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Author: Lysander Lyon, MP
Sponsor: N/A
Type: Act of Parliament
1. Short Title
(a) This bill shall be referred to as the "Seizure Act".
(b) This bill was authored by Lysander Lyon.
2. Reasons For Seizure
(a) The Ministry of Economic Affairs shall be empowered to take control of companies in the Azalea Isles for the following reasons:
(i) Very significant noncompliance. This is not missing one audit, one deadline, or failing to turn over one document. This is continued audit failure over several audits, failure to meet multiple deadlines, ignoring multiple requests for documentation, failing to pay issued fines, etc. - it must be severe noncompliance if noncompliance is the sole reason given.
(ii) Economic security impact. This means the company is having significant internal issues, potentially due to fraud or simply long-lasting poor management, and has been having those issues for a noticeable length of time (or the issue may be new, but is extremely severe). This is not merely one week of bad press or a few less than ideal financial performances, but a situation where government seizure of the company would occur to protect it from further deterioration.
(iii) National security impact. The company’s downturn or performance undermines the security of the Azalea Isles Government. This is a high bar to meet on its own, as it indicates that company is crucial to the ongoing operations of the government and that a planned change to its actions, its dissolution, or some other change to its status, could significantly harm government operations.
(iv) Citizen impact. The collapse of the company, or whatever issue has led to seizure, would have a detrimental effect not just on other businesses or on broader economic indicators, but on the citizenry. For example, a bank collapse would have an economic security impact, as it may see businesses lose savings, projects lose funding, and could cause further economic ripples; but it would also qualify as a citizen impact, if many citizens hold deposits with the bank.
(v) The burden for each of these is high, if it is the sole reason. However, the burden decreases when mixed together. For example, a continued trend of issues and poor performance, combined with missing reporting deadlines, and refusing to hand over documents for an audit, would all indicate issues within the business and would be fully valid grounds for seizure. Evidence of fraud, incorrect bookkeeping, or financial mismanagement would also be a strong reinforcement of any of the four reasons.
3. Seizure Procedure
(a) The Ministry of Economic Affairs shall determine that seizure of a company is necessary, and write up a summarization of the reasons why.
(b) The company will be given a notice of impending seizure.
(i) The Ministry of Economic Affairs may not seize the property until 48 hours have elapsed. It is recommended 3c is undertaken by the Minister during this time.
(ii) Any company provided a notice of seizure may not engage in maneuvering to attempt to avoid the seizure. This clause shall be interpreted according to its spirit - that means selling a company, dissolving it, spinning off assets, etc. all are violations without needing to be specifically mentioned.
(iii) The notice of impending seizure may be revoked if it was largely contingent on an issue the company resolves. For example, if it was due to noncompliance, and the business provides a reasonable excuse for the noncompliance and then provides the documentation within the 48 hour period following the notice.
(c) The seizure shall be brought to vote in Parliament, with a simultaneous debate thread being opened so that Parliament may vote and discuss at the same time. In order for the seizure to be approved, it must receive an absolute majority of Parliament in favor. For example, if Parliament has 9 seats, at least 5 Ayes must be cast, regardless of any vacancies or other considerations.
(d) Once the 48 hours from notice has elapsed, and Parliament has approved the seizure, the Ministry of Economic Affairs shall appoint an individual (it may be the Minister, it may not be) to manage the company. They will work with any shareholders or clients to ensure existing projects and obligations are undertaken.
4. Government Management
(a) When a company is seized by the Azalea Isles Government, notice must be put out in the main server that this has occurred. Companies seized by the government are obligated to turn over any internal documents, bookkeeping, and records to the appointed manager. The appointed individual must also be given proper roles in the Discord server to manage things.
(b) The government must classify seized businesses within one week of having seized them. The Ministry of Economic Affairs is encouraged to attempt to save businesses, but it is not a requirement for every single business. The classifications are as follows:
(i) Salvageable. The business can be turned around and released for operation again. The government manager will work with any shareholders to appoint new executive leadership, where needed. Once the business is properly stabilized to the satisfaction of the Ministry of Economic Affairs, it will be released to the new leadership. The appointed manager shall retain access to supervise and help for a two month period after the release occurs, and conditions may be put on the released business for its continued operations.
(ii) In Question. The state of the business is still in question. The Ministry is still working to have a full understanding of the issues, or is unsure of whether it can be salvaged. In Question businesses may go through the same process as Salvageable ones for selecting new leadership. However, the appointed manager is expected to retain an active role in running the company alongside the new leadership. Company success may lead to an upgrade to Salvageable, and eventual release, or failure may lead to a downgrade to Marked For Dissolution.
(iii) Marked For Dissolution. The company is not salvageable or the Ministry believes it needs to be dissolved. The appointed manager will work to end any obligations, sell off any assets, and then pay out the necessary individuals. Creditors shall be paid first, then customers, then shareholders. For a bank, for example, any loans the bank has taken out from other entities shall be paid back first, then customers shall receive their deposits back, and then anything left over goes to the shareholders receiving the base value of their investment back.
(iv) A shareholder’s base value of their investment would be the price they were initially issued or IPO’d at, or the lowest traded value in the last two months before payment is made, whichever is lower. If the company is private and has no shareholders, the step of disbursement to shareholders is skipped.
(v) If a business that is Marked For Dissolution should ever have funds left over after shareholders receive their base value back, or after customers are paid out and no shareholders exist: the Ministry of Economic Affairs shall take $5,000, and then half of the remaining funds for the government. The rest shall be disbursed to the shareholders or the owner.
(c) The Ministry of Economic Affairs may come up with additional classifications, and is in charge of managing or adjusting these as they wish. They are also responsible for managing this procedure, and may adjust or add steps as necessary to ensure things are smoothly handled in the seizure process.
5. Challenging a Seizure
(a) If the leadership, or the shareholders, of a company feel it was seized unlawfully, they may make an appeal. For an individual to make an appeal, the individual must either be/have been leadership of the seized company, or represent at least 25% of the ownership/shares of the company.
(b) Once it is confirmed the individual has the authority to appeal, they will be granted a hearing of no less than 48 hours to present their case to Parliament, and answer questions.
(c) Parliament shall then vote on whether the seizure should be reversed; if a majority of votes are in favor of reversing the seizure, it shall be reversed and the prior company situation shall be restored.
(d) If Parliament does not vote to reverse the seizure, the individual may sue in a court of law. However, to have standing, the individual must be the owner of the company, or must be part of a class that together holds over 50% ownership in the company.
(i) The reason for the over 50% requirement is because companies that are seized should usually be seized because they are in significant trouble, and so if a majority’s worth of shareholders do not agree that the government seizure is wrong/harmful, there is a low likelihood that it is.
Enactment: This Act comes into force immediately upon passage.
Sponsor: N/A
Type: Act of Parliament
A
BILL
TO
Allow For Corporate Seizure
BILL
TO
Allow For Corporate Seizure
1. Short Title
(a) This bill shall be referred to as the "Seizure Act".
(b) This bill was authored by Lysander Lyon.
2. Reasons For Seizure
(a) The Ministry of Economic Affairs shall be empowered to take control of companies in the Azalea Isles for the following reasons:
(i) Very significant noncompliance. This is not missing one audit, one deadline, or failing to turn over one document. This is continued audit failure over several audits, failure to meet multiple deadlines, ignoring multiple requests for documentation, failing to pay issued fines, etc. - it must be severe noncompliance if noncompliance is the sole reason given.
(ii) Economic security impact. This means the company is having significant internal issues, potentially due to fraud or simply long-lasting poor management, and has been having those issues for a noticeable length of time (or the issue may be new, but is extremely severe). This is not merely one week of bad press or a few less than ideal financial performances, but a situation where government seizure of the company would occur to protect it from further deterioration.
(iii) National security impact. The company’s downturn or performance undermines the security of the Azalea Isles Government. This is a high bar to meet on its own, as it indicates that company is crucial to the ongoing operations of the government and that a planned change to its actions, its dissolution, or some other change to its status, could significantly harm government operations.
(iv) Citizen impact. The collapse of the company, or whatever issue has led to seizure, would have a detrimental effect not just on other businesses or on broader economic indicators, but on the citizenry. For example, a bank collapse would have an economic security impact, as it may see businesses lose savings, projects lose funding, and could cause further economic ripples; but it would also qualify as a citizen impact, if many citizens hold deposits with the bank.
(v) The burden for each of these is high, if it is the sole reason. However, the burden decreases when mixed together. For example, a continued trend of issues and poor performance, combined with missing reporting deadlines, and refusing to hand over documents for an audit, would all indicate issues within the business and would be fully valid grounds for seizure. Evidence of fraud, incorrect bookkeeping, or financial mismanagement would also be a strong reinforcement of any of the four reasons.
3. Seizure Procedure
(a) The Ministry of Economic Affairs shall determine that seizure of a company is necessary, and write up a summarization of the reasons why.
(b) The company will be given a notice of impending seizure.
(i) The Ministry of Economic Affairs may not seize the property until 48 hours have elapsed. It is recommended 3c is undertaken by the Minister during this time.
(ii) Any company provided a notice of seizure may not engage in maneuvering to attempt to avoid the seizure. This clause shall be interpreted according to its spirit - that means selling a company, dissolving it, spinning off assets, etc. all are violations without needing to be specifically mentioned.
(iii) The notice of impending seizure may be revoked if it was largely contingent on an issue the company resolves. For example, if it was due to noncompliance, and the business provides a reasonable excuse for the noncompliance and then provides the documentation within the 48 hour period following the notice.
(c) The seizure shall be brought to vote in Parliament, with a simultaneous debate thread being opened so that Parliament may vote and discuss at the same time. In order for the seizure to be approved, it must receive an absolute majority of Parliament in favor. For example, if Parliament has 9 seats, at least 5 Ayes must be cast, regardless of any vacancies or other considerations.
(d) Once the 48 hours from notice has elapsed, and Parliament has approved the seizure, the Ministry of Economic Affairs shall appoint an individual (it may be the Minister, it may not be) to manage the company. They will work with any shareholders or clients to ensure existing projects and obligations are undertaken.
4. Government Management
(a) When a company is seized by the Azalea Isles Government, notice must be put out in the main server that this has occurred. Companies seized by the government are obligated to turn over any internal documents, bookkeeping, and records to the appointed manager. The appointed individual must also be given proper roles in the Discord server to manage things.
(b) The government must classify seized businesses within one week of having seized them. The Ministry of Economic Affairs is encouraged to attempt to save businesses, but it is not a requirement for every single business. The classifications are as follows:
(i) Salvageable. The business can be turned around and released for operation again. The government manager will work with any shareholders to appoint new executive leadership, where needed. Once the business is properly stabilized to the satisfaction of the Ministry of Economic Affairs, it will be released to the new leadership. The appointed manager shall retain access to supervise and help for a two month period after the release occurs, and conditions may be put on the released business for its continued operations.
(ii) In Question. The state of the business is still in question. The Ministry is still working to have a full understanding of the issues, or is unsure of whether it can be salvaged. In Question businesses may go through the same process as Salvageable ones for selecting new leadership. However, the appointed manager is expected to retain an active role in running the company alongside the new leadership. Company success may lead to an upgrade to Salvageable, and eventual release, or failure may lead to a downgrade to Marked For Dissolution.
(iii) Marked For Dissolution. The company is not salvageable or the Ministry believes it needs to be dissolved. The appointed manager will work to end any obligations, sell off any assets, and then pay out the necessary individuals. Creditors shall be paid first, then customers, then shareholders. For a bank, for example, any loans the bank has taken out from other entities shall be paid back first, then customers shall receive their deposits back, and then anything left over goes to the shareholders receiving the base value of their investment back.
(iv) A shareholder’s base value of their investment would be the price they were initially issued or IPO’d at, or the lowest traded value in the last two months before payment is made, whichever is lower. If the company is private and has no shareholders, the step of disbursement to shareholders is skipped.
(v) If a business that is Marked For Dissolution should ever have funds left over after shareholders receive their base value back, or after customers are paid out and no shareholders exist: the Ministry of Economic Affairs shall take $5,000, and then half of the remaining funds for the government. The rest shall be disbursed to the shareholders or the owner.
(c) The Ministry of Economic Affairs may come up with additional classifications, and is in charge of managing or adjusting these as they wish. They are also responsible for managing this procedure, and may adjust or add steps as necessary to ensure things are smoothly handled in the seizure process.
5. Challenging a Seizure
(a) If the leadership, or the shareholders, of a company feel it was seized unlawfully, they may make an appeal. For an individual to make an appeal, the individual must either be/have been leadership of the seized company, or represent at least 25% of the ownership/shares of the company.
(b) Once it is confirmed the individual has the authority to appeal, they will be granted a hearing of no less than 48 hours to present their case to Parliament, and answer questions.
(c) Parliament shall then vote on whether the seizure should be reversed; if a majority of votes are in favor of reversing the seizure, it shall be reversed and the prior company situation shall be restored.
(d) If Parliament does not vote to reverse the seizure, the individual may sue in a court of law. However, to have standing, the individual must be the owner of the company, or must be part of a class that together holds over 50% ownership in the company.
(i) The reason for the over 50% requirement is because companies that are seized should usually be seized because they are in significant trouble, and so if a majority’s worth of shareholders do not agree that the government seizure is wrong/harmful, there is a low likelihood that it is.
Enactment: This Act comes into force immediately upon passage.