Founder Repayment

The Founder Repayment is the amount of money that Members have agreed to repay outgoing Founder Members before they acquire full control of a FairShares enterprise. The Founder Repayment may take the form of Loan Notes. The provisions for Founder Repayment and Loan Notes apply when converting an existing company to a FairShares Company.

For example, if a private company is valued at £250,000 before conversion, Loan Notes for this amount to the outgoing Founder Members can be agreed as the Founder Repayment. The Founder Repayment must be repaid before any Capital Gains are distributed to Labour Members or User Members. The loan is repaid from future profits, providing a strong incentive for current members to ensure profitable trading (as they cannot share in the financial wealth created until the Founder Repayment has been completed).

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