Founder Repayment

The Founder Repayment is the amount of money that Members have agreed to repay an outgoing Founder before they acquire full control of the Company. 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, a Loan Note for this amount to the outgoing founders can be agreed as the Founder Repayment. The Founder Repayment must be repaid before any Capital Gains are distributed to Labour Members or User Members.

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