Bill: Draft LEA Hotfix: Episode III – Revenge of the Sith Act

[ToadKing]

CONGRESS OF THE
COMMONWEALTH OF REDMONT
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A BILL TO

FIX THE LEGAL ENTITY ACT A THIRD TIME

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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:

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PART I — PRELIMINARIES​

1. Short Title and Enactment

(1) This Act may be cited as the 'LEA Hotfix: Episode III – Revenge of the Sith Act.'

(2) This Act shall be enacted immediately upon its signage.

(3) This Act has been authored by Rep. ToadKing and Omegabiebel.

(4) This Act has been co-sponsored by Rep. IgnitedTnT.

(5) This Act amends the following acts:

(a) Legal Entity Act

2. Reasons and Intent

(1) To further resume the series of changes missed in the Drafting and Voting stages of the bill's life.

(2) To move Mergers/Consolidations to Part III, so LLCs and Corporations have common merge provisions.

PART II — AMENDMENTS​

3. Amendments
(1) Part III, Section 9(7)(d) of the Legal Entity Act shall be amended as follows:

"(7) winding up shall consist of:

(a) ending all contracts;

(b) paying off all creditors and debts;

(c) finishing all lawsuits;

(d) liquidating all assets or distributing all assets according to the dissolution resolution and the formation instrument, by default: equally among the shareholders (in proportion to their shares) or members.

(i) in the case of a corporation, equally among the shareholders in proportion to their shares; or

(ii) in the case of an LLC, equally among the members in proportion to their membership interests as defined in the formation instrument, or if not defined, equally among all members."

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(2) Part III of the Legal Entity Act shall be amended by adding the following new section below Section 8:

"9 - Merger or Consolidation

(1) Two or more Incorporated Entities may merge or consolidate as provided in this section.

(2) A Certificate of Merger or Consolidation shall set forth:

(a) the name of each constituent entity, and if the name of any of them has been changed, the name under which it was formed; and the name of the surviving entity, or the name, or the method of determining it, of the consolidated entity;

(b) the terms and conditions of the proposed merger or consolidation, including the manner and basis of converting the shares or membership interests of each constituent entity into shares, bonds, membership interests or other securities of the surviving or consolidated entity, or the cash or other consideration to be paid or delivered in exchange for shares or membership interests of each constituent entity, or a combination thereof;

(c) in case of merger, a statement of any amendment to the formation instrument of the surviving entity to be effected by such merger;

(d) in case of consolidation, the documents to be filed for the formation of the consolidated entity; and

(e) such other provisions with respect to the merger or consolidation as deemed necessary or desirable.

(3) When such merger or consolidation has been effected:

(a) a surviving or consolidated entity shall thereafter, consistent with its formation instrument as altered or established by the plan of merger or consolidation, possess all the rights, privileges, immunities, powers, and purposes of each constituent entity;

(b) all the property, real and personal, including subscriptions to shares or membership interests, causes of action and every other asset of each constituent entity shall vest in such surviving or consolidated entity without further act or deed;

(c) the surviving or consolidated entity shall assume and be liable for all the liabilities, obligations, and penalties of each constituent entity;

(d) no liability or obligation due or to become due, claim or demand for any cause existing against any such constituent entity, nor any shareholder, member, officer, director, or manager thereof, shall be released or impaired by such merger or consolidation;

(e) no legal action then pending by or against any such constituent entity, or any shareholder, member, officer, director, or manager thereof, shall be abated nor be discontinued by such merger or consolidation, but may be enforced, prosecuted, settled, or compromised as if such merger or consolidation had not occurred, or such surviving or consolidated entity may be substituted in place of any constituent entity;

(f) in the case of a merger, the formation instrument of the surviving entity shall be automatically amended to the extent, if any, that changes are set forth in the plan of merger;

(g) in the case of a consolidation, the statements set forth in the Certificate of Consolidation and which are required or permitted to be set forth in the formation instrument of an Incorporated Entity formed under this Act, shall be its formation instrument; and

(h) unless otherwise provided in the Certificate of Merger or Consolidation, a constituent entity which is not the surviving entity or the consolidated entity ceases to exist and is dissolved.

(4) A Certificate of Merger or Consolidation shall be filed in the Company Docket of each constituent entity to effect such merger or consolidation.

(5) The Certificate of Merger or Consolidation shall come into effect upon signature of the DOC Secretary or their delegate upon successful verification that the Certificate is lawful.

910 - Dissolution and winding up"

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(3) Part IV of the Legal Entity Act shall be amended as follows:

"9 - Merger or consolidation of a corporation

(1) Two or more corporations may merge or consolidate as provided in this section.

(2) A Certificate of Merger or Consolidation shall set forth:

(a) the name of each constituent corporation, and if the name of any of them has been changed, the name under which it was incorporated; and the name of the surviving corporation, or the name, or the method of determining it, of the consolidated corporation;

(b) the terms and conditions of the proposed merger or consolidation, including the manner and basis of converting the shares of each constituent corporation into shares, bonds or other securities of the surviving or consolidated corporation, or the cash or other consideration to be paid or delivered in exchange for shares of each constituent corporation, or a combination thereof;

(c) in case of merger, a statement of any amendment in the Certificate of Incorporation of the surviving corporation to be effected by such merger;

(d) in case of consolidation, the documents to be filed for the formation of the consolidated corporation; and

(e) such other provisions with respect to the merger or consolidation as deemed necessary or desirable.

(3) When such merger or consolidation has been effected:

(a) a surviving or consolidated corporation shall thereafter, consistent with its Certificate of Incorporation as altered or established by the plan of merger or consolidation, possess all the rights, privileges, immunities, powers, and purposes of each constituent corporation;

(b) all the property, real and personal, including subscriptions to shares, causes of action and every other asset of each constituent corporation shall vest in such surviving or consolidated corporation without further act or deed;

(c) the surviving or consolidated corporation shall assume and be liable for all the liabilities, obligations, and penalties of each constituent corporation;

(d) no liability or obligation due or to become due, claim or demand for any cause existing against any such constituent corporation, nor any shareholder, officer, or director thereof, shall be released or impaired by such merger or consolidation.

(e) no legal action then pending by or against any such constituent corporation, or any shareholder, officer or director thereof, shall be abated nor be discontinued by such merger or consolidation, but may be enforced, prosecuted, settled, or compromised as if such merger or consolidation had not occurred, or such surviving or consolidated corporation may be substituted in place of any constituent corporation;

(f) in the case of a merger, the Certificate of Incorporation of the surviving corporation shall be automatically amended to the extent, if any, that changes in its Certificate of Incorporation are set forth in the plan of merger;

(g) in the case of a consolidation, the statements set forth in the Certificate of Consolidation and which are required or permitted to be set forth in the Certificate of Incorporation of a corporation incorporated under this Act, shall be its Certificate of Incorporation; and

(h) unless otherwise provided in the Certificate of Merger or Consolidation, a constituent corporation which is not the surviving corporation or the consolidated corporation, ceases to exist and is dissolved.

(4) A Certificate of Merger or Consolidation shall be filed in the Company Docket of each constituent corporation to effect such merger or consolidation.

(5) The Certificate of Merger or Consolidation shall go in effect upon signature of the DOC secretary or their delegate upon successful verification the Certificate is lawful."

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(4) Part V, Section 2 of the Legal Entity Act shall be amended as follows:

"(2) In the event that the LLC’s name has been changed, then no legal action which is brought by or against the corporation LLC under its former name shall be abated for that reason.

(3) Any amendment to the Certificate of Incorporation Formation increasing personal liability for the LLC on its members shall need notice to be posted in the Company Docket and notice to be given to the affected members. Each member must explicitly accept the personal liability increase, otherwise it is suspended for those who did not accept.

(4) Unless otherwise provided by the Certificate of Formation, amendments to the Certificate of Formation may be adopted by a shareholder member resolution"

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(5) Part V, Section 1(d) of the Legal Entity Act shall be amended as follows:

"(d) A provision limiting the Corporation’s LLC's existence, otherwise the Corporation LLC shall have perpetual existence;"

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(7) Part VII, Section 2(2)(b) of the Legal Entity Act shall be amended as follows:

"(b) There must be 5 days notice given to the shareholders or members through at any of the following if applicable:"