ToadKing
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ToadKing__
Representative
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- Apr 4, 2025
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CONGRESS OF THE
COMMONWEALTH OF REDMONT
The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:
PART I — PRELIMINARIES
1. Short Title and Enactment
(1) This Act may be cited as the 'LEA Hotfix 2: Electric Boogaloo Act.'
(2) This Act shall be enacted immediately upon its signage.
(3) This Act has been authored by Rep. ToadKing.
(4) This Act has been co-sponsored by Senator Omegabiebel.
(5) This Act amends the following acts:
(a) Legal Entity Act
(b) Redmont Civil Code Act
2. Reasons and Intent
(1) To resume the series of minor changes missed in the Drafting and Voting stages of the bill's life.
(2) To standardise the definitions and make them clearer.
PART II — AMENDMENTS
3. Amendments to Legal Entity Act(1) Section 3 of the Legal Entity Act shall be amended as follows:
"3 - Definitions
(1) For the purposes of this Act, the following definitions shall apply:
(1) “Outstanding shares” shall mean all shares not in the possession of that company.
(2) “Authorized shares” shall mean all shares authorized by the Certificate of Incorporation.
(3) The “formation instrument” shall be the instrument that forms the legal entity.
(4) For the purposes of this Act, a “person “shall mean a natural person or a legal entity.
(5) For the purposes of this Act, an “individual” shall mean a natural person.
(6) For the purposes of this Act, an “entity” shall mean a legal entity.
(7) “Winding up” shall mean the process of dissolving the company.
(8) The “registered name” of a legal entity shall be the name on the formation instrument.
(9) ”Shareholder” shall mean the holder of a share of a corporation.
(10) For the purposes of this Act, “member” shall mean the member of an LLC.
(11) For the purposes of this Act, “manager” shall mean the manager of an LLC.
(12) For the purposes of this Act, “class characteristic” shall mean the voting powers, full or limited, or without voting powers and in such designations, preferences and relative, participating, optional or special rights and qualifications, powers, conditions, obligations, limitations or restrictions of a class.
(13) A “resolution”, for purposes of this act, means a decision that is voted on.
(14) For the purposes of this Act, “filed in the Company Docket” shall mean posted as a post in the Company Docket thread corresponding to an entity.
(15) For the purposes of this Act, “registered shares” means the shares registered to a person in the Company Docket.
(16) For the purposes of this Act, “consolidated entity” means the new entity into which two (2) or more constituent entities are consolidated;
(17) For the purposes of this Act, “consolidation” means a procedure whereby any two (2) or more entities consolidate into a new entity incorporated by the consolidation;
(18) For the purposes of this Act, “constituent entity” means an existing entity that is participating in the merger or consolidation with one (1) or more other corporations;
(19) For the purposes of this Act, “agent” shall mean a person directly acting on behalf of the legal entity. This does not include legal representation or shareholders.
(a) Outstanding Shares. Means all shares not in possession of that company.
(b) Authorised Shares. Means all shares authorised by the Certificate of Incorporation.
(c) Formation Instrument. Means the instrument that forms the legal entity.
(d) Person. Means a natural person or a legal entity.
(e) Individual. Means a natural person.
(f) Entity. Means a legal entity.
(g) Winding Up. Means the process of dissolving the company.
(h) Registered Name. Means the name of a legal entity on the formation instrument.
(i) Shareholder. Means the holder of a share of a corporation.
(j) Member. Means the member of an LLC.
(k) Manager. Means the manager of an LLC.
(l) Characteristic. Means the voting powers, full or limited, or without voting powers and in such designations, preferences and relative, participating, optional or special rights and qualifications, powers, conditions, obligations, limitations or restrictions.
(m) Resolution. Means a decision that is voted on.
(n) Filed in the Company Docket. Means posted as a post in the Company Docket thread corresponding to an entity.
(o) Registered
(p) Consolidation. Means a procedure whereby any two (2) or more entities consolidate into a new entity incorporated by the consolidation.
(q) Consolidated Entity. Means the new entity into which two (2) or more constituent entities are consolidated.
(r) Constituent Entity. Means an existing entity that is participating in the merger or consolidation with one (1) or more other corporations.
(s) Agent. Means a person directly acting on behalf of the legal entity. This does not include legal representation or shareholders."
(2) All instances of em-dashes "—" and double hyphens "--", found at the end of any and all sections/subsections to denote the start of a list, shall be replaced with colons ":".
(3) Part I, Section 3 of the Legal Entity Act shall be amended as follows:
"3 - Receivership
(1) A legal entity in receivership shall be led by a receiver.
(2) A public government entity can only be placed in receivership on its financial affairs. Any receivership provision under this section shall be limited as such.
(3) A receiver shall have the power--
(a) of the directors, managers, officers, shareholders and members in a cumulative manner, and in case of an Incorporated Entity, without restriction of the formation instrument;
(b) to control all assets and liabilities;
(c) to suspend or restrict the voting powers of a shareholder or member;
(d) to suspend or restrict any direct or indirect control or voting power over the legal entity either through contracts, equity or debt instruments or any other instrument, even the control or voting power guaranteed by law;
(e) to suspend or restrict any control or power by a director, manager or officer;."
(4) Part III, Section 3(2) of the Legal Entity Act shall be amended as follows:
"(2) A director, manager, officer, agent, or employee shall have the rebuttable presumption of acting in a manner that is in the best interest of the Incorporated entity where they have a direct conflict of interest and has disclosed this conflict or this conflict is known to the relevant parties."
(5) Part III, Section 6(6) of the Legal Entity Act shall be amended as follows:
"(6) Unless otherwise provided by the formation instrument, Any shareholder, member, manager, or director may call for a resolution to be voted upon."
(6) Part III, Section 7 of the Legal Entity Act shall be amended as follows:
"7 - Access to information
(1) Unless otherwise provided by the formation instrument, each manager and each director shall have unrestricted and absolute access to information regarding the status of the business, financial condition of the Incorporated Entity and other information regarding the affairs of the corporation as is just and reasonable
(2) Unless otherwise provided by the formation instrument, shareholders and members shall have reasonable access to information regarding the status of the business, financial condition of the Incorporated Entity and other information regarding the affairs of the corporation as is just and reasonable
(a) The directors and officers of an incorporated entity shall have the right to keep confidential from shareholders and members, for such period of time as the director or officer deems reasonable, any information for which:
(i) the director, officer, or manager reasonably believes to be in the nature of trade secrets; or
(ii) the director, officer, or manager in good faith believes that the disclosure of such information is not in the best interest of the Incorporated Entity or could damage the Incorporated Entity or its business; or
(iii) the director, officer, or manager is required by law or by agreement with a third party to keep confidential."
(7) Part III, Section 9 of the Legal Entity Act shall be amended as follows:
"9 - Dissolution and winding up
(1) Unless otherwise defined by law or by the formation instrument:
(a) The dissolution process shall be started by the adoption of a resolution advising dissolution by the directors.
(b) Such resolution shall be posted in the company docket.
(c) In order to approve the dissolution, shareholders or members must vote with at least a simple majority in approval.
(d) Following a shareholder vote in approval of a dissolution resolution, the Incorporated Entity shall wind down its affairs and post a Certificate of Dissolution in its company docket.
(2) Dissolution must be approved by shareholder or member resolution
(3) The approval of a dissolution resolution must be posted on the company docket.
(4) A dissolution resolution may contain and set out the process of winding up; this shall be binding.
(5) The dissolution resolution shall not override the formation instrument or the bylaws.
(6) The winding up of an Incorporated Entity shall be publicly announced by the DOC in #government-announcements (or any successor channel) and shall request any contractual parties, shareholders, members, creditors, and other persons with an interest to contact the wound-up company. This announcement must contain the names of the directors."
(8) Part III, Section 10(6) of the Legal Entity Act shall be amended as follows:
"(6) In discharging their duties, a director, officer, manager, member, shareholder, employee, or other agent shall be fully protected in relying in good faith upon the records of the Incorporated Entity and upon such information, opinions, reports, or statements presented to the Incorporated Entity by any of the Incorporated Entity’s directors, officers, managers, employees, or by any other person as to matters the person reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Incorporated Entity."
(9) Part IV, Section 1(3) of the Legal Entity Act shall be amended as follows:
"(3) The Certificate of Incorporation may set forth:
(a) Any provision for the management of the business and for the conduct of the affairs of the Corporation;
(b) Any provision creating, defining, limiting and regulating the powers of the Corporation, the directors, the officers, the third parties, and the shareholders, or any class of the shareholders
(c) Provisions requiring the vote of a larger portion of the shares or of any class thereof, or of any other securities having voting power, or a larger number of the directors, than is required by this Act;
(d) A provision limiting the Corporation’s existence otherwise the Corporation shall have perpetual existence;
(e) A provision imposing personal liability for the Corporation on its shareholders to a specified extent and upon specified conditions;
(f) A provision setting the conditions for forfeit of the shares by shareholders or by the corporation from the shareholders;
(g) A provision setting the share class characteristics of the share classes, directors, officers, employees and other agents; and/or
(h) A provision setting the first directors."
(10) Part V, Section 1(3) of the Legal Entity Act shall be amended as follows:
"(3) The Certificate of Formation may set forth:
(a) Any provision for the management of the business and for the conduct of the affairs of the LLC;
(b) Any provision creating, defining, limiting and regulating the powers of the LLC, the managers, the third parties, and the members, or any class of the managers or members
(c) Provisions requiring the vote of a larger portion of the members or of any class thereof, or a larger number of the managers or of any class thereof, than is required by this Act;
(d) A provision limiting the Corporation’s existence otherwise the Corporation shall have perpetual existence;
(e) A provision imposing personal liability for the LLC on its members to a specified extent and upon specified conditions;
(f) A provision setting the conditions for admission and removal of members, managers or any class thereof;
(g) A provision setting the member class or manager class, employee or other agent characteristics; and
(h) A provision setting the first members or managers."
(11) Part V, Section 3 of the Legal Entity Act shall be amended as follows:
"3 - Membership
(1) Unless otherwise provided in the Certificate of Formation, members shall be admitted by unanimous vote.
(2) Members with different characteristics shall be different member classes."
(12) Part V, Section 5 of the Legal Entity Act shall be amended as follows:
"5 - Managers
(1) Unless otherwise provided in the Certificate of Formation, a person may be designated manager by resolution of members.
(2) Managers shall be regarded as directors.
(3) Managers with different characteristics shall be different manager classes."
4. Amendments to RCCA
(1) PART X, Section 7 of the Redmont Civil Code Act shall be amended as follows:
"7. Breach of Legal Entity Act
Violation Type: Administrative
Remedy: Up to 250 Civil Penalty Units; Compliance order; Company dissolution
A person commits a violation if the person:
(a) fails to comply with any part of the Legal Entity Act after receiving a warning from the DOC 24 hours before the person was assessed this administrative violation.
(a) received a warning from the DOC in relation to a breach of the Legal Entity Act; and
(b) after 24 hours have elapsed, the person fails to comply with the warning.
This violation shall not occur where:
(b) The person is taking reasonable steps to remedy their compliance.
Relevant Law: Act of Congress - Legal Entity Act"
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