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Sponsor: Multi Man, MP
Type: Act of Parliament
Preamble: This Act establishes rules for businesses, companies, consumer protection, and the control and winding up of businesses.
1. Short Title and Enactment
(a) This Act may be cited as the "Business Act."
(b) This Act is enacted when each of the following bills has received Royal Assent: the "Business Act," the "Financial Services Act," the "Azalea Banking and Solvency Act," the Parliamentary Norms and Procedures Act, and the Public Utility Empowerment Act.
2. Private Enterprises
(a) An individual or legal entity may own any number of private enterprises. A private enterprise must have a genuine, lawful purpose.
(b) A private enterprise with one owner is a sole proprietorship. It is its owner's business, not a separate legal person. Its owner holds its rights and owes its debts.
(c) Two or more persons may jointly own a private enterprise. Unless it is registered as a limited partnership under section 33, its owners are general partners, whether or not they register their partnership. A partnership is a separate legal person and may own property, contract, sue, and be sued in its own name.
(d) An ownership interest in a private enterprise must not be publicly traded. The Ministry of Economic Affairs (MEA) may order a person to stop a violation of this subsection and seek Court enforcement of the order.
(e) "BoA" means the Bank of Azalea. "Court" means the District Court.
3. General Partnerships
(a) Partners share profits, losses, and the ultimate burden of business debts equally unless they agree otherwise in writing. The writing may consist of a document or saved messages showing each partner's agreement.
(b) Partners may agree to unequal shares, but each partner's share of profits must match that partner's share of losses and the ultimate burden of business debts. If an agreement assigns a different burden, the burden follows the profit share.
(c) A benefit that is in substance a distribution of profit counts toward the partner's profit share, including a benefit provided through a below-value transfer or a payment to an associate. Reasonable pay for work and reimbursement of actual expenses are permitted.
(d) The partnership owes its business debts. Each partner is liable for the whole of a business debt incurred while that person is a partner. A partnership's criminal fine, including a fine converted from jail time, shall be considered a kind of business debt, but a partnership's conviction does not itself convict a partner. A partner who pays more than their share may recover the excess from the other partners according to their shares, including through civil action.
(e) A new partner is not liable for an earlier business debt unless they agree to assume it. A partner's departure does not release them from a debt incurred while they were a partner, unless the creditor agrees to release them.
(f) A departing partner is liable for a later business debt to an existing creditor who reasonably relied on the partner's continued membership and had not been notified or otherwise learned of the departure.
(g) A partner may bind the partnership and its partners in a transaction in the ordinary course of the business unless the other party knows the partner lacks authority. An unusual transaction requires actual authority unless the partnership is bound under section 3(h) of the Modern Contracts Act.
(h) A majority of partners by headcount may decide ordinary management matters unless all partners agree otherwise. Admitting a new partner or selling substantially all business assets requires the agreement of all partners.
(j) Voluntary winding up requires the agreement of all partners unless they have previously agreed on another process. The Court may resolve a dispute.
(k) Subsections (b) and (c) apply to profits and losses arising after enactment, including under an existing partnership agreement. Earlier allocations and existing creditors' rights remain governed by the law and agreements that applied when they arose.
(l) When a partnership gains legal identity, a partner's interest in property used solely for the partnership transfers to it. A partner's interest in property used for both partnership and personal purposes transfers only if the owner agrees. A transfer is subject to applicable law and the rights of others, including lienholders.
(m) When an existing partnership gains legal identity, the partnership also owes its existing business debts. A person already liable for a debt remains liable unless the creditor agrees to release them.
(n) A partnership existing at enactment is a general partnership under this Act. It has separate legal identity without an application or incorporation fee. An existing legal identity continues.
(o) A plot subject to a lien registered under the Plot Liens Act does not transfer under subsection (l) unless every registered lienholder consents. The partnership gains legal identity even if the plot does not transfer. If consent is obtained afterward, the plot transfers when every lienholder consents, provided the owner and the partnership still agree to the transfer.
(p) When an existing partnership gains legal identity, its existing business contract rights and obligations transfer to it, subject to the contract's terms and applicable law. A person already responsible remains liable unless the other party agrees to release them.
(q) When a partnership winds up, its partners must follow the notice, late-claim, claim-review, and payment-order rules in section 25(b) through (f). References to the liquidator in those provisions apply to the partners or a person they appoint. Those rules do not prevent use or sale allowed by section 4(d).
(r) In winding up:
(s) If a contribution remains unpaid, winding up may be completed after available assets are distributed and the other winding-up requirements are met. An affected partner may recover their unpaid share of the shortfall from the owing partner, subject to creditors' rights and without double recovery.
(t) If a partnership asset is discovered after it ends, winding up must reopen to deal with the asset and consider valid unpaid claims under the applicable priorities. A known creditor who was not notified, or a creditor for whom the required public notice was not published, may ask the Court to reopen winding up, consider its claim, and correct an improper distribution.
(u) The partnership ends when its winding up is complete after claims and available assets are dealt with. A partner's liability for an unpaid debt is not discharged by the partnership ending.
4. Departure from a Partnership
(a) A partner may leave by notifying the other partners. The partnership agreement may require notice or provide remedies for breaking an agreed commitment.
(b) The remaining owners may continue the business and settle the departing partner's interest. If at least two partners remain, they may continue the partnership. If only one remains, the business shall continue as that owner's sole proprietorship, and the partnership shall continue only to wind up, including performing or settling its remaining obligations.
(c) If one partner remains, the partnership retains assets reasonably needed to settle its obligations. Its other assets pass to the sole owner, subject to accounting for the departing partner's interest under this section, section 3(q), and applicable property and lien rules. A retained asset passes to the sole owner when no longer needed for those obligations, subject to the same requirements.
(d) Before transfer, the sole owner may use or sell assets in the ordinary course of the continuing business if creditors' rights are respected and proceeds needed for partnership obligations remain available to the partnership. Proceeds attributable to partnership assets must not be distributed in winding up before section 3(q) permits it.
(e) The partners may agree on the value of the departing partner's interest. If they do not agree, its fair value is determined as of departure, taking the business's assets and liabilities into account. The Court may resolve a dispute over value.
(f) If the settlement shows that the continuing owners owe an amount to the departing partner, they must pay it within 30 days after the value is agreed or finally determined, unless the partners agree otherwise.
(g) If the settlement shows that the departing partner owes the continuing owners a shortfall, the other partners may recover it once the amount is agreed or finally determined. Later payments toward the same debt must be credited to prevent double recovery.
(h) Unless the remaining partners agree otherwise, they share future profits and losses in the same proportions as their shares relative to one another before the departure.
(j) If one partner remains, future rights and obligations under the partnership's existing business contracts transfer to the sole owner, subject to the contracts' terms and applicable law. The partnership and any other person already liable remain responsible for earlier debts unless the creditor agrees to release them.
(k) During winding up, a partnership plot subject to a registered lien must not transfer to the sole owner unless every registered lienholder consents. If it does not pass, the partnership retains the plot subject to applicable law.
(l) A distribution to the departing partner on account of their interest is credited against the amount due for that interest under subsection (f). After the continuing owner pays any amount due for the interest, a later distribution attributable to that interest goes to the continuing owner up to the amount paid.
5. Purpose-Based Closure
(a) The MEA may order a private enterprise closed if it lacks a genuine, lawful purpose. Temporary inactivity or overlap with another business alone does not establish that the enterprise lacks such a purpose.
(b) Before ordering closure, the MEA must explain its concern and give the owner at least 72 hours to respond or establish a genuine, lawful purpose.
(c) Before that period ends, the MEA may temporarily stop the enterprise when evidence shows an immediate risk of serious harm. The action must be necessary to address that risk. The MEA must promptly notify the owner. The owner may seek Court review.
(d) A temporary stop expires after 72 hours unless the Court extends it or the MEA completes the ordinary closure process.
(e) The owner may ask the Court to review a closure order. A challenge does not pause the order unless the Court orders otherwise.
(f) Closure ends the enterprise's operation. It does not itself transfer the owner's property or discharge its debts.
(g) The MEA may close a bank under this section only as authorized by section 3 or 8 of the Financial Services Act or section 9 of the Azalea Banking and Solvency Act.
(h) The owner may apply to the MEA to reopen. The MEA must approve reopening if the enterprise has a genuine, lawful purpose.
6. Formation of a Limited Company
(a) One or more individuals or legal entities may form a limited company. The company becomes a separate legal person when the MEA approves its formation, except as provided in section 16(c).
(b) The founders must apply to the MEA and provide:
(c) A signed document or saved messages showing each founder's agreement satisfy subsection (b)(iii). Submitted bylaws bind the company. A rule of this Act that lets bylaws provide otherwise is a default rule. A default rule and applicable MEA additions apply unless the company's bylaws provide otherwise. The company must keep its notice contact current. An independent audit is not required solely for incorporation.
(d) The applicant must pay a $1,000 filing and registration fee with the application. The MEA must refuse a name identical or confusingly similar to an existing registered company's name. The applicant may choose another name.
(e) Within 72 hours after receiving an incomplete application, the MEA must identify the missing required items. Within seven days after an application is complete, including payment of the fee, the MEA must approve it if it meets the legal requirements or deny it with written reasons.
(f) If the MEA denies an application, it must retain $100 and refund $900. If the applicant withdraws before the MEA decides, the fee is not refunded. If a denial is overturned, the applicant must repay any refund before the incorporation or merger is completed, so that the total fee paid is $1,000.
(g) An applicant may appeal an incorporation denial under section 22.
(h) If the MEA does not decide a complete application within the period in subsection (e), the applicant may ask the Court to order the MEA to decide.
(j) A newly incorporated company that does not have an underlying in-game company must create one within 72 hours after incorporation. It must notify the MEA of the in-game company's identifying details within 72 hours after creation.
(k) If the company misses the deadline in subsection (j), the MEA may, after notice and an opportunity to comply, require it to comply and use enforcement powers expressly provided elsewhere by law. Missing the deadline does not itself dissolve the company.
(l) The MEA may use the initial balance sheet for its duties. Filing the balance sheet does not itself make it public.
(m) The MEA may publish supplementary default bylaws (MEA additions) that comply with this Act and do not change its default rules. A company must follow the MEA additions in effect at its incorporation, subject to subsection (c).
(n) In sections 6 through 26, "company" means a limited company under this Act.
(o) A nonprofit company is a limited company registered as a nonprofit. During operation, it may earn surplus but must use or retain it for its stated purpose and must not distribute operating profits to shareholders or members. It may pay reasonable compensation, reimburse expenses, repay genuine debts, and pay agreed interest on deposits. Its bylaws must state how remaining assets are distributed after debts and winding-up or liquidation costs are paid; this requirement does not apply to a credit union.
7. Incorporating an Existing Business
(a) A partnership must not incorporate unless all partners agree. They must agree on the initial share allocation and record it in the application.
(b) When an existing business incorporates, a business entity's assets used solely for that business and each owner's interest in assets used solely for it transfer to the company, subject to section 8. Property used for both business and personal purposes transfers only if the owner agrees.
(c) The company may agree to assume an existing business debt. The original debtor remains liable unless the creditor agrees to release them.
(d) A transfer is not delayed merely because it puts the company over its plot limit. The company must work with the Ministry of Urban Development under the Integrated Property Regulation Act to return to compliance.
8. Liened Plots and Transfer Records
(a) A plot subject to a lien registered under the Plot Liens Act does not transfer on incorporation unless every registered lienholder consents. The business may incorporate while the plot remains with its owner.
(b) If the plot does not transfer on incorporation, it transfers when every registered lienholder consents, provided the owner and the company still agree to the transfer.
(c) If a liened plot transfers to a partnership under section 3, to a sole owner under section 4, or to a company under section 7 or this section, the new owner must notify the MEA within seven days. The MEA must record the new owner in the lien registry while retaining the original entry and lien priority.
(d) If a plot transfers under section 3, 4, 7, or this section, the former and new owners must take the available steps to update the in-game plot records as soon as reasonably practicable.
9. Company Size
(a) A limited company's size is whichever of these amounts is greatest: its value, its gross assets, or its value handled.
(b) The company must use a reasonable, good-faith valuation based on available evidence to determine its value. Gross assets are measured without deducting debts.
(c) Value handled must be measured over the most recent 90 days. It is the sum of:
(d) The company must not count the same payment twice in calculating value handled.
10. Boards of Directors
(a) A company with a size of $500,000 or more must have a board of directors. A company that first reaches that size must establish its board within seven days.
(b) A company with a size of at least $100,000 but less than $500,000 must hold a shareholder vote at least every three months on whether to have a board. Each shareholder has one vote. More than half of the eligible shareholders must participate. A proposal passes if more votes are cast for it than against it. For a credit union, voting power under section 9 of the Financial Services Act applies instead of this headcount rule, and more than half of that voting power must participate.
(c) For this section and section 14, a company is majority-owned by an entity if one entity owns more than half of all its shares and holds more than half of its voting power. A company meeting both conditions may dispense with its board if holders of more than half of all voting power approve. Holders of more than half of all voting power may request that the company restore the board.
(d) If shareholders of a company described in subsection (b) vote to have a board, the company must have one within seven days and keep it until their next vote under that subsection. A vote under subsection (c) to operate without a board does not override that decision.
(e) The exception in subsection (c) ends when the entity no longer meets both conditions for majority ownership. If a board is required when the exception ends, or if shareholders request that the company restore the board under subsection (c), the company must establish it within seven days.
(f) A board must have at least three directors. Directors must be individuals.
(g) The Government Shop company's leadership and management follow section 7(b)(ii) of the Government Contracts Act 2.0 notwithstanding any inconsistent requirement in sections 10, 11, or 14 of this Act.
11. Directors
(a) When shareholders elect directors, they must do so according to the voting rights of their shares unless the bylaws provide another shareholder election method. Another group may select directors if the MEA specifically approves the arrangement.
(b) Unless the bylaws provide otherwise, the board must have five directors, elections must be held at a general meeting at least every three months, and the candidates receiving the most votes fill the available shareholder-elected seats.
(c) Unless the bylaws provide otherwise, each director has one vote, a majority of the directors in office must participate for the board to decide a matter, and a proposal passes if more votes are cast for it than against it.
(d) The remaining directors may appoint an individual to a vacant shareholder-elected seat until the next election, except when shareholders removed the director under subsection (h). A group approved to select a director fills a vacancy in its own seat.
(e) Before the board decides a matter, a director with a distinct financial interest in it must disclose the interest to the other directors and every shareholder and refrain from participating. The interest includes a financial interest held by any of the director's spouses, legal parents, or legal children, including adoptive parents and children, or by a business the director controls. An interest shared by shareholders generally in the company's value alone does not require recusal.
(f) If too few unconflicted directors remain for a quorum, shareholders may decide the matter. A conflicted director may vote shares they hold in the shareholder vote.
(g) The board oversees the company's operations, makes major decisions, and appoints and removes high-level executives. Unless the bylaws provide otherwise, it also sets executive compensation and long-term strategy.
(h) Shareholders may remove a shareholder-elected director without cause by a vote under section 13(g). The bylaws must not take away that right or require a higher threshold. The seat remains vacant until shareholders elect a replacement. They must complete a separate replacement vote within seven days after the removal; a general meeting is not required. A group approved to select a director may remove its own appointee.
(j) A director may inspect company records reasonably needed to perform their duties. This subsection does not itself require or authorize disclosure of customer financial data protected by section 21 of the Financial Services Act. Other applicable privacy and confidentiality law also applies.
(k) Before an executive makes a company decision in which they have a distinct financial interest described in subsection (e), the executive must disclose the interest to the board, if any, and every shareholder, and must not make that decision. An unconflicted decision-maker must decide the matter. If no unconflicted decision-maker is available, shareholders may decide it.
12. Liability and Company Claims
(a) A director or executive is liable to the company for a loss caused by that person's fraud, negligence, or unlawful conduct.
(b) A shareholder or officer is not personally liable for a company debt solely because of their shares or office.
(c) A shareholder may bring a claim on the company's behalf against a director or executive for a loss caused to the company. Before filing, the shareholder must ask the company to pursue the claim and allow 72 hours for a response. The request and waiting period are not required if delay risks serious harm or the relevant decision-makers are involved in the alleged wrongdoing.
(d) The claim proceeds under the ordinary civil process without a separate application for permission. The Court may allocate reasonable costs, considering the result and benefit to the company.
(e) A shareholder may bring a personal claim for a wrong that directly causes the shareholder loss. A claim for a loss belonging to the company may be pursued only on the company's behalf.
(f) A company must not pay a dividend if the payment would leave it unable to pay its debts as they come due. Before authorizing a dividend, the people authorizing it must reasonably assess the company's ability to pay those debts after payment, using available financial information.
(g) A recipient who knew or reasonably should have known a dividend violated subsection (f) must repay it to the company. Recovery under this subsection and under another claim for the same loss must not result in double recovery.
13. Shareholder Meetings and Votes
(a) A company must hold a general meeting at least every three months so shareholders may review performance, raise concerns, propose items for consideration, and conduct applicable elections. The company must notify every shareholder of the meeting and its start date at least seven days before the meeting. Holders of at least 90% of all voting power may agree to shorten that notice to at least 24 hours. Every shareholder may agree to a shorter period.
(b) A sole shareholder may satisfy the general-meeting requirement by recording the matters considered and decisions made.
(c) A company must notify every shareholder at least 48 hours before a shareholder vote opens and keep the vote open for at least 72 hours. Holders of at least 90% of all voting power may agree to shorten either period to at least 24 hours. Every person entitled to vote may agree to a shorter period.
(d) Meetings and votes may take place in person, in game, or through a suitable remote channel. Shareholders may decide a matter by written or saved-message resolution without a live meeting, subject to the applicable notice, voting-period, participation, and approval requirements. The company must keep a record of the result.
(e) Shareholders holding at least 25% of all issued shares held by shareholders other than the company, counting voting and nonvoting shares equally, may request a special meeting for a stated purpose. The company must hold it within 14 days after the request. The company may refuse a demonstrably abusive request; the requesting shareholders may challenge the refusal in Court.
(f) If a properly requested special meeting is not held within 14 days, the requesting shareholders may arrange it with the required notice and recover reasonable costs from the company.
(g) Unless this Act or the bylaws provide otherwise, more than half of all voting power must participate in a vote on a shareholder proposal, and the proposal passes if more votes are cast for it than against it.
(h) Unless the bylaws provide otherwise, a change to the bylaws requires approval under subsection (g). A change to a share class's rights requires the approval provided in section 18(b).
(j) A company's bylaws do not prevent an action expressly authorized by a Court order under section 9, 12, 13, or 14 of the Azalea Banking and Solvency Act. The approval otherwise required under subsection (h) or section 18(c) does not apply to a share issue or bylaw change expressly ordered by the Court under section 12 or 14 of that Act.
(k) The Court may validate or correct a company act or share issue affected by a procedural defect after directly affected persons have notice and an opportunity to respond. The Court must not waive a separate mandatory substantive requirement, including required lienholder consent.
(l) For a shareholder or share-class vote under this Act, an express abstention counts toward participation but not as a vote for or against. A proposal does not pass, and a required approval is not given, if no votes are cast for it.
14. Companies Without Boards
(a) A company without a board must elect its highest executive at least every three months. If the company is majority-owned by an entity under section 10(c), that entity elects the highest executive. Otherwise, shareholders elect the highest executive according to their voting rights unless the bylaws provide another method.
(b) More than half of all shareholders by headcount may vote to remove the highest executive. For a credit union, section 9(b) of the Financial Services Act applies instead of this headcount rule. The company must elect a replacement within seven days after a vacancy, with interim management under its bylaws.
(c) If shareholders remove the highest executive of a company majority-owned by an entity under section 10(c), that person must not be reelected to that role before the next scheduled election.
(d) A company without a board may elect a shareholder representative. In a company majority-owned by an entity under section 10(c), the shareholders other than the majority entity elect the representative, with one vote per shareholder. If the entity owns all the shares, it may elect the representative.
(e) The highest executive manages the company and appoints and removes the other executives. A shareholder representative assists operations, primarily by verifying the integrity of corporate operations. If there is a shareholder representative when the highest executive is removed between elections, the representative must arrange the election of a replacement.
15. Fundamental Transactions
(a) A sale of substantially all of a company's business assets, a merger, or an acquisition using substantially all of a company's assets requires approval by at least two-thirds of the votes cast, with more than half of all voting power participating, except as provided in subsection (f). If the company has a board, a sale of substantially all its business assets must be proposed by the board unless shareholders decide the matter under section 11(f). These approval and proposal requirements do not apply to a sale expressly ordered under section 13 of the Azalea Banking and Solvency Act.
(b) Each company participating in a merger must obtain its shareholders' approval, except as provided in subsection (f). The merger agreement may designate an existing company as the survivor or provide for a new company.
(c) When the merger takes effect, the resulting company takes the participating companies' debts and obligations. The disappearing companies' assets and contractual rights also pass to the resulting company at that time, subject to contractual restrictions and applicable law. An absorbed company ceases to exist when the merger takes effect.
(d) A merger must not take effect unless every registered lienholder on a plot owned by a disappearing company consents to its transfer. The lien and its priority continue.
(e) Participating companies must give known creditors written notice of the planned merger at least seven days before it takes effect.
(f) If a parent owns all shares of a subsidiary, the parent may approve a merger of the subsidiary into the parent by a vote of its board or, if it has no board, by its highest executive instead of a parent-shareholder vote, provided the parent survives and issues no new shares. The subsidiary must obtain approval from its sole shareholder. The parent must notify its shareholders of the planned merger at least seven days before it takes effect. The other requirements of this section and section 16 apply.
16. Merger Applications
(a) Applicants must file the merger agreement and evidence of each approval required under section 15 with the MEA. If the merger forms a new company, the application must include the applicable information required by section 6(b). The MEA must identify missing required items within seven days and decide a complete application within 14 days. An application is complete when the MEA receives the fee and all required items.
(b) The MEA must approve a merger that meets the legal requirements and give written reasons for a denial. A merger takes effect when the MEA approves it or, if later, when the other required approvals have been obtained, the applicable notice periods have expired, and any repayment required by section 6(f) has been made.
(c) The fee in the first sentence of section 6(d) and the refund rules in section 6(f) also apply to merger applications. The merger fee covers formation of a new company through the merger. The new company is incorporated and becomes a separate legal person when the merger takes effect.
(d) If the MEA does not decide a complete application within 14 days, an applicant may ask the Court to compel a decision. Delay does not itself approve the merger.
(e) An applicant may appeal a denial to the BoA under section 22.
17. Shareholders of an Absorbed Company
(a) Merger terms must provide fair value for the shares of each shareholder of a disappearing company, in cash, shares, or both. The Court may resolve a valuation dispute.
(b) A shareholder of an absorbed company who votes against the merger may require a cash buyout at the fair value of their shares. The company must notify eligible shareholders of the right and the deadline after the participating shareholders approve the merger. A shareholder may request the buyout within 14 days after receiving notice. The merger must not take effect before every eligible shareholder's 14-day request period ends.
(c) The shares shall be valued on the day the merger takes effect. The merger may proceed while their value is disputed. The resulting company must pay the buyout within 30 days after the value is agreed or finally determined.
18. Company Shares
(a) A company may issue more than one class of shares, including voting and nonvoting shares. Each voting share has one vote, and shares of the same class have the same rights. The company must record and honor each class's rights. At least one issued voting share must be held by a shareholder other than the company.
(b) A change to an existing class's rights requires approval by a majority of the general shareholder votes cast and by at least two-thirds of the votes cast by the affected class. More than half of all voting power must participate in the general vote, and holders of more than half of the affected class's shares must participate in the class vote. Each share of that class has one vote on the class vote, including a nonvoting share.
(c) An ordinary issue of shares requires approval by at least two-thirds of the votes cast, with more than half of all voting power participating. The company must receive fair value in money or agreed property or services. Fair value must be determined reasonably and in good faith using available evidence; the Court may review a dispute.
(d) The company must first offer new shares proportionately to existing holders of the same class on the same terms. For a new class, it must offer them to all existing shareholders in proportion to the number of existing shares each holds. The offer must state its price and terms and remain open for 14 days unless every eligible holder has accepted, declined, or waived the offer.
(e) Before selling shares offered under subsection (d) to outsiders at a lower price or on otherwise better terms, the company must first offer those terms to the eligible existing holders under subsection (d). Subsections (d) and (e) do not apply to shares issued under a Court order under section 12 or 14 of the Azalea Banking and Solvency Act, or to shares issued as consideration when a merger takes effect under its approved agreement.
(f) An entity must notify the MEA at least 24 hours before a transaction by which it would begin or cease to hold more than half of a limited company's shares, or begin or cease to hold more than half of its voting power.
(g) A company's own shares do not count toward shareholder totals and cannot be voted.
(h) Before its shares begin public trading, a company must obtain approval from holders of more than half of all voting power and notify the MEA. This notice does not require the MEA's approval.
(j) Approval under subsection (c) and offers under subsections (d) and (e) are not required for the initial shares issued when a company forms in accordance with its MEA-approved incorporation or merger application.
(k) A company may arrange the purchase of an inactive shareholder's shares at fair value under subsections (l) through (s) if the shareholder is an individual who has not logged in to CityRP for at least 60 consecutive days, or the shareholder has not responded for at least 60 consecutive days to a direct company communication requesting a response. Time during a formal leave of absence counts toward either period.
(l) Before a purchase under subsection (k), the company must give the shareholder written notice of the proposed purchase through a known in-game or other direct contact by a method whose delivery can be verified. The shareholder must have at least 14 days after delivery to respond. Proof of delivery does not require proof that the notice was read. The notice must state the proposed price and the means of preventing the purchase under subsection (m). If no reliable direct contact is available, the company must obtain and follow Court instructions before proceeding.
(m) For a shareholder entitled to vote, the company must make a shareholder vote available and keep it open for at least 14 days after it opens. The shareholder or an authorized representative who votes during that period prevents the purchase. The purchase must not proceed before that vote closes. If the shareholder has no voting rights or no vote is available, the shareholder or an authorized representative may prevent the purchase by confirming during the notice period that the shareholder wants to retain and exercise their shareholder rights. A response alone does not prevent a purchase when the shareholder is entitled to vote and a vote is available.
(n) If succession to a legally deceased shareholder's shares remains unresolved, a purchase under subsection (k) requires Court approval. The company must notify any known authorized representative or heir of the proposed purchase and Court proceeding.
(o) The company may purchase the shares first. If it declines, it must offer them at fair value to the other shareholders, allocating available shares among interested shareholders in proportion to their existing holdings. Any remaining shares may be offered to outsiders. If no eligible buyer purchases a share at fair value, the shareholder retains it.
(p) A person holding at least 90% of both all shares and all voting power may require the remaining shareholders to sell their shares at fair value. The buyer must give each affected shareholder written notice of the proposed purchase and price at least 14 days before the proposed transfer. The purchase requires Court approval.
(q) Fair value under subsections (k) and (p) must be determined reasonably and in good faith using available financial information. An affected person may ask the Court to review a proposed purchase or price. If a challenge is filed before transfer, the transfer is paused until the Court decides the challenge or allows the transfer to proceed.
(r) A share must not transfer under subsections (k) or (p) unless its full fair value is paid. If the shareholder cannot be reached to receive payment, the buyer must place the full price in a secure, separately identifiable account for the shareholder or lawful successor.
(s) Subsections (k) through (r) do not apply to a credit union.
19. Reporting Tiers
(a) A company is in tier 1 if its size is below $100,000, tier 2 if its size is at least $100,000 but below $250,000, and tier 3 if its size is $250,000 or more.
(b) The MEA may assign a company to a higher reporting tier when specific circumstances demonstrate a need for greater reporting. Before doing so, the MEA must explain its reasons and allow at least 72 hours for a response. The company may challenge the decision in Court; the higher reporting tier applies unless the Court pauses it.
(c) A higher tier assigned under subsection (b) does not increase the company's plot allowance, which is based on its size under subsection (a).
20. Company Reports
(a) Every company must publish a monthly financial report and file it with the MEA by the end of the seventh calendar day of the following month. The report must state the month's income, expenses, and profit or loss, and its total assets and liabilities at month-end. The company must report income for the month in which it is earned and expenses for the month in which they are incurred.
(b) Tier 2 and tier 3 reports must summarize major decisions made during the month. Tier 3 reports must also explain their financial reports, explain the reasons for those decisions, and summarize major future plans.
(c) In a summary of a major decision or future plan, a company may withhold commercially sensitive details when publication would materially harm it. It must still give a meaningful general summary and note the omission.
(d) With the report, the company must file a current list of its direct shareholders and their holdings with the MEA, including when ownership has not changed. The list is not automatically public.
(e) A newly incorporated company must report for the period from incorporation through the end of its first month. An inactive company must continue reporting its activity, assets, liabilities, and shareholders.
(f) The MEA must provide financial-report and balance-sheet templates. A company may use another clear format that provides all required information. The MEA must make an easily accessible guide to additional reporting standards available on its Discord. In exceptional circumstances, the MEA may extend a reporting deadline by up to seven days before fines begin.
(g) Section 7(b)(i) of the Government Contracts Act 2.0 continues to exempt the Government Shop company from enterprise reporting.
(h) A company must keep records sufficient to support its required financial reports for at least six months after the relevant report is filed.
(j) The MEA must maintain an accessible public record of each company's current directors and highest executive. The MEA must enter a newly incorporated company's initial directors and highest executive, if any, within seven days after incorporation. A company in existence when this Act is enacted must notify the MEA of its current directors and highest executive, if any, within 30 days after enactment. A company must notify the MEA of a change to those positions within seven days after the change. The MEA must update the record within seven days after receiving notice.
21. Company Reporting and Audit Enforcement
(a) If a monthly report or shareholder list is missing, the MEA must identify the missing document and allow the company seven full days after notice to provide it. A daily fine begins after that period if the document remains missing.
(b) The daily fine for each missing document is $250 in tier 1, $500 in tier 2, or $750 in tier 3. It stops accruing at $25,000 per missing document.
(c) The MEA may require a company to provide an additional financial report and balance sheet when reasonably necessary for its duties. It must allow at least seven days to respond.
(d) The MEA may audit a company to carry out the MEA's duties. It must identify the required cooperation and allow at least seven days. The MEA may obtain an independent third party's records with that party's consent or a Court order. If evidence indicates records may be destroyed before the normal period ends, the MEA may seek an expedited Court order to preserve them or authorize earlier access.
(e) Before the audit cooperation deadline expires, the MEA must warn the company of the required cooperation, the deadline, and the possible daily fine. After the deadline, the MEA may fine continued noncooperation up to $1,000 per day, up to $25,000 for the noncompliance.
(f) The MEA may impose an applicable fine under this section and an applicable Financial Services Act fine for the same failure, subject to each Act's requirements.
(g) The MEA may waive accrued reporting or audit fines under this section for fair reasons.
(h) To compel an independent third party to produce records for a duty under the banking provisions of the Financial Services Act, the MEA must obtain a banking-records warrant under section 20(k) of the Judiciary Act. Control or liquidation of a bank following an audit under this section must comply with sections 9 and 15 of the Azalea Banking and Solvency Act.
22. Appeals
(a) An applicant or company may appeal the following MEA actions under this Act to the BoA under section 7 of the Azalea Banking and Solvency Act:
The appeal is filed when the BoA receives it. If the BoA overturns an incorporation, merger, or limited-partnership registration denial, it may direct the MEA to approve the application. The appellant may bring a civil suit if the appeal is rejected or not decided within the period in that section.
(b) During an appeal to the BoA, the disputed additional-document request and the challenged part of a general-audit demand are paused. Unrelated duties and Court orders continue.
(c) During a BoA appeal of a reporting fine, collection and further accrual of the disputed fine are paused. After rejection, collection and accrual resume unless the Court grants relief.
(d) During a BoA appeal of an audit fine, collection is paused but daily amounts continue to accrue up to the applicable cap. After rejection, collection may resume unless the Court grants relief.
23. Administrative Dissolution for Audit Noncooperation
(a) The MEA may order a limited company dissolved if serious, continuing noncooperation materially obstructs an audit and continues after the MEA warns that dissolution is proposed. This section does not apply to an institution covered by section 9(a) of the Azalea Banking and Solvency Act; its liquidation is governed by section 15 of that Act. The MEA must give the company at least 72 hours after the warning to respond or cooperate, in addition to the original audit notice.
(b) The MEA must promptly notify the company of the order. The company may appeal under section 22. The order must not take effect until 72 hours after the MEA makes it. If the company appeals within that period, the order is paused while the BoA appeal is pending, even if the BoA misses its decision deadline or the company brings a suit, unless the Court orders otherwise.
(c) If the BoA rejects an appeal made within that period, the order must not take effect for seven days after that decision. A suit does not automatically pause the order after the seven-day period, but the Court may pause it.
(d) When the order takes effect, the MEA must appoint a liquidator to wind up the company and supervise the liquidator. A creditor, shareholder, or the company may ask the Court to review the appointment and replace the liquidator. An affected person may ask the Court to review a disputed action of the liquidator.
24. Voluntary Winding Up
(a) A limited company may be wound up voluntarily with the approval of at least two-thirds of the votes cast, with more than half of all voting power participating.
(b) The company must appoint and supervise the liquidator. An affected person may ask the Court to review or replace the liquidator or review a disputed action.
25. Winding-Up Procedure
(a) This section applies to a limited company wound up under either of the preceding sections. Subsection (j) also applies to a company liquidated under section 29 or section 15 of the Azalea Banking and Solvency Act. The company shall continue in existence for the limited purpose of winding up its affairs until winding up is complete.
(b) The liquidator must give written notice to known creditors and publish notice for other creditors. The liquidator must allow a known creditor at least 30 days after receiving notice to submit a claim, and other creditors at least 30 days after publication.
(c) The liquidator must consider a late claim with the other claims if it is received before any assets are distributed. If a claim is received after a distribution, the liquidator must consider it against assets not yet distributed. A completed payment is not automatically reversed.
(d) The liquidator must assess claims and give written notice to a creditor whose claim is rejected or reduced. The creditor may ask the Court to review that decision within seven days after notice.
(e) The liquidator must not distribute assets before the claim periods in subsection (b) expire. The liquidator must not distribute assets while a creditor still has time to seek review under subsection (d), unless that creditor waives the opportunity. If a creditor timely seeks review, the liquidator must not distribute assets until the Court resolves the dispute.
(f) In a voluntary company winding up under section 24, a voluntary partnership winding up under section 3(j), a partnership winding up under section 4(b), or a limited partnership winding up under section 23, the liquidator must apply proceeds from the sale of a plot subject to a registered lien first to necessary sale expenses. The liquidator must then apply the remaining proceeds to registered lienholders in registration order, up to each lien's secured payoff under section 4(e) of the Plot Liens Act. Each payment to a lienholder is credited against the secured debt. Any unpaid rights under the lien or debt remain subject to applicable law. The remaining proceeds enter the winding-up pool.
(g) A creditor may agree to accept an unsold noncash asset at fair value, credited against the creditor's claim. The transfer must respect the applicable payment order and other creditors' rights.
(h) If bankruptcy begins during winding up, the liquidator must work through the bankruptcy proceeding for assets in the bankruptcy pool and follow the bankruptcy-overseeing Court's orders and payment priorities.
(j) After debts and winding-up or liquidation costs are paid, a credit union must distribute any remaining assets under section 9(d) of the Financial Services Act. Any other nonprofit company must distribute them under its bylaws if the bylaws provide for it. Otherwise, the remaining assets must be distributed to shareholders according to the lawful economic rights of their shares.
(k) When winding up is complete, the company ends and its remaining covered debts are discharged as to the company. A covered debt is a company debt incurred before winding up is complete, including a debt incurred during winding up.
(l) If a company asset is discovered after winding up is complete, the winding up must be reopened and a liquidator appointed to deal with it. Valid unpaid company claims, including claims not previously filed, may be asserted against that asset despite the discharge under subsection (k). The liquidator must consider them under the applicable priorities.
(m) A known creditor who was not given notice, or a creditor for whom the required public notice was not published, may ask the Court to reopen the winding up, consider the creditor's claim, and correct an improper distribution. A proper completed payment is not automatically reversed.
26. Shareholder Estates and Inspection
(a) A deceased shareholder's shares pass under applicable law, including the Inheritance and Succession Act. Inactivity alone does not give the company a right to seize the shares or buy them at a discount.
(b) An authorized estate representative may vote the deceased shareholder's shares while the estate is settled. Unrepresented voting shares must be counted in the total when a vote requires a percentage of all voting shares.
(c) A shareholder may inspect the company's shareholder list for a proper company purpose. Within seven days after a request, the company must provide access or explain its refusal.
(d) A shareholder who obtains the list may use it, contact other shareholders, and share necessary information for the stated company purpose. The shareholder must not sell the list or use it for an unrelated purpose.
(e) A shareholder may inspect records supporting the company's financial reports when relevant to a proper company purpose. Within seven days after a request, the company must provide access or explain its refusal. The shareholder must use the information only for that purpose. The company may use necessary redactions or confidentiality safeguards to protect sensitive information. This subsection does not itself require or authorize disclosure of customer financial data protected by section 21 of the Financial Services Act. Other applicable privacy and confidentiality law also applies. A shareholder may ask the Court to review a refusal or safeguard.
27. Control of a Business
(a) The MEA may apply to the Court for control of a nonfinancial business, whether it is a limited company, a limited partnership, or another unincorporated business, if:
(b) The Court must give the business notice it considers reasonable and an opportunity to respond. It may authorize control if a ground under subsection (a) exists, control is necessary and proportionate to address that ground and its effects, and no less intrusive measure would be adequately effective. The Court must specify the powers necessary for that purpose.
(c) If the MEA has a reasonable basis to believe that a ground under subsection (a) exists and that necessary, proportionate control cannot await Court authorization without an immediate risk of serious harm, it may take temporary control. The MEA may exercise only the powers needed to address that risk. It must give the business and its owners written notice of the action and its reasons immediately or as soon as reasonably practicable.
(d) The MEA must apply to the Court within twenty-four hours after taking temporary control. The Court must promptly review the temporary control. The control ends if the MEA misses that deadline or does not obtain Court authorization within seventy-two hours after control began.
(e) Control of an unincorporated business extends to its business assets and mixed-use property only to the extent necessary for the authorized purpose. It does not extend to unrelated property of an owner.
28. Management and Review
(a) The MEA must appoint a manager. An affected person may ask the Court to review or replace the manager.
(b) When control begins, the MEA must publish notice identifying the business, stating that it is under control, and providing contact information for the manager. The controlled business must provide the records and in-game or Discord roles needed for the manager's authorized duties.
(c) The business must pay the necessary, reasonable costs of management from business funds. The Court may review those costs.
(d) The Court must review continuing control at least every thirty days to determine whether it remains necessary and proportionate. It must narrow or end control that is no longer necessary or proportionate. If control is no longer necessary, the MEA or manager must promptly inform the Court. An affected person may also apply to end or narrow control.
(e) When control ends, management and access return to the business. The Court may order specific continuing conditions when necessary.
29. Sale and Liquidation
(a) The manager must obtain specific Court approval before selling substantially all the business's assets or transferring the business to a new owner. The buyer must agree to the sale. Before approving an asset sale, the Court must find that the overall consideration is fair, taking account of the obligations assumed and the other material terms.
(b) The Court must not approve the sale unless each affected creditor would receive at least as much value as that creditor would reasonably receive in a liquidation, or that creditor agrees to receive less. A contract transfers only as permitted by its terms and applicable law or with the other party's consent.
(c) An owner's shares or ownership interests may be sold under this process only with that owner's agreement.
(d) The Court may order liquidation of a controlled limited company or limited partnership if there is no reasonable prospect of a viable rescue. The Court must give notice and protect creditors under the Bankruptcy and Debt Relief Act.
(e) The MEA must appoint a liquidator. The Court must supervise the liquidation, and an affected person may ask the Court to review or replace the liquidator. The Bankruptcy and Debt Relief Act governs the liquidation with the adaptations needed for this section. The Court may order liquidation without a debtor's petition or a separate finding of insolvency. If a bankruptcy proceeding for the business is pending, the MEA must seek the liquidation order in that proceeding, and its original petition date applies. Otherwise, the MEA's application is treated as the bankruptcy petition, and its filing date is the petition date.
(f) After the Court decides claims and completes the sales and distributions required by the Bankruptcy and Debt Relief Act, it must end a limited company and discharge its remaining covered debts as to it, subject to that Act's rules on notice, omitted claims, and surviving liens. A limited partnership ends under section 3(u), without a separate discharge under this subsection. If an asset is later discovered or a claim survives, the Court may reopen the liquidation. Valid unpaid claims may be asserted against a later-discovered asset despite any discharge, under the applicable priorities. Proper completed payments are not automatically reversed.
30. Existing Seizure Proceedings
(a) A proceeding concerning a nonbank financial institution or nonfinancial business under the Seizure Act that began before enactment shall continue under that Act unless the Court approves a transition to the applicable successor procedure after affected parties have an opportunity to be heard. The powers, procedures, orders, and review available under that Act shall continue for the proceeding.
31. Consumer Protection
(a) A person carrying on a business must not use false or misleading advertising for goods or services, or make a false or misleading representation or use coercive practices when selling them.
(b) Before a customer commits to obtaining goods or services, the person carrying on the business must clearly disclose the total price and mandatory charges. If the person cannot determine the total, the person must explain how the price and charges will be calculated and give a good-faith estimate when reasonably possible.
(c) If the person carrying on the business expects the final price to be substantially higher than the estimate, the person must explain the revised price and obtain the customer's agreement before doing further chargeable work. If the customer does not agree, the customer owes for work already authorized and performed under the agreed pricing terms.
(d) A customer may bring a civil action for a violation of this section. The Court may award compensation or restitution or order the person responsible to end the violation.
(e) The MEA may order the person carrying on the business to comply with this section.
32. Company Continuity
(a) A limited company existing immediately before enactment shall continue as a limited company under this Act, with the same legal identity, property, rights, obligations, and shares. Its existing bylaws shall continue, subject to this Act's mandatory requirements. An existing company registration, appointment, filing, or approval shall continue under this Act until it expires or is lawfully changed or revoked. MEA additions in effect at enactment shall continue under section 6(m) if they comply with it. A company that had no bylaws of its own immediately before enactment follows this Act's default rules instead of the Business Reform Act defaults. For MEA additions under section 6(m), each company existing at enactment is treated as incorporated then.
(b) A right, liability, fine, or proceeding arising under the Business Reform Act or Financial Revisions Act before enactment remains governed by the law then in effect, except as this Act provides.
33. Limited Partnerships
(a) A limited partnership is registered under this section and has at least one general partner and one limited partner. A person may not be both. An individual or legal entity may be either. Sections 3 and 4 apply except as this section provides.
(b) To register, the partners must give the MEA the partnership's name, each partner's identity, role, and promised contribution, a notice contact, and each partner's written agreement to formation or conversion and their role. The applicant must pay a $1,000 fee. Sections 6(e) through (h) apply as to incorporation, treating registration as incorporation. Registration takes effect on MEA approval.
(c) The MEA must publish the partnership's name and general partners; limited partners' identities in the filing are private. The partnership or its continuing owner must notify the MEA of a partner, role, or legal-form change within seven days. The MEA must update its public record within seven days after notice.
(d) Despite section 3(d), a limited partner is not personally liable for partnership debts, fines, or allocated losses merely as a partner beyond their unpaid investment commitment. Their paid investment remains at risk; personal guarantees and liability for their own conduct remain enforceable. If the partnership cannot pay its debts, a creditor may recover the unpaid commitment, subject to applicable winding-up and bankruptcy orders and priorities. Payments are credited against the commitment and must not be recovered twice.
(e) General partners manage the partnership; limited partners may vote or advise. Despite section 3(g), a limited partner has no authority to bind the partnership merely by being a partner. Separate authority and applicable reliance rules remain.
(f) A limited partner who directs ongoing operations becomes a general partner and is personally liable for partnership debts incurred before and during their general-partner status. An isolated authorized task, vote, or advice alone does not trigger this subsection.
(g) Sections 3(b), 3(r)(ii), and 4(g) apply subject to subsection (d). General partners bear the debt a limited partner cannot be required to pay because of that limit.
(h) An existing general partnership may register only with every partner's agreement to conversion and their roles. Its identity, property, contracts, and debts continue. A general partner of any partnership who becomes a limited partner remains liable for earlier debts unless the creditor releases them. For a later debt, the former general partner is liable to an existing creditor that reasonably relied on their continued general-partner status and had not been notified or otherwise learned of the change.
(j) If no general partner remains, the partnership must appoint a consenting replacement within 30 days or wind up. During that period, a limited partner or appointed person may take necessary steps to preserve assets and protect customers without becoming a general partner; subsection (f) otherwise applies. If no limited partner remains, the partnership must admit one within 30 days or continue as a general partnership if at least two partners remain. If one remains, section 4(b) applies; if none remains, it must wind up. The partnership remains limited during either period and during winding up for lack of a general partner; sections 2(b), 4(b) through (d), and 4(j) through (l) do not apply merely because one partner remains during those times. Necessary winding-up steps do not trigger subsection (f).
(k) Section 12(f) and (g) apply to a return of a limited partner's invested capital as if the partnership were a company and the return a dividend.
(l) Sections 9, 19 through 23, and 26(c) through (e) apply to a limited partnership as to a company, except sections 19(c) and 20(j). In those sections, shareholders and their holdings mean partners and their interests, and incorporation means registration. A public report under section 20 must not identify a limited partner without their consent. For a winding up under section 23, section 25(b) through (h) applies, including section 25(f), and its liquidator is the person appointed by the MEA under section 23(d), despite section 3(q). Sections 3(t) and (u), not section 25(k), govern completion and reopening; partners retain their applicable liabilities and protections.
34. Repeals
(a) The Business Reform Act is repealed.
(b) The Seizure Act is repealed.
(c) The Financial Revisions Act is repealed.
Type: Act of Parliament
A
BILL
TO
REPEAL AND REPLACE THE BUSINESS REFORM ACT, THE SEIZURE ACT, AND THE FINANCIAL REVISIONS ACT; AND ESTABLISH RULES FOR BUSINESSES AND COMPANIES
BILL
TO
REPEAL AND REPLACE THE BUSINESS REFORM ACT, THE SEIZURE ACT, AND THE FINANCIAL REVISIONS ACT; AND ESTABLISH RULES FOR BUSINESSES AND COMPANIES
Preamble: This Act establishes rules for businesses, companies, consumer protection, and the control and winding up of businesses.
1. Short Title and Enactment
(a) This Act may be cited as the "Business Act."
(b) This Act is enacted when each of the following bills has received Royal Assent: the "Business Act," the "Financial Services Act," the "Azalea Banking and Solvency Act," the Parliamentary Norms and Procedures Act, and the Public Utility Empowerment Act.
Chapter 1: Private Enterprises
2. Private Enterprises(a) An individual or legal entity may own any number of private enterprises. A private enterprise must have a genuine, lawful purpose.
(b) A private enterprise with one owner is a sole proprietorship. It is its owner's business, not a separate legal person. Its owner holds its rights and owes its debts.
(c) Two or more persons may jointly own a private enterprise. Unless it is registered as a limited partnership under section 33, its owners are general partners, whether or not they register their partnership. A partnership is a separate legal person and may own property, contract, sue, and be sued in its own name.
(d) An ownership interest in a private enterprise must not be publicly traded. The Ministry of Economic Affairs (MEA) may order a person to stop a violation of this subsection and seek Court enforcement of the order.
(e) "BoA" means the Bank of Azalea. "Court" means the District Court.
3. General Partnerships
(a) Partners share profits, losses, and the ultimate burden of business debts equally unless they agree otherwise in writing. The writing may consist of a document or saved messages showing each partner's agreement.
(b) Partners may agree to unequal shares, but each partner's share of profits must match that partner's share of losses and the ultimate burden of business debts. If an agreement assigns a different burden, the burden follows the profit share.
(c) A benefit that is in substance a distribution of profit counts toward the partner's profit share, including a benefit provided through a below-value transfer or a payment to an associate. Reasonable pay for work and reimbursement of actual expenses are permitted.
(d) The partnership owes its business debts. Each partner is liable for the whole of a business debt incurred while that person is a partner. A partnership's criminal fine, including a fine converted from jail time, shall be considered a kind of business debt, but a partnership's conviction does not itself convict a partner. A partner who pays more than their share may recover the excess from the other partners according to their shares, including through civil action.
(e) A new partner is not liable for an earlier business debt unless they agree to assume it. A partner's departure does not release them from a debt incurred while they were a partner, unless the creditor agrees to release them.
(f) A departing partner is liable for a later business debt to an existing creditor who reasonably relied on the partner's continued membership and had not been notified or otherwise learned of the departure.
(g) A partner may bind the partnership and its partners in a transaction in the ordinary course of the business unless the other party knows the partner lacks authority. An unusual transaction requires actual authority unless the partnership is bound under section 3(h) of the Modern Contracts Act.
(h) A majority of partners by headcount may decide ordinary management matters unless all partners agree otherwise. Admitting a new partner or selling substantially all business assets requires the agreement of all partners.
(j) Voluntary winding up requires the agreement of all partners unless they have previously agreed on another process. The Court may resolve a dispute.
(k) Subsections (b) and (c) apply to profits and losses arising after enactment, including under an existing partnership agreement. Earlier allocations and existing creditors' rights remain governed by the law and agreements that applied when they arose.
(l) When a partnership gains legal identity, a partner's interest in property used solely for the partnership transfers to it. A partner's interest in property used for both partnership and personal purposes transfers only if the owner agrees. A transfer is subject to applicable law and the rights of others, including lienholders.
(m) When an existing partnership gains legal identity, the partnership also owes its existing business debts. A person already liable for a debt remains liable unless the creditor agrees to release them.
(n) A partnership existing at enactment is a general partnership under this Act. It has separate legal identity without an application or incorporation fee. An existing legal identity continues.
(o) A plot subject to a lien registered under the Plot Liens Act does not transfer under subsection (l) unless every registered lienholder consents. The partnership gains legal identity even if the plot does not transfer. If consent is obtained afterward, the plot transfers when every lienholder consents, provided the owner and the partnership still agree to the transfer.
(p) When an existing partnership gains legal identity, its existing business contract rights and obligations transfer to it, subject to the contract's terms and applicable law. A person already responsible remains liable unless the other party agrees to release them.
(q) When a partnership winds up, its partners must follow the notice, late-claim, claim-review, and payment-order rules in section 25(b) through (f). References to the liquidator in those provisions apply to the partners or a person they appoint. Those rules do not prevent use or sale allowed by section 4(d).
(r) In winding up:
(i) Each partner's share of undistributed gains and payments toward losses must be credited against that partner's share of losses.
(ii) If the remaining loss exceeds the partner's capital not already returned, the partner must contribute the difference.
(iii) After debts and winding-up costs are paid, each partner's remaining capital must be returned after these credits and contributions.
(iv) Any remaining gains must be divided according to the partners' profit shares.
(s) If a contribution remains unpaid, winding up may be completed after available assets are distributed and the other winding-up requirements are met. An affected partner may recover their unpaid share of the shortfall from the owing partner, subject to creditors' rights and without double recovery.
(t) If a partnership asset is discovered after it ends, winding up must reopen to deal with the asset and consider valid unpaid claims under the applicable priorities. A known creditor who was not notified, or a creditor for whom the required public notice was not published, may ask the Court to reopen winding up, consider its claim, and correct an improper distribution.
(u) The partnership ends when its winding up is complete after claims and available assets are dealt with. A partner's liability for an unpaid debt is not discharged by the partnership ending.
4. Departure from a Partnership
(a) A partner may leave by notifying the other partners. The partnership agreement may require notice or provide remedies for breaking an agreed commitment.
(b) The remaining owners may continue the business and settle the departing partner's interest. If at least two partners remain, they may continue the partnership. If only one remains, the business shall continue as that owner's sole proprietorship, and the partnership shall continue only to wind up, including performing or settling its remaining obligations.
(c) If one partner remains, the partnership retains assets reasonably needed to settle its obligations. Its other assets pass to the sole owner, subject to accounting for the departing partner's interest under this section, section 3(q), and applicable property and lien rules. A retained asset passes to the sole owner when no longer needed for those obligations, subject to the same requirements.
(d) Before transfer, the sole owner may use or sell assets in the ordinary course of the continuing business if creditors' rights are respected and proceeds needed for partnership obligations remain available to the partnership. Proceeds attributable to partnership assets must not be distributed in winding up before section 3(q) permits it.
(e) The partners may agree on the value of the departing partner's interest. If they do not agree, its fair value is determined as of departure, taking the business's assets and liabilities into account. The Court may resolve a dispute over value.
(f) If the settlement shows that the continuing owners owe an amount to the departing partner, they must pay it within 30 days after the value is agreed or finally determined, unless the partners agree otherwise.
(g) If the settlement shows that the departing partner owes the continuing owners a shortfall, the other partners may recover it once the amount is agreed or finally determined. Later payments toward the same debt must be credited to prevent double recovery.
(h) Unless the remaining partners agree otherwise, they share future profits and losses in the same proportions as their shares relative to one another before the departure.
(j) If one partner remains, future rights and obligations under the partnership's existing business contracts transfer to the sole owner, subject to the contracts' terms and applicable law. The partnership and any other person already liable remain responsible for earlier debts unless the creditor agrees to release them.
(k) During winding up, a partnership plot subject to a registered lien must not transfer to the sole owner unless every registered lienholder consents. If it does not pass, the partnership retains the plot subject to applicable law.
(l) A distribution to the departing partner on account of their interest is credited against the amount due for that interest under subsection (f). After the continuing owner pays any amount due for the interest, a later distribution attributable to that interest goes to the continuing owner up to the amount paid.
5. Purpose-Based Closure
(a) The MEA may order a private enterprise closed if it lacks a genuine, lawful purpose. Temporary inactivity or overlap with another business alone does not establish that the enterprise lacks such a purpose.
(b) Before ordering closure, the MEA must explain its concern and give the owner at least 72 hours to respond or establish a genuine, lawful purpose.
(c) Before that period ends, the MEA may temporarily stop the enterprise when evidence shows an immediate risk of serious harm. The action must be necessary to address that risk. The MEA must promptly notify the owner. The owner may seek Court review.
(d) A temporary stop expires after 72 hours unless the Court extends it or the MEA completes the ordinary closure process.
(e) The owner may ask the Court to review a closure order. A challenge does not pause the order unless the Court orders otherwise.
(f) Closure ends the enterprise's operation. It does not itself transfer the owner's property or discharge its debts.
(g) The MEA may close a bank under this section only as authorized by section 3 or 8 of the Financial Services Act or section 9 of the Azalea Banking and Solvency Act.
(h) The owner may apply to the MEA to reopen. The MEA must approve reopening if the enterprise has a genuine, lawful purpose.
Chapter 2: Limited Companies
6. Formation of a Limited Company
(a) One or more individuals or legal entities may form a limited company. The company becomes a separate legal person when the MEA approves its formation, except as provided in section 16(c).
(b) The founders must apply to the MEA and provide:
(i) the proposed name, purpose, and nature of the company, including whether it will be a nonprofit company;
(ii) the identifying details of any existing in-game companies underlying it;
(iii) each founder's name and written agreement to form the company;
(iv) proposed bylaws, if any;
(v) each initial shareholder and their shares or ownership percentage, including any share classes;
(vi) the initial managers, highest executive if any, and any directors;
(vii) a person or account that can receive official notices; and
(viii) an initial balance sheet listing each asset and liability expected at formation, with a good-faith value and identification of estimates.
(c) A signed document or saved messages showing each founder's agreement satisfy subsection (b)(iii). Submitted bylaws bind the company. A rule of this Act that lets bylaws provide otherwise is a default rule. A default rule and applicable MEA additions apply unless the company's bylaws provide otherwise. The company must keep its notice contact current. An independent audit is not required solely for incorporation.
(d) The applicant must pay a $1,000 filing and registration fee with the application. The MEA must refuse a name identical or confusingly similar to an existing registered company's name. The applicant may choose another name.
(e) Within 72 hours after receiving an incomplete application, the MEA must identify the missing required items. Within seven days after an application is complete, including payment of the fee, the MEA must approve it if it meets the legal requirements or deny it with written reasons.
(f) If the MEA denies an application, it must retain $100 and refund $900. If the applicant withdraws before the MEA decides, the fee is not refunded. If a denial is overturned, the applicant must repay any refund before the incorporation or merger is completed, so that the total fee paid is $1,000.
(g) An applicant may appeal an incorporation denial under section 22.
(h) If the MEA does not decide a complete application within the period in subsection (e), the applicant may ask the Court to order the MEA to decide.
(j) A newly incorporated company that does not have an underlying in-game company must create one within 72 hours after incorporation. It must notify the MEA of the in-game company's identifying details within 72 hours after creation.
(k) If the company misses the deadline in subsection (j), the MEA may, after notice and an opportunity to comply, require it to comply and use enforcement powers expressly provided elsewhere by law. Missing the deadline does not itself dissolve the company.
(l) The MEA may use the initial balance sheet for its duties. Filing the balance sheet does not itself make it public.
(m) The MEA may publish supplementary default bylaws (MEA additions) that comply with this Act and do not change its default rules. A company must follow the MEA additions in effect at its incorporation, subject to subsection (c).
(n) In sections 6 through 26, "company" means a limited company under this Act.
(o) A nonprofit company is a limited company registered as a nonprofit. During operation, it may earn surplus but must use or retain it for its stated purpose and must not distribute operating profits to shareholders or members. It may pay reasonable compensation, reimburse expenses, repay genuine debts, and pay agreed interest on deposits. Its bylaws must state how remaining assets are distributed after debts and winding-up or liquidation costs are paid; this requirement does not apply to a credit union.
7. Incorporating an Existing Business
(a) A partnership must not incorporate unless all partners agree. They must agree on the initial share allocation and record it in the application.
(b) When an existing business incorporates, a business entity's assets used solely for that business and each owner's interest in assets used solely for it transfer to the company, subject to section 8. Property used for both business and personal purposes transfers only if the owner agrees.
(c) The company may agree to assume an existing business debt. The original debtor remains liable unless the creditor agrees to release them.
(d) A transfer is not delayed merely because it puts the company over its plot limit. The company must work with the Ministry of Urban Development under the Integrated Property Regulation Act to return to compliance.
8. Liened Plots and Transfer Records
(a) A plot subject to a lien registered under the Plot Liens Act does not transfer on incorporation unless every registered lienholder consents. The business may incorporate while the plot remains with its owner.
(b) If the plot does not transfer on incorporation, it transfers when every registered lienholder consents, provided the owner and the company still agree to the transfer.
(c) If a liened plot transfers to a partnership under section 3, to a sole owner under section 4, or to a company under section 7 or this section, the new owner must notify the MEA within seven days. The MEA must record the new owner in the lien registry while retaining the original entry and lien priority.
(d) If a plot transfers under section 3, 4, 7, or this section, the former and new owners must take the available steps to update the in-game plot records as soon as reasonably practicable.
9. Company Size
(a) A limited company's size is whichever of these amounts is greatest: its value, its gross assets, or its value handled.
(b) The company must use a reasonable, good-faith valuation based on available evidence to determine its value. Gross assets are measured without deducting debts.
(c) Value handled must be measured over the most recent 90 days. It is the sum of:
(i) the highest combined balance of customer funds held at one time during that period;
(ii) the company's business receipts during that period; and
(iii) the value of payments processed during that period without holding the customers' funds.
(d) The company must not count the same payment twice in calculating value handled.
10. Boards of Directors
(a) A company with a size of $500,000 or more must have a board of directors. A company that first reaches that size must establish its board within seven days.
(b) A company with a size of at least $100,000 but less than $500,000 must hold a shareholder vote at least every three months on whether to have a board. Each shareholder has one vote. More than half of the eligible shareholders must participate. A proposal passes if more votes are cast for it than against it. For a credit union, voting power under section 9 of the Financial Services Act applies instead of this headcount rule, and more than half of that voting power must participate.
(c) For this section and section 14, a company is majority-owned by an entity if one entity owns more than half of all its shares and holds more than half of its voting power. A company meeting both conditions may dispense with its board if holders of more than half of all voting power approve. Holders of more than half of all voting power may request that the company restore the board.
(d) If shareholders of a company described in subsection (b) vote to have a board, the company must have one within seven days and keep it until their next vote under that subsection. A vote under subsection (c) to operate without a board does not override that decision.
(e) The exception in subsection (c) ends when the entity no longer meets both conditions for majority ownership. If a board is required when the exception ends, or if shareholders request that the company restore the board under subsection (c), the company must establish it within seven days.
(f) A board must have at least three directors. Directors must be individuals.
(g) The Government Shop company's leadership and management follow section 7(b)(ii) of the Government Contracts Act 2.0 notwithstanding any inconsistent requirement in sections 10, 11, or 14 of this Act.
11. Directors
(a) When shareholders elect directors, they must do so according to the voting rights of their shares unless the bylaws provide another shareholder election method. Another group may select directors if the MEA specifically approves the arrangement.
(b) Unless the bylaws provide otherwise, the board must have five directors, elections must be held at a general meeting at least every three months, and the candidates receiving the most votes fill the available shareholder-elected seats.
(c) Unless the bylaws provide otherwise, each director has one vote, a majority of the directors in office must participate for the board to decide a matter, and a proposal passes if more votes are cast for it than against it.
(d) The remaining directors may appoint an individual to a vacant shareholder-elected seat until the next election, except when shareholders removed the director under subsection (h). A group approved to select a director fills a vacancy in its own seat.
(e) Before the board decides a matter, a director with a distinct financial interest in it must disclose the interest to the other directors and every shareholder and refrain from participating. The interest includes a financial interest held by any of the director's spouses, legal parents, or legal children, including adoptive parents and children, or by a business the director controls. An interest shared by shareholders generally in the company's value alone does not require recusal.
(f) If too few unconflicted directors remain for a quorum, shareholders may decide the matter. A conflicted director may vote shares they hold in the shareholder vote.
(g) The board oversees the company's operations, makes major decisions, and appoints and removes high-level executives. Unless the bylaws provide otherwise, it also sets executive compensation and long-term strategy.
(h) Shareholders may remove a shareholder-elected director without cause by a vote under section 13(g). The bylaws must not take away that right or require a higher threshold. The seat remains vacant until shareholders elect a replacement. They must complete a separate replacement vote within seven days after the removal; a general meeting is not required. A group approved to select a director may remove its own appointee.
(j) A director may inspect company records reasonably needed to perform their duties. This subsection does not itself require or authorize disclosure of customer financial data protected by section 21 of the Financial Services Act. Other applicable privacy and confidentiality law also applies.
(k) Before an executive makes a company decision in which they have a distinct financial interest described in subsection (e), the executive must disclose the interest to the board, if any, and every shareholder, and must not make that decision. An unconflicted decision-maker must decide the matter. If no unconflicted decision-maker is available, shareholders may decide it.
12. Liability and Company Claims
(a) A director or executive is liable to the company for a loss caused by that person's fraud, negligence, or unlawful conduct.
(b) A shareholder or officer is not personally liable for a company debt solely because of their shares or office.
(c) A shareholder may bring a claim on the company's behalf against a director or executive for a loss caused to the company. Before filing, the shareholder must ask the company to pursue the claim and allow 72 hours for a response. The request and waiting period are not required if delay risks serious harm or the relevant decision-makers are involved in the alleged wrongdoing.
(d) The claim proceeds under the ordinary civil process without a separate application for permission. The Court may allocate reasonable costs, considering the result and benefit to the company.
(e) A shareholder may bring a personal claim for a wrong that directly causes the shareholder loss. A claim for a loss belonging to the company may be pursued only on the company's behalf.
(f) A company must not pay a dividend if the payment would leave it unable to pay its debts as they come due. Before authorizing a dividend, the people authorizing it must reasonably assess the company's ability to pay those debts after payment, using available financial information.
(g) A recipient who knew or reasonably should have known a dividend violated subsection (f) must repay it to the company. Recovery under this subsection and under another claim for the same loss must not result in double recovery.
13. Shareholder Meetings and Votes
(a) A company must hold a general meeting at least every three months so shareholders may review performance, raise concerns, propose items for consideration, and conduct applicable elections. The company must notify every shareholder of the meeting and its start date at least seven days before the meeting. Holders of at least 90% of all voting power may agree to shorten that notice to at least 24 hours. Every shareholder may agree to a shorter period.
(b) A sole shareholder may satisfy the general-meeting requirement by recording the matters considered and decisions made.
(c) A company must notify every shareholder at least 48 hours before a shareholder vote opens and keep the vote open for at least 72 hours. Holders of at least 90% of all voting power may agree to shorten either period to at least 24 hours. Every person entitled to vote may agree to a shorter period.
(d) Meetings and votes may take place in person, in game, or through a suitable remote channel. Shareholders may decide a matter by written or saved-message resolution without a live meeting, subject to the applicable notice, voting-period, participation, and approval requirements. The company must keep a record of the result.
(e) Shareholders holding at least 25% of all issued shares held by shareholders other than the company, counting voting and nonvoting shares equally, may request a special meeting for a stated purpose. The company must hold it within 14 days after the request. The company may refuse a demonstrably abusive request; the requesting shareholders may challenge the refusal in Court.
(f) If a properly requested special meeting is not held within 14 days, the requesting shareholders may arrange it with the required notice and recover reasonable costs from the company.
(g) Unless this Act or the bylaws provide otherwise, more than half of all voting power must participate in a vote on a shareholder proposal, and the proposal passes if more votes are cast for it than against it.
(h) Unless the bylaws provide otherwise, a change to the bylaws requires approval under subsection (g). A change to a share class's rights requires the approval provided in section 18(b).
(j) A company's bylaws do not prevent an action expressly authorized by a Court order under section 9, 12, 13, or 14 of the Azalea Banking and Solvency Act. The approval otherwise required under subsection (h) or section 18(c) does not apply to a share issue or bylaw change expressly ordered by the Court under section 12 or 14 of that Act.
(k) The Court may validate or correct a company act or share issue affected by a procedural defect after directly affected persons have notice and an opportunity to respond. The Court must not waive a separate mandatory substantive requirement, including required lienholder consent.
(l) For a shareholder or share-class vote under this Act, an express abstention counts toward participation but not as a vote for or against. A proposal does not pass, and a required approval is not given, if no votes are cast for it.
14. Companies Without Boards
(a) A company without a board must elect its highest executive at least every three months. If the company is majority-owned by an entity under section 10(c), that entity elects the highest executive. Otherwise, shareholders elect the highest executive according to their voting rights unless the bylaws provide another method.
(b) More than half of all shareholders by headcount may vote to remove the highest executive. For a credit union, section 9(b) of the Financial Services Act applies instead of this headcount rule. The company must elect a replacement within seven days after a vacancy, with interim management under its bylaws.
(c) If shareholders remove the highest executive of a company majority-owned by an entity under section 10(c), that person must not be reelected to that role before the next scheduled election.
(d) A company without a board may elect a shareholder representative. In a company majority-owned by an entity under section 10(c), the shareholders other than the majority entity elect the representative, with one vote per shareholder. If the entity owns all the shares, it may elect the representative.
(e) The highest executive manages the company and appoints and removes the other executives. A shareholder representative assists operations, primarily by verifying the integrity of corporate operations. If there is a shareholder representative when the highest executive is removed between elections, the representative must arrange the election of a replacement.
15. Fundamental Transactions
(a) A sale of substantially all of a company's business assets, a merger, or an acquisition using substantially all of a company's assets requires approval by at least two-thirds of the votes cast, with more than half of all voting power participating, except as provided in subsection (f). If the company has a board, a sale of substantially all its business assets must be proposed by the board unless shareholders decide the matter under section 11(f). These approval and proposal requirements do not apply to a sale expressly ordered under section 13 of the Azalea Banking and Solvency Act.
(b) Each company participating in a merger must obtain its shareholders' approval, except as provided in subsection (f). The merger agreement may designate an existing company as the survivor or provide for a new company.
(c) When the merger takes effect, the resulting company takes the participating companies' debts and obligations. The disappearing companies' assets and contractual rights also pass to the resulting company at that time, subject to contractual restrictions and applicable law. An absorbed company ceases to exist when the merger takes effect.
(d) A merger must not take effect unless every registered lienholder on a plot owned by a disappearing company consents to its transfer. The lien and its priority continue.
(e) Participating companies must give known creditors written notice of the planned merger at least seven days before it takes effect.
(f) If a parent owns all shares of a subsidiary, the parent may approve a merger of the subsidiary into the parent by a vote of its board or, if it has no board, by its highest executive instead of a parent-shareholder vote, provided the parent survives and issues no new shares. The subsidiary must obtain approval from its sole shareholder. The parent must notify its shareholders of the planned merger at least seven days before it takes effect. The other requirements of this section and section 16 apply.
16. Merger Applications
(a) Applicants must file the merger agreement and evidence of each approval required under section 15 with the MEA. If the merger forms a new company, the application must include the applicable information required by section 6(b). The MEA must identify missing required items within seven days and decide a complete application within 14 days. An application is complete when the MEA receives the fee and all required items.
(b) The MEA must approve a merger that meets the legal requirements and give written reasons for a denial. A merger takes effect when the MEA approves it or, if later, when the other required approvals have been obtained, the applicable notice periods have expired, and any repayment required by section 6(f) has been made.
(c) The fee in the first sentence of section 6(d) and the refund rules in section 6(f) also apply to merger applications. The merger fee covers formation of a new company through the merger. The new company is incorporated and becomes a separate legal person when the merger takes effect.
(d) If the MEA does not decide a complete application within 14 days, an applicant may ask the Court to compel a decision. Delay does not itself approve the merger.
(e) An applicant may appeal a denial to the BoA under section 22.
17. Shareholders of an Absorbed Company
(a) Merger terms must provide fair value for the shares of each shareholder of a disappearing company, in cash, shares, or both. The Court may resolve a valuation dispute.
(b) A shareholder of an absorbed company who votes against the merger may require a cash buyout at the fair value of their shares. The company must notify eligible shareholders of the right and the deadline after the participating shareholders approve the merger. A shareholder may request the buyout within 14 days after receiving notice. The merger must not take effect before every eligible shareholder's 14-day request period ends.
(c) The shares shall be valued on the day the merger takes effect. The merger may proceed while their value is disputed. The resulting company must pay the buyout within 30 days after the value is agreed or finally determined.
18. Company Shares
(a) A company may issue more than one class of shares, including voting and nonvoting shares. Each voting share has one vote, and shares of the same class have the same rights. The company must record and honor each class's rights. At least one issued voting share must be held by a shareholder other than the company.
(b) A change to an existing class's rights requires approval by a majority of the general shareholder votes cast and by at least two-thirds of the votes cast by the affected class. More than half of all voting power must participate in the general vote, and holders of more than half of the affected class's shares must participate in the class vote. Each share of that class has one vote on the class vote, including a nonvoting share.
(c) An ordinary issue of shares requires approval by at least two-thirds of the votes cast, with more than half of all voting power participating. The company must receive fair value in money or agreed property or services. Fair value must be determined reasonably and in good faith using available evidence; the Court may review a dispute.
(d) The company must first offer new shares proportionately to existing holders of the same class on the same terms. For a new class, it must offer them to all existing shareholders in proportion to the number of existing shares each holds. The offer must state its price and terms and remain open for 14 days unless every eligible holder has accepted, declined, or waived the offer.
(e) Before selling shares offered under subsection (d) to outsiders at a lower price or on otherwise better terms, the company must first offer those terms to the eligible existing holders under subsection (d). Subsections (d) and (e) do not apply to shares issued under a Court order under section 12 or 14 of the Azalea Banking and Solvency Act, or to shares issued as consideration when a merger takes effect under its approved agreement.
(f) An entity must notify the MEA at least 24 hours before a transaction by which it would begin or cease to hold more than half of a limited company's shares, or begin or cease to hold more than half of its voting power.
(g) A company's own shares do not count toward shareholder totals and cannot be voted.
(h) Before its shares begin public trading, a company must obtain approval from holders of more than half of all voting power and notify the MEA. This notice does not require the MEA's approval.
(j) Approval under subsection (c) and offers under subsections (d) and (e) are not required for the initial shares issued when a company forms in accordance with its MEA-approved incorporation or merger application.
(k) A company may arrange the purchase of an inactive shareholder's shares at fair value under subsections (l) through (s) if the shareholder is an individual who has not logged in to CityRP for at least 60 consecutive days, or the shareholder has not responded for at least 60 consecutive days to a direct company communication requesting a response. Time during a formal leave of absence counts toward either period.
(l) Before a purchase under subsection (k), the company must give the shareholder written notice of the proposed purchase through a known in-game or other direct contact by a method whose delivery can be verified. The shareholder must have at least 14 days after delivery to respond. Proof of delivery does not require proof that the notice was read. The notice must state the proposed price and the means of preventing the purchase under subsection (m). If no reliable direct contact is available, the company must obtain and follow Court instructions before proceeding.
(m) For a shareholder entitled to vote, the company must make a shareholder vote available and keep it open for at least 14 days after it opens. The shareholder or an authorized representative who votes during that period prevents the purchase. The purchase must not proceed before that vote closes. If the shareholder has no voting rights or no vote is available, the shareholder or an authorized representative may prevent the purchase by confirming during the notice period that the shareholder wants to retain and exercise their shareholder rights. A response alone does not prevent a purchase when the shareholder is entitled to vote and a vote is available.
(n) If succession to a legally deceased shareholder's shares remains unresolved, a purchase under subsection (k) requires Court approval. The company must notify any known authorized representative or heir of the proposed purchase and Court proceeding.
(o) The company may purchase the shares first. If it declines, it must offer them at fair value to the other shareholders, allocating available shares among interested shareholders in proportion to their existing holdings. Any remaining shares may be offered to outsiders. If no eligible buyer purchases a share at fair value, the shareholder retains it.
(p) A person holding at least 90% of both all shares and all voting power may require the remaining shareholders to sell their shares at fair value. The buyer must give each affected shareholder written notice of the proposed purchase and price at least 14 days before the proposed transfer. The purchase requires Court approval.
(q) Fair value under subsections (k) and (p) must be determined reasonably and in good faith using available financial information. An affected person may ask the Court to review a proposed purchase or price. If a challenge is filed before transfer, the transfer is paused until the Court decides the challenge or allows the transfer to proceed.
(r) A share must not transfer under subsections (k) or (p) unless its full fair value is paid. If the shareholder cannot be reached to receive payment, the buyer must place the full price in a secure, separately identifiable account for the shareholder or lawful successor.
(s) Subsections (k) through (r) do not apply to a credit union.
Chapter 3: Reporting and Appeals
19. Reporting Tiers
(a) A company is in tier 1 if its size is below $100,000, tier 2 if its size is at least $100,000 but below $250,000, and tier 3 if its size is $250,000 or more.
(b) The MEA may assign a company to a higher reporting tier when specific circumstances demonstrate a need for greater reporting. Before doing so, the MEA must explain its reasons and allow at least 72 hours for a response. The company may challenge the decision in Court; the higher reporting tier applies unless the Court pauses it.
(c) A higher tier assigned under subsection (b) does not increase the company's plot allowance, which is based on its size under subsection (a).
20. Company Reports
(a) Every company must publish a monthly financial report and file it with the MEA by the end of the seventh calendar day of the following month. The report must state the month's income, expenses, and profit or loss, and its total assets and liabilities at month-end. The company must report income for the month in which it is earned and expenses for the month in which they are incurred.
(b) Tier 2 and tier 3 reports must summarize major decisions made during the month. Tier 3 reports must also explain their financial reports, explain the reasons for those decisions, and summarize major future plans.
(c) In a summary of a major decision or future plan, a company may withhold commercially sensitive details when publication would materially harm it. It must still give a meaningful general summary and note the omission.
(d) With the report, the company must file a current list of its direct shareholders and their holdings with the MEA, including when ownership has not changed. The list is not automatically public.
(e) A newly incorporated company must report for the period from incorporation through the end of its first month. An inactive company must continue reporting its activity, assets, liabilities, and shareholders.
(f) The MEA must provide financial-report and balance-sheet templates. A company may use another clear format that provides all required information. The MEA must make an easily accessible guide to additional reporting standards available on its Discord. In exceptional circumstances, the MEA may extend a reporting deadline by up to seven days before fines begin.
(g) Section 7(b)(i) of the Government Contracts Act 2.0 continues to exempt the Government Shop company from enterprise reporting.
(h) A company must keep records sufficient to support its required financial reports for at least six months after the relevant report is filed.
(j) The MEA must maintain an accessible public record of each company's current directors and highest executive. The MEA must enter a newly incorporated company's initial directors and highest executive, if any, within seven days after incorporation. A company in existence when this Act is enacted must notify the MEA of its current directors and highest executive, if any, within 30 days after enactment. A company must notify the MEA of a change to those positions within seven days after the change. The MEA must update the record within seven days after receiving notice.
21. Company Reporting and Audit Enforcement
(a) If a monthly report or shareholder list is missing, the MEA must identify the missing document and allow the company seven full days after notice to provide it. A daily fine begins after that period if the document remains missing.
(b) The daily fine for each missing document is $250 in tier 1, $500 in tier 2, or $750 in tier 3. It stops accruing at $25,000 per missing document.
(c) The MEA may require a company to provide an additional financial report and balance sheet when reasonably necessary for its duties. It must allow at least seven days to respond.
(d) The MEA may audit a company to carry out the MEA's duties. It must identify the required cooperation and allow at least seven days. The MEA may obtain an independent third party's records with that party's consent or a Court order. If evidence indicates records may be destroyed before the normal period ends, the MEA may seek an expedited Court order to preserve them or authorize earlier access.
(e) Before the audit cooperation deadline expires, the MEA must warn the company of the required cooperation, the deadline, and the possible daily fine. After the deadline, the MEA may fine continued noncooperation up to $1,000 per day, up to $25,000 for the noncompliance.
(f) The MEA may impose an applicable fine under this section and an applicable Financial Services Act fine for the same failure, subject to each Act's requirements.
(g) The MEA may waive accrued reporting or audit fines under this section for fair reasons.
(h) To compel an independent third party to produce records for a duty under the banking provisions of the Financial Services Act, the MEA must obtain a banking-records warrant under section 20(k) of the Judiciary Act. Control or liquidation of a bank following an audit under this section must comply with sections 9 and 15 of the Azalea Banking and Solvency Act.
22. Appeals
(a) An applicant or company may appeal the following MEA actions under this Act to the BoA under section 7 of the Azalea Banking and Solvency Act:
(i) a denial of incorporation, merger, or limited-partnership registration;
(ii) an additional-document request;
(iii) a general-audit demand;
(iv) a reporting or audit fine; or
(v) an audit-based dissolution decision under section 23.
The appeal is filed when the BoA receives it. If the BoA overturns an incorporation, merger, or limited-partnership registration denial, it may direct the MEA to approve the application. The appellant may bring a civil suit if the appeal is rejected or not decided within the period in that section.
(b) During an appeal to the BoA, the disputed additional-document request and the challenged part of a general-audit demand are paused. Unrelated duties and Court orders continue.
(c) During a BoA appeal of a reporting fine, collection and further accrual of the disputed fine are paused. After rejection, collection and accrual resume unless the Court grants relief.
(d) During a BoA appeal of an audit fine, collection is paused but daily amounts continue to accrue up to the applicable cap. After rejection, collection may resume unless the Court grants relief.
Chapter 4: Winding Up and Shareholder Rights
23. Administrative Dissolution for Audit Noncooperation
(a) The MEA may order a limited company dissolved if serious, continuing noncooperation materially obstructs an audit and continues after the MEA warns that dissolution is proposed. This section does not apply to an institution covered by section 9(a) of the Azalea Banking and Solvency Act; its liquidation is governed by section 15 of that Act. The MEA must give the company at least 72 hours after the warning to respond or cooperate, in addition to the original audit notice.
(b) The MEA must promptly notify the company of the order. The company may appeal under section 22. The order must not take effect until 72 hours after the MEA makes it. If the company appeals within that period, the order is paused while the BoA appeal is pending, even if the BoA misses its decision deadline or the company brings a suit, unless the Court orders otherwise.
(c) If the BoA rejects an appeal made within that period, the order must not take effect for seven days after that decision. A suit does not automatically pause the order after the seven-day period, but the Court may pause it.
(d) When the order takes effect, the MEA must appoint a liquidator to wind up the company and supervise the liquidator. A creditor, shareholder, or the company may ask the Court to review the appointment and replace the liquidator. An affected person may ask the Court to review a disputed action of the liquidator.
24. Voluntary Winding Up
(a) A limited company may be wound up voluntarily with the approval of at least two-thirds of the votes cast, with more than half of all voting power participating.
(b) The company must appoint and supervise the liquidator. An affected person may ask the Court to review or replace the liquidator or review a disputed action.
25. Winding-Up Procedure
(a) This section applies to a limited company wound up under either of the preceding sections. Subsection (j) also applies to a company liquidated under section 29 or section 15 of the Azalea Banking and Solvency Act. The company shall continue in existence for the limited purpose of winding up its affairs until winding up is complete.
(b) The liquidator must give written notice to known creditors and publish notice for other creditors. The liquidator must allow a known creditor at least 30 days after receiving notice to submit a claim, and other creditors at least 30 days after publication.
(c) The liquidator must consider a late claim with the other claims if it is received before any assets are distributed. If a claim is received after a distribution, the liquidator must consider it against assets not yet distributed. A completed payment is not automatically reversed.
(d) The liquidator must assess claims and give written notice to a creditor whose claim is rejected or reduced. The creditor may ask the Court to review that decision within seven days after notice.
(e) The liquidator must not distribute assets before the claim periods in subsection (b) expire. The liquidator must not distribute assets while a creditor still has time to seek review under subsection (d), unless that creditor waives the opportunity. If a creditor timely seeks review, the liquidator must not distribute assets until the Court resolves the dispute.
(f) In a voluntary company winding up under section 24, a voluntary partnership winding up under section 3(j), a partnership winding up under section 4(b), or a limited partnership winding up under section 23, the liquidator must apply proceeds from the sale of a plot subject to a registered lien first to necessary sale expenses. The liquidator must then apply the remaining proceeds to registered lienholders in registration order, up to each lien's secured payoff under section 4(e) of the Plot Liens Act. Each payment to a lienholder is credited against the secured debt. Any unpaid rights under the lien or debt remain subject to applicable law. The remaining proceeds enter the winding-up pool.
(i) For a company winding up to which this section applies under the first sentence of subsection (a), or a partnership winding up under section 3(q), after any required lien payments, the liquidator must pay proper winding-up costs, then distribute the remaining pool under the priorities in section 3(d)(iii) through (vi) of the Bankruptcy and Debt Relief Act.
(g) A creditor may agree to accept an unsold noncash asset at fair value, credited against the creditor's claim. The transfer must respect the applicable payment order and other creditors' rights.
(h) If bankruptcy begins during winding up, the liquidator must work through the bankruptcy proceeding for assets in the bankruptcy pool and follow the bankruptcy-overseeing Court's orders and payment priorities.
(j) After debts and winding-up or liquidation costs are paid, a credit union must distribute any remaining assets under section 9(d) of the Financial Services Act. Any other nonprofit company must distribute them under its bylaws if the bylaws provide for it. Otherwise, the remaining assets must be distributed to shareholders according to the lawful economic rights of their shares.
(k) When winding up is complete, the company ends and its remaining covered debts are discharged as to the company. A covered debt is a company debt incurred before winding up is complete, including a debt incurred during winding up.
(l) If a company asset is discovered after winding up is complete, the winding up must be reopened and a liquidator appointed to deal with it. Valid unpaid company claims, including claims not previously filed, may be asserted against that asset despite the discharge under subsection (k). The liquidator must consider them under the applicable priorities.
(m) A known creditor who was not given notice, or a creditor for whom the required public notice was not published, may ask the Court to reopen the winding up, consider the creditor's claim, and correct an improper distribution. A proper completed payment is not automatically reversed.
26. Shareholder Estates and Inspection
(a) A deceased shareholder's shares pass under applicable law, including the Inheritance and Succession Act. Inactivity alone does not give the company a right to seize the shares or buy them at a discount.
(b) An authorized estate representative may vote the deceased shareholder's shares while the estate is settled. Unrepresented voting shares must be counted in the total when a vote requires a percentage of all voting shares.
(c) A shareholder may inspect the company's shareholder list for a proper company purpose. Within seven days after a request, the company must provide access or explain its refusal.
(d) A shareholder who obtains the list may use it, contact other shareholders, and share necessary information for the stated company purpose. The shareholder must not sell the list or use it for an unrelated purpose.
(e) A shareholder may inspect records supporting the company's financial reports when relevant to a proper company purpose. Within seven days after a request, the company must provide access or explain its refusal. The shareholder must use the information only for that purpose. The company may use necessary redactions or confidentiality safeguards to protect sensitive information. This subsection does not itself require or authorize disclosure of customer financial data protected by section 21 of the Financial Services Act. Other applicable privacy and confidentiality law also applies. A shareholder may ask the Court to review a refusal or safeguard.
Chapter 5: Business Control
27. Control of a Business
(a) The MEA may apply to the Court for control of a nonfinancial business, whether it is a limited company, a limited partnership, or another unincorporated business, if:
(i) financial distress creates a serious, demonstrable risk of substantial harm beyond the business;
(ii) a severe, continuing pattern of noncompliance materially frustrates enforcement; or
(iii) the business is essential to government operations and those operations face a serious, demonstrable threat.
(b) The Court must give the business notice it considers reasonable and an opportunity to respond. It may authorize control if a ground under subsection (a) exists, control is necessary and proportionate to address that ground and its effects, and no less intrusive measure would be adequately effective. The Court must specify the powers necessary for that purpose.
(c) If the MEA has a reasonable basis to believe that a ground under subsection (a) exists and that necessary, proportionate control cannot await Court authorization without an immediate risk of serious harm, it may take temporary control. The MEA may exercise only the powers needed to address that risk. It must give the business and its owners written notice of the action and its reasons immediately or as soon as reasonably practicable.
(d) The MEA must apply to the Court within twenty-four hours after taking temporary control. The Court must promptly review the temporary control. The control ends if the MEA misses that deadline or does not obtain Court authorization within seventy-two hours after control began.
(e) Control of an unincorporated business extends to its business assets and mixed-use property only to the extent necessary for the authorized purpose. It does not extend to unrelated property of an owner.
28. Management and Review
(a) The MEA must appoint a manager. An affected person may ask the Court to review or replace the manager.
(b) When control begins, the MEA must publish notice identifying the business, stating that it is under control, and providing contact information for the manager. The controlled business must provide the records and in-game or Discord roles needed for the manager's authorized duties.
(c) The business must pay the necessary, reasonable costs of management from business funds. The Court may review those costs.
(d) The Court must review continuing control at least every thirty days to determine whether it remains necessary and proportionate. It must narrow or end control that is no longer necessary or proportionate. If control is no longer necessary, the MEA or manager must promptly inform the Court. An affected person may also apply to end or narrow control.
(e) When control ends, management and access return to the business. The Court may order specific continuing conditions when necessary.
29. Sale and Liquidation
(a) The manager must obtain specific Court approval before selling substantially all the business's assets or transferring the business to a new owner. The buyer must agree to the sale. Before approving an asset sale, the Court must find that the overall consideration is fair, taking account of the obligations assumed and the other material terms.
(b) The Court must not approve the sale unless each affected creditor would receive at least as much value as that creditor would reasonably receive in a liquidation, or that creditor agrees to receive less. A contract transfers only as permitted by its terms and applicable law or with the other party's consent.
(c) An owner's shares or ownership interests may be sold under this process only with that owner's agreement.
(d) The Court may order liquidation of a controlled limited company or limited partnership if there is no reasonable prospect of a viable rescue. The Court must give notice and protect creditors under the Bankruptcy and Debt Relief Act.
(e) The MEA must appoint a liquidator. The Court must supervise the liquidation, and an affected person may ask the Court to review or replace the liquidator. The Bankruptcy and Debt Relief Act governs the liquidation with the adaptations needed for this section. The Court may order liquidation without a debtor's petition or a separate finding of insolvency. If a bankruptcy proceeding for the business is pending, the MEA must seek the liquidation order in that proceeding, and its original petition date applies. Otherwise, the MEA's application is treated as the bankruptcy petition, and its filing date is the petition date.
(f) After the Court decides claims and completes the sales and distributions required by the Bankruptcy and Debt Relief Act, it must end a limited company and discharge its remaining covered debts as to it, subject to that Act's rules on notice, omitted claims, and surviving liens. A limited partnership ends under section 3(u), without a separate discharge under this subsection. If an asset is later discovered or a claim survives, the Court may reopen the liquidation. Valid unpaid claims may be asserted against a later-discovered asset despite any discharge, under the applicable priorities. Proper completed payments are not automatically reversed.
30. Existing Seizure Proceedings
(a) A proceeding concerning a nonbank financial institution or nonfinancial business under the Seizure Act that began before enactment shall continue under that Act unless the Court approves a transition to the applicable successor procedure after affected parties have an opportunity to be heard. The powers, procedures, orders, and review available under that Act shall continue for the proceeding.
Chapter 6: Consumer Protection and Continuity
31. Consumer Protection
(a) A person carrying on a business must not use false or misleading advertising for goods or services, or make a false or misleading representation or use coercive practices when selling them.
(b) Before a customer commits to obtaining goods or services, the person carrying on the business must clearly disclose the total price and mandatory charges. If the person cannot determine the total, the person must explain how the price and charges will be calculated and give a good-faith estimate when reasonably possible.
(c) If the person carrying on the business expects the final price to be substantially higher than the estimate, the person must explain the revised price and obtain the customer's agreement before doing further chargeable work. If the customer does not agree, the customer owes for work already authorized and performed under the agreed pricing terms.
(d) A customer may bring a civil action for a violation of this section. The Court may award compensation or restitution or order the person responsible to end the violation.
(e) The MEA may order the person carrying on the business to comply with this section.
32. Company Continuity
(a) A limited company existing immediately before enactment shall continue as a limited company under this Act, with the same legal identity, property, rights, obligations, and shares. Its existing bylaws shall continue, subject to this Act's mandatory requirements. An existing company registration, appointment, filing, or approval shall continue under this Act until it expires or is lawfully changed or revoked. MEA additions in effect at enactment shall continue under section 6(m) if they comply with it. A company that had no bylaws of its own immediately before enactment follows this Act's default rules instead of the Business Reform Act defaults. For MEA additions under section 6(m), each company existing at enactment is treated as incorporated then.
(b) A right, liability, fine, or proceeding arising under the Business Reform Act or Financial Revisions Act before enactment remains governed by the law then in effect, except as this Act provides.
Chapter 7: Limited Partnerships
33. Limited Partnerships
(a) A limited partnership is registered under this section and has at least one general partner and one limited partner. A person may not be both. An individual or legal entity may be either. Sections 3 and 4 apply except as this section provides.
(b) To register, the partners must give the MEA the partnership's name, each partner's identity, role, and promised contribution, a notice contact, and each partner's written agreement to formation or conversion and their role. The applicant must pay a $1,000 fee. Sections 6(e) through (h) apply as to incorporation, treating registration as incorporation. Registration takes effect on MEA approval.
(c) The MEA must publish the partnership's name and general partners; limited partners' identities in the filing are private. The partnership or its continuing owner must notify the MEA of a partner, role, or legal-form change within seven days. The MEA must update its public record within seven days after notice.
(d) Despite section 3(d), a limited partner is not personally liable for partnership debts, fines, or allocated losses merely as a partner beyond their unpaid investment commitment. Their paid investment remains at risk; personal guarantees and liability for their own conduct remain enforceable. If the partnership cannot pay its debts, a creditor may recover the unpaid commitment, subject to applicable winding-up and bankruptcy orders and priorities. Payments are credited against the commitment and must not be recovered twice.
(e) General partners manage the partnership; limited partners may vote or advise. Despite section 3(g), a limited partner has no authority to bind the partnership merely by being a partner. Separate authority and applicable reliance rules remain.
(f) A limited partner who directs ongoing operations becomes a general partner and is personally liable for partnership debts incurred before and during their general-partner status. An isolated authorized task, vote, or advice alone does not trigger this subsection.
(g) Sections 3(b), 3(r)(ii), and 4(g) apply subject to subsection (d). General partners bear the debt a limited partner cannot be required to pay because of that limit.
(h) An existing general partnership may register only with every partner's agreement to conversion and their roles. Its identity, property, contracts, and debts continue. A general partner of any partnership who becomes a limited partner remains liable for earlier debts unless the creditor releases them. For a later debt, the former general partner is liable to an existing creditor that reasonably relied on their continued general-partner status and had not been notified or otherwise learned of the change.
(j) If no general partner remains, the partnership must appoint a consenting replacement within 30 days or wind up. During that period, a limited partner or appointed person may take necessary steps to preserve assets and protect customers without becoming a general partner; subsection (f) otherwise applies. If no limited partner remains, the partnership must admit one within 30 days or continue as a general partnership if at least two partners remain. If one remains, section 4(b) applies; if none remains, it must wind up. The partnership remains limited during either period and during winding up for lack of a general partner; sections 2(b), 4(b) through (d), and 4(j) through (l) do not apply merely because one partner remains during those times. Necessary winding-up steps do not trigger subsection (f).
(k) Section 12(f) and (g) apply to a return of a limited partner's invested capital as if the partnership were a company and the return a dividend.
(l) Sections 9, 19 through 23, and 26(c) through (e) apply to a limited partnership as to a company, except sections 19(c) and 20(j). In those sections, shareholders and their holdings mean partners and their interests, and incorporation means registration. A public report under section 20 must not identify a limited partner without their consent. For a winding up under section 23, section 25(b) through (h) applies, including section 25(f), and its liquidator is the person appointed by the MEA under section 23(d), despite section 3(q). Sections 3(t) and (u), not section 25(k), govern completion and reopening; partners retain their applicable liabilities and protections.
34. Repeals
(a) The Business Reform Act is repealed.
(b) The Seizure Act is repealed.
(c) The Financial Revisions Act is repealed.
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