The Foundation

The importance to have a legal entity
Having a legal entity that represents the DAO in the "real world" is valuable for a number of reasons:
It provides limited liability to DAO members for the actions of the DAO. Without a legal entity, members may be individually held liable for anything the DAO as a whole does.
It is capable of complying with taxation requirements - without a legal entity, DAO members may be held liable for a proportion of the DAO's income, even if they are not able to access these funds.
It is capable of entering into contracts with other "real world" entities, holding assets (including IP rights), and so forth.
For a more detailed discussion on this topic, see this excellent blog post.
Foundation as a Solution
Like a typical company, the foundation company has legal personality to enter into contracts and undertake actions with third parties. It is also managed by directors who carry on the business of the DAO. However, unlike a company, the foundation company can be structured without shareholders.
In essence, it can be ownerless – just like the DAO it represents. In place of shareholders, the foundation company can be supervised by a supervisor (or even multiple supervisors if desired).
A supervisor has no ownership or economic entitlement over the foundation company but simply acts as a steward, ensuring that the directors of the foundation company observe their obligations to the DAO in the terms of the foundation company's governing documents. Therefore, with no shareholders, all of the officers from the foundation company simply have the objectives of the DAO as their priority – similar to trustees and enforcers carrying out the objectives of a trust.
For more information see this article and this complement.
The cobogoDAO Foundation
The cobogoDAO Foundation will be a Foundation Company Limited by Guarantee, incorporated in the Cayman Islands. Foundation companies are nonprofits; The cobogoDAO Foundation has no shareholders and cannot pay out dividends to its directors or members. For more details on how foundations work, see this article.
The Foundation will be incorporated in the future.
The content of this page was based on ENS Documentation.

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The importance to have a legal entity

Foundation as a Solution

The cobogoDAO Foundation