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Howdy everyone Sandow podcast number 56.

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This episode is a special one.

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This is one I've been working on for two or three months now.

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I've been teasing it out a little bit.

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It really began back in episode 31, 32 when I did the sandbox ecosystem and the birth

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of the Tao.

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Originally I was supposed to do this episode back then.

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But these episodes turned out to be so big that I had to split them all apart.

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And before I knew it, the delegates had arrived and you know, 20, 20 episodes later, here

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we are 56.

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I'm done with the foundation company episode and here it is.

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So I'm so excited.

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I'm so excited to go through this one because to me this is like the, this is where I wanted

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to take this, which is what is a foundation company?

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What are we doing here?

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And I think we arrived at the answer now that we're here and we determined, I think it's

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going to answer a lot of questions.

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I think a lot of people, if you're a nerd like me, when it comes to looking into how

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DALs are done, I think you're going to find this to answer a lot of questions.

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So what's the scope of the talk today?

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Today is about sharing my analysis on some facts that I've learned.

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All of these facts are public.

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You can Google search all of this.

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This is not an accusation.

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It's not a smear campaign.

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It's about transparency.

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It's about, I've said many times, I want to help bring the DAL out of the shadows.

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I want to help bring the DAL from obscurity into common generality where we all know what's

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going on.

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We all, we understand the relationships.

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This, this is how we get there.

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So this episode may be a little long and that's okay.

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You'll see that it could be a lot longer.

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I have cut it down a lot.

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Before I do that, disclaimer, I do not represent the sandbox game or the sandbox foundation.

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I'm not your financial or legal advisor and nothing I say is to be taken as financial

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or legal advice.

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When I say the word SIP, I mean sandbox improvement proposal.

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When I say the word DAL, I mean decentralized autonomous organization.

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And when I say SanFam, I'm talking about the sandbox community and those who participate

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in the people, product and purpose of the sandbox ecosystem.

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Not sure how many people notice, maybe not many at all, but I, I did.

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I have some shorts that came about here.

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So take a look.

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They're about a minute a piece.

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So like what is the purpose of sandbox?

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So what is the purpose of the sandbox?

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Again from the sandbox white paper, which was launched in 2020.

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So what I did was in anticipation of Sandow, SIP 18, which check out podcast number 55

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on the debrief on that.

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I had leaned forward to create these little short snippets to start the process.

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I had already paid for them.

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So here they are, but they're short little snippets of the ecosystem and what it's all

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about.

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But that ecosystem looks a little bit like this and the people sector, there's everyone

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from gamers to the sandbox team for the product.

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It's the game client at the Dow and for the purpose, it's what's mentioned in the white

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paper and expand upon by the sandbox leadership.

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All that comes together, mixes together to, to create the ecosystem.

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And it goes round and round every day.

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All those things.

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This episode is squarely focused on the Dow, what it is and how it's out functions.

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I'm your host Lancer.

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I'm president of the Medi-Worlds group.

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We have published two experiences, lore droppers and lava defense, a alpha season four and

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a game makers fund 2023.

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Today's episode, what is a foundation company in the Caymans Island?

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I, here's everything that you're going to see.

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It comes from these sources, five main sources.

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The first one is a reading of the Cayman's Cayman Island's laws.

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That's the companies act foundations, company law, companies management act, the directors

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registration and licensing law, securities investment, business law, virtual asset service

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providers act and citation of acts parliament, citation of acts of parliament law.

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So that's, that's one portion.

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Second portion is looking up all the different online tools that the Cayman Islands has.

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And we'll, we'll show a little bit more of that later on here.

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Loads.

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There you go.

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So different tools, business portals, statistics, administrative platforms, that sort of thing.

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And then SEMA regulations.

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SEMA is a, it's a monetary authority.

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They had a bunch of regulations to read as well.

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And then I read a lot of expert opinions, all sorts of different law firms, most of

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them on the Cayman Islands, Conyers, Loweb Smith.

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Even I read an article from the United States government accountability office who did a

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study on the Cayman Islands, Stuart Humphreys, Cartan group, Maples group, Adele Christen,

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Morant law firm and Walker's global.

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Each of them had some different type of blog or article opining, talking and discussing

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and analyzing a foundation company.

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And I read as much as I could.

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And then last but not least, just regular old Google searches to fill in the blanks.

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So that's what took like two or three months is reading through all of this stuff in order

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to figure out what is a foundation company.

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Here's the agenda for today.

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It's in three parts.

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Three parts.

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However, parts two and three end up being so big, but part one, sorry, end up being

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so big that it doesn't make sense to do parts two and three.

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Otherwise this thing's gonna be four hours long.

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So what we're going to do is part one only.

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And I'm pretty sure I'm committed to part two.

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We're all done, but I don't really have like the funding for SIP 18 did not go through.

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So I'm looking at kind of changing and the way Sandow podcast goes.

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But I'm the very least right now we're doing part one, which is going to be a recap of

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Sandow 34, the birth of Sandbox Tao.

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The research that I just went over all my research findings, looking at their website,

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the Caymans, the Companies Act, the Foundation Companies Law, the Companies Management Act,

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and then the others that I mentioned, and then an application of that law.

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What does it actually mean toward the regulations you have to apply?

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How do you actually create a company, a foundation company?

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What sort of terminology does each one use?

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The TLDR, of course, and then all the remaining questions I had.

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Part two would be a building of that analysis, although that might be part three now of applying

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all that to the foundations, memos, articles, and constitution.

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Read SIPs one and two.

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If you're interested in that, you can see them linked there in snapshot.

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And then part three, which might end up being part two, is all of the case law.

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So people suing Tao's and foundation companies and that sort of stuff that's applicable to

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us, different legal opinions on what's still to be decided.

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So that legal gray area that you hear about Cyril and Kunta talk about and digging in

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the sand podcast.

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Different Q&As.

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I might be able to get a couple lawyers on here to answer some remaining Q&As.

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We'll see.

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That'll depend on basically funding.

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If they'd like to just come on and answer or have to pay them a legal rate per hour,

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we'll see.

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So a comparison of entities that are like foundations, like dunas, or there might be

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a third one.

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So those part two and threes are going to be done in a future episode.

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We're only worried about part one.

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So part one, a recap.

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Then we're going to go into research.

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Then we're going to apply that all of what we learned into how does it matter, why does

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it matter, and how is it applicable to us.

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So let's get right into first up is the recap.

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We talking about, we'll be going over the DOW timeline, the relationship map, and the

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Cayman Islands.

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So episode 34, this is where we were back then.

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So episode 34 was back in October 2021, about four or five months ago, and we went over

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the location of where the DOW was, whether or not there was a conspiracy afoot.

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I still don't think there is.

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The relationship that I could piece together of who was where doing what.

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And then there was an answer to the Apecoin DOW on who was running the foundation for

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them.

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And a lot of time and effort went into that.

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So much time and effort went into just revealing that.

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But the big remaining question was, even if we know where everyone is, we know how the

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players work and how they all work together.

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What is actually a foundation company?

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So our timeline here, we'll start first with the timeline.

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Back in 2012, the sandbox started as a 2D mobile game.

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This is back in episode 34 that we were doing this.

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Hi everybody.

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I'm Arthur Madrid.

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I'm the API founder of Pixel.

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We began doing a mobile game called the sandbox in 2012.

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And then some years later in 2018, the sandbox transformed itself into a 3D metaverse blockchain

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game.

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So what's next for us?

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We have been working on a sandbox 3D version.

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Then in September 2020, the sandbox launches its white paper.

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And in that white paper, it talks all about a DAO, like in the first paragraph, you can

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see here.

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Sandholders will be able to participate in governance of the platform via a decentralized

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autonomous organization.

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So it's back in 2020.

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And then in early 2022, the DAO plan starts.

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May 2023, DAO planning definitely starts, kicks in the high gear.

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And then by November 2023, the sandbox foundation is created as a legal entity.

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And again, you can read SIPs 1 and 2.

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In the bottom where the links are, there is the constitution and the memo and the articles.

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And you'll see it looks a lot like this.

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So Memorandum of Association.

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And here it is, the sandbox foundation and all this.

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And then in May 2024, the DAO has announced the Amedium article, it looked a little bit

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like this.

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And then SIPs 1, 2, and 3 right off the bat were there to be voted on.

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And in episode 34, a big part of it was this relationship map, the revealing of what I

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thought was going on based on my research here.

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So we went from a lot of unknown entities to what I thought was happening and who was

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connected to who.

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And it went a little bit like this.

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Beautiful.

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Beautiful.

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This is what took me days of no sleep and researching and googling and all sorts of

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things, trying to piece stuff together, reading corporate documents, delving into the weeds.

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This is what took me so long to figure out.

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And yeah, so we started with this.

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All we knew was the sandbox company, the Sandbox DAO Foundation.

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There was a special council.

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Yatsu was a part of the special council.

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Advisory board.

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You may or may not have known Yatsu was chairman of Animoca.

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I certainly didn't know that really until not even like a few months ago when I really

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started researching the DAO.

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I really didn't know Animoca's place in the sandbox company.

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I had no idea.

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I knew the name Animoca, but I didn't really know what they were or who they were.

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Until I started researching interviews.

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I like mini-SandFan people.

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I was worried about the ecosystem.

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I was just worried about Game Maker and playing the game and the rewards.

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And I was just worried about that stuff.

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I wasn't worried about who owned what and who did what.

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Not until the business end of the sandbox came full-fledged into the ecosystem in the

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form of the DAO.

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So there you have it.

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That was episode 34.

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If you want to see how that relationship unfolds, go back to episode 34.

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I go over all of it there.

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And then the latter part of that was the Grand Cayman Islands.

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And learning and understanding how closely everyone worked together.

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Some people might think it's a conspiracy, but at the end of the day, it's a small island.

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It's got a small town feel.

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The business district is really right there.

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It's like a few blocks worth.

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It's not that big to begin with.

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So it's kind of understandable that people are so close together.

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Do you remember how I mentioned how I kept throwing up a number every time I said the

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word Cayman?

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All right, I ended up getting up to one, two, three, four, five, six.

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Six mentions of Caymans.

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Carton Group, Caymans.

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Maple Groups, Caymans.

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Traverse Albarga Law Firm is in the Caymans.

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ICSL is in the Caymans.

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IPA is in the Caymans.

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8.0 also in the Caymans.

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But the more important thing is that Sandbox Dow Foundation is in the Caymans.

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Six references to the Grand Cayman Islands.

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And as I started researching and that started popping up, I was trying to figure out why

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was that?

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Why is the Caymans popping up so much?

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So part two of my talks or my investigations, my analysis was why is the Caymans so involved

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in the Dow?

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So we ended up going through a whole rigmarole on that and discussing the Grand Cayman Islands

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and how they were all next to each other.

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They're very, very close.

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Three minute drives, eight minute drives, that sort of thing.

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But there was one big question left, the big elephant in the room is why are we here?

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Why are we talking about all that?

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And as I was, I started investigating further.

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As I started delving into the laws, the regulations, I started discovering something I didn't expect.

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So episode 34, it was just Google searching who everybody was looking through Dun & Bradstreet,

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looking through Google searches, LinkedIn profiles, all sorts of things that were public

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and able to be found and company about me pages to piece together who was connected to

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what.

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What I wasn't, I didn't know at the time was why were they all connected together?

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And it wasn't until I started reading our own documents that I started linking things

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together that led me to the acts and regulations of the Cayman Islands and their legislative

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body that all of the laws that they put into place.

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And as I started reading through those things, I discovered that while it is true, they all

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are next to each other.

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That's not the question you should be asking.

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It's why are they all close together?

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And why are they all on the same island?

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And that's because there are positions that they are able to fill.

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In many cases, only them can fill it, not just the companies, but the people who are

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in the companies that are certified to because there are laws and regulations that require

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they be certified to have those positions.

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And the best people to do that, the licensed people, are the people who live on the island,

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and the Grand Cayman Islands as specified by the laws of that country.

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So that's what was surprising to me, is that it wasn't because people just chose them because

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they're best friends.

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It's because there are laws and regulations that prescribe very strict, very, very strict

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rules and regulations to be in management services, to be a director, to be a secretary,

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00:18:10,520 --> 00:18:14,600
to be even a little bit legal counsel, but management services.

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And they are fulfilling those rules after having fulfilled all the requirements and

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the acts and regulations.

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And that is the subject of today, is to share with you the research I did that revealed

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what it is that foundation company is and based on and required to do.

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So for the research, we have it into...

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The first part here is three things.

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We're going to look at the government website.

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We're going to look at statistics and we're going to look at the overview.

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And then after that, we'll be getting into the laws and regulations.

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So part one of research.

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When we're talking about the Cayman Islands law, we're really focused on...

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If you go to the website, you'll see this pops up.

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You'll see here, nice looking website, Cayman Islands.

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Cayman Islands general registry.

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00:19:13,640 --> 00:19:18,240
There's a home button, there's registers, all sorts of menus that you can look at.

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00:19:18,240 --> 00:19:25,640
There's a lot here that you can search through, different buttons, all sorts of stuff.

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00:19:25,640 --> 00:19:30,920
So when you go to their website though, there's some things I want you to key in on if you're

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00:19:30,920 --> 00:19:34,520
really trying to figure out and look at foundation companies.

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00:19:34,520 --> 00:19:38,360
Up at the top, you've got the menu.

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So there's registers, online tools, and resources.

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00:19:42,080 --> 00:19:47,840
And down below, when you hover over that, you'll see there.

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00:19:47,840 --> 00:19:49,360
These are the things that'll pop up.

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00:19:49,360 --> 00:19:56,520
So what we're worried about for the purposes of our foundation company are these.

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00:19:56,520 --> 00:20:00,640
So when you go to their website, you hover over registers and then you're looking for

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00:20:00,640 --> 00:20:01,640
a company's register.

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00:20:01,640 --> 00:20:07,520
When you go to resources, you're looking for acts and regulations and statistics overview.

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00:20:07,520 --> 00:20:11,640
So those things contain a lot of what we're after here.

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Okay.

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00:20:13,060 --> 00:20:18,080
And so for the purposes of today, to keep things nice, orally, we're going to put that

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over here on the left hand side so that you can always see where I am in this huge amount

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of data that you could be searching for.

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That way you can follow along with me if you'd like.

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00:20:29,240 --> 00:20:33,920
Okay, so the first thing is we're going to go to the statistics.

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00:20:33,920 --> 00:20:39,920
And again, go to resources and then click statistics overview and you'll be right where

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00:20:39,920 --> 00:20:42,120
I am.

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00:20:42,120 --> 00:20:46,000
Statistics are always a good thing to look at first because it tells you magnitude.

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00:20:46,000 --> 00:20:47,480
Magnitude is scope.

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00:20:47,480 --> 00:20:50,560
How big is it that we're dealing with?

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00:20:50,560 --> 00:20:56,160
And if you look at their statistics, you can kind of get an idea for what is their impact?

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00:20:56,160 --> 00:20:58,440
How deep is this going to go?

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00:20:58,440 --> 00:21:01,480
So here's some statistics that stood out to me.

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00:21:01,480 --> 00:21:11,320
In 2021, 1000 active companies as of quarter three, 2024, they came in Grand Cayman Islands

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00:21:11,320 --> 00:21:16,560
as 121,000 active companies.

312
00:21:16,560 --> 00:21:22,860
In 2023 alone, 10,000 of those companies became newly registered.

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00:21:22,860 --> 00:21:27,080
In September alone, 800 companies were terminated.

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00:21:27,080 --> 00:21:31,360
Now that doesn't just mean like they did something bad.

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00:21:31,360 --> 00:21:37,320
It could also mean that they were dissolved and that the owners no longer wanted to run

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00:21:37,320 --> 00:21:38,800
them anymore.

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00:21:38,800 --> 00:21:41,920
900 companies registered.

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00:21:41,920 --> 00:21:50,200
So in that month alone, Grand Cayman Islands added about 100 companies just in that month.

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00:21:50,200 --> 00:21:52,400
All right, so that's good.

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00:21:52,400 --> 00:22:00,220
It tells you that there are over 100,000 companies that look at these laws and that 10,000 new

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00:22:00,220 --> 00:22:02,680
companies every day are added.

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00:22:02,680 --> 00:22:08,120
So when you hear maybe a sentence about how the Grand Cayman Islands, they believe that

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00:22:08,120 --> 00:22:16,680
they are a bastion of robust and flexible and common sense business law.

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00:22:16,680 --> 00:22:22,760
They're a haven for productive business.

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00:22:22,760 --> 00:22:28,840
121,000 other companies agree with that.

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00:22:28,840 --> 00:22:30,600
Roxy says, I wish I had one there.

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00:22:30,600 --> 00:22:32,320
Yeah, me and me both.

328
00:22:32,320 --> 00:22:38,200
But if you keep watching this, Roxy, you'll see that it's actually not that hard to do.

329
00:22:38,200 --> 00:22:41,560
It's really very affordable in some cases.

330
00:22:41,560 --> 00:22:43,420
The toughest part is the legal fees.

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00:22:43,420 --> 00:22:49,480
But if you read everything yourself, you can do most of this yourself.

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00:22:49,480 --> 00:22:52,600
The flexibility is pretty...

333
00:22:52,600 --> 00:22:55,640
I can see why it's so...

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00:22:55,640 --> 00:22:59,080
What's the word?

335
00:22:59,080 --> 00:23:02,400
Alluring to have your company here.

336
00:23:02,400 --> 00:23:07,480
There's a lot of interesting stuff, a lot of flexibilities.

337
00:23:07,480 --> 00:23:09,280
But anyways, there's some statistics.

338
00:23:09,280 --> 00:23:10,920
So it kind of gives you a...

339
00:23:10,920 --> 00:23:13,000
Walking into it, are we talking like five companies?

340
00:23:13,000 --> 00:23:17,840
No, we're talking 121,000 companies.

341
00:23:17,840 --> 00:23:26,200
And with 10,000 new companies every year, that's pretty interesting.

342
00:23:26,200 --> 00:23:30,240
All right, so what's the next part?

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00:23:30,240 --> 00:23:33,880
So now what we want to do is we want to start looking at the type of companies because we

344
00:23:33,880 --> 00:23:35,500
are a foundation company after all.

345
00:23:35,500 --> 00:23:36,500
So what does that mean?

346
00:23:36,500 --> 00:23:40,720
Well, if you go over here under registers, hover over companies register, and then click

347
00:23:40,720 --> 00:23:46,360
types of companies, you will be presented with a page that looks like this.

348
00:23:46,360 --> 00:23:48,600
So I just follow the same thing.

349
00:23:48,600 --> 00:23:51,080
What we're looking for is these.

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00:23:51,080 --> 00:23:55,640
Visual overview, this is what caught my eye, as did liability of shareholder.

351
00:23:55,640 --> 00:23:58,240
And then foundation company, there's a learn more button.

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00:23:58,240 --> 00:23:59,720
So let's learn more.

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00:23:59,720 --> 00:24:02,320
All right, so the visual overview.

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00:24:02,320 --> 00:24:09,720
If you click that first button right here, that visual overview, it'll give you a PDF

355
00:24:09,720 --> 00:24:10,720
with a picture on it.

356
00:24:10,720 --> 00:24:15,920
This PDF shows you companies, ordinary, exempt, foreign, limited liability.

357
00:24:15,920 --> 00:24:19,800
So it's a nice little reference chart.

358
00:24:19,800 --> 00:24:21,200
So where are we?

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00:24:21,200 --> 00:24:26,600
Well, the way you figure out where we are is you read the memos of association and the

360
00:24:26,600 --> 00:24:29,780
articles of association from sips one and two.

361
00:24:29,780 --> 00:24:32,380
And what does it say under the memo association?

362
00:24:32,380 --> 00:24:39,480
On page five, it says, form a foundation company limited by guarantee without any share capital

363
00:24:39,480 --> 00:24:42,380
and registered as an exempted company.

364
00:24:42,380 --> 00:24:48,440
So when you apply those key terms to the little picture graph they have, where do we end up?

365
00:24:48,440 --> 00:24:50,360
This is where we end up.

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00:24:50,360 --> 00:24:52,080
Our company, we're exempt.

367
00:24:52,080 --> 00:24:54,760
We're not foreign, we're not limited liability, we're not ordinary.

368
00:24:54,760 --> 00:24:57,080
We're a foundation company.

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00:24:57,080 --> 00:25:03,840
And if you read the little one three right there says the foundation companies, what's

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00:25:03,840 --> 00:25:08,680
applicable to us is the Companies Act 2021 provision and the foundation companies law

371
00:25:08,680 --> 00:25:11,040
2017 provision.

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00:25:11,040 --> 00:25:13,080
And so there we are.

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00:25:13,080 --> 00:25:17,520
There's our next breadcrumb in the trail of what is a foundation company.

374
00:25:17,520 --> 00:25:22,600
We now need to reference Companies Act and the foundation companies law.

375
00:25:22,600 --> 00:25:28,120
So this is the sort of thing that I do, I was doing, trying to figure out what is a

376
00:25:28,120 --> 00:25:29,120
foundation company.

377
00:25:29,120 --> 00:25:31,360
All right, the next thing.

378
00:25:31,360 --> 00:25:34,520
So I said there were three buttons, three little places you go to.

379
00:25:34,520 --> 00:25:40,320
So now let's look at the next visual overview, a liability of shareholder and member.

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00:25:40,320 --> 00:25:44,560
So another little picture graph is what it brings you when you do that.

381
00:25:44,560 --> 00:25:47,980
And it shows liability shareholders, members, limited and unlimited.

382
00:25:47,980 --> 00:25:51,120
So again, where do we look to figure out which one are we?

383
00:25:51,120 --> 00:26:00,380
Look at the memo of association to form a foundation company, limited by guarantee without

384
00:26:00,380 --> 00:26:02,640
any share capital.

385
00:26:02,640 --> 00:26:03,980
Apply that to the little chart.

386
00:26:03,980 --> 00:26:05,800
And there we are.

387
00:26:05,800 --> 00:26:10,440
We are limited by guarantee without share capital.

388
00:26:10,440 --> 00:26:14,360
There's the sandbox down right there.

389
00:26:14,360 --> 00:26:21,020
So we're already starting to triangulate where a foundation company sits within the Cayman

390
00:26:21,020 --> 00:26:22,840
Islands law.

391
00:26:22,840 --> 00:26:31,200
And those are some key words that we can start to to reference when we read their regulations.

392
00:26:31,200 --> 00:26:35,120
Last but not least, let's actually look at what they have to say about a foundation company

393
00:26:35,120 --> 00:26:38,640
on their on the tutorial page.

394
00:26:38,640 --> 00:26:41,220
That one down here at the bottom.

395
00:26:41,220 --> 00:26:47,760
And when you click their their foundation page, it'll it'll show you show you this.

396
00:26:47,760 --> 00:26:54,480
So you click, you click types of companies, exempted company.

397
00:26:54,480 --> 00:26:55,480
And here you go.

398
00:26:55,480 --> 00:26:59,240
This is a looks like a wiki page almost.

399
00:26:59,240 --> 00:27:02,680
And I'll read through this one first.

400
00:27:02,680 --> 00:27:07,200
I cut down a little bit to make it summary.

401
00:27:07,200 --> 00:27:11,440
But where the proposed activities of a company are to be carried out mainly outside of the

402
00:27:11,440 --> 00:27:17,160
Cayman Islands offshore, the registrants can apply for registration as an exempted company.

403
00:27:17,160 --> 00:27:19,000
There's a lot of special features.

404
00:27:19,000 --> 00:27:22,720
We're all going to go over that when we read their rules.

405
00:27:22,720 --> 00:27:24,720
And what happens when you register?

406
00:27:24,720 --> 00:27:26,920
There's different types of exempted companies.

407
00:27:26,920 --> 00:27:29,920
So some key phrases and all that stuff.

408
00:27:29,920 --> 00:27:33,880
Here they are, where proposed activity when and when you start reading this, what you're

409
00:27:33,880 --> 00:27:36,280
really looking for are key terms.

410
00:27:36,280 --> 00:27:43,160
Most of them are like nouns and verbs, things that you must do like, like you you must register,

411
00:27:43,160 --> 00:27:47,860
or you must register with this, this place.

412
00:27:47,860 --> 00:27:51,280
Register would be verbs, something you must do.

413
00:27:51,280 --> 00:27:54,740
And SEMA is a noun, someone that you need to know about.

414
00:27:54,740 --> 00:27:57,320
So what does it mean to register with SEMA?

415
00:27:57,320 --> 00:28:02,400
That's the sort of stuff that you're really starting to piece together as you read through

416
00:28:02,400 --> 00:28:03,880
their rules.

417
00:28:03,880 --> 00:28:12,520
There's these nouns and verbs that start to really, really show you things you need to

418
00:28:12,520 --> 00:28:18,280
be paying attention to like proposed activities carried out outside of the Cayman Islands

419
00:28:18,280 --> 00:28:20,960
offshore.

420
00:28:20,960 --> 00:28:26,720
Register of members, annual general meeting, alter its memo and articles of association

421
00:28:26,720 --> 00:28:28,720
without restriction.

422
00:28:28,720 --> 00:28:32,140
May issue shares, may express its capital.

423
00:28:32,140 --> 00:28:38,320
The annual return to the registrar requires declaration.

424
00:28:38,320 --> 00:28:41,840
And what else?

425
00:28:41,840 --> 00:28:46,880
No changes have been, you must declare that no changes have been made.

426
00:28:46,880 --> 00:28:50,840
You must declare that provisions have been observed of the company's law.

427
00:28:50,840 --> 00:28:54,780
You must declare the company's operations have been outside the Cayman Islands.

428
00:28:54,780 --> 00:28:58,240
You don't have to use the word limited or an abbreviation limited.

429
00:28:58,240 --> 00:29:03,640
And you must be, must be registered under section 30.

430
00:29:03,640 --> 00:29:10,320
All of these are key words that you can start to control F and start to look for in these,

431
00:29:10,320 --> 00:29:13,840
in these regulations that we're about to read.

432
00:29:13,840 --> 00:29:16,680
That is how you start to unwind all this.

433
00:29:16,680 --> 00:29:18,260
All right.

434
00:29:18,260 --> 00:29:21,520
So then that's an exempted company.

435
00:29:21,520 --> 00:29:27,800
Now when you click foundation company, it brings you to another wiki page.

436
00:29:27,800 --> 00:29:29,220
Looks a little bit like this.

437
00:29:29,220 --> 00:29:33,700
This one's much more applicable to us because it tells us what is the foundation company

438
00:29:33,700 --> 00:29:36,600
part of a sandbox foundation.

439
00:29:36,600 --> 00:29:39,420
And here's some key words.

440
00:29:39,420 --> 00:29:41,740
It's a separate legal entity.

441
00:29:41,740 --> 00:29:46,600
There's something about a founder in it.

442
00:29:46,600 --> 00:29:49,160
There are wide parameters given to it.

443
00:29:49,160 --> 00:29:52,320
The foundation's company law and the company's act is important.

444
00:29:52,320 --> 00:29:56,480
There must be a memo and articles of association.

445
00:29:56,480 --> 00:30:02,200
Foundation companies law again is not standalone statute, which means it's added to it is in

446
00:30:02,200 --> 00:30:05,040
addition to the company's law.

447
00:30:05,040 --> 00:30:07,640
Things that will apply.

448
00:30:07,640 --> 00:30:10,560
Company may be converted.

449
00:30:10,560 --> 00:30:16,420
Foundation may created such companies must be limited by shares or by guarantee can be

450
00:30:16,420 --> 00:30:21,840
established with or without share capital foundations are prohibited from paying dividends.

451
00:30:21,840 --> 00:30:29,240
So similar to a similar to nonprofits, nonprofit organizations have no shareholders and pay

452
00:30:29,240 --> 00:30:30,240
no dividends.

453
00:30:30,240 --> 00:30:33,720
So it's kind of sounding sort of familiar there.

454
00:30:33,720 --> 00:30:36,340
Other distributions.

455
00:30:36,340 --> 00:30:42,200
The secretary qualified person license and permitted companies management act or companies

456
00:30:42,200 --> 00:30:47,760
management law, the company management services, things that you must provide disposal winding

457
00:30:47,760 --> 00:30:54,720
up licensed firms can provide such services as and lists of services.

458
00:30:54,720 --> 00:30:58,920
These key phrases start to paint a picture.

459
00:30:58,920 --> 00:31:02,000
What do we mean when we say the word foundations?

460
00:31:02,000 --> 00:31:11,600
A foundation company and through all that as you start reading through those things

461
00:31:11,600 --> 00:31:16,080
you start to piece together what's called a regulation stack.

462
00:31:16,080 --> 00:31:23,280
A regulation stack is the, the arrangement and configuration of law or regulations that

463
00:31:23,280 --> 00:31:29,000
you are required to either know comply with or adhere to.

464
00:31:29,000 --> 00:31:34,200
And it's called a stack because the way these regulations play with each other is important

465
00:31:34,200 --> 00:31:35,200
to know.

466
00:31:35,200 --> 00:31:43,320
Sometimes there is a really important foundational law that all the other laws reference.

467
00:31:43,320 --> 00:31:45,240
That would be the bottom of the stack.

468
00:31:45,240 --> 00:31:50,920
And then there's a, there's a company or a law that is in addition to that would be on

469
00:31:50,920 --> 00:31:55,500
top of the other foundational law.

470
00:31:55,500 --> 00:32:06,080
But then there is a, a, a side regulation that doesn't, that's not in addition to, but is adjacent to it.

471
00:32:06,080 --> 00:32:08,120
It's a reference.

472
00:32:08,120 --> 00:32:10,500
So that will be off to the side.

473
00:32:10,500 --> 00:32:15,900
Then there are independent regulations that, that aren't subject to or associated with

474
00:32:15,900 --> 00:32:18,720
in any way, but still have a part to play.

475
00:32:18,720 --> 00:32:21,300
And what is it that you do?

476
00:32:21,300 --> 00:32:23,520
That's called a regulation stack.

477
00:32:23,520 --> 00:32:28,960
So when you, when you start reading through these things that we were looking through

478
00:32:28,960 --> 00:32:33,480
through the website, you start to see what the regulation stack looks like.

479
00:32:33,480 --> 00:32:34,480
All right.

480
00:32:34,480 --> 00:32:37,400
So we know that the Companies Act is the foundational one.

481
00:32:37,400 --> 00:32:39,680
It's the biggest, baddest thing on the block.

482
00:32:39,680 --> 00:32:45,320
And then in the, the page that we read earlier, it said the Foundations Company Law is in

483
00:32:45,320 --> 00:32:47,720
addition to the Companies Act.

484
00:32:47,720 --> 00:32:51,560
So it's a supplemental law.

485
00:32:51,560 --> 00:33:03,240
When you, when you have laws, almost every modern, every modern country has, well, I

486
00:33:03,240 --> 00:33:04,560
went ahead of myself there.

487
00:33:04,560 --> 00:33:07,400
So you've got the Companies Act, which is the foundation.

488
00:33:07,400 --> 00:33:11,520
You've got the Foundations Company Law, which is in addition to, but then they also referenced

489
00:33:11,520 --> 00:33:16,620
the Company Management Act, which wasn't in addition to either one.

490
00:33:16,620 --> 00:33:28,000
It was, it was adjacent to there, but not subject to the both of them.

491
00:33:28,000 --> 00:33:35,040
You always, always have your commercial partners, which is your law firms that you hire to help

492
00:33:35,040 --> 00:33:38,200
advise you of the laws you need to be complying to.

493
00:33:38,200 --> 00:33:39,460
They're not government.

494
00:33:39,460 --> 00:33:44,480
They are privately held commercial entities.

495
00:33:44,480 --> 00:33:45,940
Not to be confused with law.

496
00:33:45,940 --> 00:33:47,160
They help you interpret the law.

497
00:33:47,160 --> 00:33:51,960
They render legal opinions on what you can expect if you do this or that and what the

498
00:33:51,960 --> 00:33:53,780
law says about that.

499
00:33:53,780 --> 00:33:54,780
Sometimes they're right.

500
00:33:54,780 --> 00:33:55,780
Sometimes they're wrong.

501
00:33:55,780 --> 00:33:58,220
Most of the time you pay them to be right though.

502
00:33:58,220 --> 00:34:01,480
And then last but not least, case law.

503
00:34:01,480 --> 00:34:05,680
Case law is something that is always a moving target.

504
00:34:05,680 --> 00:34:10,800
It's when you take someone to court over the law and it's dispute resolution through the

505
00:34:10,800 --> 00:34:14,920
court system that's called case law.

506
00:34:14,920 --> 00:34:21,160
So when, when, when Kunta and Cyril are talking about the legal gray area, we're mostly talking

507
00:34:21,160 --> 00:34:24,680
about the case law has been undecided.

508
00:34:24,680 --> 00:34:28,360
As in not a lot of foundation companies have been taken to court.

509
00:34:28,360 --> 00:34:29,360
Some have.

510
00:34:29,360 --> 00:34:33,320
I think there's five or six instances now.

511
00:34:33,320 --> 00:34:41,000
And we'll go over that in another part where foundation companies have, or DALs have been

512
00:34:41,000 --> 00:34:42,000
sued.

513
00:34:42,000 --> 00:34:46,240
To generate case law.

514
00:34:46,240 --> 00:34:51,160
And then all the other little stuff, all the other little adjacent laws that have a part

515
00:34:51,160 --> 00:34:56,160
to play, but are not subject to the CAAPE Companies Act, Foundation Companies Law and

516
00:34:56,160 --> 00:34:57,320
the case law.

517
00:34:57,320 --> 00:35:05,440
This is a regulation stack that is put together and furnished by the country of the Grand

518
00:35:05,440 --> 00:35:07,240
Cayman Islands.

519
00:35:07,240 --> 00:35:12,760
And if you want to be a foundation company, if the sandbox wants to be a foundation company,

520
00:35:12,760 --> 00:35:18,960
it must abide by these laws to the satisfaction of the Grand Cayman Islands government and

521
00:35:18,960 --> 00:35:25,840
ensure that it complies so that we can, we can have that, that legal protection that

522
00:35:25,840 --> 00:35:31,000
a foundation company is afforded.

523
00:35:31,000 --> 00:35:36,880
But you have all of these regulations that are supporting a foundation company.

524
00:35:36,880 --> 00:35:37,880
Okay.

525
00:35:37,880 --> 00:35:43,760
So that right there is, is the first part I wanted to go over for our research.

526
00:35:43,760 --> 00:35:50,800
We went over the website, we went over the magnitude of the statistics, 121,000 companies.

527
00:35:50,800 --> 00:35:59,020
We went over an overview of where does the sandbox DAL sit when it comes to liability

528
00:35:59,020 --> 00:36:05,640
and where does it sit when it comes to the type of company that it is.

529
00:36:05,640 --> 00:36:13,080
You know, it's an exempted foundation company and it is a limited company by guarantee without

530
00:36:13,080 --> 00:36:15,520
share capital.

531
00:36:15,520 --> 00:36:19,160
So already you're starting to hear these buzzwords, these buzzwords, and you're going to see a

532
00:36:19,160 --> 00:36:21,320
lot of it in the regulation.

533
00:36:21,320 --> 00:36:26,080
So this next part we're now going to go over in the research are all the laws and regulations

534
00:36:26,080 --> 00:36:32,980
that are applicable to us, the sort of thing that we're paying directors and law firms

535
00:36:32,980 --> 00:36:35,740
and management services for.

536
00:36:35,740 --> 00:36:40,640
This is where the rubber meets the road on what does it mean to be a foundation company?

537
00:36:40,640 --> 00:36:41,640
All right.

538
00:36:41,640 --> 00:36:48,400
So the first thing where we are now, we're under resources, acts and regulations, particularly

539
00:36:48,400 --> 00:36:52,240
acts and regulations, scroll down to where it says companies.

540
00:36:52,240 --> 00:36:57,800
And then you're looking for the two key phrases we already heard.

541
00:36:57,800 --> 00:37:04,520
Companies Act 2023 and the foundation companies law point to 17.

542
00:37:04,520 --> 00:37:15,120
So the companies act is about 224 pages had to read through originally set in 2003, originally

543
00:37:15,120 --> 00:37:22,960
published in 2003 revised 2023, the foundation companies law originally published in 2017

544
00:37:22,960 --> 00:37:24,840
revised 2023.

545
00:37:24,840 --> 00:37:29,840
Foundation companies law is 31 pages versus company act is 224 pages.

546
00:37:29,840 --> 00:37:33,400
So it got way easier after I got to foundation companies law, but getting through those 200

547
00:37:33,400 --> 00:37:37,120
pages, that was a little bit of a bear.

548
00:37:37,120 --> 00:37:40,640
The good news is, is we're not going all over all 200 pages.

549
00:37:40,640 --> 00:37:44,720
Now what we're doing is we're going to go over the summary that the key points that

550
00:37:44,720 --> 00:37:47,200
I figured out, it's still 200 pages worth.

551
00:37:47,200 --> 00:37:50,740
So there's going to be a number of slides, but it's not terrible.

552
00:37:50,740 --> 00:37:56,240
When I ended up with the summary version, it was, I'm we're talking maybe a handful

553
00:37:56,240 --> 00:37:57,860
of pages at this point.

554
00:37:57,860 --> 00:38:03,800
So I was able to really, really pull it down to the most bare essential stuff that I think

555
00:38:03,800 --> 00:38:06,900
you all should know about.

556
00:38:06,900 --> 00:38:14,000
So the company's act has 20 Oh shoot, I don't remember what that Roman number is.

557
00:38:14,000 --> 00:38:17,160
23, maybe 12345678.

558
00:38:17,160 --> 00:38:27,600
123456789101112131415161718192021.

559
00:38:27,600 --> 00:38:30,600
There are 21 parts to the company's act.

560
00:38:30,600 --> 00:38:33,200
That's 224 pages.

561
00:38:33,200 --> 00:38:35,440
21 parts.

562
00:38:35,440 --> 00:38:37,360
These are the parts that are relevant to us.

563
00:38:37,360 --> 00:38:38,680
One's here in blue.

564
00:38:38,680 --> 00:38:47,120
Only 1234567 parts I found were really relevant to what we're doing here as a foundation company.

565
00:38:47,120 --> 00:38:51,160
And you'll see already, you can see some of those keywords.

566
00:38:51,160 --> 00:39:00,120
Constitution, incorporation, membrane of association, distribution of capital, liability, companies

567
00:39:00,120 --> 00:39:07,880
associations, exempted companies, applicability of law of companies formed or registered,

568
00:39:07,880 --> 00:39:10,080
beneficial owner registers.

569
00:39:10,080 --> 00:39:14,220
These keywords we already read in the past 10 minutes when we looked at their website.

570
00:39:14,220 --> 00:39:19,920
So you could already tell that there's going to be something in there for us to know about.

571
00:39:19,920 --> 00:39:21,600
That's how you pick this apart.

572
00:39:21,600 --> 00:39:28,080
You just start looking for keywords, patterns, and then then you can start reading what they

573
00:39:28,080 --> 00:39:32,760
say about those keywords and patterns, it will start to paint a picture for you.

574
00:39:32,760 --> 00:39:34,760
You can do it.

575
00:39:34,760 --> 00:39:39,120
The only reason I can do it in the way that I'm doing is because as a contract negotiator

576
00:39:39,120 --> 00:39:44,560
and program manager, I've had a lot of background in this sort of thing.

577
00:39:44,560 --> 00:39:47,680
So I could read through it and there are there are still a lot of terms I don't know and

578
00:39:47,680 --> 00:39:50,440
I'm not a lawyer.

579
00:39:50,440 --> 00:39:52,360
But I've written a lot of contracts.

580
00:39:52,360 --> 00:39:55,600
I've done a lot of contract stuff.

581
00:39:55,600 --> 00:39:59,480
So a lot of these terms, a lot of these terms weren't new to me, although I had to learn

582
00:39:59,480 --> 00:40:02,080
a lot just by reading through all of this.

583
00:40:02,080 --> 00:40:08,680
So we're going to go through these parts and it's going to look a little bit like this.

584
00:40:08,680 --> 00:40:14,600
So I have the Companies Act here, which you all can follow along if you go to, like I

585
00:40:14,600 --> 00:40:19,240
told you here, Acts Regulations, click Companies Act.

586
00:40:19,240 --> 00:40:23,520
And when you get there, here are the page numbers and the PDF.

587
00:40:23,520 --> 00:40:29,160
So if you go to PDF page 17 or 22, you can find these things here.

588
00:40:29,160 --> 00:40:33,640
What I did is I went, I did two things, three things.

589
00:40:33,640 --> 00:40:36,080
I did three things.

590
00:40:36,080 --> 00:40:42,880
So I green highlighted important terms or words that were important to pay attention

591
00:40:42,880 --> 00:40:44,200
to.

592
00:40:44,200 --> 00:40:47,560
So they're like most of their verbs and nouns.

593
00:40:47,560 --> 00:40:55,520
And then I have blue text here for the meat of the takeaway.

594
00:40:55,520 --> 00:41:00,320
What from this sentence do you need to know in order to understand what is they're trying

595
00:41:00,320 --> 00:41:01,600
to say?

596
00:41:01,600 --> 00:41:06,880
And then here anything here and blue highlighter is my own personal thought as I was reading

597
00:41:06,880 --> 00:41:07,880
it.

598
00:41:07,880 --> 00:41:14,000
Okay, so there are here the definitions, you're going to see a ton of a ton of green.

599
00:41:14,000 --> 00:41:19,860
There's a little bit less green as we go along because the definitions is full of keywords.

600
00:41:19,860 --> 00:41:23,200
But section two is the definitions and interpretation.

601
00:41:23,200 --> 00:41:26,920
The definitions is where I go first whenever I read a regulation.

602
00:41:26,920 --> 00:41:29,440
When they say a word, what do they mean?

603
00:41:29,440 --> 00:41:34,760
The most important words are usually there in the definitions so that they can be sure

604
00:41:34,760 --> 00:41:36,640
that you know it's well defined.

605
00:41:36,640 --> 00:41:41,200
All right, so right off the bat, we're already getting hit with tons of stuff.

606
00:41:41,200 --> 00:41:43,020
Okay, so authority.

607
00:41:43,020 --> 00:41:47,160
Whenever they say the word authority, they mean Cayman Islands Monetary Authority, otherwise

608
00:41:47,160 --> 00:41:49,960
known as SEMA.

609
00:41:49,960 --> 00:41:56,320
Exempted company means a company registered as exempted under section 164.

610
00:41:56,320 --> 00:42:00,120
So we already know we need to read section 164, whatever it is.

611
00:42:00,120 --> 00:42:05,020
Just like down here, we already know we need to read section three, whatever it is.

612
00:42:05,020 --> 00:42:09,920
So an exempted company means a company registered as exempted under section 164.

613
00:42:09,920 --> 00:42:15,160
We already knew that an exempted company was a company registered as exempted because on

614
00:42:15,160 --> 00:42:20,580
their website, they gave us a nice little picture.

615
00:42:20,580 --> 00:42:25,220
And our articles of association told us under exempted company is where foundation lives.

616
00:42:25,220 --> 00:42:28,580
So we already knew that part.

617
00:42:28,580 --> 00:42:31,840
But now we're just adding to our knowledge base.

618
00:42:31,840 --> 00:42:36,440
All right, next thing is an officer.

619
00:42:36,440 --> 00:42:41,440
When they say the word officer, they mean in relation to a company, it includes a manager

620
00:42:41,440 --> 00:42:42,520
or a secretary.

621
00:42:42,520 --> 00:42:46,800
So those are already two positions that we're going to need to learn about.

622
00:42:46,800 --> 00:42:49,480
What does a manager do and what does the secretary do?

623
00:42:49,480 --> 00:42:55,840
A regulated business means a business which is required to be licensed.

624
00:42:55,840 --> 00:42:57,320
That's already a buzzword.

625
00:42:57,320 --> 00:42:59,200
What does it mean to be licensed?

626
00:42:59,200 --> 00:43:05,060
So file that one away because that is one of the key things as to why we are what we

627
00:43:05,060 --> 00:43:08,880
are at the sandbox, why things are the way they are.

628
00:43:08,880 --> 00:43:14,080
So a regulated business means a business which is required to be licensed under one or more

629
00:43:14,080 --> 00:43:19,800
of the regulatory laws and it says the C regulation laws definition.

630
00:43:19,800 --> 00:43:25,320
Okay, so we're just going to skip down here to regulatory laws means any one or more of

631
00:43:25,320 --> 00:43:26,980
the following acts.

632
00:43:26,980 --> 00:43:28,640
And there was a bunch of them.

633
00:43:28,640 --> 00:43:31,280
There was like 14, the three that stuck out to me.

634
00:43:31,280 --> 00:43:37,480
It's a company management act because it already mentioned it in the the about me page on the

635
00:43:37,480 --> 00:43:43,200
website, the security investment business law gets mentioned quite a bit later on.

636
00:43:43,200 --> 00:43:46,760
And the director's registration and licensing act, which also gets mentioned quite a bit

637
00:43:46,760 --> 00:43:47,760
later on.

638
00:43:47,760 --> 00:43:52,640
Okay, so when they say the word registrar, they mean the registrar of companies appointed

639
00:43:52,640 --> 00:43:53,640
under section three.

640
00:43:53,640 --> 00:43:57,560
And we need to familiarize ourselves with section three.

641
00:43:57,560 --> 00:44:01,120
All right.

642
00:44:01,120 --> 00:44:02,120
Next up.

643
00:44:02,120 --> 00:44:04,920
So that was part one.

644
00:44:04,920 --> 00:44:08,220
All right, so I said there were seven parts, right?

645
00:44:08,220 --> 00:44:10,760
We already just cleared part one.

646
00:44:10,760 --> 00:44:11,880
Yay.

647
00:44:11,880 --> 00:44:15,320
Part two.

648
00:44:15,320 --> 00:44:17,600
Full of buzzwords here in part two.

649
00:44:17,600 --> 00:44:19,540
Oh my.

650
00:44:19,540 --> 00:44:29,280
So full of buzzwords, the Constitution, Corporation of Companies, Associations, Memo's of Association,

651
00:44:29,280 --> 00:44:30,800
full of buzzwords already.

652
00:44:30,800 --> 00:44:38,520
So in section five, it mentions and again, section two was definition of interpretations.

653
00:44:38,520 --> 00:44:42,280
And I didn't find anything in sections three or four that I really needed to know.

654
00:44:42,280 --> 00:44:45,800
So section five is what I skipped to right here on the slide.

655
00:44:45,800 --> 00:44:49,000
So section five is the mode of forming a company.

656
00:44:49,000 --> 00:44:50,000
All right.

657
00:44:50,000 --> 00:44:56,560
It says those who subscribe, that's a very, very particular term, the verb.

658
00:44:56,560 --> 00:45:01,440
So that term will keep on showing up in the regulation.

659
00:45:01,440 --> 00:45:05,640
So it's very important to know later on what do they mean when they say subscribe?

660
00:45:05,640 --> 00:45:11,960
It's not in the definitions, so already my mind is going, what does subscribe mean?

661
00:45:11,960 --> 00:45:18,720
So those who subscribe their name to a memo of association can form an incorporated company

662
00:45:18,720 --> 00:45:20,240
with or without limited liability.

663
00:45:20,240 --> 00:45:21,240
Okay.

664
00:45:21,240 --> 00:45:23,280
So it's kind of a normal statement.

665
00:45:23,280 --> 00:45:29,120
The only thing that really perks up our ears there is what does it mean to subscribe and

666
00:45:29,120 --> 00:45:30,680
what is a memo of association?

667
00:45:30,680 --> 00:45:33,720
We already know what an incorporated company is.

668
00:45:33,720 --> 00:45:37,840
We know what limited liability is from the website.

669
00:45:37,840 --> 00:45:38,840
All right.

670
00:45:38,840 --> 00:45:44,560
Moving on to section seven, the memo of association.

671
00:45:44,560 --> 00:45:47,080
I should have highlighted that one.

672
00:45:47,080 --> 00:45:48,560
There we go.

673
00:45:48,560 --> 00:45:50,320
So the memo of association.

674
00:45:50,320 --> 00:45:51,320
Okay.

675
00:45:51,320 --> 00:45:56,680
The memo of association shall contain the name of the proposed company and where the

676
00:45:56,680 --> 00:45:58,320
registrar office is.

677
00:45:58,320 --> 00:45:59,820
Okay, cool.

678
00:45:59,820 --> 00:46:03,440
So what we learned right there is that in the memo of association, whatever that's supposed

679
00:46:03,440 --> 00:46:11,560
to be, it's going to contain the name of the company and where the registered office is.

680
00:46:11,560 --> 00:46:17,560
Which let's take a look real fast just to show you all.

681
00:46:17,560 --> 00:46:18,560
So we have a memo.

682
00:46:18,560 --> 00:46:25,320
We're looking for the memo of association.

683
00:46:25,320 --> 00:46:36,680
So if we go to sandbox.dow website, all right, and we go to sip number one, we know that's

684
00:46:36,680 --> 00:46:38,200
where the memo is going to be.

685
00:46:38,200 --> 00:46:39,200
All right.

686
00:46:39,200 --> 00:46:40,200
So here it is.

687
00:46:40,200 --> 00:46:41,200
Sip number one.

688
00:46:41,200 --> 00:46:42,200
All right.

689
00:46:42,200 --> 00:46:50,800
So when it loads, okay, so we're going down the bottom and let's go to the memo of association.

690
00:46:50,800 --> 00:46:55,840
Looks like we need to go to sip number one for that.

691
00:46:55,840 --> 00:46:59,960
Oh, sip number two.

692
00:46:59,960 --> 00:47:03,520
So in sip number two, there's the memo of association.

693
00:47:03,520 --> 00:47:06,560
Okay, so let's click the memo of association.

694
00:47:06,560 --> 00:47:13,080
So we're referring to this right here.

695
00:47:13,080 --> 00:47:20,440
So the law says that the memo of association shall contain shall means must you'd have

696
00:47:20,440 --> 00:47:26,400
no choice shall contain the name of the proposed company and where the registered office is.

697
00:47:26,400 --> 00:47:31,320
It may also specify objects, what the proposed company is to be.

698
00:47:31,320 --> 00:47:33,600
Objects is another specific word.

699
00:47:33,600 --> 00:47:36,120
Objects sounds like purpose, but we'll see.

700
00:47:36,120 --> 00:47:41,640
Let's look at the memorandum of association, the sandbox foundation.

701
00:47:41,640 --> 00:47:45,520
Okay, there's a registered office right there on the front page.

702
00:47:45,520 --> 00:47:47,740
And let's see if we can eyeball something called objects.

703
00:47:47,740 --> 00:47:54,200
So the name of the foundation company is a sandbox foundation and it is registered here.

704
00:47:54,200 --> 00:47:58,840
So already we met the law on that part on that part and here, hey, paragraph three,

705
00:47:58,840 --> 00:48:03,080
the objects for which the foundation company is established.

706
00:48:03,080 --> 00:48:04,080
There are the objects.

707
00:48:04,080 --> 00:48:07,920
So we're going to go over all this in detail and parts two or three, whichever one ends

708
00:48:07,920 --> 00:48:10,160
up being looking at these documents.

709
00:48:10,160 --> 00:48:14,040
But first, all we're worried about is how does this apply to the law?

710
00:48:14,040 --> 00:48:17,640
What does the law say that stuff must look like?

711
00:48:17,640 --> 00:48:18,640
And there it is.

712
00:48:18,640 --> 00:48:24,520
So that's how you can start to triangulate and associate things together.

713
00:48:24,520 --> 00:48:28,320
Section eight, company limited by shares.

714
00:48:28,320 --> 00:48:32,520
So the section eight of the Companies Act says, the capital registered in the company's

715
00:48:32,520 --> 00:48:35,360
creation may be divided into shares.

716
00:48:35,360 --> 00:48:39,740
Okay, so that's not bad.

717
00:48:39,740 --> 00:48:42,360
What does it mean to be divided in shares?

718
00:48:42,360 --> 00:48:46,840
Well, first of all, let's keep in mind that the very first sentence says, a foundation

719
00:48:46,840 --> 00:48:51,980
company limited by guarantee without any share capital, but shares in a company are so well

720
00:48:51,980 --> 00:48:56,520
known that I had to know what that was all about.

721
00:48:56,520 --> 00:49:01,920
And so what they're referring to when they say capital is capital can be money or assets

722
00:49:01,920 --> 00:49:02,920
or equipment.

723
00:49:02,920 --> 00:49:06,280
So it could be money that they invest in the company.

724
00:49:06,280 --> 00:49:08,120
It can be a building.

725
00:49:08,120 --> 00:49:16,800
It could be if if cryptocurrency is considered assets in some countries, cryptocurrency.

726
00:49:16,800 --> 00:49:19,200
But one thing I didn't know is what are shares.

727
00:49:19,200 --> 00:49:25,760
And when I learned what I when I searched shares, shares are units of ownership.

728
00:49:25,760 --> 00:49:30,480
So if you have one share, normally have one unit of ownership.

729
00:49:30,480 --> 00:49:34,880
And shares and stocks are used interchangeably, although they're technically different.

730
00:49:34,880 --> 00:49:36,400
So look at Investopedia.

731
00:49:36,400 --> 00:49:41,040
Do you want to get a little bit more into what that all means?

732
00:49:41,040 --> 00:49:46,120
But I realized when I was reading this, I needed to remind myself what shares mean.

733
00:49:46,120 --> 00:49:47,360
So there we go.

734
00:49:47,360 --> 00:49:51,600
Capital is money, assets or equipment and shares are units of ownership.

735
00:49:51,600 --> 00:49:53,960
All right.

736
00:49:53,960 --> 00:50:00,840
So that would be pages 17 through 22, and sections one through eight.

737
00:50:00,840 --> 00:50:02,040
So let's keep going.

738
00:50:02,040 --> 00:50:09,200
Section nine of part two, company limited by guarantee may have the liability of its

739
00:50:09,200 --> 00:50:14,560
members limited to what they contribute to the company known as a company limited by

740
00:50:14,560 --> 00:50:15,720
guarantee.

741
00:50:15,720 --> 00:50:17,320
That's what we are.

742
00:50:17,320 --> 00:50:24,160
So when we read the the Constitution and the articles and the memos for the foundation

743
00:50:24,160 --> 00:50:28,520
company that are in six, one and two, when we read that for parts two and three of the

744
00:50:28,520 --> 00:50:35,880
podcast episode later on down the road, we're going to be expecting to see how it spell

745
00:50:35,880 --> 00:50:41,680
out what it is that each member contributed to the company to limit their liability, meaning

746
00:50:41,680 --> 00:50:43,140
what they gave.

747
00:50:43,140 --> 00:50:46,520
So maybe someone gave $50,000.

748
00:50:46,520 --> 00:50:53,820
That $50,000 is the limited guarantee that the member is on the hook for should the company

749
00:50:53,820 --> 00:50:59,800
go belly up or should it have to pay its debts, all stuff that the companies act and explains

750
00:50:59,800 --> 00:51:01,800
later on in later sections.

751
00:51:01,800 --> 00:51:06,680
All right, section 10, the memo of association may be altered.

752
00:51:06,680 --> 00:51:07,680
Interesting.

753
00:51:07,680 --> 00:51:10,520
So we know that they have to have a memo of association.

754
00:51:10,520 --> 00:51:13,560
Now we're about to read how much can they alter it?

755
00:51:13,560 --> 00:51:19,320
A company may by special resolution alter its memo of association without restriction.

756
00:51:19,320 --> 00:51:27,000
So almost entirely, they have almost entire flexibility to alter their memo of association,

757
00:51:27,000 --> 00:51:28,360
which is very good to know.

758
00:51:28,360 --> 00:51:31,800
So as they develop these core documents that they're required to by the law, they're allowed

759
00:51:31,800 --> 00:51:35,480
to change these documents to fit the business model.

760
00:51:35,480 --> 00:51:43,320
So you're starting to see a lot of flexibility for a company that is limited by guarantee

761
00:51:43,320 --> 00:51:48,680
and has a memo of association.

762
00:51:48,680 --> 00:51:53,680
Section 12, signature and effect of memo shall be signed by a subscriber.

763
00:51:53,680 --> 00:51:58,800
There's that word again, is binding on the company and members.

764
00:51:58,800 --> 00:52:01,720
That's an interesting statement.

765
00:52:01,720 --> 00:52:07,640
What that says is that when the subscriber, wherever that subscriber is, signs the memo

766
00:52:07,640 --> 00:52:15,120
of association into into effect, it is binding on the company and its members.

767
00:52:15,120 --> 00:52:20,760
So we're going to be interested later on to know at what point do the members become members

768
00:52:20,760 --> 00:52:23,280
by the members right away.

769
00:52:23,280 --> 00:52:26,240
Does a subscriber or someone appoint these members?

770
00:52:26,240 --> 00:52:27,240
What's going on?

771
00:52:27,240 --> 00:52:28,240
Who is the subscriber?

772
00:52:28,240 --> 00:52:34,600
All right, section 20, articles, when I say articles, I mean articles of association,

773
00:52:34,600 --> 00:52:37,760
prescribing regulations for companies.

774
00:52:37,760 --> 00:52:44,920
A company limited by guarantee shall be registered with both a memo and articles signed by subscribers

775
00:52:44,920 --> 00:52:48,320
that prescribes regs for the company.

776
00:52:48,320 --> 00:52:55,320
Okay, so what we just learned here is that not only does a company limited by guarantee,

777
00:52:55,320 --> 00:53:01,240
which is what Fountainvaite Sandbox Foundation is, must have a memo of association, it must

778
00:53:01,240 --> 00:53:08,200
also have an article of association, and both of those things must be signed by the subscriber,

779
00:53:08,200 --> 00:53:12,040
whoever that person is because we still don't know.

780
00:53:12,040 --> 00:53:17,720
So when I read the memo as an article of association for the Sandbox, I'm looking, I'm going to

781
00:53:17,720 --> 00:53:21,560
need to know who that subscriber is because apparently they are very important to this

782
00:53:21,560 --> 00:53:23,760
process.

783
00:53:23,760 --> 00:53:27,240
Let's take a sneak peek at who that is.

784
00:53:27,240 --> 00:53:29,480
Let's take a look at subscriber.

785
00:53:29,480 --> 00:53:32,800
All right, two hits already.

786
00:53:32,800 --> 00:53:33,800
What's the first hit?

787
00:53:33,800 --> 00:53:37,320
We, the subscriber of this memo, wish the Fountainvaite Sandbox Foundation company cool.

788
00:53:37,320 --> 00:53:43,280
That's in line with the regulation and address and description of subscriber is this.

789
00:53:43,280 --> 00:53:46,600
It's that corporation and it's this person.

790
00:53:46,600 --> 00:53:48,600
Oops, you can't see what I see.

791
00:53:48,600 --> 00:53:49,600
Hold on a second.

792
00:53:49,600 --> 00:53:50,920
There we go.

793
00:53:50,920 --> 00:53:58,360
So it is address and description of subscriber at this address for this company and this

794
00:53:58,360 --> 00:53:59,360
person.

795
00:53:59,360 --> 00:54:00,360
All right.

796
00:54:00,360 --> 00:54:08,360
So it tells me this person is a subscriber because of their authorized signatory for

797
00:54:08,360 --> 00:54:09,360
this company.

798
00:54:09,360 --> 00:54:15,320
So this company is a subscriber, authorized signatory is this person, and the subscriber

799
00:54:15,320 --> 00:54:17,720
is the one that kicks all this off.

800
00:54:17,720 --> 00:54:19,400
So let's do another sneak peek.

801
00:54:19,400 --> 00:54:21,120
Where are the members?

802
00:54:21,120 --> 00:54:26,280
Members, talk about members, liability members is limited, foundation company.

803
00:54:26,280 --> 00:54:28,920
Okay, so it doesn't spell out who those members are.

804
00:54:28,920 --> 00:54:29,920
So we don't know.

805
00:54:29,920 --> 00:54:31,560
But we do know who the subscriber is.

806
00:54:31,560 --> 00:54:36,640
And apparently that is the person who starts the company.

807
00:54:36,640 --> 00:54:37,640
Okay.

808
00:54:37,640 --> 00:54:42,000
And they prescribe the regs for the company, meaning they make up the rules.

809
00:54:42,000 --> 00:54:48,120
So that subscriber is hugely important to a foundation company, to a company, not just

810
00:54:48,120 --> 00:54:52,800
a foundation company, because right now we're still in the Companies Act, which is all companies.

811
00:54:52,800 --> 00:54:59,600
All right, so every company apparently must have a memo and articles of association signed

812
00:54:59,600 --> 00:55:03,560
by a subscriber who prescribes the regs for the company.

813
00:55:03,560 --> 00:55:08,280
Okay, starting, starting to come together.

814
00:55:08,280 --> 00:55:16,480
So section 21 regulations required in case of unlimited company or company limited by

815
00:55:16,480 --> 00:55:18,960
guarantee.

816
00:55:18,960 --> 00:55:20,980
So that company limited by guarantee is us.

817
00:55:20,980 --> 00:55:22,440
So I'm interested in this section.

818
00:55:22,440 --> 00:55:24,320
What does it say?

819
00:55:24,320 --> 00:55:31,360
The articles, so that's articles of association, must state the number of members being registered

820
00:55:31,360 --> 00:55:33,320
with the company.

821
00:55:33,320 --> 00:55:40,760
Okay, so this just tells me that while the memo told us not much about the members, remember

822
00:55:40,760 --> 00:55:44,440
over here, the articles should.

823
00:55:44,440 --> 00:55:52,320
Okay, so let's go back to our SIP number one, click on articles of association.

824
00:55:52,320 --> 00:56:00,360
All right, and let's just very quickly look where the members 13 references to a member

825
00:56:00,360 --> 00:56:03,560
and it starts talking about the founder.

826
00:56:03,560 --> 00:56:07,920
Okay, so the founder has the power to do these things.

827
00:56:07,920 --> 00:56:11,920
Here's the members, the initial subscriber to the memo of association shall be the first

828
00:56:11,920 --> 00:56:13,560
member of the foundation company.

829
00:56:13,560 --> 00:56:17,680
Well, there you go.

830
00:56:17,680 --> 00:56:23,040
And then they may admit members and they may admit as a member any person who has applied

831
00:56:23,040 --> 00:56:24,360
for membership in writing.

832
00:56:24,360 --> 00:56:30,120
Okay, so it doesn't say there are any more members and the law says over here, the law

833
00:56:30,120 --> 00:56:33,920
says they must state the number of members.

834
00:56:33,920 --> 00:56:39,040
So what I read right here is that there is one member and what was that member?

835
00:56:39,040 --> 00:56:51,560
The person who signed the member animal association, which is this company authorized by this person.

836
00:56:51,560 --> 00:56:55,200
So there you go.

837
00:56:55,200 --> 00:57:02,000
That told you exactly what you need to know to know how did our how did our foundation

838
00:57:02,000 --> 00:57:03,920
company form.

839
00:57:03,920 --> 00:57:12,680
All righty, next section, section 23, printing, stamping and signature of articles.

840
00:57:12,680 --> 00:57:16,520
There I go again, not highlighting everything.

841
00:57:16,520 --> 00:57:22,320
So that keyword right there, articles shall be signed by each subscriber of the memorandum

842
00:57:22,320 --> 00:57:23,500
of association.

843
00:57:23,500 --> 00:57:29,880
So what that tells me is that when I see those those signatures that I can be sure that that

844
00:57:29,880 --> 00:57:35,960
is the full list of subscribers of which there is one, the one company.

845
00:57:35,960 --> 00:57:39,080
So there are no other subscribers.

846
00:57:39,080 --> 00:57:42,520
That also tells me that there can be more than one subscriber.

847
00:57:42,520 --> 00:57:49,440
So because the the memo of association had one subscriber and the articles of association

848
00:57:49,440 --> 00:57:55,280
association told us that that subscriber is the first member, we know there's one member

849
00:57:55,280 --> 00:58:00,480
and one subscriber at the time this was created back in November 2023.

850
00:58:00,480 --> 00:58:05,080
You see, you see how this is coming together.

851
00:58:05,080 --> 00:58:08,760
It all starts to paint a picture and a pretty easy picture.

852
00:58:08,760 --> 00:58:11,280
Once we get to the end, then it's like, oh, okay.

853
00:58:11,280 --> 00:58:12,880
All right, I get it.

854
00:58:12,880 --> 00:58:18,440
I get why everyone lives next door to each other on a small island in a business district

855
00:58:18,440 --> 00:58:25,240
of a company that's well known for its robust business ecosystem with over 121,000 companies

856
00:58:25,240 --> 00:58:26,760
Yeah, all right.

857
00:58:26,760 --> 00:58:28,320
I'm starting to get it now.

858
00:58:28,320 --> 00:58:34,040
Okay, so section 24, our alteration of articles by special resolution.

859
00:58:34,040 --> 00:58:39,720
We talked about special resolutions or we saw that word earlier where in section 10,

860
00:58:39,720 --> 00:58:45,520
the memo of association may be altered by special resolution.

861
00:58:45,520 --> 00:58:53,480
Okay, so the alteration of articles by special resolution can happen when a company may by

862
00:58:53,480 --> 00:58:56,360
special resolution alter or add to its articles.

863
00:58:56,360 --> 00:59:03,800
So just repeat itself really just said that you can alter your articles and your memos

864
00:59:03,800 --> 00:59:06,000
by special resolution.

865
00:59:06,000 --> 00:59:12,720
Okay, that we define special resolution already we didn't see it defined.

866
00:59:12,720 --> 00:59:17,240
So special resolution could mean anything that something we'll probably have to look

867
00:59:17,240 --> 00:59:20,480
at in one of our documents.

868
00:59:20,480 --> 00:59:25,560
There it is right there special resolution means a resolution passed at a general meeting

869
00:59:25,560 --> 00:59:30,880
of the foundation company by not less than two thirds majority of votes cast or by resolution

870
00:59:30,880 --> 00:59:33,080
writing on article 9.7.

871
00:59:33,080 --> 00:59:35,400
Boom, done.

872
00:59:35,400 --> 00:59:40,680
And all I had to do was look at the foundation, the sandbox foundation articles association.

873
00:59:40,680 --> 00:59:45,840
How about that, which can change itself and its own rules by a special resolution, the

874
00:59:45,840 --> 00:59:47,320
two thirds majority.

875
00:59:47,320 --> 00:59:48,720
Cool.

876
00:59:48,720 --> 00:59:49,720
This to me is fun.

877
00:59:49,720 --> 00:59:50,720
This is exciting.

878
00:59:50,720 --> 00:59:52,240
I am an I'm nerd now.

879
00:59:52,240 --> 00:59:59,560
Because it's education, it really paints a picture, it shows you what is that you need

880
00:59:59,560 --> 01:00:06,360
to do to comply with the law and why you see things go the way they go.

881
01:00:06,360 --> 01:00:08,400
Why does everything need to go through legal?

882
01:00:08,400 --> 01:00:12,200
We'll find out later, because there are pretty stiff penalties for getting it wrong, jail

883
01:00:12,200 --> 01:00:17,120
time and pretty hefty fines, all sorts of stuff.

884
01:00:17,120 --> 01:00:24,960
All right, pages 30 through 35 of the Companies Act, section 25 talks about the adoption and

885
01:00:24,960 --> 01:00:28,720
effect of the articles of association.

886
01:00:28,720 --> 01:00:33,520
If there are other if there are articles, they shall be signed by each subscriber.

887
01:00:33,520 --> 01:00:37,720
Okay, that was pretty much the only thing I could find there that talks about well,

888
01:00:37,720 --> 01:00:42,880
okay, you adopt an article association when it's signed by the subscriber.

889
01:00:42,880 --> 01:00:43,880
All right, fine.

890
01:00:43,880 --> 01:00:44,880
Good to know.

891
01:00:44,880 --> 01:00:45,880
Let's keep going.

892
01:00:45,880 --> 01:00:49,120
Section 26 registration, the registrar.

893
01:00:49,120 --> 01:00:54,420
I remember in the in the definition, the registrar means a registrar of companies appointed under

894
01:00:54,420 --> 01:00:55,420
section three.

895
01:00:55,420 --> 01:00:59,520
All right, we didn't find anything interesting in section three.

896
01:00:59,520 --> 01:01:09,240
So the back where we were, where we here is section 26, the registrar shall make the register

897
01:01:09,240 --> 01:01:15,120
available for inspection by any person on payment of a fee specified in part one a of

898
01:01:15,120 --> 01:01:16,120
schedule five.

899
01:01:16,120 --> 01:01:18,560
We'll go into that later.

900
01:01:18,560 --> 01:01:26,960
But but spoiler alert, if you go to 200 page 209, and you look at that part a schedule

901
01:01:26,960 --> 01:01:29,280
five, it's a $50 fee.

902
01:01:29,280 --> 01:01:37,120
So you pay a $50 fee and you get to see that the register of people who are registered

903
01:01:37,120 --> 01:01:38,120
to a company.

904
01:01:38,120 --> 01:01:46,080
And I showed that on episode was it was birth of the Dow episode is what it was.

905
01:01:46,080 --> 01:01:50,320
And that was episode number 34.

906
01:01:50,320 --> 01:01:56,840
So in episode 34, I show the what it looks like inside that portal.

907
01:01:56,840 --> 01:02:01,920
That was that tool, the business platform tool I mentioned earlier, you can search people.

908
01:02:01,920 --> 01:02:06,960
And if you pay a fee, you can see what the companies are, what the names are.

909
01:02:06,960 --> 01:02:09,400
So that that complies with the law.

910
01:02:09,400 --> 01:02:13,840
The registrar shall make that register available for inspection by anyone who pays that $50

911
01:02:13,840 --> 01:02:14,840
fee.

912
01:02:14,840 --> 01:02:17,200
And all you need to do is just make an account.

913
01:02:17,200 --> 01:02:20,480
Just create an account.

914
01:02:20,480 --> 01:02:29,620
Email address, password, name, pay the fee, you get the you get that register.

915
01:02:29,620 --> 01:02:31,400
So shall pay a fee.

916
01:02:31,400 --> 01:02:34,800
Also when filing a memo of association per part one of schedule five.

917
01:02:34,800 --> 01:02:43,200
Again, if you look at page 209, you'll see that the subscribers for the foundation paid

918
01:02:43,200 --> 01:02:48,240
$600 to file the memo of association with the registrar.

919
01:02:48,240 --> 01:02:49,520
So that's how you comply with the law.

920
01:02:49,520 --> 01:02:54,320
Pay the fee, fill out the form, give it to the right person.

921
01:02:54,320 --> 01:02:55,320
Boom.

922
01:02:55,320 --> 01:03:01,960
Alright, consequences of incorporation under section 27 says upon filing the memo association,

923
01:03:01,960 --> 01:03:07,020
the registrar shall issue a certificate and from the date of incorporation, the subscribers

924
01:03:07,020 --> 01:03:12,000
of the memo association shall be a company body authorized to act.

925
01:03:12,000 --> 01:03:15,280
So what does that say?

926
01:03:15,280 --> 01:03:25,680
When when the company receives their approval, their their certificate, I didn't even say

927
01:03:25,680 --> 01:03:31,000
that when they receive their approval from the registrar, the registrar will give them

928
01:03:31,000 --> 01:03:34,000
a certificate saying, yeah, you're a company now.

929
01:03:34,000 --> 01:03:40,360
And then the date of incorporation in your memo association is this official day that

930
01:03:40,360 --> 01:03:41,360
your company starts.

931
01:03:41,360 --> 01:03:48,320
So let's look at the memo of association and when does it start for us?

932
01:03:48,320 --> 01:03:52,080
Looks like you'll see that.

933
01:03:52,080 --> 01:03:53,560
Hold on.

934
01:03:53,560 --> 01:03:55,840
Just a second.

935
01:03:55,840 --> 01:03:58,040
Can you read that date?

936
01:03:58,040 --> 01:03:59,880
Right there.

937
01:03:59,880 --> 01:04:04,720
November 20th, 2023.

938
01:04:04,720 --> 01:04:09,560
That is when that is when the fifty dollar.

939
01:04:09,560 --> 01:04:14,480
It's like a fifty dollar stamp was paid.

940
01:04:14,480 --> 01:04:17,660
Filing number on 20 November 2023.

941
01:04:17,660 --> 01:04:22,160
Is there any other date here that said when it was going to be incorporated?

942
01:04:22,160 --> 01:04:24,440
I didn't see any other date.

943
01:04:24,440 --> 01:04:25,760
Let's look at the very bottom.

944
01:04:25,760 --> 01:04:28,640
The last page is normally where you find that.

945
01:04:28,640 --> 01:04:32,360
It will do it'll say something like incorporated.

946
01:04:32,360 --> 01:04:33,840
There it is.

947
01:04:33,840 --> 01:04:35,840
There's your incorporation date.

948
01:04:35,840 --> 01:04:38,080
Twenty twenty three.

949
01:04:38,080 --> 01:04:42,880
Three, the law, read the law and then you can start to piece together what it is you're

950
01:04:42,880 --> 01:04:46,240
actually reading when you go read these documents.

951
01:04:46,240 --> 01:04:50,400
It's really not that scary once you get through the whole what does this term mean?

952
01:04:50,400 --> 01:04:51,400
What does that term mean?

953
01:04:51,400 --> 01:04:53,520
How do these terms all go together?

954
01:04:53,520 --> 01:04:55,680
It's very doable.

955
01:04:55,680 --> 01:04:59,520
Okay, that's section twenty seven.

956
01:04:59,520 --> 01:05:01,640
Section twenty eight.

957
01:05:01,640 --> 01:05:05,640
Lack of capacity or power.

958
01:05:05,640 --> 01:05:06,640
Ultra V. Res.

959
01:05:06,640 --> 01:05:09,520
I didn't know what that word was, so I just looked it up on Google.

960
01:05:09,520 --> 01:05:10,520
Ultra V. Res.

961
01:05:10,520 --> 01:05:11,520
Vires.

962
01:05:11,520 --> 01:05:13,080
How do you say this?

963
01:05:13,080 --> 01:05:14,840
Ultra Vires.

964
01:05:14,840 --> 01:05:22,840
Ultra Vires is the act is acting or done beyond one's legal power or authority.

965
01:05:22,840 --> 01:05:23,840
Okay.

966
01:05:23,840 --> 01:05:26,280
So doing something you're not authorized to do.

967
01:05:26,280 --> 01:05:30,520
So that's what this section is referring to.

968
01:05:30,520 --> 01:05:36,000
No act of a company shall be invalid because it didn't have the capacity or power to perform

969
01:05:36,000 --> 01:05:37,240
the act.

970
01:05:37,240 --> 01:05:39,480
That's a fascinating statement.

971
01:05:39,480 --> 01:05:41,880
That really stuck out to me.

972
01:05:41,880 --> 01:05:48,880
What that means to me is that even though a company had ultra Vires, no power or authority

973
01:05:48,880 --> 01:05:54,040
to do it, it doesn't automatically make the companies act invalid.

974
01:05:54,040 --> 01:05:58,200
So if the foundation company did something it wasn't supposed to, that doesn't just mean

975
01:05:58,200 --> 01:06:01,000
that it gets nullified.

976
01:06:01,000 --> 01:06:03,840
But that sentence didn't stop there.

977
01:06:03,840 --> 01:06:10,520
In section twenty eight, it says, but the lack of capacity or power may be asserted

978
01:06:10,520 --> 01:06:16,040
in proceedings by a member or director against the company.

979
01:06:16,040 --> 01:06:23,200
So it can be used as an argument, maybe in a court of law or maybe in a dispute like

980
01:06:23,200 --> 01:06:29,760
mediation or arbitration or even just a resolution that's done in a business meeting.

981
01:06:29,760 --> 01:06:37,080
They may assert that the company, what it did had ultra Vires, Vires, Vires.

982
01:06:37,080 --> 01:06:39,200
Let's hear that word again.

983
01:06:39,200 --> 01:06:40,560
Ultra Vires.

984
01:06:40,560 --> 01:06:41,560
Ultra Vires.

985
01:06:41,560 --> 01:06:46,360
A lot of legal stuff going on over here.

986
01:06:46,360 --> 01:06:52,880
So but that doesn't mean that just because it's not automatically invalid that they that

987
01:06:52,880 --> 01:06:56,080
the company can just do whatever it can be challenged.

988
01:06:56,080 --> 01:07:01,280
And what's implied here, but not ultra, but not said directly is that it could be challenged

989
01:07:01,280 --> 01:07:05,120
successfully as long as they go through a process of all sorts of things.

990
01:07:05,120 --> 01:07:06,120
All right.

991
01:07:06,120 --> 01:07:10,520
So section thirty restrictions on registration of certain names.

992
01:07:10,520 --> 01:07:14,080
All right, so this part was interesting and unsurprised.

993
01:07:14,080 --> 01:07:17,840
It was surprisingly connected to us.

994
01:07:17,840 --> 01:07:22,160
No company shall be registered by a name which contains the word gaming.

995
01:07:22,160 --> 01:07:24,920
I just thought that was interesting.

996
01:07:24,920 --> 01:07:30,240
So we can't say Sandbox Gaming Foundation has to be sandbox foundation.

997
01:07:30,240 --> 01:07:31,240
Who knew?

998
01:07:31,240 --> 01:07:37,780
The more you know, section thirty two company within power to issue bearer shares, not to

999
01:07:37,780 --> 01:07:39,400
hold lands in the islands.

1000
01:07:39,400 --> 01:07:40,400
All right.

1001
01:07:40,400 --> 01:07:43,840
Here's where we start getting into capital.

1002
01:07:43,840 --> 01:07:49,640
Equity capital with respect to a company includes shares, stock and script.

1003
01:07:49,640 --> 01:07:55,940
No script was but Lynn later on a sentence says entitles the owner to receive profits

1004
01:07:55,940 --> 01:08:00,600
or to share and distribution of assets on a winding up.

1005
01:08:00,600 --> 01:08:04,280
So some of those keywords are important to us.

1006
01:08:04,280 --> 01:08:11,200
So equity capital because it's plastered on top of our foundation company, right?

1007
01:08:11,200 --> 01:08:13,880
There's no share capital at all.

1008
01:08:13,880 --> 01:08:16,140
All right.

1009
01:08:16,140 --> 01:08:19,680
But if we did have some, it would entitle the owner to receive profits.

1010
01:08:19,680 --> 01:08:26,320
But what's one big asterisk that we learned when we read the company's foundation description?

1011
01:08:26,320 --> 01:08:29,480
All right, let's go back and look at it for a second.

1012
01:08:29,480 --> 01:08:35,080
Very, very important part where I brought up the nonprofit.

1013
01:08:35,080 --> 01:08:36,080
Where was it?

1014
01:08:36,080 --> 01:08:37,080
Right here.

1015
01:08:37,080 --> 01:08:45,800
A foundation company is prohibited from paying dividends or other distributions of profits

1016
01:08:45,800 --> 01:08:46,800
or assets.

1017
01:08:46,800 --> 01:08:57,960
So we already know that this this page section in the Companies Act referring to how a company

1018
01:08:57,960 --> 01:09:01,820
with equity capital allows the owner to receive profits.

1019
01:09:01,820 --> 01:09:05,040
We know that's not going to be applicable to us, but it's still interesting to know

1020
01:09:05,040 --> 01:09:07,040
just in case.

1021
01:09:07,040 --> 01:09:09,160
All right.

1022
01:09:09,160 --> 01:09:13,320
And here's a question that was burning as I was reading this, right?

1023
01:09:13,320 --> 01:09:17,200
Does the share capital apply here?

1024
01:09:17,200 --> 01:09:21,020
Share capital was a different word than equity capital.

1025
01:09:21,020 --> 01:09:23,240
I couldn't quite figure out if there was a link there.

1026
01:09:23,240 --> 01:09:25,760
Does share capital mean the same thing as equity capital?

1027
01:09:25,760 --> 01:09:27,840
I don't know.

1028
01:09:27,840 --> 01:09:32,880
So does this mean that the sandbox foundation gave up the right to entitle the owner to

1029
01:09:32,880 --> 01:09:37,320
a variable right of participation in the profits of the company?

1030
01:09:37,320 --> 01:09:42,080
I think the overriding principle here is that the foundation and company can't distribute

1031
01:09:42,080 --> 01:09:46,040
profits, but it still was a question that that popped up as I was reading.

1032
01:09:46,040 --> 01:09:47,480
It might just be automatically.

1033
01:09:47,480 --> 01:09:50,040
Yeah, we can't do that.

1034
01:09:50,040 --> 01:09:52,640
Law says so.

1035
01:09:52,640 --> 01:09:55,040
Okay.

1036
01:09:55,040 --> 01:10:03,160
So that was page 30 through 35, which was section 25 through 32.

1037
01:10:03,160 --> 01:10:04,480
Okay.

1038
01:10:04,480 --> 01:10:05,760
Now we're out of part two.

1039
01:10:05,760 --> 01:10:08,080
Again, there were seven parts that we need to work through.

1040
01:10:08,080 --> 01:10:09,760
We're already in part three now.

1041
01:10:09,760 --> 01:10:16,320
Part three says distribution of capital and liability of members of companies and association.

1042
01:10:16,320 --> 01:10:19,320
And after this, we only have like five more slides to go through.

1043
01:10:19,320 --> 01:10:23,160
And then we go through the next regulation stuff and it only gets shorter after that.

1044
01:10:23,160 --> 01:10:25,600
So this was the biggest one.

1045
01:10:25,600 --> 01:10:29,520
Once we get through this part, then smooth sailing after this.

1046
01:10:29,520 --> 01:10:35,040
So section 36 says power of a company to pay commissions.

1047
01:10:35,040 --> 01:10:40,040
Part that interests me, interested me here was a company always has the power to pay

1048
01:10:40,040 --> 01:10:44,560
a commission to a person subscribing or agreeing to subscribe.

1049
01:10:44,560 --> 01:10:47,280
Now, why is that important to know?

1050
01:10:47,280 --> 01:10:52,860
Because it helps paint a picture for how much.

1051
01:10:52,860 --> 01:10:53,920
How can you pay someone?

1052
01:10:53,920 --> 01:10:55,720
How can you pay someone?

1053
01:10:55,720 --> 01:11:00,080
And where did we see that?

1054
01:11:00,080 --> 01:11:02,640
Where did we see that in one of our SIPs?

1055
01:11:02,640 --> 01:11:04,760
What is this one?

1056
01:11:04,760 --> 01:11:06,920
SIP number two, the Sandbox Foundation.

1057
01:11:06,920 --> 01:11:13,880
So if we search a dollar sign, right, legal fees and related fees, $50,000.

1058
01:11:13,880 --> 01:11:16,200
Director services, $30,000 annually.

1059
01:11:16,200 --> 01:11:20,560
So the director, we didn't see any word of the director being a subscriber.

1060
01:11:20,560 --> 01:11:21,560
Okay.

1061
01:11:21,560 --> 01:11:22,560
We don't know that yet.

1062
01:11:22,560 --> 01:11:29,800
We don't know for sure who it is, but those related fees, I bet you we paid the subscriber

1063
01:11:29,800 --> 01:11:34,560
a fee somewhere between one to $50,000.

1064
01:11:34,560 --> 01:11:35,920
Most of that might've even been legal fees.

1065
01:11:35,920 --> 01:11:37,280
I'm not sure.

1066
01:11:37,280 --> 01:11:39,800
But there you go.

1067
01:11:39,800 --> 01:11:44,720
Registered office fees is part of that.

1068
01:11:44,720 --> 01:11:46,820
And the registered office is the subscriber.

1069
01:11:46,820 --> 01:11:54,640
So we paid a subscriber, a company to subscribe for us, the Sandbox Foundation into existence.

1070
01:11:54,640 --> 01:11:56,480
And we paid them a fee for that.

1071
01:11:56,480 --> 01:12:01,160
And as part of the law allows, we can do that.

1072
01:12:01,160 --> 01:12:09,560
Companies Act authorizes a commission for companies to pay their subscribers.

1073
01:12:09,560 --> 01:12:11,800
At the time, I didn't know what that meant.

1074
01:12:11,800 --> 01:12:15,840
But now looking back on it, it's what I just said.

1075
01:12:15,840 --> 01:12:16,840
Yeah.

1076
01:12:16,840 --> 01:12:23,440
The part that I still need to figure out though is, does this mean that the subscriber reference

1077
01:12:23,440 --> 01:12:26,640
is no longer a part of the foundation company?

1078
01:12:26,640 --> 01:12:27,640
I don't know.

1079
01:12:27,640 --> 01:12:28,640
I have to ask.

1080
01:12:28,640 --> 01:12:31,080
Hey, that's what I need to ask here.

1081
01:12:31,080 --> 01:12:38,640
Is the subscriber still a part of the Sandbox Foundation company?

1082
01:12:38,640 --> 01:12:39,640
Right.

1083
01:12:39,640 --> 01:12:43,000
So that's probably really what I want to know here.

1084
01:12:43,000 --> 01:12:44,000
Okay.

1085
01:12:44,000 --> 01:12:45,440
Section 38.

1086
01:12:45,440 --> 01:12:47,040
The definition of a member.

1087
01:12:47,040 --> 01:12:48,040
Here we go.

1088
01:12:48,040 --> 01:12:50,800
We've been wondering what is a member.

1089
01:12:50,800 --> 01:12:55,500
The subscribers of the memo of association agreed to become a members of a company and

1090
01:12:55,500 --> 01:12:57,760
shall be entered on the register.

1091
01:12:57,760 --> 01:12:59,440
Oh, okay.

1092
01:12:59,440 --> 01:13:02,320
So the subscribers become the members.

1093
01:13:02,320 --> 01:13:04,920
That's I mean, that's that's clear.

1094
01:13:04,920 --> 01:13:07,800
It's simple, but fascinating.

1095
01:13:07,800 --> 01:13:13,440
So the subscribers that we pay are now the members of the company that they formed.

1096
01:13:13,440 --> 01:13:16,240
All right.

1097
01:13:16,240 --> 01:13:17,240
So nothing to be learned about.

1098
01:13:17,240 --> 01:13:19,040
You're just learning about the law.

1099
01:13:19,040 --> 01:13:20,520
What does it say?

1100
01:13:20,520 --> 01:13:25,240
The register of members on section 40 says every company shall keep a register of the

1101
01:13:25,240 --> 01:13:29,080
names and addresses of its members, the date when they became a member, the date when they

1102
01:13:29,080 --> 01:13:30,800
cease to become a member.

1103
01:13:30,800 --> 01:13:38,360
Now, remember back in the previous section, all you need to do is pay $50 to see to inspect

1104
01:13:38,360 --> 01:13:45,460
that register and the registrar shall make it available to you.

1105
01:13:45,460 --> 01:13:52,600
So we see now that not only shall the registrar make the register available to you, but the

1106
01:13:52,600 --> 01:13:56,000
company is required to keep an updated register.

1107
01:13:56,000 --> 01:14:00,520
And there's certain there's certain dates like 30 days after such and such happens,

1108
01:14:00,520 --> 01:14:05,720
you must update the register a month after or two months after whatever you must update.

1109
01:14:05,720 --> 01:14:09,920
So it has rules for how that that must go down.

1110
01:14:09,920 --> 01:14:12,360
All right.

1111
01:14:12,360 --> 01:14:14,080
And then we get into voting rights.

1112
01:14:14,080 --> 01:14:15,280
What does voting rights mean?

1113
01:14:15,280 --> 01:14:19,400
It means the conference on shareholders.

1114
01:14:19,400 --> 01:14:22,840
One second.

1115
01:14:22,840 --> 01:14:29,120
The conference on shareholders, including the right to appoint or remove directors.

1116
01:14:29,120 --> 01:14:31,800
All right.

1117
01:14:31,800 --> 01:14:35,000
So we're getting into how do directors come to be?

1118
01:14:35,000 --> 01:14:39,680
Well, it looks like directors come to be through the voting of shareholders.

1119
01:14:39,680 --> 01:14:42,000
This is a new term.

1120
01:14:42,000 --> 01:14:43,000
Who are shareholders?

1121
01:14:43,000 --> 01:14:45,800
We don't know yet.

1122
01:14:45,800 --> 01:14:47,280
We think they might be members.

1123
01:14:47,280 --> 01:14:52,400
Because at this point in time, I haven't seen their name.

1124
01:14:52,400 --> 01:14:58,520
But let's do a little cheat and see if shareholder pops up in one of our our documents.

1125
01:14:58,520 --> 01:14:59,700
It does not.

1126
01:14:59,700 --> 01:15:03,760
So already you can tell this term needs to be clarified.

1127
01:15:03,760 --> 01:15:10,340
So if the shareholders, by the way, which we don't have any share capital, right.

1128
01:15:10,340 --> 01:15:13,960
So who are the shareholders here?

1129
01:15:13,960 --> 01:15:15,440
Don't know yet.

1130
01:15:15,440 --> 01:15:18,480
But if I had to wager, it's probably the members.

1131
01:15:18,480 --> 01:15:20,240
I'm sure.

1132
01:15:20,240 --> 01:15:25,840
So it goes on to say in section 40, in the case of an entity not having a share capital,

1133
01:15:25,840 --> 01:15:26,840
here we go.

1134
01:15:26,840 --> 01:15:34,040
I have to answer the question on members of vote at general meetings of the entity.

1135
01:15:34,040 --> 01:15:35,840
And there's your answer.

1136
01:15:35,840 --> 01:15:39,480
So when you don't have a shareholder, which is what the Sandbox Foundation is without

1137
01:15:39,480 --> 01:15:47,440
share capital, the entity that can vote in place of the shareholders are the members.

1138
01:15:47,440 --> 01:15:49,120
And who are the members at this point in time?

1139
01:15:49,120 --> 01:15:51,200
The subscriber.

1140
01:15:51,200 --> 01:15:57,640
The subscriber who signed that document is now the member who can then vote in a meeting

1141
01:15:57,640 --> 01:15:59,500
to appoint or remove the directors.

1142
01:15:59,500 --> 01:16:02,600
You see how this is going.

1143
01:16:02,600 --> 01:16:05,600
It's cool, huh?

1144
01:16:05,600 --> 01:16:08,320
All right.

1145
01:16:08,320 --> 01:16:13,760
If a company doesn't have general meetings, the rights are conferred upon shareholders

1146
01:16:13,760 --> 01:16:14,760
or members.

1147
01:16:14,760 --> 01:16:17,980
OK, so this takes it a step further.

1148
01:16:17,980 --> 01:16:23,400
If there are no general meetings, then even though there aren't going to be any general

1149
01:16:23,400 --> 01:16:30,320
meetings to appoint or remove directors, the right to appoint or remove directors are now

1150
01:16:30,320 --> 01:16:33,520
given to the shareholders of the meeting or the members.

1151
01:16:33,520 --> 01:16:36,600
I think what that means is that there are no meetings required.

1152
01:16:36,600 --> 01:16:38,640
I'm not sure.

1153
01:16:38,640 --> 01:16:42,680
But one of the questions I had was, do subscribers become members upon initiating a foundation

1154
01:16:42,680 --> 01:16:43,680
company?

1155
01:16:43,680 --> 01:16:44,680
Oh, that was an early one I had.

1156
01:16:44,680 --> 01:16:49,120
Yes, yes, that that part we already answered.

1157
01:16:49,120 --> 01:16:50,760
Whoops.

1158
01:16:50,760 --> 01:16:55,640
And who are shareholders when a company doesn't have share capital?

1159
01:16:55,640 --> 01:16:57,220
We answer that one right here.

1160
01:16:57,220 --> 01:16:58,220
It's going to be.

1161
01:16:58,220 --> 01:17:03,120
It's going to be the members.

1162
01:17:03,120 --> 01:17:04,440
So these are questions that I had.

1163
01:17:04,440 --> 01:17:11,320
I wrote down as I was reading, not realizing later on that I answered the questions.

1164
01:17:11,320 --> 01:17:14,960
So we're going to put.

1165
01:17:14,960 --> 01:17:15,960
Yes.

1166
01:17:15,960 --> 01:17:16,960
Right.

1167
01:17:16,960 --> 01:17:17,960
So the answer is yes.

1168
01:17:17,960 --> 01:17:18,960
Who are they?

1169
01:17:18,960 --> 01:17:22,040
When you don't have share capital, the members.

1170
01:17:22,040 --> 01:17:23,040
Cool.

1171
01:17:23,040 --> 01:17:24,040
Cool.

1172
01:17:24,040 --> 01:17:25,800
So that's section.

1173
01:17:25,800 --> 01:17:29,640
That's part three.

1174
01:17:29,640 --> 01:17:33,080
We're still in part three when we go to section 44.

1175
01:17:33,080 --> 01:17:35,080
That's the inspection of the register.

1176
01:17:35,080 --> 01:17:40,960
Register of members can be kept at a registered office or anywhere else it does business.

1177
01:17:40,960 --> 01:17:42,800
Point to that.

1178
01:17:42,800 --> 01:17:48,160
An exempted company is not required to allow people to inspect the register.

1179
01:17:48,160 --> 01:17:49,160
Now this is important.

1180
01:17:49,160 --> 01:17:55,920
The important distinction from what I said earlier, how the registrar keeps.

1181
01:17:55,920 --> 01:17:58,560
Where is it?

1182
01:17:58,560 --> 01:18:01,920
The registrar.

1183
01:18:01,920 --> 01:18:06,400
The registrar shall make the register available for inspection on a fee.

1184
01:18:06,400 --> 01:18:08,960
So what is the difference here?

1185
01:18:08,960 --> 01:18:14,640
I think what this is saying is that while the registrar is required to furnish this

1186
01:18:14,640 --> 01:18:19,480
to you upon paying the fee, the company is not.

1187
01:18:19,480 --> 01:18:25,560
Okay, so an exempted company is not required to allow people to inspect its own register,

1188
01:18:25,560 --> 01:18:30,440
but you can still go to the registrar to pull that for a fee.

1189
01:18:30,440 --> 01:18:36,400
And I think the reason why this is, although I'm not sure, is because this is for free.

1190
01:18:36,400 --> 01:18:40,560
You can go to a company, I didn't see any fee associated with going to an exempted company.

1191
01:18:40,560 --> 01:18:44,240
Say, hey, let me see your registered books.

1192
01:18:44,240 --> 01:18:46,000
I don't know for sure though.

1193
01:18:46,000 --> 01:18:48,720
So that's why I asked, why is this?

1194
01:18:48,720 --> 01:18:50,920
Why is this a thing?

1195
01:18:50,920 --> 01:18:57,400
Section 49, liability of present and past members of the company.

1196
01:18:57,400 --> 01:19:03,040
If a company is wound up, which took me a while to figure out, the word wound up appears

1197
01:19:03,040 --> 01:19:06,960
so many times, it appears in both the articles in the memo.

1198
01:19:06,960 --> 01:19:09,760
And I couldn't figure out when the word wound up.

1199
01:19:09,760 --> 01:19:12,480
It means liquidated, meaning closed.

1200
01:19:12,480 --> 01:19:19,700
So if a company is closed down, what they call wound up, then every member is required

1201
01:19:19,700 --> 01:19:25,280
to contribute to the assets of the company to satisfy the debts of liabilities.

1202
01:19:25,280 --> 01:19:29,680
Hence the limited by guarantee.

1203
01:19:29,680 --> 01:19:34,040
Those members guarantee an amount that they are contributing to the company.

1204
01:19:34,040 --> 01:19:38,680
And if the company gets liquidated, closed down, or whatever, can't pay its debts, then

1205
01:19:38,680 --> 01:19:43,160
those guarantees kick in and that satisfies the debts and liabilities.

1206
01:19:43,160 --> 01:19:45,840
That's the way I read it.

1207
01:19:45,840 --> 01:19:49,720
Here's the part that really, really caught me off guard.

1208
01:19:49,720 --> 01:19:58,320
All right, past members were active up to one year prior, contribute to the debt, contribute

1209
01:19:58,320 --> 01:20:01,400
if the debt was occurred while they were a member.

1210
01:20:01,400 --> 01:20:02,820
Really?

1211
01:20:02,820 --> 01:20:12,880
So if you remember and within a year of you leaving, a debt was incurred, I'm sorry, hold

1212
01:20:12,880 --> 01:20:13,880
on.

1213
01:20:13,880 --> 01:20:22,120
If you were a member and a debt was incurred while you were a member, it doesn't say there

1214
01:20:22,120 --> 01:20:28,240
was limitation at any time you remember that debt was occurred, up to one year later, you

1215
01:20:28,240 --> 01:20:33,800
may be called upon to satisfy those debts.

1216
01:20:33,800 --> 01:20:35,120
That's fascinating.

1217
01:20:35,120 --> 01:20:37,240
That's an interesting clawback right there.

1218
01:20:37,240 --> 01:20:42,120
All right, and the next it goes on to say for companies limited by guarantee, which

1219
01:20:42,120 --> 01:20:51,240
is us, no member is required to pay more than what the memo of association cited as guaranteed.

1220
01:20:51,240 --> 01:20:52,240
Good to know.

1221
01:20:52,240 --> 01:20:54,720
Let's take a look for that real quick.

1222
01:20:54,720 --> 01:20:55,720
Guarantee.

1223
01:20:55,720 --> 01:20:56,720
Guarantee.

1224
01:20:56,720 --> 01:20:57,720
Okay.

1225
01:20:57,720 --> 01:21:00,200
So, and what does this part say?

1226
01:21:00,200 --> 01:21:08,440
It talks about foundation company shall have perhaps we didn't establish some important

1227
01:21:08,440 --> 01:21:09,440
to what we're doing.

1228
01:21:09,440 --> 01:21:14,960
Wish the form of foundation company limited by guarantee.

1229
01:21:14,960 --> 01:21:19,240
An amount equal to the amount of the guaranteed amount made by each member in accordance with

1230
01:21:19,240 --> 01:21:20,240
paragraph nine.

1231
01:21:20,240 --> 01:21:22,640
Let's look at paragraph nine.

1232
01:21:22,640 --> 01:21:26,360
Each person who is a member undertakes to contribute to the assets of the foundation

1233
01:21:26,360 --> 01:21:29,000
company, the event being wound out in about one year afterwards.

1234
01:21:29,000 --> 01:21:31,200
They're just repeating the law at that point.

1235
01:21:31,200 --> 01:21:35,640
For payment of the debts and liabilities of the foundation company contracted to blah,

1236
01:21:35,640 --> 01:21:40,240
blah, blah, blah, blah, blah, such amounts as may be required not exceeding the sum of

1237
01:21:40,240 --> 01:21:41,240
$1.

1238
01:21:41,240 --> 01:21:42,240
$1.

1239
01:21:42,240 --> 01:21:43,240
Okay.

1240
01:21:43,240 --> 01:21:51,240
So, interesting interpretation.

1241
01:21:51,240 --> 01:21:55,560
I guess there's nothing wrong with saying that the guaranteed amount is $1.

1242
01:21:55,560 --> 01:21:56,560
Okay.

1243
01:21:56,560 --> 01:22:02,240
If that, if that's what meets the law, then they're within their rights to do so.

1244
01:22:02,240 --> 01:22:03,640
All right.

1245
01:22:03,640 --> 01:22:06,040
Section 57 meetings.

1246
01:22:06,040 --> 01:22:09,640
A meeting may start with only one member or director present.

1247
01:22:09,640 --> 01:22:12,400
So we know that subscriber became a member.

1248
01:22:12,400 --> 01:22:16,600
It seemed like that was the only member, but the only subscriber, which became the only

1249
01:22:16,600 --> 01:22:25,480
member, which then may appoint directors or officers and no, no two person thing is needed.

1250
01:22:25,480 --> 01:22:28,520
All right.

1251
01:22:28,520 --> 01:22:32,520
Section 57 meetings going to say memos and articles of association may dictate how all

1252
01:22:32,520 --> 01:22:33,620
this goes.

1253
01:22:33,620 --> 01:22:34,620
And they do.

1254
01:22:34,620 --> 01:22:38,720
If you, if you read those two documents, it will tell you how that goes.

1255
01:22:38,720 --> 01:22:39,720
We'll do that again.

1256
01:22:39,720 --> 01:22:43,840
We'll go through those memos and articles in parts two and three of the podcast episode

1257
01:22:43,840 --> 01:22:46,840
somewhere not today.

1258
01:22:46,840 --> 01:22:48,800
Section 58 general meetings.

1259
01:22:48,800 --> 01:22:52,280
A general meeting other than an exempted company.

1260
01:22:52,280 --> 01:22:56,320
So not us shall be held at least once a year.

1261
01:22:56,320 --> 01:22:58,120
And that struck me as well.

1262
01:22:58,120 --> 01:23:02,360
It appears as though exempted companies aren't required to have meetings at all.

1263
01:23:02,360 --> 01:23:05,160
As I should add a big old question mark to that.

1264
01:23:05,160 --> 01:23:07,720
What does that mean?

1265
01:23:07,720 --> 01:23:12,240
I guess you can, it means a plain reading, but what does that translate into?

1266
01:23:12,240 --> 01:23:19,320
There are no meetings at all, which kind of, kind of makes sense when it said earlier,

1267
01:23:19,320 --> 01:23:25,560
right in our, in our previous slide where if a company doesn't have a general meeting,

1268
01:23:25,560 --> 01:23:31,640
then the rights, so the voting rights are conferred upon the members who was the initial

1269
01:23:31,640 --> 01:23:32,640
subscriber.

1270
01:23:32,640 --> 01:23:39,560
So this initial subscriber who becomes a member who is allowed to not have a meeting because

1271
01:23:39,560 --> 01:23:46,400
their executive company has the voting rights to appoint directors without any meeting.

1272
01:23:46,400 --> 01:23:47,760
Okay.

1273
01:23:47,760 --> 01:23:55,080
So you're starting to learn how this goes.

1274
01:23:55,080 --> 01:23:58,720
Section 60 definition of special resolution.

1275
01:23:58,720 --> 01:24:04,400
A resolution is a special resolution when it has passed by minimum of two thirds of

1276
01:24:04,400 --> 01:24:05,920
eligible members.

1277
01:24:05,920 --> 01:24:09,040
We already read that in the memo, but this is where it's coming from.

1278
01:24:09,040 --> 01:24:15,120
The law says a special resolution is it has to be passed by minimum of two thirds of eligible

1279
01:24:15,120 --> 01:24:16,120
members.

1280
01:24:16,120 --> 01:24:21,400
So if you're only one member, then you voting for it meets the two thirds.

1281
01:24:21,400 --> 01:24:26,920
If you're two members, it doesn't meet two thirds because it's 50%.

1282
01:24:26,920 --> 01:24:29,880
One one half.

1283
01:24:29,880 --> 01:24:35,200
If you're three members, you need two of the three, two thirds.

1284
01:24:35,200 --> 01:24:36,440
So you see how this goes.

1285
01:24:36,440 --> 01:24:41,600
That first person has a lot of power to decide who, but as you increase, you need more and

1286
01:24:41,600 --> 01:24:42,600
more people.

1287
01:24:42,600 --> 01:24:44,880
All right.

1288
01:24:44,880 --> 01:24:53,240
Section 61 provisions where no regs regulations as to meetings unless otherwise specified,

1289
01:24:53,240 --> 01:24:57,880
every member shall have one vote and be given five days notice of a meeting.

1290
01:24:57,880 --> 01:24:58,880
Okay.

1291
01:24:58,880 --> 01:25:04,560
So what we learned is if you do have a meeting, you have to get the members five days.

1292
01:25:04,560 --> 01:25:08,520
So maybe someone doesn't want to wait five days, right?

1293
01:25:08,520 --> 01:25:12,360
Like the subscriber who just became a member who has the voting rights and they're not

1294
01:25:12,360 --> 01:25:15,800
required to have meetings so that they want to meet, they want to get themselves noticed

1295
01:25:15,800 --> 01:25:17,400
for five days for a meeting.

1296
01:25:17,400 --> 01:25:21,480
So they just go ahead and elect someone in right then and there because they're allowed

1297
01:25:21,480 --> 01:25:24,840
to per law.

1298
01:25:24,840 --> 01:25:26,840
That's one way to do it.

1299
01:25:26,840 --> 01:25:31,600
I have no idea how it actually went for the sandbox foundation, but according to law,

1300
01:25:31,600 --> 01:25:32,600
that's possible.

1301
01:25:32,600 --> 01:25:33,600
All right.

1302
01:25:33,600 --> 01:25:37,520
So let's take just 50 through 59 of the company's act.

1303
01:25:37,520 --> 01:25:39,920
All right.

1304
01:25:39,920 --> 01:25:45,960
We're halfway pages 111 through 114.

1305
01:25:45,960 --> 01:25:48,400
We're now in part seven.

1306
01:25:48,400 --> 01:25:49,400
Okay.

1307
01:25:49,400 --> 01:25:54,520
So we went from part three to part seven.

1308
01:25:54,520 --> 01:25:57,640
There wasn't anything that I needed to really talk about in part five and six.

1309
01:25:57,640 --> 01:26:03,140
So part seven is the coup de grace for us, exempted companies.

1310
01:26:03,140 --> 01:26:07,720
So pay close attention because this is going to lay a month to that reg stack.

1311
01:26:07,720 --> 01:26:10,560
It's going to lay a solid foundation.

1312
01:26:10,560 --> 01:26:12,800
But what happens after this?

1313
01:26:12,800 --> 01:26:15,640
What happens to us?

1314
01:26:15,640 --> 01:26:17,480
Exempted companies section 163.

1315
01:26:17,480 --> 01:26:22,840
So what I noticed is that it starts with section one and the definitions and it goes all the

1316
01:26:22,840 --> 01:26:29,480
way down to sections 200 something at 266.

1317
01:26:29,480 --> 01:26:30,480
And it doesn't matter what part you're in.

1318
01:26:30,480 --> 01:26:31,800
It just keeps on being sequential.

1319
01:26:31,800 --> 01:26:32,800
So that was really cool.

1320
01:26:32,800 --> 01:26:33,800
I like that.

1321
01:26:33,800 --> 01:26:35,280
That was very easy to figure out.

1322
01:26:35,280 --> 01:26:39,000
So if I'm in part seven, I don't have to start over with section one.

1323
01:26:39,000 --> 01:26:44,280
It's just section whatever it was carried over from from section six.

1324
01:26:44,280 --> 01:26:45,280
Awesome.

1325
01:26:45,280 --> 01:26:46,280
I love that.

1326
01:26:46,280 --> 01:26:47,880
Anyway, section 163.

1327
01:26:47,880 --> 01:26:52,920
What companies may apply to be registered as exempted companies?

1328
01:26:52,920 --> 01:26:53,920
This is fascinating.

1329
01:26:53,920 --> 01:26:57,800
How do we become an exempted company?

1330
01:26:57,800 --> 01:27:02,760
Any company carrying out objects outside the islands to which section 174 refers.

1331
01:27:02,760 --> 01:27:06,280
We haven't hit that yet, but you can already see it's right there.

1332
01:27:06,280 --> 01:27:08,240
We're not far away from it.

1333
01:27:08,240 --> 01:27:13,200
All right, section 165 declaration by proposed company.

1334
01:27:13,200 --> 01:27:16,280
Subscriber must declare section 163.

1335
01:27:16,280 --> 01:27:20,180
And what does section 163 say that we just went over?

1336
01:27:20,180 --> 01:27:25,480
That the company is going to carry out its objects outside the islands.

1337
01:27:25,480 --> 01:27:27,960
So that subscriber must declare it.

1338
01:27:27,960 --> 01:27:29,080
And did we declare it?

1339
01:27:29,080 --> 01:27:31,400
Let's go the word outside.

1340
01:27:31,400 --> 01:27:32,400
Not there.

1341
01:27:32,400 --> 01:27:33,400
What about here?

1342
01:27:33,400 --> 01:27:34,400
Outside.

1343
01:27:34,400 --> 01:27:36,520
Not there.

1344
01:27:36,520 --> 01:27:38,840
So where do we declare that?

1345
01:27:38,840 --> 01:27:43,480
Maybe let's look to the word objects.

1346
01:27:43,480 --> 01:27:45,560
And let's go to the first one.

1347
01:27:45,560 --> 01:27:48,040
No, it's not there.

1348
01:27:48,040 --> 01:27:50,040
No, not there.

1349
01:27:50,040 --> 01:27:53,040
No, it's not there.

1350
01:27:53,040 --> 01:27:55,880
We're in the wrong place.

1351
01:27:55,880 --> 01:27:56,880
No.

1352
01:27:56,880 --> 01:27:57,880
No.

1353
01:27:57,880 --> 01:27:58,880
No.

1354
01:27:58,880 --> 01:28:03,560
We're in the memo now.

1355
01:28:03,560 --> 01:28:04,560
No.

1356
01:28:04,560 --> 01:28:09,160
There it is.

1357
01:28:09,160 --> 01:28:18,080
The memo of association paragraph four subsection O Oscar to do anything else within the Cayman

1358
01:28:18,080 --> 01:28:22,160
Island law and regulation which promotes or may help to promote the objects which the

1359
01:28:22,160 --> 01:28:23,960
company is established.

1360
01:28:23,960 --> 01:28:26,960
Actually that wasn't what I thought it was.

1361
01:28:26,960 --> 01:28:29,120
Huh.

1362
01:28:29,120 --> 01:28:30,520
Now they use the word islands.

1363
01:28:30,520 --> 01:28:32,040
So maybe there.

1364
01:28:32,040 --> 01:28:33,040
Okay.

1365
01:28:33,040 --> 01:28:36,840
It was it was in paragraph five of the memo.

1366
01:28:36,840 --> 01:28:41,640
The foundation company may not carry on a business for which a license is required under the

1367
01:28:41,640 --> 01:28:45,440
laws of the Cayman Islands unless duly licensed.

1368
01:28:45,440 --> 01:28:48,280
That was another that was another rabbit trail that went down.

1369
01:28:48,280 --> 01:28:52,480
And that's why the reg stack is so wide because there's more regs that we have to go through.

1370
01:28:52,480 --> 01:28:54,000
Luckily they're not that big.

1371
01:28:54,000 --> 01:28:57,640
But there are other things that we have to go through.

1372
01:28:57,640 --> 01:29:01,840
So what this tells us is that the descripts driver must declare that the company will

1373
01:29:01,840 --> 01:29:08,120
not function inside the island except where licensed or waived or whatever.

1374
01:29:08,120 --> 01:29:09,240
All right.

1375
01:29:09,240 --> 01:29:18,400
Section 168 re declare sections 165 and 174 every January.

1376
01:29:18,400 --> 01:29:22,700
Also must re declare that there has been no change to the memo or articles or the memo

1377
01:29:22,700 --> 01:29:24,760
or association.

1378
01:29:24,760 --> 01:29:25,760
But the memo.

1379
01:29:25,760 --> 01:29:26,760
Oops.

1380
01:29:26,760 --> 01:29:32,840
I think that's supposed to say the memo of.

1381
01:29:32,840 --> 01:29:36,360
So no change to the memo of association.

1382
01:29:36,360 --> 01:29:41,800
So that subscriber must declare every year or the very least a member unclear which one

1383
01:29:41,800 --> 01:29:48,120
must declare that they're not carrying business on in the island and whatever section 174

1384
01:29:48,120 --> 01:29:49,120
is about to say.

1385
01:29:49,120 --> 01:29:51,000
We're almost there.

1386
01:29:51,000 --> 01:29:54,160
Section 169 pay an annual fee.

1387
01:29:54,160 --> 01:29:57,640
The fee must be paid every January.

1388
01:29:57,640 --> 01:30:02,360
Her part for a schedule five and that schedule five is on page two hundred twelve of the

1389
01:30:02,360 --> 01:30:06,160
Companies Act and that fee is seven hundred bucks.

1390
01:30:06,160 --> 01:30:07,160
Okay.

1391
01:30:07,160 --> 01:30:08,160
Fair.

1392
01:30:08,160 --> 01:30:09,160
All right.

1393
01:30:09,160 --> 01:30:11,680
What's up next?

1394
01:30:11,680 --> 01:30:14,480
Section 174.

1395
01:30:14,480 --> 01:30:22,120
In a great critical fame and some of the earlier sections mentioned section 174 here we are.

1396
01:30:22,120 --> 01:30:24,360
What is section 174 say?

1397
01:30:24,360 --> 01:30:30,560
Shall not carry on trade or business in the islands except to further the business of

1398
01:30:30,560 --> 01:30:33,280
the exempted company outside the island.

1399
01:30:33,280 --> 01:30:35,640
What does that mean?

1400
01:30:35,640 --> 01:30:37,800
We'll go over here in a second.

1401
01:30:37,800 --> 01:30:42,800
Exempted companies are allowed to contract with Cayman Island service providers.

1402
01:30:42,800 --> 01:30:46,160
What is that word service providers that we were looking at earlier?

1403
01:30:46,160 --> 01:30:49,560
What does that mean to carry on business outside of the islands?

1404
01:30:49,560 --> 01:30:52,680
So I looked up what a service provider mean.

1405
01:30:52,680 --> 01:30:54,160
Just you can look at it in the company's law.

1406
01:30:54,160 --> 01:30:58,560
It means licensed secretaries, legal counsel, directors.

1407
01:30:58,560 --> 01:31:00,760
Does this sound familiar?

1408
01:31:00,760 --> 01:31:06,920
Those are the people that are part of the foundation company for the sandbox.

1409
01:31:06,920 --> 01:31:08,460
Right?

1410
01:31:08,460 --> 01:31:14,360
These people that we thought were right next door to each other, perhaps a conspiracy was

1411
01:31:14,360 --> 01:31:15,360
afoot.

1412
01:31:15,360 --> 01:31:16,360
Turns out no.

1413
01:31:16,360 --> 01:31:26,740
The law says they must be properly licensed and authorized to fulfill those functions.

1414
01:31:26,740 --> 01:31:30,340
And they all live in their license in the Cayman Islands.

1415
01:31:30,340 --> 01:31:32,040
So there you go.

1416
01:31:32,040 --> 01:31:35,680
That's why you're seeing what you're seeing here.

1417
01:31:35,680 --> 01:31:38,840
And I would not have known that had I not read the regs act, by the way.

1418
01:31:38,840 --> 01:31:41,840
I thought maybe maybe there's something going on there.

1419
01:31:41,840 --> 01:31:45,320
Maybe someone knows someone and they're they all work together.

1420
01:31:45,320 --> 01:31:46,560
Business requires trust.

1421
01:31:46,560 --> 01:31:49,280
If you've ever been in business, you know that.

1422
01:31:49,280 --> 01:31:52,220
So there must be a trust factor there.

1423
01:31:52,220 --> 01:31:56,200
But actually, it seems like there's more to it than that.

1424
01:31:56,200 --> 01:32:02,480
What it seems like is that there are certain requirements and regulations.

1425
01:32:02,480 --> 01:32:07,480
We haven't gotten there yet, but we're going to get to the licensing requirements that

1426
01:32:07,480 --> 01:32:15,400
these positions must have and that the people that we selected that that are our Dow admin

1427
01:32:15,400 --> 01:32:22,240
team selected, whoever it was, our subscriber selected was properly licensed in accordance

1428
01:32:22,240 --> 01:32:25,640
with the company's act and regulations that we just finished reading.

1429
01:32:25,640 --> 01:32:29,720
Not finished, but that part that we just read.

1430
01:32:29,720 --> 01:32:30,720
How about that?

1431
01:32:30,720 --> 01:32:37,920
Oh, are.

1432
01:32:37,920 --> 01:32:39,960
So there you go.

1433
01:32:39,960 --> 01:32:47,880
Exempted companies cannot, shall not carry on trader business except, except to hire

1434
01:32:47,880 --> 01:32:50,920
service providers to help them do their job.

1435
01:32:50,920 --> 01:32:56,760
So legal counsel to help advise them of legal for the Cayman Islands law.

1436
01:32:56,760 --> 01:33:00,880
And secretaries to file paperwork.

1437
01:33:00,880 --> 01:33:06,880
Directors, subscribers, members, the sorts of things that this law has already spelled

1438
01:33:06,880 --> 01:33:08,360
out for us.

1439
01:33:08,360 --> 01:33:11,440
How about that?

1440
01:33:11,440 --> 01:33:12,440
How about that?

1441
01:33:12,440 --> 01:33:15,040
It's looking less and less like a conspiracy.

1442
01:33:15,040 --> 01:33:20,440
Every section we read seems like there are good reasons for why people were selected

1443
01:33:20,440 --> 01:33:23,400
to do what they do and that those people don't work for free.

1444
01:33:23,400 --> 01:33:24,400
They're there.

1445
01:33:24,400 --> 01:33:25,400
I wouldn't expect them to.

1446
01:33:25,400 --> 01:33:26,880
They do a service.

1447
01:33:26,880 --> 01:33:32,080
All right, section 176, the penalty for carry on business contrary to this part.

1448
01:33:32,080 --> 01:33:33,080
Whoa.

1449
01:33:33,080 --> 01:33:34,080
Here's why it matters.

1450
01:33:34,080 --> 01:33:41,200
An exempted company who carries on business contrary to the rules, meaning exempted company

1451
01:33:41,200 --> 01:33:46,000
that that carries on trader business inside the license where they're not allowed to,

1452
01:33:46,000 --> 01:33:50,600
may be dissolved and every director or officer find.

1453
01:33:50,600 --> 01:33:55,000
It seemed like the fine changed from like a thousand dollars a day.

1454
01:33:55,000 --> 01:33:58,760
Some of them depend on like sometimes the director was fine, like a hundred thousand

1455
01:33:58,760 --> 01:33:59,760
dollars.

1456
01:33:59,760 --> 01:34:01,340
It's a, it's a lot.

1457
01:34:01,340 --> 01:34:02,720
It adds up a lot.

1458
01:34:02,720 --> 01:34:09,080
So and we already know that the director was compensated compensated what right?

1459
01:34:09,080 --> 01:34:11,160
50, $30,000 annually.

1460
01:34:11,160 --> 01:34:12,160
Yeah.

1461
01:34:12,160 --> 01:34:21,080
So 30 days of noncompliance, the director has already eaten up their $30,000 annual

1462
01:34:21,080 --> 01:34:22,080
salary.

1463
01:34:22,080 --> 01:34:23,120
Right?

1464
01:34:23,120 --> 01:34:29,080
So they have an incentive to be compliant all 12 months of the year.

1465
01:34:29,080 --> 01:34:33,160
I didn't even put that together until right just then.

1466
01:34:33,160 --> 01:34:36,360
So let's, let's, let's put that one in here.

1467
01:34:36,360 --> 01:34:52,240
So the sandbox Dow sandbox foundation director is paid 30 K only takes 30 days to.

1468
01:34:52,240 --> 01:35:01,520
To exhaust directors salary.

1469
01:35:01,520 --> 01:35:06,600
So they have every incentive to do the job correctly.

1470
01:35:06,600 --> 01:35:11,840
That's why things take so long because the penalty is pretty steep.

1471
01:35:11,840 --> 01:35:15,640
That foundation company could could go away in a hurry.

1472
01:35:15,640 --> 01:35:18,040
Alright next part.

1473
01:35:18,040 --> 01:35:20,320
So now we're in part 10.

1474
01:35:20,320 --> 01:35:28,000
Alright application of law to companies formed or registered in the islands section 170 section

1475
01:35:28,000 --> 01:35:34,760
196 says application to existing companies companies act shall apply to companies limited

1476
01:35:34,760 --> 01:35:35,760
by guarantee.

1477
01:35:35,760 --> 01:35:36,760
Okay.

1478
01:35:36,760 --> 01:35:38,800
Got it.

1479
01:35:38,800 --> 01:35:42,200
Part whatever that is.

1480
01:35:42,200 --> 01:35:43,680
Beneficial owners registers.

1481
01:35:43,680 --> 01:35:47,320
It's part X V I I A.

1482
01:35:47,320 --> 01:35:48,480
So let's take a look at that.

1483
01:35:48,480 --> 01:35:51,880
Google should know that says.

1484
01:35:51,880 --> 01:35:54,800
What is.

1485
01:35:54,800 --> 01:35:56,960
Heart.

1486
01:35:56,960 --> 01:35:57,960
In numbers.

1487
01:35:57,960 --> 01:36:02,080
Oh man it's telling me to look at a chart.

1488
01:36:02,080 --> 01:36:05,080
Hold on.

1489
01:36:05,080 --> 01:36:08,100
Let me show you what I'm looking at.

1490
01:36:08,100 --> 01:36:11,120
So we're looking at this chart.

1491
01:36:11,120 --> 01:36:14,760
Let's copy paste.

1492
01:36:14,760 --> 01:36:15,760
Copy paste this.

1493
01:36:15,760 --> 01:36:19,720
Alright so what what section is this.

1494
01:36:19,720 --> 01:36:22,920
Oh it doesn't show me.

1495
01:36:22,920 --> 01:36:25,360
Alright so we know it's more than 10 right.

1496
01:36:25,360 --> 01:36:30,320
So where's where's the V where's the V.

1497
01:36:30,320 --> 01:36:39,000
No here's the V that's 18 and it's 1111 a this one doesn't have an A on it just says

1498
01:36:39,000 --> 01:36:49,760
X V 1 1 or I 17 so I don't know what the A means but let's just say 17.

1499
01:36:49,760 --> 01:36:52,840
Okay we might need that later so let's keep that open.

1500
01:36:52,840 --> 01:36:54,880
Alright.

1501
01:36:54,880 --> 01:37:01,320
Part 17 beneficial owner registers section 244 is interpretation.

1502
01:37:01,320 --> 01:37:06,040
Oh finally we get to these service providers.

1503
01:37:06,040 --> 01:37:14,640
What time corporate services provider means an individual or legal entity under company

1504
01:37:14,640 --> 01:37:16,560
management act.

1505
01:37:16,560 --> 01:37:18,800
There's our next breadcrumb trail.

1506
01:37:18,800 --> 01:37:23,560
It's like the third time we've seen the word company management companies management act.

1507
01:37:23,560 --> 01:37:24,560
What is it.

1508
01:37:24,560 --> 01:37:25,560
What does it say.

1509
01:37:25,560 --> 01:37:27,600
We're going to have to find out.

1510
01:37:27,600 --> 01:37:32,600
So companies corporate services provider means an individual or legal entity under a company's

1511
01:37:32,600 --> 01:37:38,600
management act or is licensed to provide registered offices services.

1512
01:37:38,600 --> 01:37:40,280
Okay.

1513
01:37:40,280 --> 01:37:41,760
What does an approved person mean.

1514
01:37:41,760 --> 01:37:48,600
It means a person that is regulated registered or holds a license in the islands.

1515
01:37:48,600 --> 01:37:55,320
So we could probably guess right that that that licensor is SEMA the Cayman Islands Monetary

1516
01:37:55,320 --> 01:37:58,920
Authority it already mentioned licensed by SEMA.

1517
01:37:58,920 --> 01:38:01,440
This is probably what they mean.

1518
01:38:01,440 --> 01:38:03,080
The approved person so who are they.

1519
01:38:03,080 --> 01:38:06,920
We don't know quite yet but we know that there are approved people.

1520
01:38:06,920 --> 01:38:09,640
There are corporate services providers.

1521
01:38:09,640 --> 01:38:17,640
They're under this management act and the approved people are licensed probably by SEMA

1522
01:38:17,640 --> 01:38:22,240
are relevant interest means a person holding shares voting rights with a right to a point

1523
01:38:22,240 --> 01:38:25,160
with directors.

1524
01:38:25,160 --> 01:38:31,680
Section 247 through 257 was a big list.

1525
01:38:31,680 --> 01:38:38,640
The big old big old list and it would basically spelled out all the company and member duties

1526
01:38:38,640 --> 01:38:45,000
that they had to abide by and I just put out the first parts of each of each of those sections.

1527
01:38:45,000 --> 01:38:47,680
So there was a duty to identify beneficial owners.

1528
01:38:47,680 --> 01:38:50,200
There's a duty to identify relevant legal entities.

1529
01:38:50,200 --> 01:38:56,960
You need to give notice to registrable persons due to supply information to SEMA and all

1530
01:38:56,960 --> 01:39:03,520
their regulatory agencies duty to establish and maintain beneficial ownership registers.

1531
01:39:03,520 --> 01:39:08,280
That's for to go to the registrar due to keep register up to date.

1532
01:39:08,280 --> 01:39:14,000
So once you put a register in into action you have to keep going with it.

1533
01:39:14,000 --> 01:39:16,040
Cool.

1534
01:39:16,040 --> 01:39:24,680
Section 265 to 266 talks about right to issue restrictions and notices and this effect.

1535
01:39:24,680 --> 01:39:28,560
Here's where we start putting those words that we defined earlier in action.

1536
01:39:28,560 --> 01:39:34,600
Corporate services provider may send a restrictions notice to a person with a relevant interest.

1537
01:39:34,600 --> 01:39:36,040
What in the world does that mean?

1538
01:39:36,040 --> 01:39:45,200
It means that the person, the legal or individual entity under the CMA who's licensed to provide

1539
01:39:45,200 --> 01:39:52,120
office services may send a restrictions notice, whatever that is, to a relevant person who

1540
01:39:52,120 --> 01:39:56,720
holds share voting rights or the right to appoint or remove directors.

1541
01:39:56,720 --> 01:39:59,440
So who is that?

1542
01:39:59,440 --> 01:40:03,080
That would be the subscriber who became the member.

1543
01:40:03,080 --> 01:40:09,040
They held the voting rights to to appoint or remove directors.

1544
01:40:09,040 --> 01:40:17,960
So apparently a corporate services provider who is a licensed person or entity may send

1545
01:40:17,960 --> 01:40:22,960
a restrictions notice, which we don't know what that is yet, to a relevant person who

1546
01:40:22,960 --> 01:40:26,600
started the company, foundation company, ours.

1547
01:40:26,600 --> 01:40:27,760
All right.

1548
01:40:27,760 --> 01:40:33,480
Restrictions notice will halt any transfer agreement rights or payments or shares issuance.

1549
01:40:33,480 --> 01:40:36,960
Wow, that's a lot of power.

1550
01:40:36,960 --> 01:40:44,680
That restriction notice apparently can stop all the business activities of a company.

1551
01:40:44,680 --> 01:40:51,240
And apparently the person who is licensed corporate service provider can do that.

1552
01:40:51,240 --> 01:40:58,240
I don't know who these people are yet, but they're pretty important person in this process.

1553
01:40:58,240 --> 01:41:01,480
So what I what I thought was I need more clarity on that.

1554
01:41:01,480 --> 01:41:03,400
That's a lot of power.

1555
01:41:03,400 --> 01:41:05,880
And under any.

1556
01:41:05,880 --> 01:41:08,240
What else is there to that?

1557
01:41:08,240 --> 01:41:10,440
This is a lot.

1558
01:41:10,440 --> 01:41:20,200
OK, so then we move on to oh gosh, let's go back to our room and numeral X, V, I, I, I.

1559
01:41:20,200 --> 01:41:21,200
Take a look.

1560
01:41:21,200 --> 01:41:23,560
There it is.

1561
01:41:23,560 --> 01:41:26,560
Part 18.

1562
01:41:26,560 --> 01:41:30,600
Miscellaneous.

1563
01:41:30,600 --> 01:41:37,120
So section or schedule one a required particulars require particulars to be included in the

1564
01:41:37,120 --> 01:41:38,120
memo of association.

1565
01:41:38,120 --> 01:41:42,720
There's a bunch of stuff you to put in the memo, a lot of which we already went over,

1566
01:41:42,720 --> 01:41:44,600
which is what is the name of the company?

1567
01:41:44,600 --> 01:41:45,680
Where is it registered?

1568
01:41:45,680 --> 01:41:46,680
All this stuff.

1569
01:41:46,680 --> 01:41:47,680
All right.

1570
01:41:47,680 --> 01:41:49,120
So it was a big long list.

1571
01:41:49,120 --> 01:41:52,560
Schedule five is where we got all the fees and I already spoiled them earlier.

1572
01:41:52,560 --> 01:41:59,240
You had to pay $50 to see a company's registry to pay $600 to file stuff and that sort of

1573
01:41:59,240 --> 01:42:00,240
thing.

1574
01:42:00,240 --> 01:42:04,040
The dates for registering an exempted company and filing the memo of association are located

1575
01:42:04,040 --> 01:42:05,040
there.

1576
01:42:05,040 --> 01:42:06,880
That's on pages two oh one through two nine.

1577
01:42:06,880 --> 01:42:07,880
The company's act.

1578
01:42:07,880 --> 01:42:11,720
And last but not least, the end notes.

1579
01:42:11,720 --> 01:42:12,720
Wasn't its own section.

1580
01:42:12,720 --> 01:42:18,080
I just said in notes and whatever in there was that the company's act used to be called

1581
01:42:18,080 --> 01:42:23,000
the company's law from about 1964 to 2020.

1582
01:42:23,000 --> 01:42:28,760
Now that part threw me for a loop because in the earlier discussions of companies act,

1583
01:42:28,760 --> 01:42:33,320
it identified it as the company's act of 2003, not 1964.

1584
01:42:33,320 --> 01:42:36,360
So I have no idea what that's supposed to mean.

1585
01:42:36,360 --> 01:42:42,300
Apparently the company's act has been was the company's law and it started in 1964.

1586
01:42:42,300 --> 01:42:43,960
It then became the company's act.

1587
01:42:43,960 --> 01:42:50,520
So it was renamed in 2021.

1588
01:42:50,520 --> 01:42:53,560
Gee whiz information that becomes a little bit important later on.

1589
01:42:53,560 --> 01:42:57,360
And when we go over the whole terminology table, you'll see why it doesn't get very

1590
01:42:57,360 --> 01:43:00,320
confusing when one act calls it company's act.

1591
01:43:00,320 --> 01:43:02,600
Another act calls it company's law.

1592
01:43:02,600 --> 01:43:06,000
Then you start talking about company's management act and company's management law and foundation

1593
01:43:06,000 --> 01:43:07,680
company act and foundation company law.

1594
01:43:07,680 --> 01:43:09,920
What in the world are all these terms supposed to mean?

1595
01:43:09,920 --> 01:43:17,840
Well apparently law used to be called the act used to be called the law.

1596
01:43:17,840 --> 01:43:20,960
So it's now known as the company's act used to be called the company's law.

1597
01:43:20,960 --> 01:43:22,660
Same thing.

1598
01:43:22,660 --> 01:43:26,120
And also it started in 1964, I guess.

1599
01:43:26,120 --> 01:43:28,560
So that was interesting.

1600
01:43:28,560 --> 01:43:30,160
All right.

1601
01:43:30,160 --> 01:43:33,880
So guess what?

1602
01:43:33,880 --> 01:43:36,120
We're done through the company's act.

1603
01:43:36,120 --> 01:43:37,460
We went through it.

1604
01:43:37,460 --> 01:43:39,400
That was only one part.

1605
01:43:39,400 --> 01:43:43,300
That was that was one law, but it was the biggest one.

1606
01:43:43,300 --> 01:43:44,800
It took us the longest to get through.

1607
01:43:44,800 --> 01:43:48,400
The rest of them will go much, much easier.

1608
01:43:48,400 --> 01:43:53,080
And we will we will go through all of what we originally went through.

1609
01:43:53,080 --> 01:43:58,860
So when I said that reg stack was really important to understand, to make sure that you are complying

1610
01:43:58,860 --> 01:44:02,960
with the law and that the government is happy with you so that you can continue to do business.

1611
01:44:02,960 --> 01:44:08,960
Well, the biggest part of that, the company's act, we now understand there are some pretty

1612
01:44:08,960 --> 01:44:09,960
key points.

1613
01:44:09,960 --> 01:44:14,440
There's a subscriber who completes the paperwork.

1614
01:44:14,440 --> 01:44:17,440
That subscriber becomes the member.

1615
01:44:17,440 --> 01:44:19,640
That member can then vote in the director.

1616
01:44:19,640 --> 01:44:24,240
The director can then do meetings or not do meetings, apparently.

1617
01:44:24,240 --> 01:44:32,520
And as long as the subscriber or I guess the the registered office or the company secretary,

1618
01:44:32,520 --> 01:44:33,520
we're not sure yet.

1619
01:44:33,520 --> 01:44:38,600
We have to read more law to figure that out, has to declare every year that they are still

1620
01:44:38,600 --> 01:44:39,760
an exempted company.

1621
01:44:39,760 --> 01:44:42,480
They have not conducted business inside the law.

1622
01:44:42,480 --> 01:44:52,400
And that not that the memo and the articles have not changed that were originally incorporated

1623
01:44:52,400 --> 01:44:54,040
the company.

1624
01:44:54,040 --> 01:44:55,920
Some pretty fascinating information there.

1625
01:44:55,920 --> 01:44:58,160
It's a pretty interesting TLDR.

1626
01:44:58,160 --> 01:45:01,680
So that is that.

1627
01:45:01,680 --> 01:45:02,680
That's part one.

1628
01:45:02,680 --> 01:45:04,680
Now we're going to go into.

1629
01:45:04,680 --> 01:45:06,320
Yep.

1630
01:45:06,320 --> 01:45:09,680
So there's Companies Act of 2003, but apparently 1964.

1631
01:45:09,680 --> 01:45:15,680
Now we're going to get into the foundations company law.

1632
01:45:15,680 --> 01:45:33,520
So in our TLDR or the company's act, it was a pretty interesting, not wholly complete

1633
01:45:33,520 --> 01:45:38,960
for us and the foundation, but it definitely laid a groundwork for what was required of

1634
01:45:38,960 --> 01:45:43,080
the officers and the members of any company.

1635
01:45:43,080 --> 01:45:45,240
There were a number of exemptions in there.

1636
01:45:45,240 --> 01:45:52,560
And because we are an exempted company, as we explained, as we saw earlier, very beginning

1637
01:45:52,560 --> 01:45:56,920
when we traced rooted ourselves.

1638
01:45:56,920 --> 01:46:01,400
This one here, where we trace rooted ourselves under exempted foundation company.

1639
01:46:01,400 --> 01:46:05,520
There are a number of statements in there that were that specifically spelled out the

1640
01:46:05,520 --> 01:46:08,360
exemption part.

1641
01:46:08,360 --> 01:46:14,080
So in our reg stack, we have our company's act, which we just went through.

1642
01:46:14,080 --> 01:46:20,680
Now we need to read the addition to that company's act, which identified itself as the foundation

1643
01:46:20,680 --> 01:46:22,680
company's law or the FCL.

1644
01:46:22,680 --> 01:46:23,680
All right.

1645
01:46:23,680 --> 01:46:26,840
So that's what we're going to do next.

1646
01:46:26,840 --> 01:46:29,560
We're back in on the website.

1647
01:46:29,560 --> 01:46:33,720
We're going to resources, acts and regulations.

1648
01:46:33,720 --> 01:46:38,520
Click that down, go down below and you'll see foundation companies.

1649
01:46:38,520 --> 01:46:39,520
Okay.

1650
01:46:39,520 --> 01:46:41,520
It's 31 pages.

1651
01:46:41,520 --> 01:46:47,280
So a massive difference from 224 pages of the company's act.

1652
01:46:47,280 --> 01:46:48,280
That's good news.

1653
01:46:48,280 --> 01:46:52,480
So no matter how this goes down, we're only going through 30 pages.

1654
01:46:52,480 --> 01:46:53,480
Cool.

1655
01:46:53,480 --> 01:46:56,040
We deal with that.

1656
01:46:56,040 --> 01:47:03,160
And because it's an addition, you can expect to see a lot of terms or will you?

1657
01:47:03,160 --> 01:47:05,600
Because you'll see the terms vary.

1658
01:47:05,600 --> 01:47:08,380
They're similar, but they vary.

1659
01:47:08,380 --> 01:47:10,920
And that's why I had to end up doing a terminology table.

1660
01:47:10,920 --> 01:47:12,880
Show you what that looks like real fast.

1661
01:47:12,880 --> 01:47:16,520
We're only going to see it for like a few seconds because we'll get to it.

1662
01:47:16,520 --> 01:47:20,960
There's a terminology table I had to do because the way they differed so much from each other

1663
01:47:20,960 --> 01:47:21,960
like this.

1664
01:47:21,960 --> 01:47:22,960
All right.

1665
01:47:22,960 --> 01:47:23,960
So we'll get to that.

1666
01:47:23,960 --> 01:47:26,640
We'll get to the TLDR.

1667
01:47:26,640 --> 01:47:27,640
But geez.

1668
01:47:27,640 --> 01:47:28,640
Okay.

1669
01:47:28,640 --> 01:47:31,160
So we're going to foundation company.

1670
01:47:31,160 --> 01:47:33,880
There are only six parts this time with some schedules.

1671
01:47:33,880 --> 01:47:37,480
Schedules just mean like addendums and attachments.

1672
01:47:37,480 --> 01:47:41,040
That's where I think all of them are relevant to us.

1673
01:47:41,040 --> 01:47:47,280
So, so we have to go through all six parts and all 30 pages because we are foundation

1674
01:47:47,280 --> 01:47:52,320
company and this is the regulation for foundation company.

1675
01:47:52,320 --> 01:47:55,840
All right.

1676
01:47:55,840 --> 01:47:59,280
Let's look straight off the bat at the preamble.

1677
01:47:59,280 --> 01:48:02,120
So the preamble is in part zero.

1678
01:48:02,120 --> 01:48:03,920
I didn't really identify itself as a part.

1679
01:48:03,920 --> 01:48:08,280
So I guess in the end you kind of have seven parts, whatever.

1680
01:48:08,280 --> 01:48:14,080
So the preamble, pretty important thing I saw a law to allow certain companies to be

1681
01:48:14,080 --> 01:48:19,320
registered as foundation companies for their constitution, operation, management, and winding

1682
01:48:19,320 --> 01:48:20,320
up.

1683
01:48:20,320 --> 01:48:22,300
There's that liquidation term again.

1684
01:48:22,300 --> 01:48:26,520
And to provide for incidental and connected matters.

1685
01:48:26,520 --> 01:48:29,880
Inacted in 2017 revised in 2023.

1686
01:48:29,880 --> 01:48:31,400
Is this another thing we're going to find out?

1687
01:48:31,400 --> 01:48:32,400
What's 1964?

1688
01:48:32,400 --> 01:48:35,080
No, short answer is no.

1689
01:48:35,080 --> 01:48:37,160
It really was an act in 2017.

1690
01:48:37,160 --> 01:48:40,600
So but that's still funny to find out.

1691
01:48:40,600 --> 01:48:42,160
All right.

1692
01:48:42,160 --> 01:48:45,960
Part one definitions.

1693
01:48:45,960 --> 01:48:51,120
So section two is where our definitions are a term used in this law, but not defined in

1694
01:48:51,120 --> 01:48:56,320
definitions has the same meaning that it has in the company's law.

1695
01:48:56,320 --> 01:48:59,360
Now this is where I told you about the whole companies act company's law thing.

1696
01:48:59,360 --> 01:49:05,680
So before 2020 and 2017, the company's act was called company's law company foundation

1697
01:49:05,680 --> 01:49:10,560
company's law was first enacted in 2017 before 2020.

1698
01:49:10,560 --> 01:49:13,280
So it is now saying the word company's law.

1699
01:49:13,280 --> 01:49:14,280
Okay.

1700
01:49:14,280 --> 01:49:21,800
So now we know when they say the word company's law, they really mean companies act.

1701
01:49:21,800 --> 01:49:23,800
So the CA.

1702
01:49:23,800 --> 01:49:25,560
Okay.

1703
01:49:25,560 --> 01:49:29,520
Put that put that one in your brain.

1704
01:49:29,520 --> 01:49:35,800
So what this is saying is that a term used in this law that isn't in the company's act

1705
01:49:35,800 --> 01:49:38,000
has the same meaning as if it were in the company's act.

1706
01:49:38,000 --> 01:49:41,200
No, no, wait, wait, hold on back up.

1707
01:49:41,200 --> 01:49:44,200
I just stumbled all over myself.

1708
01:49:44,200 --> 01:49:54,160
A term used in the foundation company's law, but it's not defined here in the definitions

1709
01:49:54,160 --> 01:50:01,520
that same term that is using defined in the company's act is the same thing used here

1710
01:50:01,520 --> 01:50:02,520
in the foundation company's law.

1711
01:50:02,520 --> 01:50:03,520
All right.

1712
01:50:03,520 --> 01:50:07,280
So here's the perfect example.

1713
01:50:07,280 --> 01:50:12,360
Constitution if the con the word constitution is defined in the company's act, but not found

1714
01:50:12,360 --> 01:50:18,480
to find in the foundation company's law, then that law has the same meaning in both the

1715
01:50:18,480 --> 01:50:21,000
foundation company's law and the company's act.

1716
01:50:21,000 --> 01:50:22,000
All right.

1717
01:50:22,000 --> 01:50:23,360
So the word winding up.

1718
01:50:23,360 --> 01:50:24,360
Same thing.

1719
01:50:24,360 --> 01:50:28,440
If we don't find a definition for it in the foundation company's law, but we do find a

1720
01:50:28,440 --> 01:50:32,480
foundation definition for it in the company's act.

1721
01:50:32,480 --> 01:50:40,960
That meaning is also transmuted or absorbed in the foundation company's law by default.

1722
01:50:40,960 --> 01:50:41,960
Okay.

1723
01:50:41,960 --> 01:50:43,840
Good to know.

1724
01:50:43,840 --> 01:50:44,840
That's good to know.

1725
01:50:44,840 --> 01:50:45,840
All right.

1726
01:50:45,840 --> 01:50:51,080
So what did I say here in the company's act paid 219 legislative history.

1727
01:50:51,080 --> 01:50:53,080
Oh, oh, that's where I said.

1728
01:50:53,080 --> 01:50:54,080
Right.

1729
01:50:54,080 --> 01:50:59,760
In the legislative history, it changed from the company's laws, the company's act in 2021.

1730
01:50:59,760 --> 01:51:00,760
Okay.

1731
01:51:00,760 --> 01:51:01,760
Whatever that part.

1732
01:51:01,760 --> 01:51:02,760
All right.

1733
01:51:02,760 --> 01:51:04,360
What do articles mean?

1734
01:51:04,360 --> 01:51:06,400
Articles mean the articles of association.

1735
01:51:06,400 --> 01:51:08,560
Well, what do beneficiary mean?

1736
01:51:08,560 --> 01:51:09,560
That's a new term.

1737
01:51:09,560 --> 01:51:11,640
We've not run across that before.

1738
01:51:11,640 --> 01:51:17,280
Beneficiary means a person who will may benefit from the foundation company carrying out its

1739
01:51:17,280 --> 01:51:18,280
objects.

1740
01:51:18,280 --> 01:51:19,280
Okay.

1741
01:51:19,280 --> 01:51:21,360
So those are key words we already know.

1742
01:51:21,360 --> 01:51:26,640
Foundation company is exempted and objects means its purpose.

1743
01:51:26,640 --> 01:51:29,400
What is it that we're trying to do?

1744
01:51:29,400 --> 01:51:35,000
Bylaws that's a new term means it's bylaws under section 12.

1745
01:51:35,000 --> 01:51:40,240
Pet peeve of mine has always been don't use the term or the definition, but they gave

1746
01:51:40,240 --> 01:51:41,480
us kind of a hint here.

1747
01:51:41,480 --> 01:51:42,600
Go to section 12.

1748
01:51:42,600 --> 01:51:44,800
It will further define bylaws.

1749
01:51:44,800 --> 01:51:48,040
Okay fine.

1750
01:51:48,040 --> 01:51:51,480
But yeah, bylaws means bylaws.

1751
01:51:51,480 --> 01:51:55,000
Go to section 12 for more information and we will go to section 12.

1752
01:51:55,000 --> 01:51:56,440
All right.

1753
01:51:56,440 --> 01:51:59,120
Constitution, kind of a new word.

1754
01:51:59,120 --> 01:52:01,640
Saw it once before, it wasn't defined.

1755
01:52:01,640 --> 01:52:07,760
Means the memo and articles of a foundation company, but not is bylaws.

1756
01:52:07,760 --> 01:52:09,680
Okay.

1757
01:52:09,680 --> 01:52:10,960
Interesting stuff there.

1758
01:52:10,960 --> 01:52:17,840
So a constitution is a memo of association and articles association of a foundation company.

1759
01:52:17,840 --> 01:52:21,960
So two founding documents called the constitution.

1760
01:52:21,960 --> 01:52:23,480
We have both of these, right?

1761
01:52:23,480 --> 01:52:31,560
We have the, we have the articles and we have the memo.

1762
01:52:31,560 --> 01:52:34,360
Both of those things equal the constitution.

1763
01:52:34,360 --> 01:52:36,280
Now here's the confusing part.

1764
01:52:36,280 --> 01:52:43,560
I don't know how this happened or why yet, but if you look at sip number two, excuse

1765
01:52:43,560 --> 01:52:52,280
me, sip number one, you'll see the word constitution.

1766
01:52:52,280 --> 01:52:55,280
Okay.

1767
01:52:55,280 --> 01:52:57,400
Nothing, nothing to be alarmed about yet.

1768
01:52:57,400 --> 01:53:00,040
So here it is constitution under sip number one.

1769
01:53:00,040 --> 01:53:04,720
If you click the constitution, guess what it says in the title?

1770
01:53:04,720 --> 01:53:06,800
Oh, you can't see that.

1771
01:53:06,800 --> 01:53:07,800
Hold on.

1772
01:53:07,800 --> 01:53:08,800
Let me find it.

1773
01:53:08,800 --> 01:53:09,800
There.

1774
01:53:09,800 --> 01:53:10,800
What does that say?

1775
01:53:10,800 --> 01:53:14,960
The constitution as of May 28th, 2024.

1776
01:53:14,960 --> 01:53:20,080
That's when the Dow launched is also called the bylaws.

1777
01:53:20,080 --> 01:53:25,720
But we know that the law says it cannot be the bylaws.

1778
01:53:25,720 --> 01:53:28,440
So I think that's just a, it's an oversight.

1779
01:53:28,440 --> 01:53:31,440
I think I don't think we need Roman numerals anymore.

1780
01:53:31,440 --> 01:53:36,200
I think it's just an oversight that someone didn't notice.

1781
01:53:36,200 --> 01:53:41,160
I couldn't find a reason for this in the Dow foundation.

1782
01:53:41,160 --> 01:53:42,160
So I don't know.

1783
01:53:42,160 --> 01:53:48,400
I don't know how to explain it, but there's definitely the TSBs foundation labels its

1784
01:53:48,400 --> 01:53:54,000
constitution as bylaws, but per the foundation company's law, it can't be the bylaws.

1785
01:53:54,000 --> 01:53:56,800
It is instead the memo and articles of association.

1786
01:53:56,800 --> 01:53:59,080
You're just going to have to live with that.

1787
01:53:59,080 --> 01:54:02,720
And maybe one day I'll ask part of the questions probably later on.

1788
01:54:02,720 --> 01:54:03,720
All right.

1789
01:54:03,720 --> 01:54:05,560
What does a foundation company defined as?

1790
01:54:05,560 --> 01:54:07,600
It means declared under section five.

1791
01:54:07,600 --> 01:54:12,320
So we need to read section five to be stuff.

1792
01:54:12,320 --> 01:54:14,440
And we're going to go in section five to read it.

1793
01:54:14,440 --> 01:54:15,560
All right.

1794
01:54:15,560 --> 01:54:17,440
What is an interested person?

1795
01:54:17,440 --> 01:54:24,840
A new term, I think only we've seen that term before means any of its members or supervisors,

1796
01:54:24,840 --> 01:54:29,800
someone entitled to be a member or supervisor or someone declared under its constitution

1797
01:54:29,800 --> 01:54:33,680
to be an interested person.

1798
01:54:33,680 --> 01:54:35,840
So who does it automatically give you?

1799
01:54:35,840 --> 01:54:36,840
Right?

1800
01:54:36,840 --> 01:54:38,560
Who is automatically a member?

1801
01:54:38,560 --> 01:54:39,560
The subscriber.

1802
01:54:39,560 --> 01:54:44,480
So automatically the subscriber is an interested person and whatever that's supposed to do

1803
01:54:44,480 --> 01:54:46,800
for them later on.

1804
01:54:46,800 --> 01:54:51,040
They do talk about interested people later on and what rights they have.

1805
01:54:51,040 --> 01:54:55,200
Supervisor, that's a new term.

1806
01:54:55,200 --> 01:54:59,920
Don't know what a supervisor is yet, but apparently it's important to a foundation company's law.

1807
01:54:59,920 --> 01:55:03,960
Cause there's, I guess, an interested person.

1808
01:55:03,960 --> 01:55:06,160
Memoranda means memo of association.

1809
01:55:06,160 --> 01:55:08,920
Good reminder.

1810
01:55:08,920 --> 01:55:09,920
Qualified person.

1811
01:55:09,920 --> 01:55:16,120
Now that is a fascinating term because earlier we talked about how qualified people, right

1812
01:55:16,120 --> 01:55:17,120
in the preamble.

1813
01:55:17,120 --> 01:55:18,120
Nope, not there.

1814
01:55:18,120 --> 01:55:19,120
Where was it?

1815
01:55:19,120 --> 01:55:20,120
It was here.

1816
01:55:20,120 --> 01:55:21,120
Nope.

1817
01:55:21,120 --> 01:55:26,040
Where the companies act again.

1818
01:55:26,040 --> 01:55:30,080
We ran into that term earlier and what did it say?

1819
01:55:30,080 --> 01:55:31,080
Qualified qualified.

1820
01:55:31,080 --> 01:55:33,040
Oh, there you go.

1821
01:55:33,040 --> 01:55:34,520
Qualified person licensed or permitted.

1822
01:55:34,520 --> 01:55:36,960
And that was in the website description.

1823
01:55:36,960 --> 01:55:37,960
Okay.

1824
01:55:37,960 --> 01:55:42,440
So now we're back in the foundation company law where it's going to spell it out for us.

1825
01:55:42,440 --> 01:55:49,480
A qualified person means a person who is licensed or permitted by the company's management law.

1826
01:55:49,480 --> 01:55:50,480
Okay.

1827
01:55:50,480 --> 01:55:53,720
There's that, that we are terminology phrasing thing again.

1828
01:55:53,720 --> 01:55:56,200
They mean the company's management act.

1829
01:55:56,200 --> 01:55:57,200
Okay.

1830
01:55:57,200 --> 01:56:02,480
CMA by the company's management law, otherwise known as the company company's management

1831
01:56:02,480 --> 01:56:06,320
act to provide company management services.

1832
01:56:06,320 --> 01:56:11,920
That sounds a lot like when we heard earlier, uh, corporate services.

1833
01:56:11,920 --> 01:56:12,920
Okay.

1834
01:56:12,920 --> 01:56:18,540
This is that terminology thing that we're going to get to later on, which body of law

1835
01:56:18,540 --> 01:56:19,860
uses what?

1836
01:56:19,860 --> 01:56:25,640
So company management services is a new term different than company corporate services

1837
01:56:25,640 --> 01:56:27,640
use in the company's act.

1838
01:56:27,640 --> 01:56:32,160
They mean something similar, not exactly the same, but they're both licensed.

1839
01:56:32,160 --> 01:56:33,380
Okay.

1840
01:56:33,380 --> 01:56:40,080
So in the CMA pace 25 of the end notes, a CMA used to be called the CML.

1841
01:56:40,080 --> 01:56:43,480
So the camp to the company's management act was called the company's management law until

1842
01:56:43,480 --> 01:56:45,960
2021 when they changed their name.

1843
01:56:45,960 --> 01:56:46,960
Okay.

1844
01:56:46,960 --> 01:56:47,960
So good to know.

1845
01:56:47,960 --> 01:56:55,560
You didn't know that and we'll, we'll put it back here to a company's management law.

1846
01:56:55,560 --> 01:56:57,080
All right.

1847
01:56:57,080 --> 01:57:03,880
So a qualified person, the person who's licensed or permitted by the CMA to provide company

1848
01:57:03,880 --> 01:57:06,160
management services on the islands.

1849
01:57:06,160 --> 01:57:11,560
So where it said earlier that a, a, a zip to company may not conduct create trade or business

1850
01:57:11,560 --> 01:57:18,920
on the islands, except when they do business with a qualified person to do the company's

1851
01:57:18,920 --> 01:57:21,980
business like a lawyer or a director.

1852
01:57:21,980 --> 01:57:27,120
So now they've, they have identified that a lawyer or a director, or they're about to

1853
01:57:27,120 --> 01:57:33,160
identify a director and a secretary is, has to be a qualified person and that you can

1854
01:57:33,160 --> 01:57:39,720
contract those people within the company and you're not in violation of the company's act.

1855
01:57:39,720 --> 01:57:41,200
All right.

1856
01:57:41,200 --> 01:57:46,000
So we're starting to kind of piece together the train.

1857
01:57:46,000 --> 01:57:55,720
A supervisor means a person other than a member who is under the foundation company's constitution

1858
01:57:55,720 --> 01:58:00,820
has an unconditional right to attend and vote at general meetings, whether or not the person

1859
01:58:00,820 --> 01:58:03,320
has supervisory powers or duties.

1860
01:58:03,320 --> 01:58:04,320
Wow.

1861
01:58:04,320 --> 01:58:05,320
Okay.

1862
01:58:05,320 --> 01:58:11,200
So we have a new person that we have to now figure out called a supervisor who is not

1863
01:58:11,200 --> 01:58:21,520
a member, but it seems to be an interested party, an interested person who also is entitled

1864
01:58:21,520 --> 01:58:28,380
to vote and attend meetings, but meetings don't have to be held or the for companies

1865
01:58:28,380 --> 01:58:29,720
act what we read earlier, right?

1866
01:58:29,720 --> 01:58:33,440
And accepted company doesn't have to have general meetings once a year.

1867
01:58:33,440 --> 01:58:34,440
Okay.

1868
01:58:34,440 --> 01:58:35,440
Fascinating.

1869
01:58:35,440 --> 01:58:38,440
I don't know how that's going to play out.

1870
01:58:38,440 --> 01:58:45,400
So yeah, we need to figure out who the supervisor is.

1871
01:58:45,400 --> 01:58:47,400
Let's take a quick look.

1872
01:58:47,400 --> 01:58:51,400
See the word supervisor 31 mentions in our articles of association.

1873
01:58:51,400 --> 01:58:52,400
All right.

1874
01:58:52,400 --> 01:58:53,400
So here's the supervisors.

1875
01:58:53,400 --> 01:58:56,560
We'll read that another part, another episode.

1876
01:58:56,560 --> 01:59:05,200
Let's see if supervisors is in our, our memo association.

1877
01:59:05,200 --> 01:59:10,640
It doesn't looks like there's one mention of supervisor.

1878
01:59:10,640 --> 01:59:13,960
I don't see the word anywhere.

1879
01:59:13,960 --> 01:59:20,080
But to look for it in our future episode where the supervisor is, but I don't see the word

1880
01:59:20,080 --> 01:59:22,760
here somewhere should have highlighted it.

1881
01:59:22,760 --> 01:59:26,320
We're going to keep going.

1882
01:59:26,320 --> 01:59:28,640
What is the end of the definitions?

1883
01:59:28,640 --> 01:59:31,400
Section two of the foundation's company law.

1884
01:59:31,400 --> 01:59:32,880
All right.

1885
01:59:32,880 --> 01:59:35,360
Section three application of laws.

1886
01:59:35,360 --> 01:59:39,680
The company's act applies to a foundation company with changes described in section

1887
01:59:39,680 --> 01:59:40,680
one.

1888
01:59:40,680 --> 01:59:41,680
All right.

1889
01:59:41,680 --> 01:59:46,120
So section one, I expect to be all pretty big, but we'll see.

1890
01:59:46,120 --> 01:59:49,340
It's only 30 pages, so it can be super huge.

1891
01:59:49,340 --> 01:59:55,560
But what this is saying is that there are changes to the company's act, which is that

1892
01:59:55,560 --> 01:59:59,960
bottom piece of the, of the reg stack here.

1893
01:59:59,960 --> 02:00:00,960
All right.

1894
02:00:00,960 --> 02:00:07,160
So it's saying this foundation's company law is modifying parts of the company's act.

1895
02:00:07,160 --> 02:00:11,320
And because we know all the company's act applies to the foundation company's law and

1896
02:00:11,320 --> 02:00:12,920
it's only an addition.

1897
02:00:12,920 --> 02:00:18,080
So that means that whatever changes here is meant to change what is here in the company's

1898
02:00:18,080 --> 02:00:19,080
act.

1899
02:00:19,080 --> 02:00:25,160
So it's, it's authorizing itself to adjust what that base foundation is.

1900
02:00:25,160 --> 02:00:26,160
Okay.

1901
02:00:26,160 --> 02:00:27,160
All right.

1902
02:00:27,160 --> 02:00:28,160
All right.

1903
02:00:28,160 --> 02:00:33,160
Where are we in section three?

1904
02:00:33,160 --> 02:00:39,360
Right down here at the bottom.

1905
02:00:39,360 --> 02:00:40,360
Okay.

1906
02:00:40,360 --> 02:00:41,360
Let's keep on going.

1907
02:00:41,360 --> 02:00:47,640
Now we're in part two, which starts with section four becoming a foundation company.

1908
02:00:47,640 --> 02:00:48,640
Cool.

1909
02:00:48,640 --> 02:00:49,840
Now we're getting into it.

1910
02:00:49,840 --> 02:00:56,040
So when we have our people, our founder, our, or not founder, excuse me, our subscriber,

1911
02:00:56,040 --> 02:00:57,840
what do they have to do to become a foundation company?

1912
02:00:57,840 --> 02:01:05,360
So a foundation company must be limited by share or guarantee with or without share capital.

1913
02:01:05,360 --> 02:01:10,040
So we know which one we are, we're limited by guarantee and we're without share capital.

1914
02:01:10,040 --> 02:01:11,040
Cool.

1915
02:01:11,040 --> 02:01:12,260
Checkbox.

1916
02:01:12,260 --> 02:01:14,760
Company must have a memo of association.

1917
02:01:14,760 --> 02:01:15,760
Cool.

1918
02:01:15,760 --> 02:01:16,760
Checkbox.

1919
02:01:16,760 --> 02:01:17,760
We have that.

1920
02:01:17,760 --> 02:01:19,560
Company must also have an article of association.

1921
02:01:19,560 --> 02:01:20,560
Cool.

1922
02:01:20,560 --> 02:01:21,560
Checkbox.

1923
02:01:21,560 --> 02:01:22,560
We have that.

1924
02:01:22,560 --> 02:01:25,640
A foundation company must have a secretary who is a qualified person.

1925
02:01:25,640 --> 02:01:26,640
Boom.

1926
02:01:26,640 --> 02:01:27,640
There's a connection.

1927
02:01:27,640 --> 02:01:29,640
So what was a qualified person?

1928
02:01:29,640 --> 02:01:34,640
A person who is licensed or permitted by the company's management law, also known as the

1929
02:01:34,640 --> 02:01:38,720
company's management act to provide company management services in the islands.

1930
02:01:38,720 --> 02:01:39,720
All right.

1931
02:01:39,720 --> 02:01:45,240
And here you have foundation company must have a secretary who is a qualified person.

1932
02:01:45,240 --> 02:01:46,760
So what is this saying?

1933
02:01:46,760 --> 02:01:52,280
That's saying that the secretary position in a foundation company must be a licensed

1934
02:01:52,280 --> 02:01:53,280
person.

1935
02:01:53,280 --> 02:01:55,960
They must be qualified to do the job.

1936
02:01:55,960 --> 02:02:02,720
But that qualified person, that secretary must be licensed under a different legislative

1937
02:02:02,720 --> 02:02:03,720
act.

1938
02:02:03,720 --> 02:02:07,480
So we haven't read that one yet, but it's not that big.

1939
02:02:07,480 --> 02:02:09,960
So we're going to get to that one next.

1940
02:02:09,960 --> 02:02:14,400
So that act seems pretty important because I bet you we're going to find license requirements.

1941
02:02:14,400 --> 02:02:21,200
So fees, continuing education, different professional requirements to become a licensed person.

1942
02:02:21,200 --> 02:02:25,800
I bet you that's what we're going to see there.

1943
02:02:25,800 --> 02:02:28,020
So that's a pretty important thing right there.

1944
02:02:28,020 --> 02:02:35,560
You cannot conduct business with a secretary who is unqualified, who is not licensed.

1945
02:02:35,560 --> 02:02:36,560
Good to know.

1946
02:02:36,560 --> 02:02:37,560
All right.

1947
02:02:37,560 --> 02:02:40,900
Section five, declaration of a foundation company.

1948
02:02:40,900 --> 02:02:46,800
This is pretty cool, G was saying the certificate of incorporation, declaring it to be a foundation

1949
02:02:46,800 --> 02:02:49,640
company is evidence that it is.

1950
02:02:49,640 --> 02:02:59,240
Remember earlier in the company's act when once you complete, once you complete the requirements,

1951
02:02:59,240 --> 02:03:01,000
you get a certificate from the registrar.

1952
02:03:01,000 --> 02:03:02,240
Where's that?

1953
02:03:02,240 --> 02:03:03,240
Here it is.

1954
02:03:03,240 --> 02:03:07,760
Section 27 of the company's act upon filing the memo of association, the registrar shall

1955
02:03:07,760 --> 02:03:08,760
issue a certificate.

1956
02:03:08,760 --> 02:03:09,760
All right.

1957
02:03:09,760 --> 02:03:19,040
So now we know once we get that certificate in the foundation's company law, it says it

1958
02:03:19,040 --> 02:03:23,840
is evidence that you are a foundation company when you get a certificate.

1959
02:03:23,840 --> 02:03:24,840
Cool.

1960
02:03:24,840 --> 02:03:25,840
Cool.

1961
02:03:25,840 --> 02:03:26,840
All right.

1962
02:03:26,840 --> 02:03:36,080
Part three starts with, part three says the constitutions of foundation companies.

1963
02:03:36,080 --> 02:03:43,600
Foundation means memos of association and articles of association are two founding documents.

1964
02:03:43,600 --> 02:03:48,440
Section six, model form of a constitution.

1965
02:03:48,440 --> 02:03:55,520
That model form may adopt any or all of the template constitution and schedule two.

1966
02:03:55,520 --> 02:04:00,040
Remember how there are, there are six parts, but at the very bottom there's schedules.

1967
02:04:00,040 --> 02:04:01,040
Okay.

1968
02:04:01,040 --> 02:04:08,000
So we know one of those schedules provides a template or the constitution and the constitution

1969
02:04:08,000 --> 02:04:09,480
is the memo and the articles.

1970
02:04:09,480 --> 02:04:10,480
Cool.

1971
02:04:10,480 --> 02:04:14,280
So that's going to be pretty important, but here's the interesting thing.

1972
02:04:14,280 --> 02:04:15,600
You may adopt it.

1973
02:04:15,600 --> 02:04:20,380
So it means you may not adopt it and it's a template and you are not required to do

1974
02:04:20,380 --> 02:04:22,600
it that specific way.

1975
02:04:22,600 --> 02:04:24,280
All right.

1976
02:04:24,280 --> 02:04:29,280
So we know the constitution equals the memo plus articles and the sandbox foundation.

1977
02:04:29,280 --> 02:04:35,200
Just spoiler alert, when you compare the two, the foundation definitely adopted most of

1978
02:04:35,200 --> 02:04:36,200
the template.

1979
02:04:36,200 --> 02:04:40,800
So when we get to schedule two, you'll see, I'll probably even put it side by side where

1980
02:04:40,800 --> 02:04:46,280
you can see how, where the template and schedule two says this sentence, our TSB foundation

1981
02:04:46,280 --> 02:04:48,920
document says this sentence also.

1982
02:04:48,920 --> 02:04:53,880
There's some differences, but for the vast majority of it, it's very similar.

1983
02:04:53,880 --> 02:04:55,080
All right.

1984
02:04:55,080 --> 02:04:57,820
Section seven, duties, powers and rights.

1985
02:04:57,820 --> 02:05:05,320
The constitution has broad power to shape the foundation company, how it sees fit.

1986
02:05:05,320 --> 02:05:06,880
Okay.

1987
02:05:06,880 --> 02:05:10,300
All right.

1988
02:05:10,300 --> 02:05:16,240
So we're already starting to see why a foundation company, why, why I'm reading in those, those

1989
02:05:16,240 --> 02:05:17,240
articles.

1990
02:05:17,240 --> 02:05:24,100
When I said the very beginning, I read a lot of articles from different law firms and stuff.

1991
02:05:24,100 --> 02:05:28,640
It was my earlier slide, right here.

1992
02:05:28,640 --> 02:05:33,880
So all these law firms, so many of them talked about the foundation company and how flexible

1993
02:05:33,880 --> 02:05:41,380
it was, how it could, it's like a trust 2.0, the best of a nonprofit, the best of a corporation

1994
02:05:41,380 --> 02:05:43,880
for profit, the best of a nonprofit.

1995
02:05:43,880 --> 02:05:51,280
A lot of these, these expert opinions had many different viewpoints and many different

1996
02:05:51,280 --> 02:05:57,120
interpretations, but what most of them agreed on was that foundation company is a very flexible

1997
02:05:57,120 --> 02:06:03,000
tool and, and most of them mentioned a favorite tool of a Dow.

1998
02:06:03,000 --> 02:06:09,440
Now it's going to take a little bit more time for us to figure out why exactly that is and

1999
02:06:09,440 --> 02:06:14,240
how we can think through this connecting to a Dow.

2000
02:06:14,240 --> 02:06:22,440
But what's super clear already is that all of these broad powers that the foundation

2001
02:06:22,440 --> 02:06:26,680
company has, that's the wrong one.

2002
02:06:26,680 --> 02:06:30,240
And we need to be here.

2003
02:06:30,240 --> 02:06:39,480
All these broad powers that they now have means that that one subscriber who becomes

2004
02:06:39,480 --> 02:06:46,160
that one member who then can elect the board, the director.

2005
02:06:46,160 --> 02:06:49,440
Now we know that they can pretty much do whatever they want.

2006
02:06:49,440 --> 02:06:52,480
You know, as long as it's not illegal.

2007
02:06:52,480 --> 02:06:54,560
All right, next up.

2008
02:06:54,560 --> 02:06:56,920
So section seven was duties, powers and rights.

2009
02:06:56,920 --> 02:07:01,880
The constitution has broad power to shape the foundation company how it sees fit.

2010
02:07:01,880 --> 02:07:06,920
The constitution is only enforceable against the foundation company, meaning it's not

2011
02:07:06,920 --> 02:07:10,480
enforceable against anything else.

2012
02:07:10,480 --> 02:07:15,000
Interested persons are entitled to receive reports, accounts, business affairs of the

2013
02:07:15,000 --> 02:07:16,640
foundation company.

2014
02:07:16,640 --> 02:07:20,920
Now we start to see what an interested person actually gets to do.

2015
02:07:20,920 --> 02:07:23,960
Cool.

2016
02:07:23,960 --> 02:07:31,240
Next up, so pages nine through 11 beneficiaries have no powers or rights and is not an interested

2017
02:07:31,240 --> 02:07:32,240
person.

2018
02:07:32,240 --> 02:07:42,360
All right, so now if you are a beneficiary, which was defined as a person who will or

2019
02:07:42,360 --> 02:07:48,560
may benefit from the foundation company carrying out its objects, you have no power or rights

2020
02:07:48,560 --> 02:07:50,720
and you are not an interested person.

2021
02:07:50,720 --> 02:07:55,560
An interested person is entitled to receiving reports, accounts and business affairs of

2022
02:07:55,560 --> 02:07:59,000
the foundation company.

2023
02:07:59,000 --> 02:08:01,000
Good to know.

2024
02:08:01,000 --> 02:08:02,760
Very good to know.

2025
02:08:02,760 --> 02:08:07,960
So the foundation company has a duty to carry out the objects set out in its memo if and

2026
02:08:07,960 --> 02:08:14,560
only if the memo declares and designates persons within standing to enforce the duty against

2027
02:08:14,560 --> 02:08:17,000
the foundation company.

2028
02:08:17,000 --> 02:08:19,800
I don't understand that one at all.

2029
02:08:19,800 --> 02:08:23,200
Sounds like they're saying the company has a choice in carrying out its objects.

2030
02:08:23,200 --> 02:08:25,600
I need help understanding that.

2031
02:08:25,600 --> 02:08:30,100
Why would that even be in there?

2032
02:08:30,100 --> 02:08:39,260
So the foundation company doesn't have a duty to carry out its objects if the memo declares

2033
02:08:39,260 --> 02:08:46,220
and designates, if the memo doesn't declare and designate the person with standing to

2034
02:08:46,220 --> 02:08:47,220
enforce the duty.

2035
02:08:47,220 --> 02:08:48,220
I'm not sure.

2036
02:08:48,220 --> 02:08:52,320
I'm going to need help.

2037
02:08:52,320 --> 02:08:54,160
Section eight, members and supervisors.

2038
02:08:54,160 --> 02:08:57,640
Okay, finally, we might get to see what a supervisor is here.

2039
02:08:57,640 --> 02:09:00,280
Foundation, didn't we already?

2040
02:09:00,280 --> 02:09:01,720
Never mind, we did.

2041
02:09:01,720 --> 02:09:07,360
Supervisor means a person other than a member who under the company's constitution has an

2042
02:09:07,360 --> 02:09:11,000
unconditional right to attend and vote.

2043
02:09:11,000 --> 02:09:19,120
So this one is the constitution may grant the right for a person to be a member or supervisor.

2044
02:09:19,120 --> 02:09:24,800
Foundation company may cease to have members, but must have at least one supervisor.

2045
02:09:24,800 --> 02:09:27,280
Well, there you go.

2046
02:09:27,280 --> 02:09:30,120
That tells you just how important supervisors are.

2047
02:09:30,120 --> 02:09:36,600
And those supervisors are there who are required to be there and have voting rights in a meeting.

2048
02:09:36,600 --> 02:09:39,480
A member or supervisor may be a director.

2049
02:09:39,480 --> 02:09:40,480
Cool.

2050
02:09:40,480 --> 02:09:43,280
A big question I had was, can a secretary also be a director?

2051
02:09:43,280 --> 02:09:47,280
Wasn't able to figure that one out by reading it.

2052
02:09:47,280 --> 02:09:48,280
And part four.

2053
02:09:48,280 --> 02:09:53,800
All right, so now we're in part four, operations and management of foundation companies.

2054
02:09:53,800 --> 02:09:55,880
We're pretty close already being done.

2055
02:09:55,880 --> 02:09:58,400
Section 12 are the bylaws.

2056
02:09:58,400 --> 02:10:04,240
Bylaws must be followed, but are beneath constitution, which is the memo in the articles.

2057
02:10:04,240 --> 02:10:09,680
Okay, so that means that the bylaws are subordinate to the constitution.

2058
02:10:09,680 --> 02:10:14,040
Bylaws are not part of a constitution and people who deal with a foundation company

2059
02:10:14,040 --> 02:10:17,280
are not required to consider its bylaws.

2060
02:10:17,280 --> 02:10:21,120
I guess that means they are required to consider the constitution.

2061
02:10:21,120 --> 02:10:25,840
Not exactly sure how that plays out in business dealings, but at the very least, if you'd

2062
02:10:25,840 --> 02:10:32,080
conduct business with a foundation company, you are not required to look at its bylaws.

2063
02:10:32,080 --> 02:10:33,080
Okay.

2064
02:10:33,080 --> 02:10:36,520
That was pages nine through 11.

2065
02:10:36,520 --> 02:10:42,040
Pages 11 through 17 starts with section 13, register offices.

2066
02:10:42,040 --> 02:10:46,840
And a foundation company's registered office shall be at the secretary's business address

2067
02:10:46,840 --> 02:10:48,560
as a qualified person.

2068
02:10:48,560 --> 02:10:50,880
Now we understand the importance of the secretary.

2069
02:10:50,880 --> 02:10:57,840
So that registered person, that subscriber is the secretary and that secretary is qualified,

2070
02:10:57,840 --> 02:11:00,840
which means they must be licensed by the company's management act.

2071
02:11:00,840 --> 02:11:01,840
Cool.

2072
02:11:01,840 --> 02:11:03,280
So here we go.

2073
02:11:03,280 --> 02:11:04,840
Section 16, secretary.

2074
02:11:04,840 --> 02:11:08,120
A foundation company shall have a qualified person as a secretary.

2075
02:11:08,120 --> 02:11:09,440
We already knew that.

2076
02:11:09,440 --> 02:11:10,920
Said the same thing.

2077
02:11:10,920 --> 02:11:12,880
Just reiterated it.

2078
02:11:12,880 --> 02:11:16,200
Section 17, compliance with laws.

2079
02:11:16,200 --> 02:11:25,080
Foundation company must give info for secretary to comply with AML, which is anti-money, anti-monetary

2080
02:11:25,080 --> 02:11:26,080
laundering.

2081
02:11:26,080 --> 02:11:27,080
Wait a minute.

2082
02:11:27,080 --> 02:11:28,080
Hold on.

2083
02:11:28,080 --> 02:11:30,080
I think I just messed that up.

2084
02:11:30,080 --> 02:11:31,080
Anti-money laundering.

2085
02:11:31,080 --> 02:11:32,080
Right.

2086
02:11:32,080 --> 02:11:39,720
So SC must give info for the secretary to comply with anti-money laundering, terrorism

2087
02:11:39,720 --> 02:11:42,200
law or crime law.

2088
02:11:42,200 --> 02:11:46,640
Foundation company must not accept assets unless the secretary states no objection.

2089
02:11:46,640 --> 02:11:47,640
Okay.

2090
02:11:47,640 --> 02:11:50,120
That is a, that's a pretty powerful authority.

2091
02:11:50,120 --> 02:11:57,360
So the foundation company cannot accept things that it's given unless the secretary says

2092
02:11:57,360 --> 02:11:59,800
that nothing's wrong with that.

2093
02:11:59,800 --> 02:12:00,800
Okay.

2094
02:12:00,800 --> 02:12:03,280
Now we get into part five.

2095
02:12:03,280 --> 02:12:04,660
All right.

2096
02:12:04,660 --> 02:12:06,520
So we just left part four.

2097
02:12:06,520 --> 02:12:13,560
The court plays an important role in resolving FC financial, foundation company disputes,

2098
02:12:13,560 --> 02:12:17,080
appointing, removing members and conducting investigations.

2099
02:12:17,080 --> 02:12:18,480
That's the grand court's function.

2100
02:12:18,480 --> 02:12:19,480
Cool.

2101
02:12:19,480 --> 02:12:21,080
Part six, miscellaneous.

2102
02:12:21,080 --> 02:12:24,040
Schedule one.

2103
02:12:24,040 --> 02:12:29,960
Schedule one is the, the company's act, a list of companies act things that are applicable

2104
02:12:29,960 --> 02:12:34,640
to the financial, to the foundation companies.

2105
02:12:34,640 --> 02:12:41,320
There are a lot of sections that are not applicable to, to foundation companies here.

2106
02:12:41,320 --> 02:12:46,040
And so none of these came up in any of my research that I really need to talk about.

2107
02:12:46,040 --> 02:12:52,040
The reference to a member also references an interested person.

2108
02:12:52,040 --> 02:12:57,400
So fascinating thing there is if you are a member, you are also an interested person.

2109
02:12:57,400 --> 02:12:58,400
Cool.

2110
02:12:58,400 --> 02:13:00,640
So it's, it's an interesting connection.

2111
02:13:00,640 --> 02:13:06,160
Whereas before we had interested person means any of its members or supervisors, someone

2112
02:13:06,160 --> 02:13:09,640
who is entitled to be a member or supervisor in the schedule.

2113
02:13:09,640 --> 02:13:15,840
It reiterates that the member also references an interested person.

2114
02:13:15,840 --> 02:13:18,920
So there's another link there.

2115
02:13:18,920 --> 02:13:24,760
I am still kind of unsure what that connection is supposed to mean, except that an interested

2116
02:13:24,760 --> 02:13:26,640
person is entitled to reports.

2117
02:13:26,640 --> 02:13:29,040
Like is there some, is there more there?

2118
02:13:29,040 --> 02:13:35,280
Is that also why they, they go so far as to say that, that we're modifying the company's

2119
02:13:35,280 --> 02:13:37,640
act for the foundation company's law?

2120
02:13:37,640 --> 02:13:38,640
I don't know.

2121
02:13:38,640 --> 02:13:41,560
I need to, I need to ask a lawyer or something.

2122
02:13:41,560 --> 02:13:43,520
And there are many, many other sections that are modified.

2123
02:13:43,520 --> 02:13:44,520
They're all seem very minor.

2124
02:13:44,520 --> 02:13:45,520
All right.

2125
02:13:45,520 --> 02:13:51,040
So now let's go into schedule two, the model constitution.

2126
02:13:51,040 --> 02:13:56,240
This provides a template of the memo and articles, which is what the constitution is, two things

2127
02:13:56,240 --> 02:13:59,480
for what a foundation company could look like.

2128
02:13:59,480 --> 02:14:03,760
Remember they said may the template it's not required.

2129
02:14:03,760 --> 02:14:06,360
It's not mandatory.

2130
02:14:06,360 --> 02:14:08,000
It is optional and not mandatory.

2131
02:14:08,000 --> 02:14:09,000
All right.

2132
02:14:09,000 --> 02:14:12,880
So under the memo association, it established the template, establishes the location of

2133
02:14:12,880 --> 02:14:17,200
a foundation company, defines the objects, which is the things it wants to do and how

2134
02:14:17,200 --> 02:14:18,480
many members it has.

2135
02:14:18,480 --> 02:14:19,480
All right.

2136
02:14:19,480 --> 02:14:24,560
It also creates that document is a thing that creates the foundation company, that memo.

2137
02:14:24,560 --> 02:14:27,000
Okay, so here's the memo for us.

2138
02:14:27,000 --> 02:14:29,560
It says memo of association.

2139
02:14:29,560 --> 02:14:33,120
It says where we are, who we are, what we're trying to do.

2140
02:14:33,120 --> 02:14:40,840
And at the bottom it's signed and then it gets stamped here somewhere, stamp, stamp,

2141
02:14:40,840 --> 02:14:43,440
stamp at the top right.

2142
02:14:43,440 --> 02:14:45,120
And it gets stamped into existence.

2143
02:14:45,120 --> 02:14:46,120
Okay.

2144
02:14:46,120 --> 02:14:48,080
So that whole thing looked pretty standard to me.

2145
02:14:48,080 --> 02:14:53,040
There was nothing that read very surprising from what we had already researched about this.

2146
02:14:53,040 --> 02:14:59,000
And what I found is that when I put the two side by side, the foundations memo association

2147
02:14:59,000 --> 02:15:01,520
was very similar to the template.

2148
02:15:01,520 --> 02:15:09,360
The only big thing is that section four here, paragraph four, where it talks about foundation

2149
02:15:09,360 --> 02:15:15,360
company shall have and be capable of exercising all functions and all these objects.

2150
02:15:15,360 --> 02:15:18,800
It has a long list of objects that are not included in the template.

2151
02:15:18,800 --> 02:15:26,200
So, so clearly the objects are, there's more to our foundation company, but what we're

2152
02:15:26,200 --> 02:15:29,880
trying to do in the Dow, then what the template provided for guys.

2153
02:15:29,880 --> 02:15:30,880
That was a big difference.

2154
02:15:30,880 --> 02:15:36,720
Now we go to the articles of association, the articles defines.

2155
02:15:36,720 --> 02:15:40,680
That's where I see the founder is defined.

2156
02:15:40,680 --> 02:15:45,680
And that's interesting because this is the first time I've seen the word founder defined

2157
02:15:45,680 --> 02:15:46,820
anywhere.

2158
02:15:46,820 --> 02:15:50,080
It's not in the foundation's company law of parks one through seven.

2159
02:15:50,080 --> 02:15:52,060
It's not in the company's act.

2160
02:15:52,060 --> 02:15:59,600
The founder doesn't even exist until you get to the template, which is not required.

2161
02:15:59,600 --> 02:16:03,560
So I don't know what the, I don't know what to make of that.

2162
02:16:03,560 --> 02:16:05,800
I'm not sure what that's supposed to mean.

2163
02:16:05,800 --> 02:16:13,280
Clearly it means it's not required, but as you'll see in our foundation, the founder

2164
02:16:13,280 --> 02:16:17,700
has a lot, a lot of power and responsibility.

2165
02:16:17,700 --> 02:16:21,960
And when I was reading these expert opinions from different law firms in the Cayman islands,

2166
02:16:21,960 --> 02:16:26,240
they too talk about the founder like they're an important part of the foundation company.

2167
02:16:26,240 --> 02:16:29,720
So why is the founder only mentioned in the template and defined there?

2168
02:16:29,720 --> 02:16:30,720
I don't, I don't know.

2169
02:16:30,720 --> 02:16:31,720
I don't know.

2170
02:16:31,720 --> 02:16:33,480
I can't, I couldn't figure it out.

2171
02:16:33,480 --> 02:16:37,880
So anyways, it defines a founder in the articles association, which is the template, which

2172
02:16:37,880 --> 02:16:43,000
is not, which is not required and set schedule to the foundation's company law.

2173
02:16:43,000 --> 02:16:44,000
Okay.

2174
02:16:44,000 --> 02:16:49,920
It gives this template gives overall guidance and direction of the foundation company, including

2175
02:16:49,920 --> 02:16:55,120
role descriptions for the founder member, director, supervisor, beneficiary, secretary

2176
02:16:55,120 --> 02:16:56,120
and proxies.

2177
02:16:56,120 --> 02:17:01,520
And once you know it, our article does the same thing.

2178
02:17:01,520 --> 02:17:03,640
Our articles talks about the supervisors.

2179
02:17:03,640 --> 02:17:12,440
It talks about the beneficiaries, the secretary talks about general meetings and the proxies.

2180
02:17:12,440 --> 02:17:15,000
So it does, it does the same thing.

2181
02:17:15,000 --> 02:17:19,200
It also gives guidance on the registers, the accounts, the auditors, all the winding up,

2182
02:17:19,200 --> 02:17:23,560
which is that liquidation term indemnity, which is when you hold people harmless for

2183
02:17:23,560 --> 02:17:29,860
doing things bylaws alterations and how meetings are really conducted.

2184
02:17:29,860 --> 02:17:33,600
It basically structures how a foundation foundation company will operate.

2185
02:17:33,600 --> 02:17:34,600
All right.

2186
02:17:34,600 --> 02:17:44,600
So again, when I put them side by side, the Dow, the Sandbach Dow's articles of association

2187
02:17:44,600 --> 02:17:47,920
matched very closely to the template and the foundation's company law.

2188
02:17:47,920 --> 02:17:52,360
They just expanded more on the directors and officers role.

2189
02:17:52,360 --> 02:17:55,480
So you, on the one hand, you have a constitution.

2190
02:17:55,480 --> 02:17:58,280
It creates the company, the foundation company.

2191
02:17:58,280 --> 02:18:00,280
On the other hand, you have the articles.

2192
02:18:00,280 --> 02:18:01,280
Okay.

2193
02:18:01,280 --> 02:18:02,760
I'm sorry.

2194
02:18:02,760 --> 02:18:08,000
You have the constitution, which equals the memo association and the article of association.

2195
02:18:08,000 --> 02:18:09,000
Okay.

2196
02:18:09,000 --> 02:18:14,200
The memo association creates the foundation company talks about where things are, where

2197
02:18:14,200 --> 02:18:20,040
they live, all that article association talks about the roles and how the company will be

2198
02:18:20,040 --> 02:18:21,040
conducted.

2199
02:18:21,040 --> 02:18:23,040
What meetings would look like.

2200
02:18:23,040 --> 02:18:24,040
Okay.

2201
02:18:24,040 --> 02:18:27,240
So both of them together equals the constitution.

2202
02:18:27,240 --> 02:18:33,040
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no points.

2203
02:18:33,040 --> 02:18:36,480
If you know what that reference is from.

2204
02:18:36,480 --> 02:18:37,480
All right.

2205
02:18:37,480 --> 02:18:42,760
That concludes the foundation's company law, the second stack in the reg stack.

2206
02:18:42,760 --> 02:18:44,560
All right.

2207
02:18:44,560 --> 02:18:48,520
We're already done much sooner than we were with the company's act.

2208
02:18:48,520 --> 02:18:50,140
Next up, the CMA.

2209
02:18:50,140 --> 02:18:51,560
It was mentioned a lot.

2210
02:18:51,560 --> 02:18:58,000
It talks about licensing stuff to the CMA of 1999 companies management act is where we're

2211
02:18:58,000 --> 02:18:59,320
going next.

2212
02:18:59,320 --> 02:19:05,740
This time, instead of going to the Cayman Island register, you instead have to go to

2213
02:19:05,740 --> 02:19:10,000
what's called SEMA, the Cayman Island monetary authority.

2214
02:19:10,000 --> 02:19:11,000
All right.

2215
02:19:11,000 --> 02:19:12,000
It's got another website.

2216
02:19:12,000 --> 02:19:13,000
Look at that.

2217
02:19:13,000 --> 02:19:16,000
It's got another website.

2218
02:19:16,000 --> 02:19:22,640
Looks a little bit like this and it has regulations and stuff.

2219
02:19:22,640 --> 02:19:29,360
And yeah, it's an entity within the Cayman Island that is the authority for issuing stuff.

2220
02:19:29,360 --> 02:19:30,360
Okay.

2221
02:19:30,360 --> 02:19:32,040
So you would go to publication.

2222
02:19:32,040 --> 02:19:33,040
Nope.

2223
02:19:33,040 --> 02:19:36,960
You go to regulatory framework, acts and regulations up here at the top.

2224
02:19:36,960 --> 02:19:37,960
Okay.

2225
02:19:37,960 --> 02:19:42,920
So like I just showed you under regulation, regulatory framework, you will ask some regulations

2226
02:19:42,920 --> 02:19:47,720
and they're boom, companies management act 2024 revision.

2227
02:19:47,720 --> 02:19:50,800
But what you'll see here is there are a lot of companies act.

2228
02:19:50,800 --> 02:19:51,800
Okay.

2229
02:19:51,800 --> 02:19:56,960
We're going to get into something, a term, a legal thing later on, but just worry about

2230
02:19:56,960 --> 02:20:00,640
the one that says companies management act 2024 revision.

2231
02:20:00,640 --> 02:20:01,640
Okay.

2232
02:20:01,640 --> 02:20:05,920
This revision 2024 is 28 pages.

2233
02:20:05,920 --> 02:20:06,920
Okay.

2234
02:20:06,920 --> 02:20:08,920
So another, another short one.

2235
02:20:08,920 --> 02:20:11,160
All right.

2236
02:20:11,160 --> 02:20:13,920
Here we go.

2237
02:20:13,920 --> 02:20:17,040
There are 24 parts this time.

2238
02:20:17,040 --> 02:20:22,140
However, only one, two, three, four, five, six, seven, eight, nine parts are relevant

2239
02:20:22,140 --> 02:20:23,140
to us.

2240
02:20:23,140 --> 02:20:24,140
Okay.

2241
02:20:24,140 --> 02:20:29,360
So companies management act on page five, section two, authority means SEMA.

2242
02:20:29,360 --> 02:20:30,840
We already knew that, right?

2243
02:20:30,840 --> 02:20:33,440
It was in the, the, the company's act.

2244
02:20:33,440 --> 02:20:37,920
The authority meant the Cayman Island monetary authority.

2245
02:20:37,920 --> 02:20:38,920
Okay.

2246
02:20:38,920 --> 02:20:44,320
So a managed company means a company to which the services included in the definition of

2247
02:20:44,320 --> 02:20:47,820
section three are provided by a licensee.

2248
02:20:47,820 --> 02:20:55,680
So we already know based on what we've learned earlier that the licensee, which is a secretary,

2249
02:20:55,680 --> 02:20:59,960
also the director, which we will find out pretty soon.

2250
02:20:59,960 --> 02:21:03,800
The licensee has to do things in accordance with section three.

2251
02:21:03,800 --> 02:21:04,800
Cool.

2252
02:21:04,800 --> 02:21:07,240
We're very interested in section three now.

2253
02:21:07,240 --> 02:21:11,800
License means a license granted by the authority.

2254
02:21:11,800 --> 02:21:14,920
So we're connecting dots by crazy over here.

2255
02:21:14,920 --> 02:21:15,920
Right?

2256
02:21:15,920 --> 02:21:21,240
So the, the licensee is given by the authority.

2257
02:21:21,240 --> 02:21:27,200
The authority is SEMA or a licensee is a secretary and we'll find out soon.

2258
02:21:27,200 --> 02:21:29,120
Also a director.

2259
02:21:29,120 --> 02:21:35,220
And those people are qualified persons to give company management services to a foundation

2260
02:21:35,220 --> 02:21:43,440
company, which is only allowed to do business on the islands with company management services.

2261
02:21:43,440 --> 02:21:47,000
So see how that's working.

2262
02:21:47,000 --> 02:21:54,800
That my friends is why we see this.

2263
02:21:54,800 --> 02:21:57,520
That's why it's not just that they're there.

2264
02:21:57,520 --> 02:21:58,520
I don't know.

2265
02:21:58,520 --> 02:21:59,520
They went to high school together.

2266
02:21:59,520 --> 02:22:00,520
They all used to work together.

2267
02:22:00,520 --> 02:22:02,640
It's not just that.

2268
02:22:02,640 --> 02:22:10,240
It's that the law states they have to be licensed and they have to go through all these things

2269
02:22:10,240 --> 02:22:13,480
and that they have to be qualified people.

2270
02:22:13,480 --> 02:22:21,400
And that qualification, that license comes from the central, the, a, a Canyon islands

2271
02:22:21,400 --> 02:22:22,400
monetary authority.

2272
02:22:22,400 --> 02:22:28,120
I'm about to figure out in a few minutes here what it required, what you have to do to become

2273
02:22:28,120 --> 02:22:29,120
a licensee.

2274
02:22:29,120 --> 02:22:30,120
Okay.

2275
02:22:30,120 --> 02:22:34,320
That's the last part we haven't quite figured out yet.

2276
02:22:34,320 --> 02:22:36,800
All right.

2277
02:22:36,800 --> 02:22:40,520
Next up on the interpretation, which is basically the definitions of section two of the company's

2278
02:22:40,520 --> 02:22:44,400
management act, senior officer, a new term we haven't seen.

2279
02:22:44,400 --> 02:22:46,400
We saw the word officer, but not senior.

2280
02:22:46,400 --> 02:22:51,440
So it's a new combination means a managing director, president, chief executive officer

2281
02:22:51,440 --> 02:22:57,280
or other officer with authority to bind the licensee of which that person is an officer.

2282
02:22:57,280 --> 02:22:58,400
All right, cool.

2283
02:22:58,400 --> 02:22:59,400
New term.

2284
02:22:59,400 --> 02:23:01,840
Management basically means the head honchos of the company.

2285
02:23:01,840 --> 02:23:06,880
Now we move on to section three, definition of business of company management.

2286
02:23:06,880 --> 02:23:07,880
All right.

2287
02:23:07,880 --> 02:23:11,640
So that term we've seen before, we know that the foundation company's law says company

2288
02:23:11,640 --> 02:23:12,920
management services.

2289
02:23:12,920 --> 02:23:14,680
All right.

2290
02:23:14,680 --> 02:23:19,120
Means the provision of the following corporate services.

2291
02:23:19,120 --> 02:23:23,200
Now where we've seen that term before, that was the company's act saying corporate services

2292
02:23:23,200 --> 02:23:24,200
provider.

2293
02:23:24,200 --> 02:23:29,400
So now you're starting to see kind of like a merging of terminology in the third body

2294
02:23:29,400 --> 02:23:33,960
that is separate from both the foundation company's law and the company's act.

2295
02:23:33,960 --> 02:23:34,960
Okay.

2296
02:23:34,960 --> 02:23:38,640
So that reg stack that we're up to right now.

2297
02:23:38,640 --> 02:23:41,760
So this one right here is where we are.

2298
02:23:41,760 --> 02:23:44,880
It's defining terms found in both of these two.

2299
02:23:44,880 --> 02:23:45,880
Okay.

2300
02:23:45,880 --> 02:23:46,880
That's good news.

2301
02:23:46,880 --> 02:23:49,920
That means you're finally seeing like a convergence.

2302
02:23:49,920 --> 02:23:50,920
That's awesome.

2303
02:23:50,920 --> 02:23:51,920
I love seeing that.

2304
02:23:51,920 --> 02:23:54,520
All right, where are we?

2305
02:23:54,520 --> 02:23:55,520
We're here.

2306
02:23:55,520 --> 02:23:56,520
All right.

2307
02:23:56,520 --> 02:24:03,120
Section three, definition of business of company management means the provision of following

2308
02:24:03,120 --> 02:24:08,080
of the following corporate services for profit or reward in or from within the islands.

2309
02:24:08,080 --> 02:24:14,640
And it gives a big long list of stuff, but it basically boils down to you can act and

2310
02:24:14,640 --> 02:24:16,800
do things you can provide.

2311
02:24:16,800 --> 02:24:21,680
You can file, you can establish, you can maintain all the stuff that you would think that you

2312
02:24:21,680 --> 02:24:30,920
would do in a company like filing meeting minutes or providing secretary services or

2313
02:24:30,920 --> 02:24:38,680
establishing documents and accepting assets without objection, maintaining the company

2314
02:24:38,680 --> 02:24:40,320
and declaring stuff.

2315
02:24:40,320 --> 02:24:46,000
All of these things that we've already went over that you have to do has to be done by

2316
02:24:46,000 --> 02:24:55,720
someone who is licensed, who is a qualified person licensed by SEMA.

2317
02:24:55,720 --> 02:24:59,040
They came in islands monetary authority.

2318
02:24:59,040 --> 02:25:01,380
We're very close to closing the loop here.

2319
02:25:01,380 --> 02:25:04,840
Very close, almost through.

2320
02:25:04,840 --> 02:25:09,100
So moving on to pages eight through 10, that brings us to section four, which is a definition

2321
02:25:09,100 --> 02:25:11,600
of group of companies.

2322
02:25:11,600 --> 02:25:17,000
A company is treated as a subsidiary of another company when it controls the composition of

2323
02:25:17,000 --> 02:25:23,120
the subsidiary's board of directors or controls more than half of the votes or is a subsidiary

2324
02:25:23,120 --> 02:25:28,200
of a subsidiary or can appoint or remove directors of that company.

2325
02:25:28,200 --> 02:25:33,360
All right, so this was this one jumped out at me because it kind of gave you this.

2326
02:25:33,360 --> 02:25:38,480
You're not going to be like a subsidiary and then somehow get around being called a company.

2327
02:25:38,480 --> 02:25:43,400
Like you have to get to disclose your beneficiaries and part of that disclosure, not just the

2328
02:25:43,400 --> 02:25:50,600
beneficiaries, but part of that, that calculus is if you are controlled by another company,

2329
02:25:50,600 --> 02:25:54,440
then then you are considered a group of companies.

2330
02:25:54,440 --> 02:25:59,480
And it kind of like ropes you in to where this you can't just loophole yourself around

2331
02:25:59,480 --> 02:26:02,160
some of these licensing requirements.

2332
02:26:02,160 --> 02:26:03,340
So that's pretty cool.

2333
02:26:03,340 --> 02:26:05,180
That's good to see.

2334
02:26:05,180 --> 02:26:09,520
And good terminology there you can use in many different ways.

2335
02:26:09,520 --> 02:26:16,800
So section five, we're going to move on to application of the authority.

2336
02:26:16,800 --> 02:26:20,320
Corporate services licensed to perform section three may be granted by the authority.

2337
02:26:20,320 --> 02:26:22,120
Okay, we're going to do that.

2338
02:26:22,120 --> 02:26:24,520
Stiff penalties for not being licensed.

2339
02:26:24,520 --> 02:26:30,840
Again, more fines and more jail time if you conduct corporate services management stuff

2340
02:26:30,840 --> 02:26:33,120
and you're not licensed.

2341
02:26:33,120 --> 02:26:34,120
Stiff penalties.

2342
02:26:34,120 --> 02:26:38,040
So we already know the director and the officers could be hit with stiff penalties.

2343
02:26:38,040 --> 02:26:44,040
Now we know the secretary can be hit with stiff penalties in jail time.

2344
02:26:44,040 --> 02:26:51,400
All right, so going on section five, authority may grant either a corporate services license

2345
02:26:51,400 --> 02:26:53,960
or a company management license.

2346
02:26:53,960 --> 02:26:54,960
Interesting.

2347
02:26:54,960 --> 02:26:58,240
So those are those terms that we were playing with earlier.

2348
02:26:58,240 --> 02:27:01,680
So what this seemed to me is that the services license seems to be most of section three.

2349
02:27:01,680 --> 02:27:05,600
We just went over that long list of stuff that we expect to do in a company.

2350
02:27:05,600 --> 02:27:09,200
And the management license seems to be like an additional services thing.

2351
02:27:09,200 --> 02:27:13,400
Kind of like a catchall for what's not in section three.

2352
02:27:13,400 --> 02:27:17,440
The company, the management license is like, whatever is not in section three, we can give

2353
02:27:17,440 --> 02:27:22,640
you this extra license, which does all these non specified things.

2354
02:27:22,640 --> 02:27:26,120
That's as best as I could figure that one out.

2355
02:27:26,120 --> 02:27:31,480
A license grants when the authority is satisfied that the applicant has, and here's the requirements

2356
02:27:31,480 --> 02:27:37,320
for being licensed, sufficient expertise to carry on the business of company management.

2357
02:27:37,320 --> 02:27:39,000
Wow, that's broad.

2358
02:27:39,000 --> 02:27:43,880
That pretty much gives, well, there's more, I'll keep going, and can be carried on by

2359
02:27:43,880 --> 02:27:51,000
a person who is fit and proper to be directors or managers or officers.

2360
02:27:51,000 --> 02:27:56,240
It pretty much says the SEMA has a discretion to choose whether or not they want to license

2361
02:27:56,240 --> 02:27:57,240
someone.

2362
02:27:57,240 --> 02:28:03,920
It's not like you have to be a lawyer for five years, or you have to have a business

2363
02:28:03,920 --> 02:28:08,240
degree, or you have to have X number of dollars in your bank account.

2364
02:28:08,240 --> 02:28:12,400
This is just saying SEMA is going to look at your application and decide whether or

2365
02:28:12,400 --> 02:28:14,760
not you have sufficient expertise.

2366
02:28:14,760 --> 02:28:17,480
They're also going to decide if you're a person who's fit and proper.

2367
02:28:17,480 --> 02:28:21,960
And if you're not, it doesn't seem like you can do anything about it and your license

2368
02:28:21,960 --> 02:28:22,960
will be denied.

2369
02:28:22,960 --> 02:28:25,560
Application, your license application.

2370
02:28:25,560 --> 02:28:31,360
Here are the factors that are considered honesty, integrity, reputation, competence, capability,

2371
02:28:31,360 --> 02:28:33,960
financial soundness.

2372
02:28:33,960 --> 02:28:36,200
So there are things that you can do.

2373
02:28:36,200 --> 02:28:41,520
Obviously, this things that I've learned is there are certifications you can do here

2374
02:28:41,520 --> 02:28:44,120
to help demonstrate these things.

2375
02:28:44,120 --> 02:28:47,920
Like if your financial soundness, there's different finance courses you can have.

2376
02:28:47,920 --> 02:28:52,760
So if you have a degree in finance, you probably can demonstrate you have financial soundness.

2377
02:28:52,760 --> 02:28:56,800
If you've been an accountant for X number of years at a company, you can probably demonstrate

2378
02:28:56,800 --> 02:28:58,520
financial soundness.

2379
02:28:58,520 --> 02:29:06,560
Reputation, maybe there's a reputation score website somewhere, or a news article by a

2380
02:29:06,560 --> 02:29:12,060
CNN or some reputable place that you think that the people who review this license will

2381
02:29:12,060 --> 02:29:14,960
think highly of speaking well of you.

2382
02:29:14,960 --> 02:29:19,560
As it's like this whole thing you can do to demonstrate each of these integrity would

2383
02:29:19,560 --> 02:29:26,880
just be like, hey, I've never I've never been convicted of a law or have a violating a law.

2384
02:29:26,880 --> 02:29:34,720
And that's demonstrating my integrity, my honesty, all these different things.

2385
02:29:34,720 --> 02:29:36,720
Very broad, though, very, very broad.

2386
02:29:36,720 --> 02:29:41,000
Alright, let's keep going page 11 through 25.

2387
02:29:41,000 --> 02:29:42,520
Section seven is display of license.

2388
02:29:42,520 --> 02:29:46,600
The license shall be prominently displayed on the premises of the company.

2389
02:29:46,600 --> 02:29:54,280
Cool, a lot of a lot of regulatory licensing type things they have that require the same

2390
02:29:54,280 --> 02:29:55,280
thing.

2391
02:29:55,280 --> 02:30:00,420
And in my career field, I've had to do the same thing I've had to display my license

2392
02:30:00,420 --> 02:30:03,180
in a public place so that it can be viewed.

2393
02:30:03,180 --> 02:30:05,920
Someone does transact with me.

2394
02:30:05,920 --> 02:30:11,160
Alright, so section 13 audits and accounts.

2395
02:30:11,160 --> 02:30:15,200
License holders are audited annually.

2396
02:30:15,200 --> 02:30:20,280
Within six months of financial year end, Ford audited accounts and certificate of compliance.

2397
02:30:20,280 --> 02:30:27,040
Alright, so now we're starting to see the weight that goes behind being licensed.

2398
02:30:27,040 --> 02:30:30,000
It's not just filing application given the fee.

2399
02:30:30,000 --> 02:30:34,080
You are also required to be audited annually every single year.

2400
02:30:34,080 --> 02:30:37,360
And within six months of a financial year end, which doesn't have to be December, by

2401
02:30:37,360 --> 02:30:43,600
the way, your company can declare that a financial year end is September, February or whatever.

2402
02:30:43,600 --> 02:30:47,800
But within six months of that financial year end of your company, you are to forward whatever

2403
02:30:47,800 --> 02:30:51,960
audited accounts they're referring to and that certificate of compliance.

2404
02:30:51,960 --> 02:30:55,200
I don't know yet what that is, but it probably sounds exactly what it is.

2405
02:30:55,200 --> 02:31:02,440
That compliance is that you complied with the intent of the law to keep your license.

2406
02:31:02,440 --> 02:31:03,440
Section 17.

2407
02:31:03,440 --> 02:31:05,040
This was fascinating.

2408
02:31:05,040 --> 02:31:06,680
Licensees to ensure.

2409
02:31:06,680 --> 02:31:12,440
So a licensee is required to ensure against losses arising from claims of civil liability.

2410
02:31:12,440 --> 02:31:16,880
They didn't give it a dollar figure for what you're supposed to be licensed to insure it

2411
02:31:16,880 --> 02:31:17,880
against.

2412
02:31:17,880 --> 02:31:23,880
I don't know if it's $5 or $5 million or what, but I'm not entirely sure if this applies

2413
02:31:23,880 --> 02:31:26,480
to the foundation secretary or not.

2414
02:31:26,480 --> 02:31:31,040
That's probably something I need to ask a lawyer if I can get them on for part two or

2415
02:31:31,040 --> 02:31:34,040
three.

2416
02:31:34,040 --> 02:31:35,040
Section 18.

2417
02:31:35,040 --> 02:31:36,280
Additional powers of the authority.

2418
02:31:36,280 --> 02:31:41,000
So authority, which is SEMA, may revoke a license if it believes a licensee is unable

2419
02:31:41,000 --> 02:31:45,000
to meet obligations or is not fit and proper.

2420
02:31:45,000 --> 02:31:49,880
If revoked, it will disclose that revocation in the news, which is basically the local

2421
02:31:49,880 --> 02:31:52,720
Cayman news or whatever.

2422
02:31:52,720 --> 02:31:54,480
And then section in the end notes.

2423
02:31:54,480 --> 02:31:56,400
So we're at the end already.

2424
02:31:56,400 --> 02:32:04,520
Companies management law was first put out in 1999 again with the whole CMA 2023 revised

2425
02:32:04,520 --> 02:32:05,520
2024.

2426
02:32:05,520 --> 02:32:08,120
Apparently it came out in 1999, I guess.

2427
02:32:08,120 --> 02:32:09,440
I whatever.

2428
02:32:09,440 --> 02:32:13,320
And then was changed to Companies Management Act in 2021.

2429
02:32:13,320 --> 02:32:14,320
Good to know.

2430
02:32:14,320 --> 02:32:19,320
So that way when you see company's management law and the act or elsewhere, you know it's

2431
02:32:19,320 --> 02:32:22,800
referring to both companies management act and the company's management law.

2432
02:32:22,800 --> 02:32:23,800
They're interchangeable.

2433
02:32:23,800 --> 02:32:27,280
It just kind of reduces the confusion.

2434
02:32:27,280 --> 02:32:30,040
So what did we learn from the SCL?

2435
02:32:30,040 --> 02:32:40,440
We learned that that the authority, which is SEMA, grants licenses to qualify people

2436
02:32:40,440 --> 02:32:47,040
who determines to be fit and proper and has sufficient expertise to carry on the business

2437
02:32:47,040 --> 02:32:48,600
of company management.

2438
02:32:48,600 --> 02:32:55,080
And when it licenses these people, they must be audited annually.

2439
02:32:55,080 --> 02:33:02,200
And they face stiff fines and jail time if they act and practice without a license.

2440
02:33:02,200 --> 02:33:06,400
And that these people are also directors and secretaries.

2441
02:33:06,400 --> 02:33:11,440
And those are the two terms we could find within the CMA that are licensed.

2442
02:33:11,440 --> 02:33:15,080
Your director is licensed and your secretary is licensed.

2443
02:33:15,080 --> 02:33:19,720
Two very important positions in a foundation company as we find out.

2444
02:33:19,720 --> 02:33:22,800
So they have it.

2445
02:33:22,800 --> 02:33:25,640
Where's your third law?

2446
02:33:25,640 --> 02:33:26,640
Right there.

2447
02:33:26,640 --> 02:33:27,640
Boom.

2448
02:33:27,640 --> 02:33:36,280
Now the good news is we only have, we only have, we have four more sections to go through,

2449
02:33:36,280 --> 02:33:39,080
but we're going to be going through this pretty quickly.

2450
02:33:39,080 --> 02:33:41,160
So we're pretty much already done.

2451
02:33:41,160 --> 02:33:42,840
But we have this last part to go.

2452
02:33:42,840 --> 02:33:47,600
So the DRLL, which again is the directors registration and licensing law.

2453
02:33:47,600 --> 02:33:51,100
Again that sounds pretty important to look through.

2454
02:33:51,100 --> 02:33:54,420
So something about that tells us that our director should be licensed.

2455
02:33:54,420 --> 02:33:59,640
The securities investment business law, we'll go through that and why that's listed here.

2456
02:33:59,640 --> 02:34:02,620
Virtual Asset Service Provider Act.

2457
02:34:02,620 --> 02:34:06,040
That is where cryptocurrency law is for the Cayman Islands.

2458
02:34:06,040 --> 02:34:08,280
And the citation of acts of parliament law.

2459
02:34:08,280 --> 02:34:11,080
Very, very short, it's one slide.

2460
02:34:11,080 --> 02:34:16,720
Get through now why those acts are important to us here.

2461
02:34:16,720 --> 02:34:20,840
You'll find, all right, here's the first thing I want to note earlier.

2462
02:34:20,840 --> 02:34:25,920
In SEMA, when you go to the acts and regulations and you go to their website, you'll see a

2463
02:34:25,920 --> 02:34:28,000
bunch of what looks like the same name.

2464
02:34:28,000 --> 02:34:29,000
Okay.

2465
02:34:29,000 --> 02:34:35,960
So here you see directors registration and licensing, the DRLL Act 2015 Act 2023 Act

2466
02:34:35,960 --> 02:34:36,960
2019.

2467
02:34:36,960 --> 02:34:37,960
So what is this really saying to you?

2468
02:34:37,960 --> 02:34:44,040
What this is saying is that this is why it was important to know when the law came into

2469
02:34:44,040 --> 02:34:45,040
effect.

2470
02:34:45,040 --> 02:34:48,160
So we know the law came into effect in 1999.

2471
02:34:48,160 --> 02:34:50,820
We don't see anything here that says 1999.

2472
02:34:50,820 --> 02:34:54,640
We do have our see 2015 or 2014.

2473
02:34:54,640 --> 02:34:56,520
Excuse me.

2474
02:34:56,520 --> 02:35:06,000
So we can be assured here that for DRLL, which came out in 2014, REV is 2023.

2475
02:35:06,000 --> 02:35:07,880
REV means the latest version revision.

2476
02:35:07,880 --> 02:35:09,640
It's 40 pages.

2477
02:35:09,640 --> 02:35:11,880
If you look at all of these four things.

2478
02:35:11,880 --> 02:35:18,780
Now the reason why you can't just look at one is because of what's called conformed.

2479
02:35:18,780 --> 02:35:24,680
When we went to look at this important point for anyone who just wants to read law in your

2480
02:35:24,680 --> 02:35:27,680
spare time.

2481
02:35:27,680 --> 02:35:31,240
So here, here's a in the company's management act.

2482
02:35:31,240 --> 02:35:37,400
The only reason why we only had to go to this one right here, this 2024 revision was because

2483
02:35:37,400 --> 02:35:46,120
in the 2020, 24 revision here, when you click this, it included all of the adjustments and

2484
02:35:46,120 --> 02:35:48,160
revisions from prior years.

2485
02:35:48,160 --> 02:35:58,480
So this 2024 revision included the amendments, 2023, 1997, 2018, all of these others that

2486
02:35:58,480 --> 02:36:00,000
you see here.

2487
02:36:00,000 --> 02:36:05,640
2024 revision included all of those prior year revisions.

2488
02:36:05,640 --> 02:36:08,640
And that's called a conformed copy.

2489
02:36:08,640 --> 02:36:12,560
Conformed meaning absorbed, all absorbed.

2490
02:36:12,560 --> 02:36:18,460
However, when you go to this DRLL, the one we're about to go to, the director's registration

2491
02:36:18,460 --> 02:36:25,920
and licensing law, what I quickly found out is that this 2023 is not conformed.

2492
02:36:25,920 --> 02:36:29,640
It's not conformed at all.

2493
02:36:29,640 --> 02:36:37,180
What that means is that that 2014, that original law here, you have to read it.

2494
02:36:37,180 --> 02:36:42,200
And then you have to read the 2015 amendment to see what it changed from the 2014.

2495
02:36:42,200 --> 02:36:47,480
And then you had to read the 2019 amendment to read what it changed from the 2015.

2496
02:36:47,480 --> 02:36:51,120
And then you have to read the 2023 amendment to know what it changed from the 2019.

2497
02:36:51,120 --> 02:36:57,640
All right, so there's no conformed copy that I could find anywhere that absorbed all of

2498
02:36:57,640 --> 02:36:58,860
those amendments into one.

2499
02:36:58,860 --> 02:37:04,640
And that's important to know, because if you only read the 2014 law, you will be outdated.

2500
02:37:04,640 --> 02:37:08,880
There is laws in here that are somewhat important, but you have to read them to figure out if

2501
02:37:08,880 --> 02:37:10,640
they are important.

2502
02:37:10,640 --> 02:37:13,520
And that's why it's called a conformed copy.

2503
02:37:13,520 --> 02:37:17,400
Just a bit of a gee whiz I wanted to share with everyone.

2504
02:37:17,400 --> 02:37:22,680
This is what I did as a contract negotiator and a contract writer is I managed conformed

2505
02:37:22,680 --> 02:37:23,680
copies.

2506
02:37:23,680 --> 02:37:28,440
After I wrote the contract and negotiated it, and I signed it and all of that, whenever

2507
02:37:28,440 --> 02:37:35,320
I made changes to that contract, an amendment, what we call a modification, whenever we made

2508
02:37:35,320 --> 02:37:40,620
a modification to the original contract, if I didn't produce a conformed copy, then that

2509
02:37:40,620 --> 02:37:44,400
meant that everyone had to read the original contract and all the modifications done to

2510
02:37:44,400 --> 02:37:50,540
that contract thereafter to make sure that they saw the full totality of the changes.

2511
02:37:50,540 --> 02:37:58,480
If I did create a conformed copy, which normally took extra time, but it automatically like

2512
02:37:58,480 --> 02:38:01,720
ran a script to combine everything into one.

2513
02:38:01,720 --> 02:38:07,080
So if in the original contract, the original dollar figure was $1 and then modification

2514
02:38:07,080 --> 02:38:10,740
four, increase that dollar by another dollar.

2515
02:38:10,740 --> 02:38:15,040
So it increased the total contract value by $2.

2516
02:38:15,040 --> 02:38:22,240
A conformed copy would show $2 as the total contract value, whereas a not conformed copy

2517
02:38:22,240 --> 02:38:23,240
would not.

2518
02:38:23,240 --> 02:38:27,560
You'd have to read both the original contract and mod four to know that the contract value

2519
02:38:27,560 --> 02:38:28,560
is $2.

2520
02:38:28,560 --> 02:38:30,360
Hope that makes sense.

2521
02:38:30,360 --> 02:38:33,700
That's important for you to know because up until this point, everything has been a conformed

2522
02:38:33,700 --> 02:38:35,800
copy for what we've read.

2523
02:38:35,800 --> 02:38:40,000
But this DRLL takes a different approach for whatever reason, it didn't do a conformed

2524
02:38:40,000 --> 02:38:41,000
copy.

2525
02:38:41,000 --> 02:38:42,000
All right, cool.

2526
02:38:42,000 --> 02:38:46,780
So I will put in the slides what the amendment changed.

2527
02:38:46,780 --> 02:38:48,880
And then we're all happy.

2528
02:38:48,880 --> 02:38:51,040
Everyone's fine.

2529
02:38:51,040 --> 02:38:54,760
So of these six parts, only four parts are really applicable to us.

2530
02:38:54,760 --> 02:38:56,760
So here we go.

2531
02:38:56,760 --> 02:39:00,560
Yeah, it's only one slide, right?

2532
02:39:00,560 --> 02:39:01,880
I think so.

2533
02:39:01,880 --> 02:39:04,400
Nope, it's more than one slide.

2534
02:39:04,400 --> 02:39:05,560
Okay.

2535
02:39:05,560 --> 02:39:09,280
So what I did was I have the original law and then have what the amendments did.

2536
02:39:09,280 --> 02:39:12,840
That way you can kind of keep that in mind as we go through this.

2537
02:39:12,840 --> 02:39:19,200
So the 2014 law defines terms, establishes registration, licensing, consequences, authority,

2538
02:39:19,200 --> 02:39:20,200
insurance requirements.

2539
02:39:20,200 --> 02:39:26,360
The first amendment, which was in 2015, made minor alterations to the wording schedule

2540
02:39:26,360 --> 02:39:27,740
in section seven.

2541
02:39:27,740 --> 02:39:30,960
That kind of is important to us a little bit.

2542
02:39:30,960 --> 02:39:36,180
The 2019 amendment did some minor alteration to the definition of the word covered entity

2543
02:39:36,180 --> 02:39:37,640
in section two.

2544
02:39:37,640 --> 02:39:38,640
That's the definitions.

2545
02:39:38,640 --> 02:39:45,200
And then 2023, that amendment modified some added the word partnership to definitions

2546
02:39:45,200 --> 02:39:49,520
in section two and add consequences to partnerships in section 28.

2547
02:39:49,520 --> 02:39:54,480
That's not really important to us because we're not a partnership that I'm aware of.

2548
02:39:54,480 --> 02:39:58,820
But you still need to know what all the amendment said because again, it's not a conformed copy.

2549
02:39:58,820 --> 02:40:03,960
So DRLL, let's take a look.

2550
02:40:03,960 --> 02:40:04,960
So where are we?

2551
02:40:04,960 --> 02:40:07,280
We are in SEMA, the website.

2552
02:40:07,280 --> 02:40:09,760
I'm under acts and regulations.

2553
02:40:09,760 --> 02:40:14,860
Click DRLL 2014 rev 2023, 32 pages and all.

2554
02:40:14,860 --> 02:40:20,280
So the cover page talks a little bit about how it establishes registration rules for

2555
02:40:20,280 --> 02:40:24,700
directors and licensing of professional directors, corporate directors and registered directors.

2556
02:40:24,700 --> 02:40:27,920
So right off the bat, we already have brand new terms.

2557
02:40:27,920 --> 02:40:32,680
So it talks about how this is going to establish registration rules and licensing for directors.

2558
02:40:32,680 --> 02:40:39,480
It splits directors off into three components, professional, corporate, registered.

2559
02:40:39,480 --> 02:40:40,480
Okay, cool.

2560
02:40:40,480 --> 02:40:41,600
Got it.

2561
02:40:41,600 --> 02:40:43,960
So there's three types of directors now.

2562
02:40:43,960 --> 02:40:48,240
In section two interpretation, which is pretty much another word for definitions, it talks

2563
02:40:48,240 --> 02:40:50,200
about what those three directors are.

2564
02:40:50,200 --> 02:40:59,260
So corporate director means a body of corporate, a corporate entity appointed as a director

2565
02:40:59,260 --> 02:41:01,280
for a covered entity.

2566
02:41:01,280 --> 02:41:02,920
Covered entity is a brand new word.

2567
02:41:02,920 --> 02:41:05,160
It's defined in a little bit.

2568
02:41:05,160 --> 02:41:09,800
But a corporate director here basically means a company.

2569
02:41:09,800 --> 02:41:14,720
It is a company that has been designated as a director that of another company.

2570
02:41:14,720 --> 02:41:19,080
So that's where you get into that like that groups of companies definitions that we were

2571
02:41:19,080 --> 02:41:23,120
talking about earlier, where it's a subsidiary, you can't escape the fact that it's a city

2572
02:41:23,120 --> 02:41:24,120
area.

2573
02:41:24,120 --> 02:41:25,120
It's not going to be a loophole.

2574
02:41:25,120 --> 02:41:27,440
The law is not going to allow you to do that.

2575
02:41:27,440 --> 02:41:34,000
So corporate director, I guess in theory here, you would have a corporate director, which

2576
02:41:34,000 --> 02:41:35,520
is an entity.

2577
02:41:35,520 --> 02:41:38,660
So a company that's designated as director of itself.

2578
02:41:38,660 --> 02:41:39,760
I don't know why you do that.

2579
02:41:39,760 --> 02:41:44,400
But I guess that's something that it might maybe guard against.

2580
02:41:44,400 --> 02:41:45,800
Not sure.

2581
02:41:45,800 --> 02:41:49,120
You'd have to have experience in this to kind of know what this is really after.

2582
02:41:49,120 --> 02:41:51,000
Then you have a professional director.

2583
02:41:51,000 --> 02:41:55,600
It means a person who is a director for 20 or more covered entities.

2584
02:41:55,600 --> 02:41:59,800
Well, a registered director means a person registered under this law.

2585
02:41:59,800 --> 02:42:04,560
So it looks like someone who is a director for under 20 entities.

2586
02:42:04,560 --> 02:42:07,860
So 19, one to 19.

2587
02:42:07,860 --> 02:42:12,680
And then a covered entity means a company to which paragraphs one and two of schedule

2588
02:42:12,680 --> 02:42:19,760
four of the securities investment business law apply or mutual fund.

2589
02:42:19,760 --> 02:42:21,320
So we're not a mutual fund.

2590
02:42:21,320 --> 02:42:24,840
What we might be though is a securities investment business law.

2591
02:42:24,840 --> 02:42:30,360
And if you have if you've been paying attention to anything about cryptocurrency regulations,

2592
02:42:30,360 --> 02:42:33,200
regular authorities, that should not be a surprise to you.

2593
02:42:33,200 --> 02:42:35,600
But we're in the Cayman Islands.

2594
02:42:35,600 --> 02:42:36,600
They have their own laws.

2595
02:42:36,600 --> 02:42:40,320
So let's see what their laws say about this.

2596
02:42:40,320 --> 02:42:42,760
That's what matters here.

2597
02:42:42,760 --> 02:42:50,400
So you have the foundation company, Sandbox Foundation, which has a cover, which has a

2598
02:42:50,400 --> 02:42:53,520
qualified person who must be licensed.

2599
02:42:53,520 --> 02:42:55,040
One of those people must be the director.

2600
02:42:55,040 --> 02:43:01,640
And the director now has their own licensing law, which says that if they are a director

2601
02:43:01,640 --> 02:43:12,200
of a covered entity, they must they must also they must also pay attention to the securities

2602
02:43:12,200 --> 02:43:13,480
investment business law.

2603
02:43:13,480 --> 02:43:14,480
All right.

2604
02:43:14,480 --> 02:43:20,640
So that's why we have SIBL on the reg stack is because now we're getting drawn into that

2605
02:43:20,640 --> 02:43:24,860
regulation through this reg stack.

2606
02:43:24,860 --> 02:43:26,080
This thing is complicated.

2607
02:43:26,080 --> 02:43:30,440
This is why you pay lawyers thousands of dollars for them to sit through all this and tell

2608
02:43:30,440 --> 02:43:32,760
you what the answer is to your question.

2609
02:43:32,760 --> 02:43:36,120
When you say, hey, I want to I want to fire my director.

2610
02:43:36,120 --> 02:43:37,120
Am I allowed to do that?

2611
02:43:37,120 --> 02:43:40,720
First, they're going to ask, OK, what position do you hold?

2612
02:43:40,720 --> 02:43:42,560
Are you an interested person?

2613
02:43:42,560 --> 02:43:45,420
Are you just a beneficiary with no rights?

2614
02:43:45,420 --> 02:43:49,840
Are you a supervisor who may always vote and may might not you're not allowed to get shut

2615
02:43:49,840 --> 02:43:55,400
out that you're paying the lawyer to read through these hundreds of pages and have the

2616
02:43:55,400 --> 02:44:02,440
expertise and the experience to know what to do in that situation, what to tell you.

2617
02:44:02,440 --> 02:44:06,880
So there you go.

2618
02:44:06,880 --> 02:44:09,920
We will get into that in the next slide.

2619
02:44:09,920 --> 02:44:14,960
But for right now, we know that the covered entity means a company to which paragraphs

2620
02:44:14,960 --> 02:44:19,220
one and two of schedule four of the securities investment business law applies.

2621
02:44:19,220 --> 02:44:26,280
So if you are a a director, a licensed director of this covered entity, which is cited in

2622
02:44:26,280 --> 02:44:34,320
this law, you must be licensed through the director's registration and licensing law.

2623
02:44:34,320 --> 02:44:37,680
All right, so we will figure out here pretty soon.

2624
02:44:37,680 --> 02:44:38,680
We think that applies.

2625
02:44:38,680 --> 02:44:41,000
I'm not sure that does.

2626
02:44:41,000 --> 02:44:44,680
So sections four through 22, it just starts talking about the differences between the

2627
02:44:44,680 --> 02:44:48,680
registered directors, professional directors and corporate directors.

2628
02:44:48,680 --> 02:44:52,680
So you cannot be a director unless properly licensed by SEMA.

2629
02:44:52,680 --> 02:44:54,160
There we go.

2630
02:44:54,160 --> 02:44:56,280
There it states it explicitly.

2631
02:44:56,280 --> 02:45:01,480
It doesn't exactly state it explicitly in the the Companies Management Act.

2632
02:45:01,480 --> 02:45:03,960
It just says the word director in the same sentence as license.

2633
02:45:03,960 --> 02:45:07,920
So you kind of have to in my mind, it's it's there.

2634
02:45:07,920 --> 02:45:10,440
But it's not explicit.

2635
02:45:10,440 --> 02:45:12,520
Here it is very explicit.

2636
02:45:12,520 --> 02:45:15,160
You will be licensed if you're a director.

2637
02:45:15,160 --> 02:45:20,260
And applicants must have sufficient capacity to carry out duties and fit proper person.

2638
02:45:20,260 --> 02:45:23,120
Same thing as the Companies Management Act.

2639
02:45:23,120 --> 02:45:26,600
Professional and corporate directors must must be insured against liability.

2640
02:45:26,600 --> 02:45:30,760
Again, it doesn't exactly specify what that insurance looks like.

2641
02:45:30,760 --> 02:45:35,260
But you must be insured to cover liabilities, I guess, when the if the foundation company

2642
02:45:35,260 --> 02:45:37,840
gets sued.

2643
02:45:37,840 --> 02:45:39,480
But not registered directors.

2644
02:45:39,480 --> 02:45:49,040
So if you are a director of less than 20 companies, then you are not required to be insured.

2645
02:45:49,040 --> 02:45:52,760
So I'm not really sure exactly how that plays out because the Companies Management Act requires

2646
02:45:52,760 --> 02:45:54,960
that licensees be insured.

2647
02:45:54,960 --> 02:45:57,560
I don't know if that's a loophole or contradiction or what.

2648
02:45:57,560 --> 02:45:58,560
That's actually a good point.

2649
02:45:58,560 --> 02:46:01,480
Let's put that down here.

2650
02:46:01,480 --> 02:46:07,880
So CMA says licensees must be insured.

2651
02:46:07,880 --> 02:46:10,280
Is this a contradiction?

2652
02:46:10,280 --> 02:46:12,060
Yep.

2653
02:46:12,060 --> 02:46:14,680
Good question.

2654
02:46:14,680 --> 02:46:17,840
Good question for another podcast episode.

2655
02:46:17,840 --> 02:46:19,640
All right.

2656
02:46:19,640 --> 02:46:20,840
Let's continue on.

2657
02:46:20,840 --> 02:46:30,920
So under under the DRR, the director's registration and licensing regulations, schedules one to

2658
02:46:30,920 --> 02:46:31,920
five.

2659
02:46:31,920 --> 02:46:34,640
It just goes through application details.

2660
02:46:34,640 --> 02:46:36,000
Like what you have to fill out.

2661
02:46:36,000 --> 02:46:37,000
You have to fill out personal information.

2662
02:46:37,000 --> 02:46:39,380
You have to pay a fee, all that stuff.

2663
02:46:39,380 --> 02:46:46,680
So at the end of all this, I'm not sure if the director's registration and licensing

2664
02:46:46,680 --> 02:46:52,320
law applies because of the definition of the term covered entity.

2665
02:46:52,320 --> 02:46:58,200
So now we have to go to SIBL, the Securities Investment Business Law, to figure out what

2666
02:46:58,200 --> 02:47:05,160
a covered entity is defined as to figure out if a director is required to be licensed under

2667
02:47:05,160 --> 02:47:06,160
this law.

2668
02:47:06,160 --> 02:47:08,920
Okay, let's do that.

2669
02:47:08,920 --> 02:47:12,400
So we're going now to the Securities Investment Business Law.

2670
02:47:12,400 --> 02:47:15,480
It is also under CMA under the acts and regulations.

2671
02:47:15,480 --> 02:47:16,480
Let's get into that.

2672
02:47:16,480 --> 02:47:18,920
56 pages, by the way.

2673
02:47:18,920 --> 02:47:20,400
That was a little bit longer.

2674
02:47:20,400 --> 02:47:27,080
So section three definitions, securities mean assets, rights or interests specified in schedule

2675
02:47:27,080 --> 02:47:28,080
one.

2676
02:47:28,080 --> 02:47:31,040
Okay, so we got to go to schedule one to figure that one out.

2677
02:47:31,040 --> 02:47:34,920
Securities Investment Business has the meaning assigned to it in section four.

2678
02:47:34,920 --> 02:47:35,920
All right.

2679
02:47:35,920 --> 02:47:37,600
Let's go to section four.

2680
02:47:37,600 --> 02:47:42,480
Section four is the meaning of securities investment business means if a person is engaged

2681
02:47:42,480 --> 02:47:49,840
in the course of business in any of the activities set out in schedule two of that person is

2682
02:47:49,840 --> 02:47:57,680
a company incorporated under the Companies Act.

2683
02:47:57,680 --> 02:48:02,400
All right, so let's read that back.

2684
02:48:02,400 --> 02:48:06,040
Or the word securities investment business, what was that word?

2685
02:48:06,040 --> 02:48:10,720
Why is that word important?

2686
02:48:10,720 --> 02:48:13,040
I don't know why right now I can't remember.

2687
02:48:13,040 --> 02:48:18,140
So it means if a person is engaged in the course of business in any of the activities

2688
02:48:18,140 --> 02:48:19,140
set out.

2689
02:48:19,140 --> 02:48:20,140
Oh, oh, right, right.

2690
02:48:20,140 --> 02:48:26,080
So if the rule is you have to be licensed as a director under this law, if you are a

2691
02:48:26,080 --> 02:48:30,960
covered, if you are director of a covered entity, and a covered entity refers to this

2692
02:48:30,960 --> 02:48:38,160
other law which says you are a covered entity if you are engaged in this business that is

2693
02:48:38,160 --> 02:48:41,960
listed under another part of this law.

2694
02:48:41,960 --> 02:48:44,960
Now we got to go to that other part to figure out what all that is.

2695
02:48:44,960 --> 02:48:45,960
Okay.

2696
02:48:45,960 --> 02:48:54,440
So let's go to schedule one, which is where the securities definition meaning assets,

2697
02:48:54,440 --> 02:48:56,760
rights or interests specified in schedule one.

2698
02:48:56,760 --> 02:48:59,720
Okay, so now we're going to figure out what that is defined as.

2699
02:48:59,720 --> 02:49:08,080
The only one that seemed relatively important to us at all was sub paragraph A of schedule

2700
02:49:08,080 --> 02:49:14,960
one which said shares and stocks of any kind in the share capital of a company.

2701
02:49:14,960 --> 02:49:20,320
Now the good news is, if you remember what we talked about earlier, we do not have share

2702
02:49:20,320 --> 02:49:21,320
capital.

2703
02:49:21,320 --> 02:49:24,320
All right, it said it very clearly.

2704
02:49:24,320 --> 02:49:29,360
And I'm pretty sure now we understand why without any share capital, right, we couldn't

2705
02:49:29,360 --> 02:49:35,320
figure out why they use the word share capital versus equity capital in the company's act.

2706
02:49:35,320 --> 02:49:40,560
I think that's why they use that term share capital because now it is not considered a

2707
02:49:40,560 --> 02:49:44,280
security when otherwise it would have been.

2708
02:49:44,280 --> 02:49:49,120
The business would not have been considered a security per the Cayman Island law.

2709
02:49:49,120 --> 02:49:51,480
I don't know that for sure, but that's just the way I read this.

2710
02:49:51,480 --> 02:49:56,880
All right, so there this here's the second part, schedule two securities investment business,

2711
02:49:56,880 --> 02:50:01,080
all of the regulated activities that makes it a securities business.

2712
02:50:01,080 --> 02:50:05,800
The following activities are activities carried out in the course of a securities investment

2713
02:50:05,800 --> 02:50:08,280
business for the purpose of this law.

2714
02:50:08,280 --> 02:50:13,000
And then it just says a bunch of broad things like dealing the securities, arranging deals

2715
02:50:13,000 --> 02:50:18,600
and securities, managing securities, advising of securities, managing EU connected funds,

2716
02:50:18,600 --> 02:50:24,520
marketing EU connected funds, acting as a depository on an EU connected fund.

2717
02:50:24,520 --> 02:50:28,800
So the word security is all up in this thing.

2718
02:50:28,800 --> 02:50:33,320
And we just define security as the only one that could be applicable to us that I could

2719
02:50:33,320 --> 02:50:40,020
see shares and stocks of any kind in the share capital of a company, which we don't have.

2720
02:50:40,020 --> 02:50:46,520
So that leads me to assume that it's not applicable, but I'm not a lawyer and I don't know how

2721
02:50:46,520 --> 02:50:52,360
the case law on this, which is that that Greg stack at the very top of the pyramid, that

2722
02:50:52,360 --> 02:51:02,560
the what is that trap trap piece traps trapezoid think that I don't think it applies, but I'm

2723
02:51:02,560 --> 02:51:03,560
not sure.

2724
02:51:03,560 --> 02:51:07,440
So I have to ask a lawyer on a different part of different episode for Sandow.

2725
02:51:07,440 --> 02:51:08,440
All right.

2726
02:51:08,440 --> 02:51:13,320
The last one that was of interest of any kind was section four schedule for persons required

2727
02:51:13,320 --> 02:51:19,040
to be registered under subparagraph five four.

2728
02:51:19,040 --> 02:51:22,440
And it's one a company within a group of companies.

2729
02:51:22,440 --> 02:51:23,440
There's that word again.

2730
02:51:23,440 --> 02:51:29,320
That's saying the subsidiary thing carrying on securities investment business exclusively

2731
02:51:29,320 --> 02:51:31,760
for one or more companies than the same group.

2732
02:51:31,760 --> 02:51:32,760
All right.

2733
02:51:32,760 --> 02:51:34,600
That was that was kind of a word salad.

2734
02:51:34,600 --> 02:51:37,780
But we understand the terms right.

2735
02:51:37,780 --> 02:51:41,960
Security investment business, which should be should be highlighted.

2736
02:51:41,960 --> 02:51:43,760
All right.

2737
02:51:43,760 --> 02:51:46,080
What does security investment business mean?

2738
02:51:46,080 --> 02:51:49,600
Securities What does the word securities mean?

2739
02:51:49,600 --> 02:51:55,320
Share in stock of any kind of any share capital, which the sound foundation does not have.

2740
02:51:55,320 --> 02:51:59,000
At least it says it doesn't on its own.

2741
02:51:59,000 --> 02:52:01,800
It's constitution, which is the articles in the memo.

2742
02:52:01,800 --> 02:52:05,800
Okay, so we can safely assume that's not us.

2743
02:52:05,800 --> 02:52:09,560
I don't mean that safely, but doesn't look like it's us.

2744
02:52:09,560 --> 02:52:14,880
But then subparagraph two, a person carrying on securities investment business exclusively

2745
02:52:14,880 --> 02:52:24,040
for a sophisticated person, a high net worth person or a company that is A or B. All right.

2746
02:52:24,040 --> 02:52:28,160
So here's the reason why I'm not sure if it applies.

2747
02:52:28,160 --> 02:52:32,160
While the plain reading makes it seem like we're not it's not applicable to us because

2748
02:52:32,160 --> 02:52:36,840
we don't have share capital and the rest didn't even make sense for us.

2749
02:52:36,840 --> 02:52:38,720
It's it's circular.

2750
02:52:38,720 --> 02:52:41,280
This thing is circular.

2751
02:52:41,280 --> 02:52:47,440
And there's enough ambiguity in my mind here that I'm not sure if it really applies.

2752
02:52:47,440 --> 02:52:53,560
It says outright that a director must be licensed, just like a CMA does the Companies Management

2753
02:52:53,560 --> 02:52:54,560
Act.

2754
02:52:54,560 --> 02:52:58,280
But there's clearly something more here.

2755
02:52:58,280 --> 02:53:01,880
And when you read the rest of these, there's a higher level of scrutiny that a director

2756
02:53:01,880 --> 02:53:04,200
has to go through if this applies.

2757
02:53:04,200 --> 02:53:08,440
That's why I think that without share capital is what it is.

2758
02:53:08,440 --> 02:53:14,880
So that they don't have to be so that the securities investment business law isn't applicable.

2759
02:53:14,880 --> 02:53:16,880
But I don't know.

2760
02:53:16,880 --> 02:53:18,440
I'm not an expert in this field.

2761
02:53:18,440 --> 02:53:20,440
I don't know.

2762
02:53:20,440 --> 02:53:23,520
So that's where I that's where I'm going to end on it.

2763
02:53:23,520 --> 02:53:24,940
I'm not sure that it applies.

2764
02:53:24,940 --> 02:53:26,940
I don't think it does.

2765
02:53:26,940 --> 02:53:29,080
I'm not I'm not 100% sure.

2766
02:53:29,080 --> 02:53:30,720
Let's go to the next one.

2767
02:53:30,720 --> 02:53:33,840
This one popped up in a couple different places.

2768
02:53:33,840 --> 02:53:35,880
Just one sentence is two sentences.

2769
02:53:35,880 --> 02:53:40,440
So I looked it up, the virtual asset service providers were still within CMA's website,

2770
02:53:40,440 --> 02:53:42,680
were still in acts and regulations.

2771
02:53:42,680 --> 02:53:48,520
Okay, so the VASP law 44 pages.

2772
02:53:48,520 --> 02:53:53,760
This one was immediately this one immediately caught my attention.

2773
02:53:53,760 --> 02:53:57,800
The interpretation of the virtual asset service providers act.

2774
02:53:57,800 --> 02:54:02,500
Virtual asset means a digital representation of value that can be digitally traded or transferred

2775
02:54:02,500 --> 02:54:09,160
and can be used for payment or investment purposes doesn't include digital rep of fiat

2776
02:54:09,160 --> 02:54:10,160
currencies.

2777
02:54:10,160 --> 02:54:16,960
Okay, so this basically means cryptocurrencies.

2778
02:54:16,960 --> 02:54:18,180
That's what this means.

2779
02:54:18,180 --> 02:54:24,000
So virtual asset service is interpreted as means the issuance of virtual assets or the

2780
02:54:24,000 --> 02:54:29,300
businesses are providing exchange between virtual assets and fiat exchange between convertible

2781
02:54:29,300 --> 02:54:38,200
virtual assets, transfer of virtual assets, virtual asset custody service or participation

2782
02:54:38,200 --> 02:54:43,720
provision of financial services related to a virtual asset issuance with a sale of a

2783
02:54:43,720 --> 02:54:44,720
virtual asset.

2784
02:54:44,720 --> 02:54:48,520
Okay, so there's two in here that might already apply to us.

2785
02:54:48,520 --> 02:54:54,920
But what we need to know is, are we a virtual asset service?

2786
02:54:54,920 --> 02:54:57,000
Are we a virtual asset?

2787
02:54:57,000 --> 02:55:01,240
It might seem like it, but let's keep reading.

2788
02:55:01,240 --> 02:55:03,440
Virtual asset service license.

2789
02:55:03,440 --> 02:55:09,280
Okay, so before I even read the rest of that, what that term means, we already know now

2790
02:55:09,280 --> 02:55:16,160
that there's an extra license that's needed if the virtual asset applies to our foundation

2791
02:55:16,160 --> 02:55:18,160
sandbox.

2792
02:55:18,160 --> 02:55:21,840
Virtual asset service license means a license under section eight.

2793
02:55:21,840 --> 02:55:23,960
Okay, so let's go read section eight.

2794
02:55:23,960 --> 02:55:25,280
Let's keep going.

2795
02:55:25,280 --> 02:55:33,440
So section three, meaning of a virtual asset service provider applies to companies incorporated

2796
02:55:33,440 --> 02:55:40,520
under the Companies Act and also applies to those who provide virtual asset service.

2797
02:55:40,520 --> 02:55:46,800
So far I'm not seeing anything that would disqualify us or doesn't apply to us.

2798
02:55:46,800 --> 02:55:50,280
And I'll go further to say it already names out companies.

2799
02:55:50,280 --> 02:55:51,280
We're a company.

2800
02:55:51,280 --> 02:55:53,960
We're an exempted company, but we are a company.

2801
02:55:53,960 --> 02:55:55,880
So let's keep reading.

2802
02:55:55,880 --> 02:55:56,880
Section four.

2803
02:55:56,880 --> 02:56:01,560
Section four is what the...

2804
02:56:01,560 --> 02:56:02,560
Actually nothing said that.

2805
02:56:02,560 --> 02:56:06,220
So section four is registration or license required.

2806
02:56:06,220 --> 02:56:15,840
So requires either a waiver or virtual asset service license to conduct virtual asset provide

2807
02:56:15,840 --> 02:56:18,600
to be a virtual asset service provider.

2808
02:56:18,600 --> 02:56:20,480
Okay, so let's keep going.

2809
02:56:20,480 --> 02:56:27,720
So if you go into the virtual asset service providers act regulations, it is 20 pages.

2810
02:56:27,720 --> 02:56:35,040
And section three, decisions by the authority regarding issuance of virtual assets.

2811
02:56:35,040 --> 02:56:37,080
This is where it defines it.

2812
02:56:37,080 --> 02:56:38,080
Okay.

2813
02:56:38,080 --> 02:56:43,720
The sale or offer for sale of virtual assets.

2814
02:56:43,720 --> 02:56:49,380
Okay, so here we have a definition.

2815
02:56:49,380 --> 02:56:57,660
The decision by the authority regarding the issuance of virtual assets applies to companies

2816
02:56:57,660 --> 02:57:00,120
or people.

2817
02:57:00,120 --> 02:57:09,600
Companies or yeah, companies that offer the sale or the offer for sale of virtual assets.

2818
02:57:09,600 --> 02:57:11,960
And what is a virtual asset?

2819
02:57:11,960 --> 02:57:15,400
The digital representation of a value that can be digitally traded.

2820
02:57:15,400 --> 02:57:18,440
So it's a cryptocurrency.

2821
02:57:18,440 --> 02:57:25,920
Or we do a virtual asset service, which could mean the transfer of virtual assets, the asset

2822
02:57:25,920 --> 02:57:29,000
custody service.

2823
02:57:29,000 --> 02:57:31,760
A lot of these things make it look like it might apply to us.

2824
02:57:31,760 --> 02:57:38,360
But the reason why I would say I'm not sure that it does need some legal clarity there

2825
02:57:38,360 --> 02:57:42,680
is because the sale or offer for sale.

2826
02:57:42,680 --> 02:57:49,440
So does the sandbox DAO offer cryptocurrency for sale?

2827
02:57:49,440 --> 02:57:52,120
I don't think it does.

2828
02:57:52,120 --> 02:57:56,840
I don't think the sandbox DAO offers the virtual asset to be sold.

2829
02:57:56,840 --> 02:57:58,720
Again, I'm not a lawyer.

2830
02:57:58,720 --> 02:58:00,640
We need a legal read on that.

2831
02:58:00,640 --> 02:58:06,880
But it looks like that fine, fine line that the DAO has, the foundation has not crossed.

2832
02:58:06,880 --> 02:58:08,560
But I don't know.

2833
02:58:08,560 --> 02:58:10,840
We have to ask a lawyer.

2834
02:58:10,840 --> 02:58:16,500
The only thing that might get caught up here is under the virtual asset service, that virtual

2835
02:58:16,500 --> 02:58:19,360
asset custody service.

2836
02:58:19,360 --> 02:58:23,960
So the DAO foundation has bullets.

2837
02:58:23,960 --> 02:58:28,440
Does it have a virtual asset custody service?

2838
02:58:28,440 --> 02:58:30,280
I don't know.

2839
02:58:30,280 --> 02:58:39,240
I don't know what service means except here, the issuance of virtual assets.

2840
02:58:39,240 --> 02:58:41,860
It gets circular again, though.

2841
02:58:41,860 --> 02:58:43,380
We didn't issue the coin.

2842
02:58:43,380 --> 02:58:47,480
It was part of the white paper that the Sandbox Gaming Limited Company registered in Malta.

2843
02:58:47,480 --> 02:58:50,760
You'll see episode 31 for the birth of the DAO.

2844
02:58:50,760 --> 02:58:57,360
There's a 34, one of them 31 and 34, where we talk about how the Sandbox Gaming Company

2845
02:58:57,360 --> 02:59:00,680
is actually the Sandbox Limited, which is incorporated in Malta.

2846
02:59:00,680 --> 02:59:04,760
It used to be incorporated in France, but no longer.

2847
02:59:04,760 --> 02:59:10,480
So it's not, it's not beheld to the same law that the Cayman Islands is for the Sandbox

2848
02:59:10,480 --> 02:59:11,560
Foundation.

2849
02:59:11,560 --> 02:59:12,560
Two different things.

2850
02:59:12,560 --> 02:59:13,800
Don't get them confused.

2851
02:59:13,800 --> 02:59:17,320
So I don't know.

2852
02:59:17,320 --> 02:59:18,320
It looks like it might.

2853
02:59:18,320 --> 02:59:23,760
And if it is, then it looks like we need an extra license, I guess.

2854
02:59:23,760 --> 02:59:28,980
But that's why you pay lawyers so much money to figure this stuff out.

2855
02:59:28,980 --> 02:59:30,800
And they're going to look at the reading of the law.

2856
02:59:30,800 --> 02:59:32,360
They're going to look at case law.

2857
02:59:32,360 --> 02:59:34,740
They're going to look at how disputes resolved.

2858
02:59:34,740 --> 02:59:37,640
They're going to have their own experiences and their own education.

2859
02:59:37,640 --> 02:59:39,440
That's why you pay them.

2860
02:59:39,440 --> 02:59:42,520
All right.

2861
02:59:42,520 --> 02:59:44,280
So there we are.

2862
02:59:44,280 --> 02:59:48,760
That is the Virtual Asset Service Providers Act.

2863
02:59:48,760 --> 02:59:51,480
And we have one more in our reg stack.

2864
02:59:51,480 --> 02:59:53,400
The Citation of Acts of Parliament Law.

2865
02:59:53,400 --> 02:59:59,680
So what was so confusing this whole time is one act called it the Companies Management

2866
02:59:59,680 --> 03:00:00,680
Act.

2867
03:00:00,680 --> 03:00:02,960
Another act called it the Companies Management Law.

2868
03:00:02,960 --> 03:00:05,880
A third act called it the Companies Management Act.

2869
03:00:05,880 --> 03:00:07,840
They all called each other different things.

2870
03:00:07,840 --> 03:00:12,240
And it was so confusing until I saw this one.

2871
03:00:12,240 --> 03:00:18,520
The citations of Acts of Parliament's Law, which was 2020, seven pages.

2872
03:00:18,520 --> 03:00:20,020
It's super simple.

2873
03:00:20,020 --> 03:00:23,960
The part that was the most interesting in section three was the Amendment of Enactments.

2874
03:00:23,960 --> 03:00:31,280
And it said the word law replaces the word act and affects past, present, and future

2875
03:00:31,280 --> 03:00:32,800
laws.

2876
03:00:32,800 --> 03:00:37,720
So that's why, where it said the Companies Management Law and I wrote it as the Companies

2877
03:00:37,720 --> 03:00:39,140
Management Act.

2878
03:00:39,140 --> 03:00:50,560
That's because this citations of Acts of Parliament's Law, COAPL, says that as of 2020, anything

2879
03:00:50,560 --> 03:00:55,560
that said the word law is now saying the word act and this applies to anything past, present,

2880
03:00:55,560 --> 03:00:56,560
or future.

2881
03:00:56,560 --> 03:00:58,420
There we go.

2882
03:00:58,420 --> 03:01:03,760
So the Companies Law is now the Companies Management Act, Companies Management Law is

2883
03:01:03,760 --> 03:01:08,480
now the Companies Management Act, Foundation Companies Law is technically, I guess, the

2884
03:01:08,480 --> 03:01:09,880
Companies Management Act.

2885
03:01:09,880 --> 03:01:16,200
But I kept there because even itself, everyone refers to it as the Companies Management Law.

2886
03:01:16,200 --> 03:01:18,920
No one says the Companies Management Act that I could find.

2887
03:01:18,920 --> 03:01:20,680
So I just left it there.

2888
03:01:20,680 --> 03:01:21,680
It's still the same thing.

2889
03:01:21,680 --> 03:01:22,680
Okay.

2890
03:01:22,680 --> 03:01:25,360
So all laws and all those acts and there we go.

2891
03:01:25,360 --> 03:01:26,680
It doesn't affect anything.

2892
03:01:26,680 --> 03:01:29,080
It just is the way you refer to it.

2893
03:01:29,080 --> 03:01:33,800
Although it's good to know that this is why it was so confusing this whole time.

2894
03:01:33,800 --> 03:01:37,600
Took me a long time to figure out this house.

2895
03:01:37,600 --> 03:01:39,200
All right.

2896
03:01:39,200 --> 03:01:42,040
So there you go.

2897
03:01:42,040 --> 03:01:44,760
The research is all done.

2898
03:01:44,760 --> 03:01:47,280
Now we get to apply that research.

2899
03:01:47,280 --> 03:01:48,720
It's not gonna take us long to get through all this.

2900
03:01:48,720 --> 03:01:49,720
I don't think.

2901
03:01:49,720 --> 03:01:59,320
So Yuma put in chat that Yuma was learning things that they didn't even know.

2902
03:01:59,320 --> 03:02:02,360
And I completely agree with Yuma.

2903
03:02:02,360 --> 03:02:04,560
I couldn't even.

2904
03:02:04,560 --> 03:02:08,560
I thought this episode was going to take me like an hour.

2905
03:02:08,560 --> 03:02:14,560
And I mean, not just this one, but the birth of the Sandbox Dow episode and the review

2906
03:02:14,560 --> 03:02:19,500
of the Sandbox founding documents.

2907
03:02:19,500 --> 03:02:22,500
And then when I started reading them, like, man, this thing's really, really big.

2908
03:02:22,500 --> 03:02:29,440
And as I start reading through it more, I discovered, oh, this thing's huge.

2909
03:02:29,440 --> 03:02:32,880
That's why there's so many management companies and then people have to pay and all these

2910
03:02:32,880 --> 03:02:35,840
rules and all the stuff.

2911
03:02:35,840 --> 03:02:37,980
It's intense.

2912
03:02:37,980 --> 03:02:43,920
So even when I set out for this episode, I thought I was going to get through this and

2913
03:02:43,920 --> 03:02:54,960
through all the analysis and the reading of the company documents for the company's Sandbox

2914
03:02:54,960 --> 03:02:55,960
Dow foundation.

2915
03:02:55,960 --> 03:03:00,280
I thought I could do it all in one episode.

2916
03:03:00,280 --> 03:03:03,440
And then as I was doing this slide deck and I was going through here's all the stuff I

2917
03:03:03,440 --> 03:03:08,640
found, I figured out, oh my gosh, I'm going to be at like two hours for this thing.

2918
03:03:08,640 --> 03:03:14,160
And so that's why I decided to split it up into three different things.

2919
03:03:14,160 --> 03:03:16,840
Yeah, I learned a lot.

2920
03:03:16,840 --> 03:03:18,320
I'm still learning, by the way.

2921
03:03:18,320 --> 03:03:19,320
I don't know everything.

2922
03:03:19,320 --> 03:03:24,840
I'm just, it's just, I just read it, wrote it all down and then try to figure it out.

2923
03:03:24,840 --> 03:03:30,840
It's yeah, that's why you pay lawyers to go through all this so they can do all the tough

2924
03:03:30,840 --> 03:03:34,120
things of figuring out what all this stuff means.

2925
03:03:34,120 --> 03:03:39,500
So here we are, here we are.

2926
03:03:39,500 --> 03:03:47,640
The last part to go through of our agenda, apply the Cayman Island law to our foundation

2927
03:03:47,640 --> 03:03:49,480
at the very least to the beginning of it.

2928
03:03:49,480 --> 03:03:52,160
All right, so we're going to try and bring it all together.

2929
03:03:52,160 --> 03:03:58,080
TLDR it, look at some flow charts, look at the terminology comparison.

2930
03:03:58,080 --> 03:04:00,360
Last part, all right, so we're going to look at the reg stack one more time.

2931
03:04:00,360 --> 03:04:06,840
We're going to look at how I think a foundation company is created now and also terminology

2932
03:04:06,840 --> 03:04:08,200
comparison.

2933
03:04:08,200 --> 03:04:09,200
That's pretty important.

2934
03:04:09,200 --> 03:04:10,200
The terminology changes.

2935
03:04:10,200 --> 03:04:13,840
So it's important to know what, which one is using what term.

2936
03:04:13,840 --> 03:04:18,840
TLDR under one slide and then we'll briefly go over the remaining questions, but that

2937
03:04:18,840 --> 03:04:21,320
is going to be a different part where we go through that more.

2938
03:04:21,320 --> 03:04:23,760
Okay, it's time to apply.

2939
03:04:23,760 --> 03:04:29,080
Remember in the beginning where I showed you this slide, it was when we were talking about

2940
03:04:29,080 --> 03:04:34,160
the Cayman Islands, the Cayman Islands, why was everyone there?

2941
03:04:34,160 --> 03:04:38,000
Why did I keep mentioning seeing the Cayman Islands when I was doing Birds of the Sandbox

2942
03:04:38,000 --> 03:04:39,000
Dow?

2943
03:04:39,000 --> 03:04:40,880
I think that was episode 34, right?

2944
03:04:40,880 --> 03:04:41,880
And why?

2945
03:04:41,880 --> 03:04:49,480
Well, now that we've read through all the, all of the laws that are important to us,

2946
03:04:49,480 --> 03:04:50,840
now we know why.

2947
03:04:50,840 --> 03:04:55,440
You can start to see when you read these terms, what it really is trying to tell you.

2948
03:04:55,440 --> 03:05:01,440
An article of association, which is a required document or foundation company, a foundation,

2949
03:05:01,440 --> 03:05:05,760
which is a foundation company, which is an exempted company under the Companies Act.

2950
03:05:05,760 --> 03:05:11,280
Alright, so a foundation company that's limited by guarantee, that's telling you that the

2951
03:05:11,280 --> 03:05:17,600
people who put in as members and subscribers and they, they had a maximum liability that

2952
03:05:17,600 --> 03:05:23,280
they're on the hook to pay the amount that they guaranteed, which spoiler alert, when

2953
03:05:23,280 --> 03:05:28,240
we go over the, we searched earlier is $1, right?

2954
03:05:28,240 --> 03:05:30,200
The guarantee is $1.

2955
03:05:30,200 --> 03:05:34,860
But we're going to be doing over that episode in depth in the future.

2956
03:05:34,860 --> 03:05:42,080
So the, the article of association is this fine, all of the roles and all the rules,

2957
03:05:42,080 --> 03:05:46,760
the memo of association describes what the company is and it brings it into existence.

2958
03:05:46,760 --> 03:05:47,760
Right?

2959
03:05:47,760 --> 03:05:53,160
So now we know this phrase, a foundation company, limited by guarantee without any share capital,

2960
03:05:53,160 --> 03:05:55,360
share capital meaning units of ownership.

2961
03:05:55,360 --> 03:05:59,600
So there's none of that in the foundation for the sandbox.

2962
03:05:59,600 --> 03:06:03,640
This is the stuff we're learning that we, when you pay attention to these words, now

2963
03:06:03,640 --> 03:06:05,000
we know what they mean.

2964
03:06:05,000 --> 03:06:08,400
The Cayman Islands government, we know what that means now.

2965
03:06:08,400 --> 03:06:15,600
It means the SEMA, the Cayman Islands Monetary Authority, we know why they're paying $50,

2966
03:06:15,600 --> 03:06:16,680
that duty stamp.

2967
03:06:16,680 --> 03:06:19,060
We know what a subscriber is.

2968
03:06:19,060 --> 03:06:21,500
We know why there is an address here.

2969
03:06:21,500 --> 03:06:24,520
We know why there is a company here.

2970
03:06:24,520 --> 03:06:27,400
We know why this stamp says exempted foundation company.

2971
03:06:27,400 --> 03:06:28,640
What are they exempted from?

2972
03:06:28,640 --> 03:06:29,640
Now we know.

2973
03:06:29,640 --> 03:06:32,080
They're exempted from a lot of things.

2974
03:06:32,080 --> 03:06:33,480
Apparently they're exempted from meetings.

2975
03:06:33,480 --> 03:06:34,480
All right.

2976
03:06:34,480 --> 03:06:39,280
And then we know that the exist, assistant registrar acts on behalf of the registrar

2977
03:06:39,280 --> 03:06:42,620
companies.

2978
03:06:42,620 --> 03:06:47,540
We know why there is SEMA, a monetary authority with acts and regulations, why there's a gender

2979
03:06:47,540 --> 03:06:50,760
registry with acts and regulations.

2980
03:06:50,760 --> 03:06:52,520
Now we know.

2981
03:06:52,520 --> 03:06:59,400
So when we go on the next episode and we read through the memo and the articles and the

2982
03:06:59,400 --> 03:07:03,840
constitution, we now know what it is we're reading.

2983
03:07:03,840 --> 03:07:07,520
Whereas the first time I read those things, just like everybody else in step number one,

2984
03:07:07,520 --> 03:07:10,540
two, I had no idea what I was reading.

2985
03:07:10,540 --> 03:07:15,680
Why did it mention subscribers and members and officers and it may cease to have members?

2986
03:07:15,680 --> 03:07:17,020
Why in the world?

2987
03:07:17,020 --> 03:07:19,360
All this stuff was very confusing.

2988
03:07:19,360 --> 03:07:21,120
But now it's not confusing.

2989
03:07:21,120 --> 03:07:22,120
There's still a lot of questions.

2990
03:07:22,120 --> 03:07:24,960
There's still things that I don't have the expertise to answer.

2991
03:07:24,960 --> 03:07:28,000
But by and large, we about know what's going on now.

2992
03:07:28,000 --> 03:07:29,000
Good.

2993
03:07:29,000 --> 03:07:31,880
So let's look at this terminology comparison.

2994
03:07:31,880 --> 03:07:33,720
So here's the things we figured out.

2995
03:07:33,720 --> 03:07:39,920
Some terms overlap across all three regulations like member, director, secretary.

2996
03:07:39,920 --> 03:07:43,740
Those are used across all the regulations that are important to us.

2997
03:07:43,740 --> 03:07:48,240
Some are unique to each regulation, which know with no equivalence elsewhere, meaning

2998
03:07:48,240 --> 03:07:50,640
they're not defined in anywhere else.

2999
03:07:50,640 --> 03:07:52,000
It has one regulation.

3000
03:07:52,000 --> 03:07:55,520
So a regulated business and the Companies Act is not defined anywhere.

3001
03:07:55,520 --> 03:07:59,520
The founder is not defined anywhere except for Foundations Company Law.

3002
03:07:59,520 --> 03:08:02,880
Senior officer is not defined anywhere except the Companies Management Act.

3003
03:08:02,880 --> 03:08:03,880
Why?

3004
03:08:03,880 --> 03:08:05,080
I don't know.

3005
03:08:05,080 --> 03:08:07,440
It's just sometimes regulations are hard.

3006
03:08:07,440 --> 03:08:08,440
It's hard to keep track.

3007
03:08:08,440 --> 03:08:09,440
Lots of memos.

3008
03:08:09,440 --> 03:08:12,440
One of them came out in 1965.

3009
03:08:12,440 --> 03:08:16,120
One of them came out in I guess 1999.

3010
03:08:16,120 --> 03:08:20,760
Companies Management Act and then the FCL came out in 2017.

3011
03:08:20,760 --> 03:08:23,240
So okay, got it.

3012
03:08:23,240 --> 03:08:25,880
They're allowed to be a little bit inconsistent.

3013
03:08:25,880 --> 03:08:29,280
Some are substitutes across various regulations.

3014
03:08:29,280 --> 03:08:34,720
So the word officer in Companies Act also means director in the Companies Act and the

3015
03:08:34,720 --> 03:08:38,120
Foundations Company Law and the Companies Management Act.

3016
03:08:38,120 --> 03:08:42,000
And senior officer in the Companies Management Act means director.

3017
03:08:42,000 --> 03:08:46,000
So it's just kind of weird like some of them mean some of the others but not everything

3018
03:08:46,000 --> 03:08:47,120
means all of it.

3019
03:08:47,120 --> 03:08:48,800
It's I don't know.

3020
03:08:48,800 --> 03:08:53,880
So this table I put together because I had to just keep it straight in my brain when

3021
03:08:53,880 --> 03:08:56,680
I'm looking at these regulations, these terms.

3022
03:08:56,680 --> 03:09:00,160
Know what I mean?

3023
03:09:00,160 --> 03:09:02,920
So I know what belongs where.

3024
03:09:02,920 --> 03:09:07,120
When I see the word beneficial owner, I know that I don't know, I know that term isn't

3025
03:09:07,120 --> 03:09:13,400
found in the Financial, the Findations Company Law or the Directors Registration Licensing

3026
03:09:13,400 --> 03:09:15,200
Act.

3027
03:09:15,200 --> 03:09:21,200
But I know that subscribers found in all three except for the Directors Registration Licensing

3028
03:09:21,200 --> 03:09:22,200
Law.

3029
03:09:22,200 --> 03:09:25,840
But we don't think that the DRLL is applicable because of the reasons we already went through

3030
03:09:25,840 --> 03:09:28,880
with the Securities Business Law.

3031
03:09:28,880 --> 03:09:31,240
Unsure.

3032
03:09:31,240 --> 03:09:35,120
But director is mentioned in all four of them.

3033
03:09:35,120 --> 03:09:40,480
So okay, so consistency is not all there.

3034
03:09:40,480 --> 03:09:44,040
But you know, it's pretty comprehensive.

3035
03:09:44,040 --> 03:09:48,560
Alright, so that's an important bit to know.

3036
03:09:48,560 --> 03:09:49,560
Now let's TLDR it.

3037
03:09:49,560 --> 03:09:50,560
TLDR it.

3038
03:09:50,560 --> 03:09:54,080
I mean, let's TLDR it.

3039
03:09:54,080 --> 03:09:55,700
Too long didn't read.

3040
03:09:55,700 --> 03:10:01,600
If you decided to happen here and you skipped the past three hours, here's the TLDR.

3041
03:10:01,600 --> 03:10:04,920
Here's what we learned.

3042
03:10:04,920 --> 03:10:09,320
The Registration Company is both the name of the sandboxed out and a type of company

3043
03:10:09,320 --> 03:10:12,040
in the Cayman Islands.

3044
03:10:12,040 --> 03:10:13,940
Okay.

3045
03:10:13,940 --> 03:10:19,560
It is flexible and how it is structured and operated.

3046
03:10:19,560 --> 03:10:22,240
Has maximum has a lot of flexibilities.

3047
03:10:22,240 --> 03:10:23,720
Doesn't have to do meetings.

3048
03:10:23,720 --> 03:10:25,240
It can direct its own people.

3049
03:10:25,240 --> 03:10:27,540
It only needs one subscriber.

3050
03:10:27,540 --> 03:10:32,200
It doesn't have to furnish its register to be be inspected by people.

3051
03:10:32,200 --> 03:10:36,000
It's exempted from a lot of things.

3052
03:10:36,000 --> 03:10:37,000
It's also not.

3053
03:10:37,000 --> 03:10:39,160
Oh, here we go.

3054
03:10:39,160 --> 03:10:41,540
So the next part is exempted company.

3055
03:10:41,540 --> 03:10:45,080
It means a company that does business outside of the Cayman Islands.

3056
03:10:45,080 --> 03:10:50,280
So the foundation company for the sandbox does business worldwide, except for the Cayman

3057
03:10:50,280 --> 03:10:51,520
Islands.

3058
03:10:51,520 --> 03:10:57,160
Because by law, by the Cayman Islands law, it cannot do business in the Cayman Islands,

3059
03:10:57,160 --> 03:11:05,040
except with licensed service providers like lawyers and directors and secretaries and

3060
03:11:05,040 --> 03:11:08,720
supervisors.

3061
03:11:08,720 --> 03:11:13,000
Limited by guarantee means the members of the foundation can only lose what they put

3062
03:11:13,000 --> 03:11:14,000
into the company.

3063
03:11:14,000 --> 03:11:20,840
And apparently per the sandbox foundation, it means one dollar, which we'll cover in

3064
03:11:20,840 --> 03:11:23,440
a future episode.

3065
03:11:23,440 --> 03:11:27,720
Without any share capital means no shares, otherwise known as units of ownership, as

3066
03:11:27,720 --> 03:11:33,680
we talked about in the beginning with the investopedia definition, means no shares were

3067
03:11:33,680 --> 03:11:37,760
created when the company was formed.

3068
03:11:37,760 --> 03:11:40,040
I'm still not exactly sure what that plays out.

3069
03:11:40,040 --> 03:11:44,120
Like, why is that important?

3070
03:11:44,120 --> 03:11:46,600
I think it means that there's no like profit motive.

3071
03:11:46,600 --> 03:11:47,600
I don't know.

3072
03:11:47,600 --> 03:11:52,240
I have to kind of think through that.

3073
03:11:52,240 --> 03:11:54,600
Memos and memos of association.

3074
03:11:54,600 --> 03:11:59,800
The memo creates the foundation company, the article describes how it will be operated.

3075
03:11:59,800 --> 03:12:03,560
Both of them equal the constitution.

3076
03:12:03,560 --> 03:12:07,800
And the constitution is not the bylaws, even though the foundation calls its constitution

3077
03:12:07,800 --> 03:12:08,800
to bylaws.

3078
03:12:08,800 --> 03:12:12,400
And that's just an oversight.

3079
03:12:12,400 --> 03:12:14,560
Lots of business is done in the Cayman Islands.

3080
03:12:14,560 --> 03:12:16,520
A lot of business.

3081
03:12:16,520 --> 03:12:23,640
21,000 companies are doing business in the Cayman Islands, and 1000 companies registered

3082
03:12:23,640 --> 03:12:27,160
in one month alone and 1000 companies registered.

3083
03:12:27,160 --> 03:12:31,560
I'm sorry, 10,000 companies registered in one year alone.

3084
03:12:31,560 --> 03:12:34,840
A lot of movement.

3085
03:12:34,840 --> 03:12:39,760
Foundation roles are flexible and varied in a foundation company.

3086
03:12:39,760 --> 03:12:44,080
Subscriber and secretary roles are required and they're very important.

3087
03:12:44,080 --> 03:12:52,040
Members, directors, officers, supervisors, managers, all seem secondary with the exception

3088
03:12:52,040 --> 03:12:58,880
of the supervisor, which is somehow important and required.

3089
03:12:58,880 --> 03:13:01,440
But also it's not emphasized at all.

3090
03:13:01,440 --> 03:13:03,600
It's like it gets like a few lines.

3091
03:13:03,600 --> 03:13:07,440
But the subscriber and the secretary get a lot.

3092
03:13:07,440 --> 03:13:14,000
As you I mean, when it comes down to it all, maybe I should put the supervisor here.

3093
03:13:14,000 --> 03:13:20,440
So, their subscriber, secretary, and supervisor roles are required and important.

3094
03:13:20,440 --> 03:13:24,640
But the members, directors, officers, managers, they all seem kind of secondary.

3095
03:13:24,640 --> 03:13:29,960
It doesn't even seem like you need some of them.

3096
03:13:29,960 --> 03:13:30,960
Definitely the founder.

3097
03:13:30,960 --> 03:13:36,640
The founder seems like he's just, we don't even need to, he or she, we don't even need

3098
03:13:36,640 --> 03:13:42,400
to worry about that person unless you decide to include it in the template.

3099
03:13:42,400 --> 03:13:43,400
I don't know.

3100
03:13:43,400 --> 03:13:45,760
I don't, I don't fully understand that.

3101
03:13:45,760 --> 03:13:51,000
So that's our TLDR.

3102
03:13:51,000 --> 03:13:55,320
But what's a TLDR without a flow chart?

3103
03:13:55,320 --> 03:13:57,840
So I sat down and I thought about it all.

3104
03:13:57,840 --> 03:14:02,960
How do I, how do I think this actually goes when you want to create a foundation company?

3105
03:14:02,960 --> 03:14:06,600
All right, so this is my best guess as to how it works.

3106
03:14:06,600 --> 03:14:08,600
All right, so you start here.

3107
03:14:08,600 --> 03:14:14,400
All right, the DAO wants to become a foundation company.

3108
03:14:14,400 --> 03:14:15,400
What happens next?

3109
03:14:15,400 --> 03:14:19,320
The DAO then selects a qualified person.

3110
03:14:19,320 --> 03:14:27,960
All right, qualified is all defined in our Companies Act.

3111
03:14:27,960 --> 03:14:35,520
Then the DAO selects a director and a secretary that provides corporate services.

3112
03:14:35,520 --> 03:14:40,960
And those two people are licensed.

3113
03:14:40,960 --> 03:14:47,480
We know that the secretary is licensed by SEMA, which is spelled out in the Companies

3114
03:14:47,480 --> 03:14:49,540
Management Act.

3115
03:14:49,540 --> 03:14:54,300
We think the director is licensed by the Director's Registration and Licensing, although we're

3116
03:14:54,300 --> 03:14:56,200
not sure it applies.

3117
03:14:56,200 --> 03:14:59,000
And they're licensed by SEMA.

3118
03:14:59,000 --> 03:15:06,120
At the very least, we know they're licensed by either DRLL or CMA, Companies Management

3119
03:15:06,120 --> 03:15:09,680
Act.

3120
03:15:09,680 --> 03:15:15,920
So those qualified people have to be the director and secretary who provides corporate services

3121
03:15:15,920 --> 03:15:19,960
and licensed by the proper authority.

3122
03:15:19,960 --> 03:15:26,160
Then the director and the secretary create the memo or articles of association.

3123
03:15:26,160 --> 03:15:32,240
All right, I actually think now that I've gone through this and the way that I did,

3124
03:15:32,240 --> 03:15:33,720
it's actually just a subscriber.

3125
03:15:33,720 --> 03:15:38,680
I should have put that, but we keep going.

3126
03:15:38,680 --> 03:15:46,640
The registrar then declares the foundation company to be a foundation company.

3127
03:15:46,640 --> 03:15:49,280
And that creates the company.

3128
03:15:49,280 --> 03:15:57,880
That company can do all the day-to-day voting, the directors, the renewals, the declarations,

3129
03:15:57,880 --> 03:16:02,640
do all their general meetings, have members, have officers, create optional bylaws.

3130
03:16:02,640 --> 03:16:07,480
They have beneficiaries who benefit from the objects of the company.

3131
03:16:07,480 --> 03:16:15,880
They have interested persons who are entitled to different things and reports and stuff.

3132
03:16:15,880 --> 03:16:26,120
But what's not clear from all of this is how they all interact together.

3133
03:16:26,120 --> 03:16:33,600
And this takes experience to be in this process, to see how it plays out day-to-day.

3134
03:16:33,600 --> 03:16:40,080
I don't know how all this plays out.

3135
03:16:40,080 --> 03:16:45,880
So in episode 34, I cover the beginnings of this.

3136
03:16:45,880 --> 03:16:50,200
I didn't even know what I was delving into until I read these.

3137
03:16:50,200 --> 03:16:56,640
But now that I've been through this and I have time to think about it, this reminds

3138
03:16:56,640 --> 03:16:57,640
me of episode 34.

3139
03:16:57,640 --> 03:17:03,840
And I'm going to play a short clip from it relevant to what we're talking about.

3140
03:17:03,840 --> 03:17:05,360
This is where I'd like to pause.

3141
03:17:05,360 --> 03:17:10,440
So this right here, this little section here that you're seeing, I like to call this my

3142
03:17:10,440 --> 03:17:17,360
triangle of confusion because it's still very unclear the relationships and how everything

3143
03:17:17,360 --> 03:17:24,040
works between the foundation and the council and the admin team.

3144
03:17:24,040 --> 03:17:30,680
The SIPs kind of brought into being what they had done, but it's still very unclear how

3145
03:17:30,680 --> 03:17:32,760
all the relationships work together.

3146
03:17:32,760 --> 03:17:39,120
Okay, so I called that my triangle of confusion at the time, because even Google searching

3147
03:17:39,120 --> 03:17:45,760
that and reading some things, I couldn't figure out how everyone who reported to who, who

3148
03:17:45,760 --> 03:17:47,600
was in charge of what.

3149
03:17:47,600 --> 03:17:48,920
I didn't know.

3150
03:17:48,920 --> 03:17:54,200
Now, now we do know more of what each person does.

3151
03:17:54,200 --> 03:17:56,480
However, we still don't know how they interact.

3152
03:17:56,480 --> 03:18:01,880
So my triangle confusion has become my rectangle of confusion.

3153
03:18:01,880 --> 03:18:03,720
We added a fourth dimension.

3154
03:18:03,720 --> 03:18:10,440
I'm still confused as to how all these people play together, but that is supposed to be

3155
03:18:10,440 --> 03:18:15,360
what the constitution of each foundation company spells out in their articles.

3156
03:18:15,360 --> 03:18:19,920
Remember their articles creates the structure, talks about the meetings and all that sort

3157
03:18:19,920 --> 03:18:20,920
of stuff.

3158
03:18:20,920 --> 03:18:31,840
So in our next episode, what I expect to do is to have a lot of these relationships clarified

3159
03:18:31,840 --> 03:18:35,480
about how do the members do the day to day stuff?

3160
03:18:35,480 --> 03:18:38,880
How are the renewals and declarations done with the director?

3161
03:18:38,880 --> 03:18:40,280
Is it just the secretary?

3162
03:18:40,280 --> 03:18:43,520
Because apparently that is what their job is.

3163
03:18:43,520 --> 03:18:46,360
But is there some sort of different stuff that has to happen?

3164
03:18:46,360 --> 03:18:50,240
The optional bylaws, who ended up creating that?

3165
03:18:50,240 --> 03:18:51,240
How did the voting happen?

3166
03:18:51,240 --> 03:18:52,240
How the meetings happen?

3167
03:18:52,240 --> 03:18:53,920
What do the members do?

3168
03:18:53,920 --> 03:19:01,800
All of these things we know is included in our sandbox foundation constitution, particularly

3169
03:19:01,800 --> 03:19:05,400
in the articles of association.

3170
03:19:05,400 --> 03:19:07,080
We know it's spelled out there.

3171
03:19:07,080 --> 03:19:13,240
So in our next episode, we're going to delve into that with the benefit of having listened

3172
03:19:13,240 --> 03:19:16,480
to and read all of this stuff.

3173
03:19:16,480 --> 03:19:19,240
So that's why this thing is three to four hours long.

3174
03:19:19,240 --> 03:19:26,280
Because we're setting up the hopefully a much quicker episode with the sandbox constitution

3175
03:19:26,280 --> 03:19:33,240
documents, which is the articles of association, the memo of association, what they call the

3176
03:19:33,240 --> 03:19:35,000
bylaws.

3177
03:19:35,000 --> 03:19:37,000
So we're going to go through that.

3178
03:19:37,000 --> 03:19:40,520
All right, almost done.

3179
03:19:40,520 --> 03:19:42,040
So here it was.

3180
03:19:42,040 --> 03:19:44,840
Here was our reg stack that we just went through.

3181
03:19:44,840 --> 03:19:50,280
Companies Act, Foundation of Company Law, Companies Management Act, Directors, Registration

3182
03:19:50,280 --> 03:19:57,080
and Licensing Law, the Citation of Acts of Parliament's Law, the Virtual Asset Service

3183
03:19:57,080 --> 03:20:01,160
Providers Act, and the Securities Investment Business Law.

3184
03:20:01,160 --> 03:20:06,660
All right, we incorporated and fused in all of this and the way I presented it was also

3185
03:20:06,660 --> 03:20:12,300
that law firm input, the expertise and all the articles I read.

3186
03:20:12,300 --> 03:20:22,200
But what we're going to do is we're going to cover the case law, the professional law

3187
03:20:22,200 --> 03:20:29,600
firm input, probably in part three, so episode three of this and episode two or episode three,

3188
03:20:29,600 --> 03:20:31,480
I haven't figured out which one yet.

3189
03:20:31,480 --> 03:20:38,520
But in episode two, part two, we're going to cover, we're going to read the articles

3190
03:20:38,520 --> 03:20:43,600
of the memos and we're going to read it with the benefit of this education.

3191
03:20:43,600 --> 03:20:47,240
All right, so in the end, we're going to be doing this.

3192
03:20:47,240 --> 03:20:52,480
This reg stack is how we're going to get at what is a foundation company?

3193
03:20:52,480 --> 03:20:54,920
What does it mean to be a sandbox foundation?

3194
03:20:54,920 --> 03:20:56,440
What does that mean for RDAO?

3195
03:20:56,440 --> 03:20:59,040
We are very close to figuring this out now.

3196
03:20:59,040 --> 03:21:06,440
That all we need to do is figure out what is, what is, how does that rectangle of confusion

3197
03:21:06,440 --> 03:21:07,440
work?

3198
03:21:07,440 --> 03:21:10,120
How does that work out day to day?

3199
03:21:10,120 --> 03:21:15,320
Okay, so that, that is largely informed by the reg stack, but also by the experience

3200
03:21:15,320 --> 03:21:17,640
and people telling us what's going on.

3201
03:21:17,640 --> 03:21:21,840
The digging in the sand podcast, which Cyril explained the sausage making behind that.

3202
03:21:21,840 --> 03:21:23,440
He didn't like that term.

3203
03:21:23,440 --> 03:21:26,640
Explained all the way things were put together in the background.

3204
03:21:26,640 --> 03:21:31,000
So super happy with digging in the sand podcast.

3205
03:21:31,000 --> 03:21:33,880
I'm so happy to see them do these episodes.

3206
03:21:33,880 --> 03:21:36,280
I know they're coming out with an episode somewhat soon about this.

3207
03:21:36,280 --> 03:21:37,840
We've talked about it before.

3208
03:21:37,840 --> 03:21:40,600
They're going to talk about that legal gray area.

3209
03:21:40,600 --> 03:21:51,080
And now by watching this episode, you probably have a good idea for what that legal gray

3210
03:21:51,080 --> 03:21:56,680
area might be.

3211
03:21:56,680 --> 03:22:01,200
Don't know, but I'm very interested to find out.

3212
03:22:01,200 --> 03:22:02,660
And yeah.

3213
03:22:02,660 --> 03:22:06,720
So the only thing left to go over now are the key questions.

3214
03:22:06,720 --> 03:22:08,520
Right?

3215
03:22:08,520 --> 03:22:12,800
So if, if I have an episode in the future where we have a lawyer on, I'm going to be

3216
03:22:12,800 --> 03:22:14,640
asking them these questions.

3217
03:22:14,640 --> 03:22:22,640
I have specific questions to the, all the laws we went through.

3218
03:22:22,640 --> 03:22:26,540
So I have specific questions for all of these, but I'm only going to go over the key questions

3219
03:22:26,540 --> 03:22:27,540
for this episode.

3220
03:22:27,540 --> 03:22:28,540
Right?

3221
03:22:28,540 --> 03:22:31,680
So here's the things that stuck out to me that I really, really, really, really, really

3222
03:22:31,680 --> 03:22:35,760
want to know that I think we should be asking.

3223
03:22:35,760 --> 03:22:38,040
Is this related to wrapping a Dow?

3224
03:22:38,040 --> 03:22:40,440
When they say wrapping a Dow, is this what they're referring to?

3225
03:22:40,440 --> 03:22:42,000
I'm pretty sure there is.

3226
03:22:42,000 --> 03:22:46,200
I read a recent article by walkers.

3227
03:22:46,200 --> 03:22:48,640
Thank you to someone who shared that with me.

3228
03:22:48,640 --> 03:22:52,400
I won't dox that person, but thank you so much for that.

3229
03:22:52,400 --> 03:22:56,760
They talked about wrapping the Dow specifically and that wrapping Dow was creating a corporate

3230
03:22:56,760 --> 03:22:58,120
entity.

3231
03:22:58,120 --> 03:23:03,680
Most positively referring to the foundation company, but there might be more to it that

3232
03:23:03,680 --> 03:23:05,760
I don't understand.

3233
03:23:05,760 --> 03:23:10,560
So is that what we mean by wrapping a Dow, wrapping it in illegal wrapper?

3234
03:23:10,560 --> 03:23:15,520
Is there a legal distinction between the sandbox Dow and the sandbox foundation?

3235
03:23:15,520 --> 03:23:16,520
I don't know.

3236
03:23:16,520 --> 03:23:22,320
I can't tell what I think that where I think that might mean that it is, is if the sandbox

3237
03:23:22,320 --> 03:23:29,200
foundation owns the assets of the sandbox Dow, which is the wallet, the cryptocurrency,

3238
03:23:29,200 --> 03:23:35,640
the tech stack, the discourse, the Twitter handle, all that stuff.

3239
03:23:35,640 --> 03:23:43,120
If they do own it, then is there a legal distinction between the two?

3240
03:23:43,120 --> 03:23:48,160
Because there is a world in which the sandbox Dow, the we, us, the people that participates

3241
03:23:48,160 --> 03:23:52,960
in the process that is separate and distinct and not part of the legal entity called the

3242
03:23:52,960 --> 03:23:54,200
sandbox foundation.

3243
03:23:54,200 --> 03:23:55,400
I don't know.

3244
03:23:55,400 --> 03:23:56,680
I don't know the answer to that.

3245
03:23:56,680 --> 03:23:58,080
I really want to know the answer to that.

3246
03:23:58,080 --> 03:24:00,120
That's like my almost my number one question.

3247
03:24:00,120 --> 03:24:05,760
My number two question is why take a chance on a foundation company instead of an LLC

3248
03:24:05,760 --> 03:24:08,880
or a regular corporation?

3249
03:24:08,880 --> 03:24:13,800
What is it that the foundation company is that an LLC and a corp isn't?

3250
03:24:13,800 --> 03:24:16,400
Because that part is not obvious to me.

3251
03:24:16,400 --> 03:24:22,840
I get that there's more flexibilities, but that foundation company is so untested.

3252
03:24:22,840 --> 03:24:26,440
That legal gray area that Kunta and Cyril keep talking about, the reason why we need

3253
03:24:26,440 --> 03:24:34,080
so many lawyers to advise us on stuff is because there is not enough case law to benefit from

3254
03:24:34,080 --> 03:24:37,840
a legal, from a stable business environment.

3255
03:24:37,840 --> 03:24:41,280
Like all the Dow's that are getting sued right now, reason why some of that stuff isn't

3256
03:24:41,280 --> 03:24:45,160
already settled is because it's a new type of entity.

3257
03:24:45,160 --> 03:24:47,200
So why take a chance?

3258
03:24:47,200 --> 03:24:54,480
What is it that a C corp, S corp or an LLC, what is it about them that they that you can't

3259
03:24:54,480 --> 03:24:57,880
do what you're trying to achieve with the foundation company?

3260
03:24:57,880 --> 03:25:00,220
I can't figure that one out.

3261
03:25:00,220 --> 03:25:05,640
I think we would probably need to ask the director that or the lawyer, but I'm not able

3262
03:25:05,640 --> 03:25:06,640
to figure that out.

3263
03:25:06,640 --> 03:25:08,360
I really want to know that.

3264
03:25:08,360 --> 03:25:09,360
Here's another one.

3265
03:25:09,360 --> 03:25:14,080
How do the initial subscriber, director, secretary, supervisor roles interact at the start of

3266
03:25:14,080 --> 03:25:15,720
the foundation company play out?

3267
03:25:15,720 --> 03:25:22,160
We know that the subscriber becomes the member automatically and that can appoint other members,

3268
03:25:22,160 --> 03:25:26,200
but it's, I don't, I don't understand.

3269
03:25:26,200 --> 03:25:31,960
If a subscriber has to be appointed, does that mean they're automatically there or are

3270
03:25:31,960 --> 03:25:35,400
they appointed after the foundation company comes into effect?

3271
03:25:35,400 --> 03:25:37,480
Is the director coming in after?

3272
03:25:37,480 --> 03:25:40,680
I don't, I don't understand that order of operations.

3273
03:25:40,680 --> 03:25:44,960
What's my rectangle of confusion?

3274
03:25:44,960 --> 03:25:47,680
All right, let's keep going.

3275
03:25:47,680 --> 03:25:49,680
Key questions.

3276
03:25:49,680 --> 03:25:54,920
Yeah, like the supervisor is, is an, is an emergency role.

3277
03:25:54,920 --> 03:25:57,680
Uh, I don't, I don't know.

3278
03:25:57,680 --> 03:26:03,240
Anyways, question number five foundation corp companies can have no members.

3279
03:26:03,240 --> 03:26:06,600
So under section eight of the foundation's company law, it says it can cease to have

3280
03:26:06,600 --> 03:26:07,680
members.

3281
03:26:07,680 --> 03:26:09,640
What does that mean?

3282
03:26:09,640 --> 03:26:11,840
What does it mean to not have a member?

3283
03:26:11,840 --> 03:26:14,840
I don't know what that means.

3284
03:26:14,840 --> 03:26:17,560
In the beginning, you have to have a subscriber, right?

3285
03:26:17,560 --> 03:26:21,560
Subscriber to create a company who then automatically becomes a member, but then it can cease to

3286
03:26:21,560 --> 03:26:24,840
have members, but also has to have a supervisor at all times.

3287
03:26:24,840 --> 03:26:25,840
I don't get it.

3288
03:26:25,840 --> 03:26:29,680
And you have to have a secretary to do all the qualified services.

3289
03:26:29,680 --> 03:26:30,680
I don't know.

3290
03:26:30,680 --> 03:26:31,680
I don't, I don't understand what that means.

3291
03:26:31,680 --> 03:26:32,960
All right.

3292
03:26:32,960 --> 03:26:38,040
Why does the founder role seem optional?

3293
03:26:38,040 --> 03:26:43,760
It's very unclear to me what the founder is in all of this.

3294
03:26:43,760 --> 03:26:44,760
I don't know.

3295
03:26:44,760 --> 03:26:46,000
All right.

3296
03:26:46,000 --> 03:26:50,400
Foundation companies have a choice in carrying out its objects.

3297
03:26:50,400 --> 03:26:55,680
That seemed to be almost a plain reading of financial or a foundation company's law in

3298
03:26:55,680 --> 03:27:00,160
section seven that it, it only if right.

3299
03:27:00,160 --> 03:27:06,240
It said if and only if it has to carry it out as objects, if and only if it says so

3300
03:27:06,240 --> 03:27:12,120
in the constitution, I don't understand why it seems to give itself the option to carry

3301
03:27:12,120 --> 03:27:13,120
out its objects.

3302
03:27:13,120 --> 03:27:15,960
Like what, what does the, what does that mean?

3303
03:27:15,960 --> 03:27:18,880
It can just do whatever it wants.

3304
03:27:18,880 --> 03:27:19,880
I don't know.

3305
03:27:19,880 --> 03:27:20,880
I don't know.

3306
03:27:20,880 --> 03:27:21,880
All right.

3307
03:27:21,880 --> 03:27:27,040
Question eight, secretary must be properly licensed by SEMA.

3308
03:27:27,040 --> 03:27:28,040
Okay.

3309
03:27:28,040 --> 03:27:32,760
Does the supervisor and the director need to be like, we're pretty, pretty positive.

3310
03:27:32,760 --> 03:27:39,680
The director has to be licensed, although there is some confusion about just how explicit

3311
03:27:39,680 --> 03:27:42,320
it is in the company's management act.

3312
03:27:42,320 --> 03:27:48,480
The director must be licensed and does the director's registration and licensing law

3313
03:27:48,480 --> 03:27:52,760
apply to non securities?

3314
03:27:52,760 --> 03:27:57,680
It doesn't seem like it does, but I'm not a legal expert, so I have to, I need to ask

3315
03:27:57,680 --> 03:28:00,360
that question of, of legal counsel.

3316
03:28:00,360 --> 03:28:02,640
Does a supervisor need to be licensed?

3317
03:28:02,640 --> 03:28:08,960
I didn't see anywhere that did, but they have their requirement to be in a foundation company.

3318
03:28:08,960 --> 03:28:13,240
Kind of makes me think that there might be a license there, but I didn't see anything.

3319
03:28:13,240 --> 03:28:14,480
Okay.

3320
03:28:14,480 --> 03:28:16,640
An interested person versus a beneficiary.

3321
03:28:16,640 --> 03:28:21,960
We knew, we know that a beneficiary has no rights except to benefit, like to receive

3322
03:28:21,960 --> 03:28:22,960
the benefit.

3323
03:28:22,960 --> 03:28:30,240
An interested person is someone who is entitled to reports and stuff, to entitled to participate.

3324
03:28:30,240 --> 03:28:34,640
But what is the Dow community?

3325
03:28:34,640 --> 03:28:39,680
Is the Dow community a beneficiary or an interested person?

3326
03:28:39,680 --> 03:28:46,280
What is the legal status of the Dow community in a foundation company?

3327
03:28:46,280 --> 03:28:48,040
That's a key question I would be asking.

3328
03:28:48,040 --> 03:28:53,960
If I could only choose my top three questions, these are the three that I'm choosing.

3329
03:28:53,960 --> 03:28:54,960
All right.

3330
03:28:54,960 --> 03:28:56,040
And then my last question.

3331
03:28:56,040 --> 03:29:00,720
How does the terminology relate to each other across the Companies Act, the Foundation Company

3332
03:29:00,720 --> 03:29:03,800
Law and the Companies Management Act?

3333
03:29:03,800 --> 03:29:09,040
They seem like some overlap, some don't, some don't have equivalencies.

3334
03:29:09,040 --> 03:29:11,680
Some seem like they do, but they call themselves different things.

3335
03:29:11,680 --> 03:29:16,200
It's very inconsistent at times.

3336
03:29:16,200 --> 03:29:23,660
So is there some clarity there that legal counsel can give us on why the terminology

3337
03:29:23,660 --> 03:29:24,660
difference exists?

3338
03:29:24,660 --> 03:29:29,920
Like is there some overarching guidance that I missed in a law that I couldn't find?

3339
03:29:29,920 --> 03:29:31,400
I tried to find everything I could.

3340
03:29:31,400 --> 03:29:36,960
I think I found most of it, but I'm not a legal advisor, I'm not a legal counsel, I'm

3341
03:29:36,960 --> 03:29:38,960
not any of that.

3342
03:29:38,960 --> 03:29:43,960
Just an enthusiast community member at this point.

3343
03:29:43,960 --> 03:29:45,320
All right.

3344
03:29:45,320 --> 03:29:51,200
So like I said, we have more questions, which if I ever get the chance to ask legal counsel

3345
03:29:51,200 --> 03:29:55,680
and I have the opportunity to go in depth with them, I'll be asking these.

3346
03:29:55,680 --> 03:29:57,640
We'll cover that in another episode.

3347
03:29:57,640 --> 03:30:00,720
But if I'm not able to get legal counsel, then I'll probably just end up using the episode

3348
03:30:00,720 --> 03:30:01,720
to read it.

3349
03:30:01,720 --> 03:30:02,720
And then that'll be the episode.

3350
03:30:02,720 --> 03:30:05,320
That'll be part two, probably.

3351
03:30:05,320 --> 03:30:14,640
Part three, we will use all of that knowledge to read the memo, articles, and the bylaws

3352
03:30:14,640 --> 03:30:16,240
of the Sandbox Foundation.

3353
03:30:16,240 --> 03:30:20,280
And then we will apply all of this knowledge to that in real time.

3354
03:30:20,280 --> 03:30:21,280
That'll be the real one.

3355
03:30:21,280 --> 03:30:25,920
That'll be the end, in my mind, of what is a foundation company to us.

3356
03:30:25,920 --> 03:30:26,920
Okay?

3357
03:30:26,920 --> 03:30:32,200
I had a few community questions, but I answered them all throughout the course of the four

3358
03:30:32,200 --> 03:30:33,240
hours.

3359
03:30:33,240 --> 03:30:38,160
So thank you, Roxy, Miguel, and Yuma.

3360
03:30:38,160 --> 03:30:43,800
And I know I'm missing one, but my stream cut off, so I couldn't see your name, so sorry.

3361
03:30:43,800 --> 03:30:47,840
Thank you for the community questions.

3362
03:30:47,840 --> 03:30:48,840
And open topics.

3363
03:30:48,840 --> 03:30:49,840
All right.

3364
03:30:49,840 --> 03:31:04,280
So, again, I did not do, in the beginning of this episode, I did not do the DAO scoreboard.

3365
03:31:04,280 --> 03:31:05,600
I did not do the DAO checkbook.

3366
03:31:05,600 --> 03:31:08,080
There are a few other things I didn't do that I normally do.

3367
03:31:08,080 --> 03:31:10,480
That's because SandDAL is changing.

3368
03:31:10,480 --> 03:31:18,600
Because the community was not able or willing to fund SandDAL's episodes, I'm going to

3369
03:31:18,600 --> 03:31:23,320
scale back how many I do and how deep I go.

3370
03:31:23,320 --> 03:31:24,520
And so this is one of the last ones.

3371
03:31:24,520 --> 03:31:29,320
There's a few more, but this is one of the big ones that I'm going to do for a long time,

3372
03:31:29,320 --> 03:31:33,640
just because it takes too much time, effort, and money that I'm paying by myself.

3373
03:31:33,640 --> 03:31:36,800
So I can't keep doing that.

3374
03:31:36,800 --> 03:31:42,520
So what I did is I started up something called SandDAL Weekly, and I'll probably start it

3375
03:31:42,520 --> 03:31:43,520
up this coming week.

3376
03:31:43,520 --> 03:31:48,560
And it's basically going to be like a five, 10-minute rehash of what the last week was.

3377
03:31:48,560 --> 03:31:56,960
And our DAO community just updates, and that'll be the episode.

3378
03:31:56,960 --> 03:32:00,880
I might do an episode every now and again if something really piques my interest, or

3379
03:32:00,880 --> 03:32:04,480
an interview, or a discussion topic.

3380
03:32:04,480 --> 03:32:11,760
There's a few more I want to accomplish, like the DAO ecosystem, and maybe the gamer ecosystem

3381
03:32:11,760 --> 03:32:14,600
within the sandbox ecosystem itself.

3382
03:32:14,600 --> 03:32:25,280
I think I might have one more interview coming up with World and Women Tech.

3383
03:32:25,280 --> 03:32:32,120
So sorry, I have a four-hour podcast, so it's slipping my mind.

3384
03:32:32,120 --> 03:32:40,760
So SandDAL Weekly is coming, and it will replace, or at the very least, it will become the new

3385
03:32:40,760 --> 03:32:46,400
SandDAL podcast, so I won't be going so deep into everything.

3386
03:32:46,400 --> 03:32:52,360
But it will be like a weekly update of news, events, and SIPs.

3387
03:32:52,360 --> 03:32:56,200
So I'll also cover SIPs.

3388
03:32:56,200 --> 03:33:01,520
But it will be very brief, like five, 10 minutes, maybe 15.

3389
03:33:01,520 --> 03:33:02,520
That's it.

3390
03:33:02,520 --> 03:33:03,680
That is the whole agenda.

3391
03:33:03,680 --> 03:33:08,800
Like I said, parts two and three will be coming out.

3392
03:33:08,800 --> 03:33:17,040
Then we will conclude this mini-series of what is a foundation company?

3393
03:33:17,040 --> 03:33:19,840
Let's go over Sandbox Spaces one last time.

3394
03:33:19,840 --> 03:33:21,960
I do want to go over this each episode.

3395
03:33:21,960 --> 03:33:25,760
So if you are new to SandFam, if this is the first time you're listening to us, after four

3396
03:33:25,760 --> 03:33:27,720
hours, thank you for being here.

3397
03:33:27,720 --> 03:33:28,720
Thank you again, Yuma.

3398
03:33:28,720 --> 03:33:31,720
Appreciate you being in chat.

3399
03:33:31,720 --> 03:33:35,240
And so here's where we gather as SandFam.

3400
03:33:35,240 --> 03:33:36,800
SandFam again is the community.

3401
03:33:36,800 --> 03:33:42,200
All the people who participate in the product, purpose, and the people.

3402
03:33:42,200 --> 03:33:46,320
So in Discord, we have the hashtag DAL discussion.

3403
03:33:46,320 --> 03:33:47,320
The Sandbox Discord.

3404
03:33:47,320 --> 03:33:49,720
We also have the Sandbox DAL forums.

3405
03:33:49,720 --> 03:33:54,400
On Twitter, we have hashtag SandFam, hashtag the Sandbox DAL, hashtag the Sandbox game.

3406
03:33:54,400 --> 03:33:58,320
There's also the Twitter handle for the Sandbox DAL.

3407
03:33:58,320 --> 03:34:01,600
On YouTube, we have the Sandbox DAL, which is the Sand podcast.

3408
03:34:01,600 --> 03:34:05,000
Then you have Lancer YT, which is the SandDAL podcast.

3409
03:34:05,000 --> 03:34:06,840
That's what you're listening to right now.

3410
03:34:06,840 --> 03:34:12,000
And then there's SandFam Cafe, which is usually monthly panels of community members hosted

3411
03:34:12,000 --> 03:34:15,820
by Bruno, otherwise known as Pickaxe Master.

3412
03:34:15,820 --> 03:34:25,800
And he was, if you want to know about him, he was episode SandDAL episode 17, where we

3413
03:34:25,800 --> 03:34:27,840
interviewed Bruno, Pickaxe Master.

3414
03:34:27,840 --> 03:34:30,880
Talked a little bit about SandFam Cafe.

3415
03:34:30,880 --> 03:34:32,200
Okay.

3416
03:34:32,200 --> 03:34:37,400
There are ex Twitter spaces every month and every week they go on.

3417
03:34:37,400 --> 03:34:41,680
So on Mondays there's Mogulverse Hall with G is Us.

3418
03:34:41,680 --> 03:34:45,520
There on Saturdays there's Bulls on the Block.

3419
03:34:45,520 --> 03:34:51,300
Monday through Friday is Coffee with Captain, although they are primarily focused on Apoindao.

3420
03:34:51,300 --> 03:34:58,040
And whale members, natively digital, although they primarily focus on art, NFT art.

3421
03:34:58,040 --> 03:35:00,240
All right, everyone.

3422
03:35:00,240 --> 03:35:05,760
This has been SandDAL podcast number 56.

3423
03:35:05,760 --> 03:35:11,160
What is a foundation company in the Cayman Islands and why does it matter to the sandbox

3424
03:35:11,160 --> 03:35:12,160
community?

3425
03:35:12,160 --> 03:35:32,560
Thanks SandFam.