User Share Fraction

The User Share Fraction is the share of Surplus paid to User Shareholders.

In early versions of FairShares, the User Share Fraction is:

• 0.5 in User and Worker Co-operatives

• 0.35 in Social Enterprises and Social Co-operatives

From V3.0 onwards, the fraction is set during the creation of rules in the FairShares Rules Generator, and this provides for a range of choices from 0.30 to 0.45. The V3.0 rules generator does not permit rules to specify more than 0.4 for Investor Shareholders, and a sets the minimum payout to Labour and User Members at 60%. Typically, 70% or higher is paid out to people active in FairShares companies, and 75% of higher in FairShares cooperatives.

The total amount paid out to User Shareholders is called the User Share of Surplus.

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