduciary duty to Tornado Fund or any other member. Under the operating agreement, members agree to interact in good faith and to engage in fair dealing.
# Can members make separate investments in or provide services to projects that receive investments from Tornado Fund?
# Can members vary the operating agreement or the ways in which Tornado Fund operates?
The terms and provisions of the operating agreement may be amended if 50% or more of Tornado Fund members, or their delegates, vote to approve the amendment. Voting will be based on the number of LAO Units held by the members at the time of the vote.
# What are the tax issues with Tornado Fund?
Each member of Tornado Fund must rely on the member's own tax and legal representatives as to the tax consequences of joining Tornado Fund or making investments through Tornado Fund.