penicuik 19 05_11

The Community is the Currency

Chris Cook

Penicuik 19 May 2011

Enterprise Models are Legal and Financial Structures

01/06/10 2

The unseen plumbing of Society

01/06/10 3

Public = State...

01/06/10 4

...funded by taxes and public borrowing

01/06/10 5

Private = Legal Person: Individual or Company

01/06/10 6

'For Profit' Companies are funded by

shares with par value eg £1.00 - Equity

01/06/10 7

'Not for Profit' Companies are Limited by

Guarantee

01/06/10 8

Financing and funding requires Debt - usually secured by a legal claim eg mortgage

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...giving two conflicting claims over the same productive asset

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Or an unequal 'partnership' relationship

01/06/10 11

Scots know it's not a case of 'either/or'

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'Not Proven' is both...or neither

01/06/10 13

A 'quantum' zone of uncertainty

01/06/10 14

There’s a new legal animal out there

01/06/10 15

There are now over 60,000 UK Limited Liability Partnerships (LLP)...

01/06/10 16

...even in the Public Sector, where Glasgow has five municipal LLPs

01/06/10 17

An LLP is a corporate body with limited liability....

01/06/10 18

...and...errrr...that’s it !

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As far as the Tax Man is concerned it is a Partnership

01/06/10 20

LLPs are being put to very interesting uses

01/06/10 21

Capital Partnership

CustodianCustodian

InvestorsInvestors

UsersUsers

Managers

% %

£

01/06/10 22

Equity Shares - % age shares in revenues or production...

01/06/10 23

Units - redeemable in payment for production

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Example: “The Art of Flirting” – a film incorporated as an LLP

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The actors received nth’s of the gross revenues

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I got 5%...and the producer the rest...

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But we needed lights, cameras, pizza, coffee

01/06/10 28

Two Capital Partners invested £10k for 20% of revenues

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If there are any

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Art of Flirting Partnership

CustodianCustodian

Financial Capital(Investors)

Financial Capital(Investors)

ViewersViewers

Human Capital(Actors, Producer, Me)

% %

£

01/06/10 31

The Capital Partnership aligns stakeholder interests....

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...but it’s not a magic bullet

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Conventional finance requires binding contracts

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Partnership finance requires consensual agreement

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But there may be no magnetism..

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...or partners may fall out...

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A Capital Partnership is not an Organisation

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...it does not own anything, do anything, employ anyone, or contract with anyone...

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...it is simply a framework within which the stakeholders self organise ...

01/06/10 40

Community Partnership

CustodianCustodian

InvestorInvestor

UserUser

Manager

% %

£

01/06/10 41

An associative framework agreement for community projects or events

Agreement between stakeholdersIndividually

How does it work?

01/06/10 44

Custodian – asset-holder and steward

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Company Limited by Guarantee

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Collective agreement between all Stakeholders

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User - a Club or Association

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A Club is Closed because only members have access....

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...but also Open because anyone consenting to club rules may join

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Manager – gets things done....

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...and agrees who does what

01/06/10 52

Community Partnership

CustodianCustodian

InvestorInvestor

UserUser

Manager

% %

£

01/06/10 53

Community Land Partnership

CustodianCustodian

InvestorInvestor

OccupierOccupier

Manager

% %

Rental

16/06/10 54

Community Energy Partnership

CustodianCustodian

InvestorInvestor

UserUser

Energy Energy

Energy

ManagerManager

Energy Pool: Community Mega Watts

Or even NegaWatts of energy savings

Community Media Partnership

CustodianCustodian

InvestorInvestor

UserUser

Service Provider

% %

£

01/06/10 58

Networks of Communities are the future

01/06/10 59

Thank You

16/06/10 60