Difference between revisions of "Redemption Fund"

Revision as of 12:30, 8 February 2014

The Redemption Fund is created by allocating part of the Surplus to a special reserve fund for the creation of mutual, co-operatives and charities that can buy members' Investor Shares and redeem members' Investor Accounts. Without a Redemption Fund, members would have to borrow capital to create the institutions defined in Clause 10(a)(iv).

As defined in Clause 10(a), a FairShares Company plans, from the outset, to create one or more of the following:

1. An Employee Benefit Trust or Co-operative Society established for the purpose of buying and selling (redeeming) Labour shareholders’ investor shares and managing the income from them for the benefit of employees;
2. A Charitable Trust or Charitable Company established for the purpose of buying and selling (redeeming) members’ investor shares, and managing the income from them to support charitable projects;
3. A Community Interest Company, Community Benefit Society, FairShares Company or FairShares Co-operative created or selected to purchase (redeem) members’ investor shares and manage the income from them to make social investments in a community.

The Redemption Fund provides the start-up capital for these organisations. Thereafter, they are funded by income derived from their shareholdings in FairShares Companies.

Outside the UK

Not all countries will have laws for the creation of employee benefit trusts or charitable trust, but they may have alternative laws that enable organisations for employee, community and public benefit to be created.

In the US, there is provision for:

Non-Profit Corporations (Non-Profit Law)
Employee Share Ownership Plans / Trust (ESOPs and ESOTs)
Benefit Corporations (Company Law)
Co-operatives (Co-operative Law)

In Japan, there is provision for:

Specified and Certified Non-Profits (Non-Profit Law)
Social Responsibility Corporations (Company Law)
Co-operatives (Co-operative Law)

Return to the FairShares Glossary.