View source for Founder Repayment

The Founder Repayment is the amount of money that [[Member]]s have agreed to repay outgoing [[Founder Member]]s 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 Member]]s can be agreed as the Founder Repayment. The Founder Repayment must be repaid before any Capital Gains are distributed to [[Labour Member]]s or [[User Member]]s. 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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