User Share Fraction

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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.

In associations, this fraction (as is the case with Founder and Labour Share Fractions) determines the share of surplus User Members (as a group) can allocate to social objects without board approval.

The V3.0 rules generator does not permit rules to specify more than 0.4 for Investor Shareholders, and 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.


Return to the FairShares Glossary.

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