User Shares
A User Share is a share owned by a member who is a user of goods and services, entitling her or him to participate in governance and receive a share of the surplus. For the purposes of clarity, any person recognised as a beneficiary or a customer of the organisation will quality for User Shares.
From v3.0, the FairShares Rules Generator allows clients to change User Shares to 'Customer Shares', 'Consumer Shares' or another label of the Founders' choice. Their characteristics are identical.
In FairShares V3.0/3.1, User Shares are defined in Clause/Article 10 (iii). In V3.2, they are defined in Clause/Article 10(iv) as follows:
- User Shares: issued at par value to natural or legal persons who use company products and services; non-transferable; one vote per shareholder at General Meetings (as defined in Articles 23 and 24); forfeited on holder's death, bankruptcy or insolvency; cancelled upon cessation of a trading relationship; cancelled without payment on winding up.
As with Labour Shares, the default rules suggest that User Shares should only be issued to users who have made a Qualifying Contribution that shows an ongoing commitment. This prevents having to issue shares for people who make a single, or short series of purchases. It does encourage, however, the issue of shares to customers who renew an annual contract, or who contract to buy a service for an unspecified period of time.
The number of User Shares becomes important when surpluses are generated. In companies and cooperatives it determines both the share of surplus distributed as a cash dividend to User Shareholders, and the number of Investor Shares (Member Shares) that are distributed to represent User Shareholders' ownership of the company's assets. In associations and partnerships, it is less important than the User Share Fraction which determines the amount of surplus that comes under the control of User Members.
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