Standard Form LLC, Member Managed

[edwardcul1en]

Business Name LLC​

In-game Firm Name: BusinessName
Entity Form: Liability Company (LLC)

Purpose:
To engage in any lawful activity.

Form: Standard Form

Standard Form Elections​

• Manager-managed
• Admission by majority
• Distributions in proportion to interests
• Voting in proportion to interests
• Supervisory Board
• Fixed Term: Ending January 1 2027

This entity is licensed as a Class A: Commercial Bank

Positions​

Spoiler: Managers

In-game Name​	Discord Username​	Forum Username​	Title​
edwardcul1en​	edwardcul1en​	@edwardcul1en​	Manager​

Spoiler: Supervisory Board

In-game Name​	Discord Username​	Forum Username​	Title​
edwardcul1en​	edwardcul1en​	@edwardcul1en​	Chairperson​

Membership Register(s)​

Spoiler: General Members

In-game Name​	Discord Username​	Forum Username​	Membership Interest​
edwardcul1en​	edwardcul1en​	@edwardcul1en​	100%​

Ongoing Actions​

Court Cases​

• None

Enforcement Actions​

• None

Legal Correspondence Designee: None

 

[edwardcul1en]

View attachment 60556
Company Register
Formation and Standard Forms
Written by Commerce Secretary Planke32​

INFORMATION
The Redmont Corporate Entities Act replaces the Legal Entity Act and changes how a business is formed. You no longer apply to the Department for permission to incorporate. You form the entity yourself by posting your formation filing in a new thread in the Company Register.

The Department may reject a filing within 14 days for a clear and justifiable reason related to the filing, stating the reason and the steps needed to cure it. If it does not, your entity is formed and its formation is deemed approved. (s.20)


WHAT YOU NO LONGER HAVE TO WRITE
Under the previous policy a corporation had to draft 13 separate provisions and 7 for an LLC. Almost all of them are now supplied by the Act, and several are stronger than what most agreements contained:

(1) Pre-emption rights on new share issues. s.52
(2) Class voting on changes that adversely affect a class. s.21(4)
(3) 50% quorum, with express abstentions counted. s.24(1)
(4) Drag-along (squeeze-out) and tag-along (sell-out) at 90%. s.54, s.55
(5) Distributions limited to distributable reserves. s.47
(6) Directors' duties, wrongful trading, creditor protection. Parts XI, XIX
(7) Dissolution and winding up. Part XVIII

These apply whether or not you write them down, and most of them cannot be written out. s.4(7)

THE STANDARD FORM
The Department publishes a Standard Form for each of the seven incorporated entity types. Forming on the Standard Form takes a single post. You state the required particulars, say that you adopt the Standard Form, and list any elections you make. You need no bylaws, no certificate document and no further formation filing. s.19

Two benefits worth knowing before you choose:

(1) A Standard Form entity with total assets under $100,000 is exempt by statute from any future Departmental rule creating a filing obligation, periodic return or minimum threshold, unless it is a licensed financial institution, Public Company or foundation. s.76(3)(b)
(2) A Standard Form corporation under $100,000 in assets is also exempt from the serious-loss-of-capital duty. s.49(3)

A bespoke instrument forfeits both. You may move between the Standard Form and a bespoke instrument at any time by amendment. s.19(4)

EVERY FILING MUST STATE
(1) the registered name of the entity;
(2) its form;
(3) the name of each incorporator;
(4) the name of the associated in-game company;
(5) its purpose, "to engage in any lawful activity" is sufficient, except for a foundation or a non-profit.

LIMITED LIABILITY COMPANY (LLC)
(a) Also state: the initial members and their interests.
(b) Default rules you receive:
(i) members are admitted by unanimous vote of existing members;
(ii) each member has one vote and an equal share of distributions;
(iii) the LLC is managed by its members;
(iv) resolutions stay open 48 hours and pass on a simple majority of the voting power cast, with a 50% quorum;
(v) a written consent by those holding the necessary voting power may replace a vote entirely;
(vi) the entity exists perpetually.
(c) You may elect: manager-managed with named managers; admission by majority; distributions or voting in proportion to interests; a Supervisory Board; a fixed term.
(d) Series liability separation is not available on the Standard Form. It requires a bespoke Certificate of Formation. s.42

CORPORATION
(a) Also state: the number of authorised shares, and an initial issue of at least one share. s.43(2)(b) and s.44(1)
(b) Default rules you receive:
(i) a single class of ordinary shares, one vote each, no par value, in the number you state;
(ii) directors elected and removed by resolution of shareholders, with no limit on the number of seats;
(iii) the incorporators serve as directors until directors are appointed;
(iv) officers appointed and removed at the board's pleasure, and vacancies filled by the remaining directors;
(v) share certificates permitted, as in-game written books;
(vi) pre-emption rights on any issue for cash, open 48 hours;
(vii) squeeze-out and sell-out rights at 90% of a class;
(viii) distributions only out of distributable reserves, and only if the corporation stays solvent.
(c) You may elect: named first directors; no share certificates; pre-emption disapplied generally; a Supervisory Board; a fixed term; a higher voting threshold than the Act requires.
(d) Any other capital structure, multiple classes, par value and preference shares, requires a bespoke Certificate.

LIMITED PARTNERSHIP
(a) Also state: at least one general partner and at least one limited partner, with each partner's contribution. s.36(1) and s.36(3)
(b) Default rules you receive:
(i) the general partner manages the partnership and is liable for its obligations without limit;
(ii) a limited partner is liable only up to what they contributed or agreed to contribute;
(iii) a limited partner does not lose that protection by voting on a reserved matter, advising the general partner, or acting as an agent under a written mandate;
(iv) a partnership interest may not be transferred without the consent of the other partners.
(c) profits, losses and voting power in proportion to contributions; ordinary course decisions by the general partner; everything else by a majority of all voting power.
(d) A limited partner who holds themselves out as a general partner is liable as one. s.36(5)

LIMITED LIABILITY PARTNERSHIP
(a) Also state: all partners.
(b) Default rules you receive:
(i) no partner is liable for the obligations of the partnership, or for the acts of another partner, solely by being a partner;
(ii) each partner remains liable for their own wrongful acts and anything they voluntarily assume.
(c) equal profit shares and equal votes; every partner may bind the partnership in the ordinary course; ordinary-course decisions by majority, all else by unanimity; new partners admitted unanimously.
(d) You may elect: stated profit shares or voting power; designated managing partners; admission by majority; free transfer.

COOPERATIVE
(a) Also state: the initial members.
(b) Default rules you receive:
(i) one member, one vote, regardless of contribution size;
(ii) the governing body is elected democratically from among the members;
(iii) surplus is retained or reinvested;
(iv) member-managed LLC rules otherwise apply. s.56(5)
(c) You may elect: board size, term and election cycle; membership qualifications; surplus distributed to members in proportion to their use of the cooperative rather than their capital.
(d) No member or related group may hold more than 40% of total voting power, however drafted. Weighted voting is therefore not offered on the Standard Form.
(e) A Class B Credit Union must be formed as a cooperative or a non-profit.

FOUNDATION
(a) A foundation has no members, no shares and no owners. Its assets are bound to its purpose and its founder keeps no claim to them.
(b) Also state, all mandatory:
(i) the purpose, with enough particularity that a court can decide whether an act furthers it, "any lawful activity" is NOT sufficient here;
(ii) the initial endowment, which may be nil;
(iii) the first directors and how successors are appointed and removed;
(iv) where the net assets go on dissolution;
(v) how the purpose may be amended. If you say nothing, the purpose can never be amended except by the Federal Court. s.58(3) and s.58(4)
(c) Default rules you receive: the board governs and each director has one vote; no distribution may be made to the founder, a director or a controller beyond reasonable compensation; a foundation may not convert into any other form.
(d) WARNING. If you name yourself a beneficiary, or keep the power to appoint or remove directors, or the power to amend the purpose or direct dissolution, the law presumes you still control the assets and a creditor may enforce against them as if they were yours. s.60(2)–(3) The presumption can be rebutted, but the burden is on you.
(e) A foundation never qualifies for the small-entity exemption in. s.76(3)(b)

GENERAL PARTNERSHIP
(a) A general partnership exists automatically once two or more people carry on a business in common with a view to profit, whether or not they meant to form one. Its partners are jointly and severally liable without limit.
(b) It does not need to file anything. If it does file a Partnership Agreement it becomes an incorporated entity for the Company Register and governance rules only. Unlimited liability continues.
(c) Default rules: equal profit shares and equal votes; any partner may bind the partnership in the ordinary course; ordinary course decisions by majority and all else by unanimity; a partner may withdraw on notice without dissolving the partnership.

NON-PROFIT
(a) A non-profit is not a standalone form. It is a member-based LLC, a cooperative or a foundation that states a clear purpose and holds itself out as a non-profit. Complete that base form in full, then add the non-profit block.
(b) Also state: the base form; a clear purpose; and where any surplus goes on a voluntary winding up; the government, another registered non-profit, or returned to donors up to what each gave.
(c) Rules that apply at all times: revenue is not distributed to members; compensation is reasonable; transactions with members and related parties are at arm's length.
(d) A tax exemption is a separate grant by the Department, not automatic. It carries record-keeping and reporting duties and may be withdrawn for misconduct or non-compliance. s.61(3)–(4)

SOLE PROPRIETORSHIP
A sole proprietorship is an in-game company with no incorporated entity behind it. It needs no formation instrument, no Company Register record and no filings. It has no liability or bankruptcy protection separate from its owner. Do not file for one.

IF YOU DO NOT WANT THE STANDARD FORM
You are not required to use it. You may write your own formation instrument and file that instead. The process is exactly the same: one post, in a new thread in the Company Register.

(1) State the same required particulars listed above.
(2) Set your instrument out in full in the post, or attach it as a PDF through the forum's own attachment system. A link, a Google Doc link, or a document held anywhere off this forum IS NOT A FILING. You will be treated as not having filed at all. s.15(7)
(3) If you attach rather than set out in full, the post must also state in text what the document is, when it was adopted, and what provisions it creates, alters or removes. s.15(9)
(4) An attachment can never be replaced or removed. If you need to change something, file an amendment. If the attachment becomes unavailable, you must file the document afresh within 7 days of being notified. s.15(8)
(5) A corporation filing a bespoke Certificate must state, for every class of share, the class name, the number authorised and the par value. The single-class default applies only on the Standard Form. s.43(2) and s.43(3)

YOU CAN CHANGE YOUR MIND
A Standard Form entity may adopt a bespoke instrument at any time, and a bespoke entity may adopt the Standard Form, by ordinary amendment. s.19(4) Our advice to most filers is to start on the Standard Form and write your own only when you need something the Act does not already give you.

BYLAWS
There is no requirement to adopt bylaws. s.18(6) If your instrument delegates a subject to bylaws or an internal agreement, this Act's references to the formation instrument include that document, and the formation instrument prevails in any conflict. s.18(4)

AFTER YOU FILE
(1) Keep your Entity Profile (the first post of your thread) current. This is your duty, not the Department's. s.17(1)
(2) File amendments, appointments and resignations, share and membership transfers, and anything Part XI or Part XIX requires. s.16(1)
(3) Documents must be posted in the thread or attached as PDFs. A link or an external document is not a filing and the Department will treat you as not having filed. s.15(7)
(4) A person dealing with you may rely on your Entity Profile, and you cannot later assert a fact it contradicts. s.17(4) An out-of-date Profile is a liability, not an oversight.

EXISTING ENTITIES
Every entity formed under the Legal Entity Act continues to exist as the corresponding form. Nothing needs to be refiled, restated or reformatted, except that every incorporated entity must post a compliant Entity Profile within 30 days of the Act's enactment (s.85).