Can a natural person issue stock in a private project they’re working on? I’m trying to find out about the legality of issuing stock in some project you’re working on if you’re just a natural person, by which I mean that you haven’t knowingly founded any sort of organization for the project. I’m most interested in the law in English- and German-speaking countries at the moment, but information on any country would be helpful. Specifically: Is this possible at all or do you automatically found some sort of legal entity the moment you do this? Does such a stock issue have to be registered with the country’s equivalent of the SEC or are they exempt? If the latter, do you have to apply for such an exemption or is it granted automatically? Is this regulated on a federal, state/cantonal or municipal level or does the issuer have to comply with the law on all levels? Are there relevant court cases that show what the penalties are for getting this wrong? Does it make a difference in practice if the market capitalization of the project is almost certainly always well below $1 million? Example: One member of a group of friends is good at planning vacations and enjoys it. Let’s call her Cynthia. The whole group wants to go on an expensive vacation together, but Cynthia doesn’t have the money to pay for everything up front. So she sells shares in the vacation project – on paper or using tokens on a blockchain – to the other members, and uses the raised money to pay for flights, hotels, etc. and to compensate herself for her time. Some of the shares change hands: The hotel rooms are already booked when a new member of the group wants to join the vacation. She’s happy to pay a bit extra, so one shareholder agrees to sell all his shares to her at a bit of a profit. Eventually the final shareholders all enjoy a great vacation together.
There are certain legal arrangements that are implied in law when a project or activity is carried out without forming a legal entity. The classification of the legal arrangements in question govern the legal rights of the parties. These arrangements are surveyed below. This is followed by a brief list, for contrast and completeness, of the main different kinds of entities that must be formed expressly and registered to come into existence. This overview is then applied to the specific questions asked. One is a trust. A trust arises by operation of law when a person (called a settlor) provides money or other property or legal rights to another person (the trustee) for the benefit of one or more persons (people who are called beneficiaries) and often for some purpose specified by the settlor. In the U.S. this was historically governed by case law from both courts of law and courts of equity. The concept of a trust and the broader concept of a fiduciary as a general concept are particular to common law systems and don't have a direct analog in civil law legal systems, although there are legal arrangements in civil law countries that have material differences from common law trusts that can be used in circumstances where trusts are used in common law countries. But, now, many states have adopted a statutory trust code that covers most issues of trust law fairly comprehensively. Guardians, conservators, and receivers, sometimes with rights arising by operation of law, or a private non-governmental appointment, but more often arising from a court order, are close cousins of trustees of trusts. Trustees, guardians, conservators, receivers, and agents are part of a group of kinds of people who are often collectively grouped in a larger category of people in charge of other people's property or rights called &quot;fiduciaries.&quot; Most often, the enterprises and properties managed by fiduciaries are not considered to be entities, even though the arrangement is similar to an entity. Some jurisdictions require some kinds of fiduciaries to file some sort of registrations or public filings, but these statutes typical regulate people who are already fiduciaries by operation of law or a court order, rather than requiring registration for the legal arrangement to come into existence. A related form of entity, which requires government registration as an entity in some jurisdictions, and can be formed without registration or similar formalities in others, is a business trust which will often have transferrable beneficial interests, the most common examples of which is a real estate investment trust (REIT) or a mutual fund, both of which are sometimes, but not always, organized as business trusts. Most businesses organized as business trusts are subject to considerable government regulation as securities and under tax law, and also under other laws specific to those entity forms. Another related concept in common law countries is a &quot;bailment&quot; (holding the property of another for safekeeping) by a bailee for a bailor and an escrow arrangement. France has a similar set of concepts in its civil code translated into English as &quot;deposits&quot; meaning &quot;bailments&quot; and &quot;sequestrations&quot; meaning escrow arrangements and similar relationships in Articles 1915 to 1963 of its Civil Code. Another is a general partnership. A general partnership arises by operation of law when two or more people jointly carry on business for the purpose of making a profit (whether or not they actually do), without forming some other entity. There is a uniform state law adopted in every state in some version or another, with minor state-specific variations, that governs general partnerships. A joint venture is almost indistinguishable from a general partnership. While codified now, in common law countries, general partnership law is a natural and organic outgrowth of the laws of trusts, fiduciaries and agency, that has evolved and been modified in the process of codification; while in civil law countries, general partnerships are just another kind of entity that isn't necessarily registered as an entity per se (although civil law countries generally have a category of registration-like regulation and accounting and banking rules that apply to all &quot;merchants&quot; whether or not they operate through entities). A third is an unincorporated association. An unincorporated association arises by operation of law when two or more people jointly carry on an activity for purposes other than making a profit, without forming some other entity. In some jurisdictions this is governed by a statute pertaining to them, while in others (and in part, even in states that have a statute) it is governed by common-law case law (drawn historically from both courts of law and courts of equity). In France, the civil code provides for a similar kind of unregistered entity known in English translation as a &quot;Partnership for Non-Commercial Purposes&quot; in Articles 1845 to 1870 of its civil code. A fourth and related notion, which is somewhere between an unincorporated association and a simple contract – which is not a general partnership because it is not carried out for profit – is a domestic partnership or civil union which is sometimes just a subcategory of contract, but in other cases is treated as a special kind of arrangement subject to case law or statutory regulation. Many state and local governments, and some national governments outside the United States, adopted domestic partnership and/or civil union laws that vary widely in their details, before same sex marriage became legal in the United States, to address the needs of same sex couples and/or unmarried opposite sex cohabitants and/or domestic arrangements involving more than two people. Along the same lines, while all countries allow qualified opposite sex couples and sometimes qualified same sex adult couples to form a marriage with a license from the government or government registration, some jurisdictions recognize marriage-like relationships that can be formed without government registration such as common law marriage, putative marriage, and de facto relationships that have legal rights associated with them. France, for example, in Article 515 of its civil code, has &quot;civil covenants of solidarity&quot; (PACS) akin to a civil union in the U.S. which must be formally registered giving rise to formal rights that are significant but less so than those created by marriage. French civil code Article 515 also defines a different category of relationship translated as &quot;concubinage&quot;, which is roughly equivalent to &quot;cohabitation&quot; in English which gives rise only to very limited legal rights, and may be (but need not be) governed by a custom drafted domestic partnership agreement called a &quot;convention de concubinage&quot; in French and can, but need not be, formally recognized in a &quot;certificat de concubinage&quot; or a &quot;declaration sur l'honneur&quot; which has only slight legal effect. The law of a &quot;convention de concubinage&quot; is somewhat akin to the kind of contract contemplated in the OP as it is an &quot;atypical&quot; contract that is not heavily regulated and not entered into primarily for the purpose of making a profit. A fifth is a contract. Sometimes a legal arrangement is contractually entered into and has the character of assigning people legal rights and obligations vis-a-vis each other without constituting an unincorporated entity or trust. A contract would typically involve less discretion than an unincorporated entity or a trust, although this isn't a hard and fast rule. In some respects, all entities are basically standardized and regulated contracts. Often, but not always, contractual rights are assignable. Corporations have their roots in the laws of trusts, contracts, and general partnerships, and eventually were given a statutory treatment not directly derived from those sources. This is governed mostly by case law. One kind of contract that bears similarity to what you describe in your example is called in economics a &quot;dominant assurance contract&quot; also known by the registered trademark specific provider of such arrangements known as &quot;Kickstarter&quot; contracts with a refund bonus, and similar in principle but without profit-making objectives, to a subscription agreement. It also bears similarity to a gift registry. Many leases create de facto partnerships and unincorporated associations, as do some real estate covenants. Another important (and heavily regulated) type of contract, which is often mistaken for an entity type since it is used in lieu of a parent-subsidiary relationship between a business headquarters and a particular location of a business, is a franchising agreement, in which the franchisor receives a share of gross profits and a fee from a franchisee who gets the right and the obligation to conduct business under a trademark in accordance with highly detailed central rules regarding how the business is conducted on a day to day basis, even though particular business locations are not enterprises owned by the franchisor. Legal multilevel marketing arrangements, and very similar illegal pyramid schemes are likewise typically organized on a contractual basis. There is also terminology for certain kind of contractual arrangements for non-business purposes, similar to those described in the question, in many civil law countries such as France (as opposed to countries with common law legal systems), but I am not familiar with all of this terminology itself (much of which lacks a direct and exact English language equivalent). A distinction is made procedurally, and in some formalities and requirements, between commercial contracts on one hand, and a category of contracts often translated as &quot;non-commercial contracts&quot; or &quot;civil contract&quot; on the other. For example, in France, arbitration clauses are usually not permitted in non-commercial contracts, and lawsuits to enforce non-commercial contracts must normally be brought at the defendant's domicile. Civil law countries also make a stronger distinction between &quot;typical&quot; contracts, which are spelled out in detail by statute and to which many default rules of law and mandatory rules apply, and &quot;atypical contracts&quot; which are treated with more skepticism by civil law courts and require more detailed express enumeration of the rights of the parties and of the reasons that the government should enforce those rights, than in common law country jurisprudence (although France eliminated this concept from its civil code in lieu of provisions enforcing substantive fairness in many cases, in an October 2016 overhaul of the contract law provisions of its civil code which had only been lightly amended before that since its original adoption in 1804). A sixth is co-ownership of property or other legal rights. Sometimes more than one person owns property and they have legal rights that arise from co-ownership of that property, even in the absence of any contract formation related to their co-ownership, in the absence of any imposition of a trust relationship on someone as a trustee for someone who is not the legal owner of property, and without an intent to carry out any particular enterprise or project with or without an intent to make a profit. This is mostly governed by case law but typically with modest statutory regulation of specific issues (like the right to bring a partition action if one party wants to end the co-ownership relationship). Sometimes co-owners also have a contract governing their respective rights (or a covenant, which is a contract that runs to successive owners of property, usually real estate). France recognizes along these lines &quot;Agreements Relating To The Exercise of Undivided Rights&quot; in Article 1873 of its Civil Code. A seventh is that when someone conducts business for the purpose of making a profit without working jointly with someone else, and without forming an entity, the enterprise is called a &quot;sole proprietorship&quot; (if business is actively conducted) or an &quot;investment&quot; (if profits arise mostly from passive ownership of property). Custom dictates that certain activities, like renting real estate, are considered investments, even when significant active management is involved, while other activities are usually considered to be sole proprietorships, even when they don't involve particularly pro-active conduct. The common law of agency and tax law are important to the operation and regulation of these businesses. In a related issue, a sole proprietorship or other entity (whether or not registered with the government) may often, either by formal registration or merely by dint of using it in the course of business, depending upon the jurisdiction, acquire legal rights in a trade name of an enterprise (also known as a &quot;doing business as name&quot; or &quot;dba&quot;) and/or trademarks associated with goods or services sold by an enterprise or sole proprietorship. An eighth is that when someone engages in a project for purposes other than making a profit without working jointly with someone else, or with an intent to make a profit that is consistently not achieved most of the time for a statutory number and proportion of years, and without forming an entity, that has a character similar to conducting a business, the enterprise is called a &quot;hobby&quot; for tax law purposes. This isn't comprehensive, however. Some economic activity undertaken without involving someone else or forming an entity, and without an intent to make a profit, simply doesn't have any name other than &quot;consumer spending&quot; or a &quot;personal and/or household activity.&quot; In contrast, entities formed by registration with the government, more or less exclusively, include corporations (both for profit and not for profit, including most corporations sole which are similar to trusts), limited liability companies, limited liability partnerships, limited partnerships, limited liability limited partnerships, limited partnership associations, mutual companies, and cooperatives. Entity formation is typically cheap and easy, although some kinds of entities such as national banking associations require special regulatory permission. Municipal governments, local governments such as school districts and special districts, and many independent government agencies are also often organized as governmental corporations and governed by specific statutes that apply to them. Is this possible at all or do you automatically found some sort of legal entity the moment you do this? This is often, but not always, the case when more than one person is involved, as the list above illustrates. Does such a stock issue have to be registered with the country’s equivalent of the SEC or are they exempt? If the latter, do you have to apply for such an exemption or is it granted automatically? It depends. In the U.S., the threshold question is whether an interest in the project is a &quot;security&quot;. There are many kinds of debt and equity investments that are automatically securities (even debt issued by a natural person, rather than an entity, which is transferrable and sold to members of the general public, could be a security). There is also a residual category called an &quot;investment contract&quot; which counts as a security if it meets a multi-factor legal test. There are various exemptions from the securities laws, and some are automatic, while others are not. But there are also some securities laws that apply to transactions involving securities even if the securities are exempt from formal registration with a government entity. The most notable of these is federal SEC regulation 10b-5 that imposes securities fraud liability when there is fraud within the meaning of the regulation in any transaction involving the purchase or sale of a security, even if that security is exempt from registration as such with a governmental entity. Some transferrable rights that are not necessarily securities but have some similarities to them are publicly traded commodities, security entitlements, negotiable instruments, warehouse receipts (particularly negotiable ones), and cryptocurrencies. In addition to regulation under state and federal securities laws, certain kinds of joint activities have other very specific regulations that apply to them (e.g. churches, or pooled investment funds, or cooperatives, or home owner's associations, or political parties, or election campaigns, or buyer's clubs, or timeshares) and there is really no way to know, in general, what those activities will be, without just learning about them from a general knowledge of a jurisdiction's laws. Is this regulated on a federal, state, or municipal level or does the issuer have to comply with the law on all levels? You have to comply with the laws on all levels. Normally, the legal rights of the parties primarily arise under state law in the U.S., and the disclosure requirements normally arise under both federal and state law. But no one level of government has exclusive jurisdiction to regulate private activities and it isn't unprecedented, for example, for local governments to authorize certain kinds of private enterprises (e.g. neighborhood associations in places that don't have HOAs, or composting co-operatives). Many local governments require all businesses that operate in their territory to be registered or licensed with them, no matter how they are legally organized, and state and local governments also often require special licenses for all businesses (regardless of form of organization) which are obligated to collect particular taxes such as lodging taxes, sales taxes, value added taxes, fuel taxes, alcohol or cigarette taxes, or &quot;head taxes&quot;. Similarly, many occupations and professions require government licenses at one level of government or another, and sometimes, more than one level of government. Some licenses are mostly federal (e.g. investment advisors and securities brokers), some are primarily state level (e.g. doctors and lawyers), and some are primarily local (e.g. street vendors and many construction trades). Are there relevant court cases that show what the penalties are for getting this wrong? Yes. But the question is too broad and vague to meaningfully discuss them. These cases are usually particular to the specific type of transaction involved. Does it make a difference in practice if the market capitalization of the project is almost certainly always well below $1 million? This is relevant to the kind of securities law exemptions that apply when a transaction is deemed to be a security under federal and state securities regulations. There are many exemptions and most of them have dollar limitations attached (although some do not). The background is that I want to start an online platform to make this easier for people, but of course I don’t want to get into legal trouble and I don’t want my customers to get into trouble. You haven't even begun to scratch the surface of the myriad legal issues presented. Your example sounds more like some sort of transferrable contract right, rather than a security (although it could be both), since it appears to be purchased primarily for use rather than as a profit making investment. It bears a fair amount of similarity to certain kinds of timeshare rights (and might even qualify as a timeshare under the regulatory and consumer protection rules of some jurisdictions which define them broadly). You need to develop a far more specific idea of what you plan to do and then meet with a lawyer to discuss the entire concept start to finish to spot as many legal issues as possible. This is not something you should try to do without a lawyer.
It is certainly possible to transfer a copyright or other IP without an explicit charge, indeed it can be a pure gift, and normally would be when it is left by will, as is common enough. From a paid consultant it might be clearer to include a statement that the transfer is part of the consulting assignment, rather than putting a price of zero in a blank. But one could instead convey a permanent non-exclusive license, granting permission to use or modify the work in any way desired, ans saying that this is provided as part of the consulting process. Then there would be no question of what rights the consultant retained, or that the same or a very similar solution could be provided to different clients. Indeed such a license would not be so very different from a CC-BY license, or any of several open source licenses, although I would not use one of those by name. But the legal effect would be much the same, and the wording could be similar. Otherwise there could be a later claim that the right transferred precluded the consultant from using the same solution for other clients. Even if such a claim was not legally sound, and was not upheld, it could be a distraction and costly of time and energy at least.
not in germany Germany has laws about founding, operating and financing political parties, the Parteiengesetz which demands certain organisatorial structures, and the Parteifinanzierungsgesetz, which is very explicit about how they can finance themselves and what a party needs to report. The only allowed gains are property proceeds (like from owning property or selling goods), membership fees, gifts to the party, and state sponsorship. Also, non-citizens are not allowed to give to a party unlimitedly. The parties also are also obligated under the basic law to report all financing they get, down to the cent. Their organisation form is strictly limited: Parteien sind frei gebildete Personenvereinigungen im Sinne des Artikels 9 Absatz 1 GG, die sich auf der Basis des privaten Rechts nach den vereinsrechtlichen Regelungen des Bürgerlichen Gesetzbuches (§§ 21 bis 79 Bürgerliches Gesetzbuch - BGB) gründen. Sie sind in der Regel nicht rechtsfähige Vereine This precludes them from being Aktiengesellschaften: they have to be organizations of people (Personenvereinigungen) that follow the BGB, and thus are not allowed to organize as an AG under the Aktiengesetz, which demands that an AG to not be an organization of people. So, a party can't be a stock company, and selling stock in a political party in Germany is not allowed under the framework and is thus neither possible nor legal.
When does a CEO (or the investor or the board) have to notify employees they will be unable to pay them for work already done? Directors and officers (which includes executive officers like the CEO) but not investors have a duty to ensure that the corporation does not trade while insolvent. In this context, "trading" means incurring new debts and "insolvent" means being unable to pay their debts as and when they fall due. Unfortunately, it is a judgment call by those directors and officers and the exact point where it occurred is generally only clear with hindsight, if then. For example, you describe a "tumultuous week"; quite likely the company was urgently seeking additional sources of funds and until it was clear they had no prospect of getting those, they weren't insolvent. The director's duty is to act reasonably (a broad range of activities) and not be overly pessimistic nor optimistic about the company's prospects. As far as I know, they don't have a positive duty to inform their creditors that they can't pay. If that happens their obligation is to file for bankruptcy and their obligations cease - the bankruptcy trustee then invites creditors to prove their debts. Does an investor have a responsibility to ensure all employees are paid? No. That is pretty much the purpose of limited liability corporations: to shield the investor from the debts of the company. Do the employees have any recourse? Yes. Employees are typically priority creditors in Colorado and rank ahead of many other creditors. However, if the company is not based in Colorado different laws will apply. Of course, you must be an employee of the company - this priority doesn't apply to true independent contractors. Also, the liquidator's fees rank ahead of anyone and unless the bankrupt company has adequate realizable assets, even employees are unlikely to get a dividend. You also need to be clear who you work for as you say "that last Friday was paid for/fronted by the HR company". Do you work for the bankrupt company or this (non-bankrupt) HR company? If the latter then they owe you your wages and the bankruptcy of their principal is their problem, not yours. Is "secured debt" real? And does that reduce the likelihood of receiving a paycheck in a bankruptcy settlement? Yes. There is a priority in the payment of creditors in liquidations and it varies by jurisdiction but a typical arrangement might go like: Liquidator's Fees Employee wages and entitlement accrued within the last 6 months Certain taxes Secured creditors (who may have a ranking among themselves) Unsecured creditors (including employee entitlements more than 12 months old, other taxes, trade creditors etc.) Shareholders (who may have a ranking among themselves) Basically, the lower you rank, the less likely you are to see a dividend. Does any of this change if the company doesn't file for bankruptcy? Sure. Until the company does this it is still a going concern and it has to pay its debts. If it doesn't it's creditors can sue and recover their monies as best they can which may include forcing the company into bankruptcy.
You won't be able to get around self-doxxing yourself. § 5 Abs 1 TMG requires tele-media service providers like you to list den Namen und die Anschrift, unter der sie niedergelassen sind the name and the address where they reside or are established Similarly, Art 13(1) GDPR requires you to provide the identity and the contact details of the controller In a German context, it is generally accepted that both of these involve a ladungsfähige Anschrift, i.e. a street address where you could be served with a lawsuit (not a post box). These requirements exist for both natural persons and legal entities, and for both businesses and non-commercial activities. The TMG Impressumspflicht talks about “geschäftsmäßige, in der Regel gegen Entgelt angebotene Telemedien” but in practice this only requires that the service could be paid (not that you're actually making any money), and that the service is offered routinely/business-like (not necessarily commercially). It does not matter where your service is hosted as long as you live in Germany. The TMG and GDPR might not apply if the forum is run purely privately, e.g. if it is only made available to a few close friends or family members.
Yes The directors of a company have a fiduciary duty to act within the law for the benefit of their shareholders - not to their customers, not to the government, not to the environment and not to the public. A lawsuit against the company will incur financial loss irrespective of if it is won or lost. It is difficult to see how it is in the shareholder's interest for the company to be enabling the funding of a lawsuit against it.
Finding S seems to be hard and I have not much hope, if her siblings cannot provide any information. I think the "inhabitants registry" (Einwohnermeldeamt) is not allowed to give you her first address in Spain ("Zuzugsanschrift im Ausland") (§§ 44 and 45 Bundesmeldegesetz (BMG)). The best option I see is a court auction (Zwangsversteigerung), more precise a "Teilungsversteigerung". If one of S's siblings want money for the land, he can ask for a court auction at the local court (Amtsgericht). The court will get S's first address in Spain (§ 34 BMG) and if it cannot deliver its letter to S, there will be a "public delivery" (öffentliche Zustellung) through a posting in court. It would take a while, but in the end the land could be yours. Be prepared that the cost for the court auction will be much higher than the 1000€. If you plan to take this way, ask a lawyer for detailed advice. Also you need one of S's siblings to participate in the process. If the trees are really a danger for your house, the heirs could also have an obligation to remove them. Maybe this could help you too.
The law on the web page is not current: as of the beginning of the year, RCW 23.86.030(1) reads (you'll find this under Sec. 9103) "The name of any association subject to this chapter must comply with part I, Article 3 of this act" and is otherwise unchanged. In Article 3, sec. 1301 governs names, giving the sec'y some discretion to deem a name to not be distinguishable from another, saying in (3) "A name may not be considered distinguishable on the records of the secretary of state from the name of another entity by virtue of...variation in the words, phrases, or abbreviations indicating the type of entity, such as "corporation," "corp.," "incorporated," "Inc.,". It does not list "co-op", but there is no legal requirement that the list be exhaustive. This discretion is, however, related to distinguishability. However, (4) then says An entity name may not contain language stating or implying that the entity is organized for a purpose other than those permitted by the entity's public organic record. and I think that means "no". Note that LLCs, LPs, LLPs, business corporations, nonprofit corporations and cooperative associations all have name requirements of the type "must contain" and "may not contain" (a cooperative association, oddly, has no "must contain" requirements). I would say that we have to conclude that "legislative intent" was to more closely align names and legal status, and the new "purpose-implication" language isn't brilliantly clear, but that is what the intent of the law is. This is one of those issues that could easily work its way to the Supreme Court, if someone wanted to make a state case of it.