Request for feedback on proposal for incorporation guidelines

The bank is needed first — but after that, here go some rough guidelines for a future bill to be proposed to the RA on incoporating companies:

1. Neualtenburg-incorporated companies are "legal personas" with all rights and duties of every citizen in Neualtenburg (as related to full protection of the law, the ability to own and transfer deeded land, etc.) except for elegibility for public governmental offices and the ability to vote (note: a company *may* be elegible for other things, like running the MoCA — it doesn't need to be an "individual" doing that)
   
2. Appliance to incorporation will start with requesting a unique name from the Guild (ie. the Guild makes sure no two companies will use the same name), set to some restrictions (for instance, using "Neualtenburg" in the name might be misleading and disallowed), and which will be registered in the name of the Founder of the company for a fee. The registration assumes full incorporation in the period of 7 days following the registration; the right to the name will be void after that period.
   
3. The company will deposit the Incorporation Charter with the Neualtenburg Notary, defining the company's purpose, its initial stock, its Director, and procedures for signing valid documents (ie. how many signatures are necessary, just the Director or a majority of stockholders have to sign, etc.) as well as any limitations regarding stock ownership and transferal. Subsequent changes might need further notarisation or not (to be discussed) or simply a registration with the Chamber of Commerce (see Sudane's proposal on that)
   
4. The equivalent of stock in L$ is deposited with the Neualtenburg Bank (in L$, US$, land, or other assets deemed equivalent), which will emit a Certificate of Escrow
   
5. The newly incorporated company will need to present their accounting quarterly to the Guild, in a form defined by the Guild; failure to do so will result in suspension of the incorporation status (subject to appeal to the Chamber of Commerce, or, if necessary, the SC's Commercial Court), the payment of fines, or any other limitations the Guild sees fit
   
6. Contracts signed and deposited at the Neualtenburg Notary are deemed public and have free access; the use of escrowed assets as guarantees on contracts will only apply if the contract is public and notarised (this allows for simple shops to make small-scale sales on vendors; the customers won't need to "sign a contract" each time they buy a L$25 bier stein — but assets in escrow will not "cover" for unsuccessful transactions, although, as always, the customer can complain to the Chamber of Commerce)
   
7. Each and every company incorporated in Neualtenburg will automatically be listed as member of the Chamber of Commerce, and subject to any special regulations and requirements as set by that body
   
8. Taxation on income or assets held by the company is defined by the RA (ie. just because no taxation is suggested at the moment, this may change in the future)
   
9. The company has the right to request loans from the Neualtenburg Bank based on escrowed assets, but the Neualtenburg Bank has full authority to approve or not any loans requested.
   

For your discussion!

I have on the basis of Gwyneth's outline and the previous conversations on the topic drafted a rough sketch of what could become bill to introduce registration and possibly incorporation of companies under Neualtenburg legislation.

The current sketch deviates from Gwyneths guidelines in the following ways:
- Both registered companies with unlimited liability and incorporated companies with limited liability are supported

- The legislation does not require an incorporation charter as such but merely request the filling in of a Company Registration Form, which should be signed

- There is no provision for 'stock' as such. In general the proposed legislation shies away from dealing with the problem of determining ownership. It merely requires that owners be registered and that criteria be specified to determine who is empowered to transfer ownership, enter into obligations and otherwise act on behalf of the company. I think introducing legislation to deal with issues of stock ownership and transfer would make this legislation unnecessarily complicated at this stage.

- There is of course the requirement that companies with limited liability deposit an amount in escrow with the National Bank. The exact amount is not specified but required to be in excess of 10,000 L$

- There is no explicit requirement for the incorporated company to present its accounts to the Guild. However there is a provision for the Guild to introduce this requirement through a blanket clause authorising the Chamber of Commerce to draw up Codes of Conduct for companies.

- I did not put in any explicit right for the company to request loans based on escrowed assets. This is something better left for private banks to provide in my view. In any case it is something that should be left for implementation in the bill for the National Bank.

This proposal mentiones the National Bank briefly in so far as it is relevant for the deposit of assets in escrow but explicitly refers to a seperate law detailing the charter and operations of this institution. This bill has yet to be drafted perhaps by someone more knowledgeable about banking operations than myself.

I have quoted the text of the proposed bill in the below. I look forward to any questions and comments. Keep in mind it was typed up late at night in the CET timezone!

***

BILL FOR THE REGISTRATION AND INCORPORATION OF COMPANIES IN NEUALTENBURG

Article 1: Purpose

Section 1: The purpose of this bill is as follows:
- To allow companies to register for recognition as legal entities under Neualtenburg jurisdiction
- To facilitate collective ownership of companies with respect to the above
- To allow the incorporation of a company setting up requirements limiting the liability of ownership while providing a necessary degree of security for creditors

Article 2: Definitions

Section 1: The Neualtenburg Chamber of Commerce (Chamber of Commerce) is an institution under the auspices of the Guild, which is chartered with the responsibility of maintaining a public registry of companies, their securities and obligations (the Register).

Section 2: A Neualtenburg Registered Company (NRC) describes an entity capable of entering into agreements and undertake obligations, which will be recognised under the jurisdiction of Neualtenburg legislation.

Section 3: The Commercial Court of Neualtenburg (Commercial Court) is an institution under the Scientific Council chartered with the responsibility of settling disputes where one or more parties is an NRC in accordance with the provisions of section 7, article 3 of the Constitution.

Section 4: A company registration form is used to describe the details of a NRC's name, ownership, empowerment criteria, concept of liability and if applicable the size of the deposit being kept in escrow with the National Bank of Neualtenburg. A template of this form is maintained by the Chamber of Commerce.

Section 5: A company dissolution form is used to propose how the Neualtenburg-registered assets of an NRC will be distributed between individuals and entities upon the closure of an NRC. It also states the reason for the desired dissolution of the NRC.

Section 6: Empowerment is understood as the ability of one or more individuals or entities to take action on behalf of a NRC with respect to entering into obligations, certifying that obligations of other parties in relation to the NRC have been met, submitting a new company registration form or submitting a company dissolution form to the Commercial Chamber.

Section 7: The Neualtenburg Notary service (the Notary) is the facility installed at the Rathaus, which enables users to enthrust a document with a certificate of authenticity as well as signatures of the involved parties. The process by which this is arrived at is called notarisation.

Section 8: The National Bank of Neualtenburg (the National Bank) is an institution under the Guild, which for the purpose of this document is chartered with taking assets into escrow to establish a minimum deposit fulfilling the requirements for NRC's operating under a concept of limited liability and issuing a certificate to that effect. A seperate law governs the operations of this institution.

Article 3: Registration

Section 1: Any individual or collection of individuals may apply to be registered as an NRC by obtaining a copy of the template for the company registration form and filling it in with the necessary information as guided by the Chamber of Commerce. However, the actual approval and continued upkeep of NRC status is dependent on the specific form of company as well as of the fulfilment of the requirements detailed in the remainder of this document.

Section 2: The name of the NRC as specified in the company registration form consists of three elements: The distinctive element, the descriptive element and an element describing the concept of liability under which the NRC will operate:

The distinctive element is mandatory. It must be one or more words uniquely identifying the company. This can be anything such as a family name, a brand name or the name of a geographic region. It may not contain the word "Neualtenburg".

The descriptive element is optional. It describes the kind of business, which the company will operate. Examples of descriptive elements are "real estate", "architects" or "weaponsmith".

The element describing liability is mandatory. It must be either "N.Reg."or "N. Registered" or "Neualtenburg Registerd" to describe a company with unlimited liability in respect to any obligations registered, or it must be "N.Inc." or "N. Incorporated" or "Neualtenburg Incorporated" to describe an incorporated company with a liability limited to the assets held by it under Neualtenburg jurisdiction.

The combined elements of the NRC name must uniquely identify the company. It is the prerogative of the Chamber of Commerce to determine whether or not the name specified on the company registration form is sufficiently distinct as to merit registration. This verdict cannot be appealed.

Section 3: The owners of the NRC should be listed on the Company Registration Form as the names of the avatars that will be considered owners of this company under Neualtenburg jurisdiction.

Section 4: The empowerment criteria should be described on the company registration as conditions that must be met in order for a person or an entity to be empowered to carry out either of the following transactions on behalf of the company relative to Neualtenburg jurisdiction:

- Register a new Company Registration Form with amendments to the old one
- Sign documents on behalf of the NRC containing obligations that will be honoured or even executed by Neualtenburg jurisdiction.
- Sign documents on behalf of the NRC releasing other entities from obligations undertaken in respect of an agreement with the NRC
- Register a Company Dissolution Form

The criteria should be described in a way that they can be objectively verified to have been fulfilled by the Commercial Chamber ahead of its registration of a document

Section 5: It must be specified on the Company Registration Form whether the NRC will operate as a registered company with unlimited liability respect to any obligations registered to it, or if it will operate as an incorporated company with a liability limited to the assets held by it under Neualtenburg jurisdiction. Further requirements will apply depending on the chosen concept of liability as described in Articles 4 and 5 as applicable.

Section 6: The company registration form must be submitted to a representative of the Chamber of Commerce and contain information as described in Article 2, sections 4. At the same time a registration fee is paid according to the tariff set by the Gildemeister. This fee is non-refundable.

Section 7: In the case of the Company Registration Form being approved by the Chamber of Commerce the Form must be signed by all the Owners as specified in Article 3, section 3 and notarised at the Notary after which it will be deposited in the public Register by the Chamber of Commerce.

Article 4: Requirements for NRC with unlimited liability

Section 1: All owners of an NRC registered as operating with unlimited liability must be residents of Neualtenburg and own total land in excess of 144 sqm.

Section 2: The NRC is required to abide by any Code of Conduct that may be published by the Chamber of Commerce with respect to their operations.

Section 3: The current owners of an NRC registered as operating with unlimited liability are personally responsible in solidum for payment of any obligations resulting from agreements entered into by anyone acting on behalf of the company in accordance with the empowerment criteria described in the Company Registration Form at the time of the act.

Section 4: If an NRC is found to not fulfil the criteria outlined in Article 4, section 1 - 2 they have 7 days to bring this in order. Otherwise, the Chamber of Commerce will file a Company Dissolution Form with the Commercial Court.

Article 5: Requirements for NRC with limited liability

Section 1: An incorporated NRC with limited liability must own land in Neualtenburg. The deed to this land must be notarised and deposited ih the company file with the Commercial Chamber.

Section 2: An incorporated NRC with limited liability must deposit assets in escrow with the National Bank and receive a notarised certificate from the National Bank to this effect. The notarised certificate must be deposited with the Chamber of Commerce where it will be published in the Register. The total sum to be deposited in escrow will be determined by the owners of the NRC but must be in excess of 10,000 L$.

Section 3: The NRC is required to abide by any Code of Conduct that may be published by the Chamber of Commerce with respect to their operations.

Section 4: If an NRC registered as operating with limited liability is found to not fulfil the criteria outlined in article 5, sections 1 - 3 they have 7 days to bring this in order. Otherwise, the Chamber of Commerce will file a Company Dissolution Form with the Commercial Court.

Article 6: Obligations and litigation

Section 1: An NRC may enter into agreements with other entities or persons under legally binding obligations.

Section 2: In order for an agreement between the NRC and another party to be legally binding it must be signed by empowered parties acting on behalf of the NRC in accordance with the empowerment criteria and a representative of the other party, notarised at the Notary and deposited with the Chamber of Commerce, which will publish it in the Registry.

Section 3: For an NRC to be absolved of an obligation entered into under a legally binding agreement, a new agreement to this effect between the NRC and the other party must be signed by empowered parties acting on behalf of the NRC in accordance with the empowerment criteria and a representative of the other party, notarised at the Notary and deposited with the Chamber of Commerce, which will publish it in the Registry.

Section 4: Correspondingly, anyone empowered under the criteria specified in the Company Registration Form may authorise the release of another NRC from obligations previously entered into with this NRC by persons or entitites then empowered to act on behalf of the NRC. For this to be legally binding it should be declared in writing, notarised, signed by both parties and submitted to the Chamber of Commerce, which will publish it in the Register.

Section 5: Should a creditor be unable to obtain the fulfilment of obligations undertaken by an NRC with unlimited liability in respect to a still current agreement signed by the empowered parties, notarised and deposited with the Chamber of Commerce, he may bring the matter to the Commercial Cort. The Commercial Court will then initiate arbitration proceedings to assess the claim in accordance with article 7, section 3 of the Constitution If the claim is found to have merit it must be honoured by the NRC or the creditor will be authorised to file a company dissolution form with the Commercial Court, which will then execute the claim on behalf of the creditor through extension of the claim to the owners of the company in solidum.

Section 6: Should a creditor be unable to obtain the fulfilment of obligations undertaken by an NRC with limited liability in respect to a still current agreement signed by the empowered parties, notarised and deposited with the Chamber of Commerce, he may bring the matter to the Commercial Court. The Commercial Court will then initiate arbitration proceedings to assess the claim in accordance with article 7, section 3 of the Constitution If the claim is found to have merit it must be honoured by the NRC or the creditor will be authorised to file a company dissolution form with the Commercial Court, which will then initiate a liquidation of the company on the basis of the deposit kept in escrow with the National Bank and any other holdings and assets of the NRC that may be within reach of the authorities of Neualtenburg.

Article 7: Re-registration

Section 1: Anyone empowered to do so according to the criteria specified in the Company Registration Form for an NRC may file a new Company Registration Form specifying amendments to the original form. The procedure is identical with that described in article 3 and the requirements the same as those outlined in article 4.

Section 2: The following changes may take place during re-registration:
- The NRC may change its name.
- The ownership may be changed.
- Empowerment criteria may be changed
- The concept of liability may be changed
- For an NRC with a limited liability the amount being deposited in escrow may be increased

Article 8: Dissolution

Section 1: Anyone empowered to do so according to the criteria specified in the Company Registration Form for an NRC may file a Company Dissolution Form with the Commercial Court. This will result in the Court initiating a liquidation of the company with a subsequent distribution of assets among creditors who are able to prove their claims in accordance with article 6, sections 5 or 6 as applicable. Any remaining assets will be distributed among the owners listed in the current Company Registration Form.

Section 2: The Chamber of Commerce may file for dissolution of an NRC initiating the same procedure as described in article 8, section 1 when an NRC fails to meet its obligations under sections 3 and 4 of this document.

Section 3: Any creditor with an unhonoured claim deemed valid through through arbitration proceedings as described in article 6, sections 4 - 5 may file a Company Dissolution Form with the Commercial Court initiating the same procedure as described in article 8, section 1.

Article 9: Fees

Section 1: The Chamber of Commerce, the National Bank and the Commercial Court have the mandate to charge fees for any services provided in accordance with this document. Tariffs should be maintained and made publicly available.

Section 2: The Representative Assembly may decide to charge a recurring fee for the privilege of being registered with the Chamber of Commerce. Any NRC registered with the Chamber of Commerce is obliged to honour payments of this fee regardless of the time of their registration. In case of non-payment of fees the Representative Assembly has the mandate to file a Company Dissolution Form with the Commercial Court following the procedure as outlined in article 8 section 1.

Diderot,

Thank you for your attention to detail and precision. Regardless of the degree to which one agrees oe disagrees with the specifics, one very much appreciates their exactitude.

Excellent work, Diderot I think that proposed bill to the RA very much covers it all. I specifically like the way you provide for limited and unlimited liability, and the relationships between companies, the Chamber of Commerce, the courts, and the Neualtenburg Bank. All seem to be pretty much covered, or at least enough detail is provided for getting this rolling...

Just a clarification, what you call a "Company Registration Form" I called an "Incorporation Charter"; the scope is precisely the same, it's just a question of word choice.

There is almost nothing in the whole proposal that I don't agree with, I just have two or three slight details to raise:

1) I see you don't wish to have listed is stock owned. May I ask why? How can a company establish an "empowerment rule" that the owner of 51% of stock will be the Director, if owned stock is not listed? In case of bankrupcy, how can the Commercial Court, according to your proposed Art. 6, Sec. 6, "[...] initiate a liquidation of the company on the basis of the deposit kept in escrow with the National Bank and any other holdings and assets of the NRC that may be within reach of the authorities of Neualtenburg"? The Court has to know what assets the company owns in Neualtenburg!

I can understand that you'd like to keep stock transfer simple (while strangely enough requiring a lot of notarisation for all other acts — see point 3 below), but I fail to understand how you can avoid companies publicly listing their stock and assets and still keep a degree of transparency and openness about their business transactions (see also point 5 below).

2) I think that there should be a little more detail in what rights the company has as a "legal entity" under Neualtenburg law; you just describe that these entities will be allowed to "entering into agreements and undertake obligations" (obviously under N'burg law). Do you think that those rights are enough? I've noticed that you just place the companies under the obligation of the "Code of Conduct" established by the Chamber of Commerce. I would require much more; full compliance with the whole body of laws (except for electing and getting elected).

Under your proposed model, for instance, a company could own a deed of land, but technically suffer no penalties for disregarding a covenant, unless that were mentioned explicitly under the "Code of Conduct". Legally, the company is not a citizen, so citizen's laws would not apply to them — only the ones mentioned in the "Code of Conduct".

Whereas I see things precisely the other way round. Companies should have legal persona with a status equivalent to citizens — ie. full rights and duties of a citizen (except for voting and getting elected; so, yes, companies could be Guild members, or rather, members of the Chamber of Commerce, or, why not, members of the SC) — but additional rights & duties as established by the Code of Conduct and company-specific and applicable laws. But the basis should be the same set of laws, not a different set.

Remember that individual citizens owning shops and not having a registered company are fully under N'burg law; they should not be discriminated towards companies which would be working under a 'different' set of laws.

3) You propose quite an amount of acts that need notarisation. Since the "Nota Bene" notary is not for free (and the more people need to sign it, the more expensive it gets), this is a problem for very small companies (I'm thinking of small shops, not Anshe-level corporations). I'd reserve specific acts requiring notarisation (the Company Registration Form, for instance), but the rest could be optional — a simple notecard sent to the Registry (a department of the Chamber of Commerce, as I understand it) should suffice. Letters of escrow, of course, need notarisation; and I expect that all entities wishing more solid contracts would certainly notarise them. But I'd make all that optional. That's just a suggestion, mind you. It's not a very serious issue.

4) There is no provision for companies involving non-citizens. While this might be intentional (ie. making sure all owners are also subject to N'burg law), I wonder if that's not too restrictive. I'd make sure that at the very least all "empowered" people described in Art. 2, Sec. 6 need to be citizens. Of course, if in the future SL evolves more "Neualtenburg clones", N'burg may open a whole chapter of "international" law (ie. agreements on jurisdiction), and eventually a citizen of, say, a government-enabled Dreamland would have the same rights under the law as a N'burg citizen, since there would be a jurisdiction for filing complaints and suits. The problem arises only with "nationless" residents — ie. 99.9998% of the current population (if my math doesn't fail me!)

Of course, we can start with the concept of "all owners have to be citizens" and introduce more flexibility later.

5) Although the issue of taxation on revenue is never mentioned on your proposal — just "registration fees" or similar — I think it's fundamental that companies are audited, specifically, all companies with limited liability have to be audited. At the very least, what this means is filing a quarterly accounting report. That's the only way that the City knows if the escrow held, for instance, is a reasonable amount or not (a company dealing with multi-million L$ transactions regularly should not have 'only' L$10,000 in escrow). I admit I'm personally biased; under my RL jurisdiction, limited liability companies have constantly to update their stock (ie. raising it or diminishing it), based upon their (monthly) accounting reports.

IRL, accounting is a measure for Governments to do overseeing (ie. controlling liquidity and good assets management) and apply taxation; even if taxation in our case is zero (as set by the RA), I'd still like companies' accounting to be overseen by the City Government.

Also, this means that there are some pre-emptive measures that can be taken. Assuming a limited responsability NRC, and that the Registry is public (you don't mention that), one can clearly see, if accounting is filed quarterly, if a company is slowly going towards bankrupcy, extending their liabilities beyond a reasonable value (say, four times the money + assets in escrow), or making good, solid business and thus "deserving" better credit, for instance.

I fully agree that issues related to borrowing/loaning money should be left out of this proposed bill; I don't think, however, that the Guild should have a "free hand" in setting up a Code of Conduct that provides for a "parallel legislation" not under supervision of the RA. Legislation regulating the workings and auditing of companies should be the prerogative of the RA; actual enforcement and the details should be left to the Guild. In a sense, what this means is that it should be the RA defining that "companies have to be audited" but it would be the Guild that would set up the templates for the quarterly accounting, for instance.

Thanks everyone for the input I have received so far on this proposal. As I mentioned already it was typed up quite late so I may have intentionally left out parts that were too complicated for me to handle with only half my brain working. Your feedback has however raised a number of issues that need to be addressed explicitly. I have also discovered a few typos and logical fallacies in the existing proposal so I'd like to prepare a revised revision once I return this evening from a meeting of the RL charity in which I'm active.

Gwyneth thank you especially for your review with insightful and challenging observations. I will try to address each of these seperately in a post once I return from said meeting. Just to make sure that I've understood your concerns precisely would it be fair to summarise them as follows?

1: Why do you not formalise supervision of ownership arrangements - be they based on stock, equity or cooperative?

2: Would it not be better to give NRC's full rights and duties as citizens and explicitly limit this rather than explicitly giving them a few rights and duties and implying the rest is off limits?

3: Do we really need to notarise all acts pertaining to an NRC's dealings?

4: Should we not allow non-citizens to be owners of an NRC?

5: Would a mandatory audit procedure of accounts not be beneficial both in relation to a desire to tax the proceeds and as a way of providing improved governmental oversight with the solidity of an NRC?

5.b: To what extent should the Chamber of Commerce / Guild be authorised to issue directions as to the conduct of NRC's? Should they not be authorised to demand an increase of the sum held in escrow deposit and would this not best be based on a regular audit?

My original plan was to the following breakdown paid out monthly:

Principal (me) - 52% equity
Profit sharing among employees -18%, while there is only 1 employee, reinvest
Guild (not bank/treasury) - Silent partner 10%
City (bank) - Escrow 10%
City (treasury) - Silent partner 10%

I felt this would incentivize the guild to help me a bit with prims and scripting. I go back to my contention that the guild also needs its own funds to pay artisans for work contracted through the guild. The escrow was needed as FDIC style deposit insurance, and I felt an additional 10% to the city as a type of income tax/civic duty was warranted.

I'd be happy to provide monthly financials to the guildmaster. I must say that I'd like a private pre-IPO corporation. In this respect I don't want my monthly financials made public, I'd like to provide them to the guild as required. The same is true of my business plan, some of this is proprietary information I don't want my competitors seeing.

I do like the new ideas and would be happy to morph my plans to fit the new proposals.

After a lengthy conversation with Gwyneth in world on the above issues we managed to iron out a few issues and reach an understanding on most of the remainder, which has enabled me to do a quick revision of the text as submitted yesterday. Basically the changes are:

- It is explicitly stated that an NRC is a legal person and has the same rights and duties as such except the right to be elected to the RA and to vote in elections for this body.

- It is explicitly stated that NRC's become members of the Guild and that the Guild will draw up a Code of Conduct specifying further requirements as to the company's operations to which it must adhere.

- Some small typos were corrected.

I think that was it. There was of course an immense amount of discusson and negotiation going on in between but frankly I'm too tired at this stage to recap it. I'll be happy to do so later or even at the RA meeting tomorrow. Perhaps Gwyneth can also contribute to this:

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BILL FOR THE REGISTRATION AND INCORPORATION OF COMPANIES IN NEUALTENBURG

Article 1: Purpose

Section 1: The purpose of this bill is as follows:
- To allow companies to register for recognition as legal entities under Neualtenburg jurisdiction
- To facilitate collective ownership of companies with respect to the above
- To allow the incorporation of a company setting up requirements limiting the liability of ownership while providing a necessary degree of security for creditors

Article 2: Definitions

Section 1: The Neualtenburg Chamber of Commerce (Chamber of Commerce) is an institution under the auspices of the Guild, which is chartered with the responsibility of maintaining a public registry of companies, their securities and obligations (the Register).

Section 2: A Neualtenburg Registered Company (NRC) describes an entity capable of entering into agreements and undertake obligations, which will be recognised under the jurisdiction of Neualtenburg legislation.

Section 3: The Commercial Court of Neualtenburg (Commercial Court) is an institution under the Scientific Council chartered with the responsibility of settling disputes where one or more parties is an NRC in accordance with the provisions of article 7, section 3 of the Constitution.

Section 4: A company registration form is used to describe the details of a NRC's name, ownership, empowerment criteria, concept of liability and if applicable the size of the deposit being kept in escrow with the National Bank of Neualtenburg. A template of this form is maintained by the Chamber of Commerce.

Section 5: A company dissolution form is used to propose how the Neualtenburg-registered assets of an NRC will be distributed between individuals and entities upon the closure of an NRC. It also states the reason for the desired dissolution of the NRC.

Section 6: Empowerment is understood as the ability of one or more individuals or entities to take action on behalf of a NRC with respect to entering into obligations, certifying that obligations of other parties in relation to the NRC have been met, submitting a new company registration form or submitting a company dissolution form to the Commercial Chamber.

Section 7: The Neualtenburg Notary service (the Notary) is the facility installed at the Rathaus, which enables users to entrust a document with a certificate of authenticity as well as signatures of the involved parties. The process by which this is arrived at is called notarisation.

Section 8: The Neualtenburger Bank is an institution under the Guild, which for the purpose of this document is chartered with taking assets into escrow to establish a minimum deposit fulfilling the requirements for NRC's operating under a concept of limited liability and issuing a certificate to that effect. A seperate law governs the operations of this institution.

Article 3: Registration

Section 1: Any individual or collection of individuals may apply to be registered as an NRC by obtaining a copy of the template for the company registration form and filling it in with the necessary information as guided by the Chamber of Commerce. However, the actual approval and continued upkeep of NRC status is dependent on the specific form of company as well as of the fulfilment of the requirements detailed in the remainder of this document.

Section 2: The name of the NRC as specified in the company registration form consists of three elements: The distinctive element, the descriptive element and an element describing the concept of liability under which the NRC will operate:

The distinctive element is mandatory. It must be one or more words uniquely identifying the company. This can be anything such as a family name, a brand name or the name of a geographic region. It may not contain the word "Neualtenburg".

The descriptive element is optional. It describes the kind of business, which the company will operate. Examples of descriptive elements are "real estate", "architects" or "weaponsmith".

The element describing liability is mandatory. It must be either "N.Reg."or "N. Registered" or "Neualtenburg Registered" to describe a company with unlimited liability in respect to any obligations registered, or it must be "N.Inc." or "N. Incorporated" or "Neualtenburg Incorporated" to describe an incorporated company with a liability limited to the assets held by it under Neualtenburg jurisdiction.

The combined elements of the NRC name must uniquely identify the company. It is the prerogative of the Chamber of Commerce to determine whether or not the name specified on the company registration form is sufficiently distinct as to merit registration. This verdict cannot be appealed.

Section 3: The owners of the NRC should be listed on the Company Registration Form as the names of the avatars that will be considered owners of this company under Neualtenburg jurisdiction.

Section 4: The empowerment criteria should be described on the company registration as conditions that must be met in order for a person or an entity to be empowered to carry out either of the following transactions on behalf of the company relative to Neualtenburg jurisdiction:

- Register a new Company Registration Form with amendments to the old one
- Sign documents on behalf of the NRC containing obligations that will be honoured or even executed by Neualtenburg jurisdiction.
- Sign documents on behalf of the NRC releasing other entities from obligations undertaken in respect of an agreement with the NRC
- Register a Company Dissolution Form

The criteria should be described in a way that they can be objectively verified to have been fulfilled by the Commercial Chamber ahead of its registration of a document

Section 5: It must be specified on the Company Registration Form whether the NRC will operate as a registered company with unlimited liability respect to any obligations registered to it, or if it will operate as an incorporated company with a liability limited to the assets held by it under Neualtenburg jurisdiction. Further requirements will apply depending on the chosen concept of liability as described in Articles 4 and 5 as applicable.

Section 6: The company registration form must be submitted to a representative of the Chamber of Commerce and contain information as described in Article 2, sections 4. At the same time a registration fee is paid according to the tariff set by the Gildemeister. This fee is non-refundable.

Section 7: In the case of the Company Registration Form being approved by the Chamber of Commerce the Form must be signed by all the Owners as specified in Article 3, section 3 and notarised at the Notary after which it will be deposited in the public Register by the Chamber of Commerce.

Section 8: Upon successful registration with the Chamber of Commerce the NRC will be considered a legal person with the same rights and duties as a citizen of Neualtenburg with the exception that it cannot vote in nor stand as a candidate for the elections to the Representative Assembly.

Article 4: Requirements for NRC with unlimited liability

Section 1: All owners of an NRC registered as operating with unlimited liability must be residents of Neualtenburg and own total land in excess of 144 sqm.

Section 2: The NRC will become a member of the Neualtenburger Guild and is required to abide by any Code of Conduct that may be published by the Guild with respect to their operations.

Section 3: The current owners of an NRC registered as operating with unlimited liability are personally responsible in solidum for payment of any obligations resulting from agreements entered into by anyone acting on behalf of the company in accordance with the empowerment criteria described in the Company Registration Form at the time of the act.

Section 4: If an NRC is found to not fulfill the criteria outlined in Article 4, section 1 - 2 they have 7 days to bring this in order. Otherwise, the Chamber of Commerce will file a Company Dissolution Form with the Commercial Court.

Article 5: Requirements for NRC with limited liability

Section 1: An incorporated NRC with limited liability must own land in Neualtenburg. The deed to this land must be notarised and deposited in the company file with the Commercial Chamber.

Section 2: An incorporated NRC with limited liability must deposit assets in escrow with the National Bank and receive a notarised certificate from the Neualtenburger Bank to this effect. The notarised certificate must be deposited with the Chamber of Commerce where it will be published in the Register. The total sum to be deposited in escrow will be determined by the owners of the NRC but must be in excess of 10,000 L$.

Section 3: The NRC will become a member of the Neualtenburger Guild and is required to abide by any Code of Conduct that may be published by the Guild with respect to their operations.

Section 4: If an NRC registered as operating with limited liability is found to not fulfill the criteria outlined in article 5, sections 1 - 3 they have 7 days to bring this in order. Otherwise, the Chamber of Commerce will file a Company Dissolution Form with the Commercial Court.

Article 6: Obligations and litigation

Section 1: An NRC may enter into agreements with other entities or persons under legally binding obligations.

Section 2: In order for an agreement between the NRC and another party to be legally binding it must be signed by empowered parties acting on behalf of the NRC in accordance with the empowerment criteria and a representative of the other party, notarised at the Notary and deposited with the Chamber of Commerce, which will publish it in the Registry.

Section 3: For an NRC to be absolved of an obligation entered into under a legally binding agreement, a new agreement to this effect between the NRC and the other party must be signed by empowered parties acting on behalf of the NRC in accordance with the empowerment criteria and a representative of the other party, notarised at the Notary and deposited with the Chamber of Commerce, which will publish it in the Registry.

Section 4: Correspondingly, anyone empowered under the criteria specified in the Company Registration Form may authorise the release of another NRC from obligations previously entered into with this NRC by persons or entitites then empowered to act on behalf of the NRC. For this to be legally binding it should be declared in writing, notarised, signed by both parties and submitted to the Chamber of Commerce, which will publish it in the Register.

Section 5: Should a creditor be unable to obtain the fulfilment of obligations undertaken by an NRC with unlimited liability in respect to a still current agreement signed by the empowered parties, notarised and deposited with the Chamber of Commerce, he may bring the matter to the Commercial Cort. The Commercial Court will then initiate arbitration proceedings to assess the claim in accordance with article 7, section 3 of the Constitution If the claim is found to have merit it must be honoured by the NRC or the creditor will be authorised to file a company dissolution form with the Commercial Court, which will then execute the claim on behalf of the creditor through extension of the claim to the owners of the company in solidum.

Section 6: Should a creditor be unable to obtain the fulfilment of obligations undertaken by an NRC with limited liability in respect to a still current agreement signed by the empowered parties, notarised and deposited with the Chamber of Commerce, he may bring the matter to the Commercial Court. The Commercial Court will then initiate arbitration proceedings to assess the claim in accordance with article 7, section 3 of the Constitution If the claim is found to have merit it must be honoured by the NRC or the creditor will be authorised to file a company dissolution form with the Commercial Court, which will then initiate a liquidation of the company on the basis of the deposit kept in escrow with the Neualtenburger Bank and any other holdings and assets of the NRC that may be within reach of the authorities of Neualtenburg.

Article 7: Re-registration

Section 1: Anyone empowered to do so according to the criteria specified in the Company Registration Form for an NRC may file a new Company Registration Form specifying amendments to the original form. The procedure is identical with that described in article 3 and the requirements the same as those outlined in article 4.

Section 2: The following changes may take place during re-registration:
- The NRC may change its name.
- The ownership may be changed.
- Empowerment criteria may be changed
- The concept of liability may be changed
- For an NRC with a limited liability the amount being deposited in escrow may be increased

Article 8: Dissolution

Section 1: Anyone empowered to do so according to the criteria specified in the Company Registration Form for an NRC may file a Company Dissolution Form with the Commercial Court. This will result in the Court initiating a liquidation of the company with a subsequent distribution of assets among creditors who are able to prove their claims in accordance with article 6, sections 5 or 6 as applicable. Any remaining assets will be distributed among the owners listed in the current Company Registration Form.

Section 2: The Chamber of Commerce may file for dissolution of an NRC initiating the same procedure as described in article 8, section 1 when an NRC fails to meet its obligations under sections 3 and 4 of this document.

Section 3: Any creditor with an unhonoured claim deemed valid through through arbitration proceedings as described in article 6, sections 4 - 5 may file a Company Dissolution Form with the Commercial Court initiating the same procedure as described in article 8, section 1.

Article 9: Fees

Section 1: The Chamber of Commerce, the Neualtenburger Bank and the Commercial Court have the mandate to charge fees for any services provided in accordance with this document. Tariffs should be maintained and made publicly available.

Section 2: The Representative Assembly may decide to charge a recurring fee for the privilege of being registered with the Chamber of Commerce. Any NRC registered with the Chamber of Commerce is obliged to honour payments of this fee regardless of the time of their registration. In case of non-payment of fees the Representative Assembly has the mandate to file a Company Dissolution Form with the Commercial Court following the procedure as outlined in article 8 section 1.

Okay, questions:

The "must hold at least 144 m^2 of land". Given my microplot suggestion... why?

I'd like to see the "companies cannot vote nor hold office" provision expanded to all branches. I do not ever wish to see a "corporation" as Guildmaster, or as a member of the SC.

Well .. it was put in there because I thought that otherwise there will be absolutely no security against opportunistic behaviour being exercised from owners of companies with unlimited liability: If they are not required to hold assets of more than a 16 sqm plot ... well .. what is there for them to lose should they choose to engage in obligations they cannot fulfil? Losing 16 sqm of land is hardly an incentive against opportunistic behaviour. And what assets will there be left for the SC to confiscate in a forced dissolution?

I'd say we run the risk of infusing the company scheme with a lot of distrust if we do not give some serious consideration to the question of how to hold owners of companies with unlimited liability accountable in the case of them engaging in opportunistic behaviour or simply going bankrupt.

If we come to the conclusion that we don't mind there being virtually no security in a company owned 'with unlimited liability' then naturally the provision should be removed.


I'm inclined to agree with your opinion but it is my impression that others might see it otherwise.

Having been able to give this a second thought I can come up with what I believe to be further reasoning for this:

The company code is primarily intended to:
(a) enable a group of individuals to join together and act as one for the purpose of entering into agreements
(b) allow the parties to the agreement a possibility for legal redress under Neualtenburg jurisdiction
(c) offer company owners a sort of protection from unlimited liability should they so wish if in turn they fulfill certain requirements

In other words the company code extends a framework of legality and by extension trustworthiness upon companies choosing to operate out of Neualtenburg.

The key requirement for us as a community to be able to offer a higher degree of trust with regard to agreements entered into with Neualtenburg-registered companies is that we are able to subject these companies to legally binding verdicts from independent courts in the case when disputes arise - in other words we need to be able to enforce the law.

In order for us to be able to enforce the law we must have access to sanctions of a nature sufficiently severe to make it a greater incentive for the owner of the company in question to comply with a ruling rather than to reject it and see his company be dissolved and his assets stripped and distributed to the relevant creditors.

I think it is reasonable of us to expect citizens to show a commitment of a certain size to Neualtenburg in order for us to bestow upon them the advantages of a framework designed to facilitate trust, legally binding agreements and the cooperation of individuals working as a collective.

As I recall it the 16 sqm plot citizenship was being offered in part as a solution to people wishing to put up a vendor on the Marktplatz but not wanting to go through the outlay of investing in a significant stake in Neualtenburg's development. This is all fine as I see it - we want a low entry-barrier for people desiring exposure to the Neualtenburg experience.

However, I think it may be a mistake to see this initiative and the company bill as necessarily having something to do with each other. Note that it is perfectly possible to sell items from a vendor in the Marktplatz without having to register as a company and it will also be so in the future.

One needs only register as a company if one wants to be able to act as a collective of individuals with shared responsibility and the ability to collectively enter into agreements with other parties with the possibility of legal redress through the courts. These are advantages that Neualtenburg can bestow on a company and I think it is only reasonable that those who want these advantages also show their commitment to the city's development and deposit something of value that can ensure that our arbitration mechanism will actually have some clout to act as a disincentive against opportunistic behaviour.

To sum it up it is my opinion that the company bill need not be viewed together with the 16 sqm plot and a vendor on the Marktplatz initiative. The company bill has been set up predominantly to encourage the formation of businesses such as those mentioned by Frank Lardner and not so much to support the vendors. Note that people doing business through vendors on the Marktplatz are still bound by the Codes of Conduct by the Guild as individuals since - as I understand from Gwyneth - all persons trading in goods and services in Neualtenburg are bound to be members of the guild - in spite of this not at all being clear from the present wording of the Constitution.

I hope the above contributes to making things clearer. Otherwise I'm sure we'll have an opportunity to discuss it further at the RA meeting later today.

I get you. You seem to be saying that some minimum barrier/contribution to the city is desirable. Which I don't necessarily disagree with - since this is for "unlimited liability" setups that don't leave money on escrow.

Ok, I'm looking at the NB website, and I notice:

Website: Citizens can own land, rent, or work for the city.
Constitution: Citizens must own land.

I think the Constitution is the more accurate reference. The microplots make this much more attainable for the poor.

Constitution: Guild membership is open to citizens only.
Corp bill: An NRC registrant must be a Guild Member.

I also understand that renting land is currently forbidden, so effectively all business owners in NB must be citizens. All NRC registrants must be guild members. Am I missing something? Is this what is intended? How does the Guild regulate non NRC businesses?

There is a lot that really needs to be changed on the Website, Pelanor — our apologies for that. The RA is currently in the middle of the process of requesting proposals for the new web site, but this will take some time, and officially, the request for proposals is not open yet.

Still, the 'old' site will be changed here and there as we correct blatant mistakes. The Constitution, in this case, is right: you must own land to be a citizen.

However, the incorporation guidelines are being voted upon as we speak In about a week or so, we'll have the results on that. It's not clear yet that all NRCs owners must be citizens ('foreign capital', ie. non-citizens owning shares in NRCs, might be allowed, if the RA votes on that; the NRCs 'empowered persons', ie., the ones signing valid documents on behalf of the company, might need to be citizens because of their double accountability to civil and criminal law — which don't apply to other NRC share owners).

NRC stakeholders mightg not need to be Guild members — but the NRC will need to be registered with the Guild, thus, effectively, the NRC will be a Guild 'member' by joining the Chamber of Commerce. Regulation of NRCs by the Guild will be done through a Code of Conduct to be emitted by the Chamber of Commerce.

All this is currently being voted upon — the RA decided yesterday on a 7-day voting period — so this might change in the next week or so. Stay tuned The good news is that if enough RA members vote positively on this new bill, next week or so we might be able to allow the first companies to get registered...

As Gwyneth said in her contribution it was decided at yesterday's meeting of the RA that the company registration and incorporation bill would be submitted to the 7 day discussion and vote procedure.

Claude will presumably be publishing a transcript of the meeting shortly but just for the record I recall that three issues were raised for which we'd like to put forward proposed amendments:

1) Instead of simply banning the use of the word "Neualtenburg" in company names we should allow the Guild / Chamber of Commerce the right to scrutinise and accept or veto proposed company names according to a list of broad criteria, which will be mentioned in the legislation. The Guild / Chamber of Commerce will then be required to draw up specific guidelines on the basis of these.

2) Companies should not be allowed to hold nor stand for any elected office. Apart from this exemtpion we are furthermore not sure whether we will want to grant them full, unspecified rights as citizens. The important thing is that they are required to comply with all duties imposed on 'real' avatar-based citizens.

3) As I recall it the question was also raised whether there should be more restrictive requirements regarding citizenship for companies incorporated with limited liablility. For example, it might be beneficial to require that managers are citizens in the case where the actions of one are of a nature to incur personal responsibility (fraud for example).

I would like to suggest that in addition to the above we use the coming week to look into the question of whether we can carve out a more elaborate framework oversseing the particulars of ownership and the owner - management distinction as initially suggested by Gwyneth.

I left this out of the original proposal since the timeframe given for the proposal really did mandate a 'keep it simple'-approach to avoid drafting something, which we would later regret. However, since we now have a further seven days before the issue will be put to the vote I think it may be possible to draft a proposal and have a solid debate on a legislative superstructure to this bill outlining specific forms of ownership that we allow and the procedures that we require to be implemented in order to translate ownership into a mandate and a responsibility for overseeing a company's operations (i.e. general meetings, election of boards, roles and competencies of managers) and possibly also the question of supporting shares of ownership in a company.

I haven't seen any contributions to the forum in extension of the above. Since the bill has been moved to the 7 day discussion and vote procedure I'd like to be able to put forward a final draft shortly. Could anyone with comments or suggestions for additions to the company registration and incorporation bill therefore please submit these in the forum as soon as possible so that we may have an informed discussion leading up to the final vote, which is awaited (im)patiently by at least the MoCA Society of Neualtenburg (to be) and presumably a few other entities as well...

i think we need to pass or not pass the bill with its friendly amendments as of 1 MArch. If we need additional changes we can go back to it.