Difference between revisions of "Surplus"

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(Add sentences to cover distributions with in a FairShares Association)
 
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  Surplus is £32,000 less £6,400 = £25,600
 
  Surplus is £32,000 less £6,400 = £25,600
  
This [[Surplus]] would then be allocated to [[Reserves]], [[Labour Share Dividends]], [[User Share Dividends]] and [[Investor Share Dividends]] as defined in the [[FairShares Articles of Association]].
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In a FairShares Company or Co-operative, this [[Surplus]] would then be allocated to [[Reserves]], [[Labour Share Dividends]], [[User Share Dividends]] and [[Investor Share Dividends]] as defined in the [[FairShares Articles of Association]].
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In a FairShares Assocation, the [[Surplus]] is allocated to [[Investor Accounts]] where they cannot be withdrawn from the association.  Members can allocate their share of surplus to projects created by executive and/or board members.  
  
 
In the above example, using the default values set in v2.0 of the [[FairShares Model]].
 
In the above example, using the default values set in v2.0 of the [[FairShares Model]].
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£10,000 would be allocated to reserves, leaving £15,600 for dividends.
 
£10,000 would be allocated to reserves, leaving £15,600 for dividends.
  
* 35% (the [[Labour Share Fraction]]) would be allocated as [[Labour Share Dividends]] (£15,600 x 35%) = £5,460
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* 35% (the [[Labour Share Fraction]]) would be allocated as [[Labour Share Dividends]] (£15,600 x 35%) = '''£5,460'''
* 35% (the [[User Share Fraction]]) would be allocated as [[User Share Dividends]] = £5,460
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* 35% (the [[User Share Fraction]]) would be allocated as [[User Share Dividends]] = '''£5,460'''
* 0.5 of 30% (1 - [[Capital Gain Fraction]] x [[Investor Share Fraction]]) would be paid as dividends to existing [[Investor Shareholders]] = £2,340.
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* 0.5 of 30% (1 - [[Capital Gain Fraction]] x [[Investor Share Fraction]]) would be paid as dividends / credits to existing [[Investor Shareholders]] / [[Investor Accounts]] = '''£2,340'''.
  
 
(under [[IPS]] versions the [[FairShares Model]], 2,340 [[Investor Shares]] would be issued to existing [[Investor Shareholders]] in proportion to their existing holdings.  This would be a much smaller amount than the [[Member Shares]] issued to [[Labour Shareholders|Labour]] and [[User Shareholders]].
 
(under [[IPS]] versions the [[FairShares Model]], 2,340 [[Investor Shares]] would be issued to existing [[Investor Shareholders]] in proportion to their existing holdings.  This would be a much smaller amount than the [[Member Shares]] issued to [[Labour Shareholders|Labour]] and [[User Shareholders]].

Latest revision as of 03:15, 21 June 2014

The Surplus in a FairShares Enterprise is calculated as follows (see Clause 37):

Profit, less Pay including their Associated Costs, less Corporation Tax

For example, if Profit is £100,000, and Pay is £60,000, and Associated Costs are £8,000:

  • Nett Profit would be £100,000 less £60,000 less £8,000 = £32,000
  • UK corporation tax would be £32,000 x 20% = £6,400
Surplus is £32,000 less £6,400 = £25,600

In a FairShares Company or Co-operative, this Surplus would then be allocated to Reserves, Labour Share Dividends, User Share Dividends and Investor Share Dividends as defined in the FairShares Articles of Association.

In a FairShares Assocation, the Surplus is allocated to Investor Accounts where they cannot be withdrawn from the association. Members can allocate their share of surplus to projects created by executive and/or board members.

In the above example, using the default values set in v2.0 of the FairShares Model.

£10,000 would be allocated to reserves, leaving £15,600 for dividends.

(under IPS versions the FairShares Model, 2,340 Investor Shares would be issued to existing Investor Shareholders in proportion to their existing holdings. This would be a much smaller amount than the Member Shares issued to Labour and User Shareholders.



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