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Intangible Assets (Enterprises)
- Privately controlled existing companies
- Board of directors appoints successors
- Board appoints on the basis of skill and capacity of appointee to continue to deliver success and develop the business further
- Some powers to protect reputation of Corporation are reserved for extreme situations – illegal behaviour of directors etc.
- CSoc appoints new Board if Board is lost
- Purpose locked by the CSoc
- Changing purpose in constitution has to be agreed by CSoc
- Asset locked through neutralisation of capital by CSoc
- Neutralisation prevents shares being traded
- Removes secondary market in shares
- Achieving purpose of enterprise is only motivation
- Management is set free from burden of shareholder value
- Management is for the long term, no market in company’s stock so no short-term pressure from stock market valuation
Enterprise is set free from shareholder interests to make profit through serving purpose
Profit becomes a positive economic and social force
- In the founding phase the immature enterprise’s capital and profit goes to the founding entrepreneurs.
- The enterprise matures with the ending of the founding phase when the founders are paid off.
- Founders are bought out for a fair valuation of the balance sheet including notional value of goodwill
- Founders may continue as Directors or may leave company having put in place a successor Board
- The enterprise itself buys out the founders, with its own cash reserves, or with CSoc Investment Fund cash, with non-voting redeemable preference shares, or with debt.
- Mature enterprises distribute profit
- 1/3 to co-workers
- 1/3 to Investment Fund
- 1/3 to Development Fund
- Directly supporting human beings
- The arts
- A symbiotic relationship with the for-profit sector
- For-profit needs strong, capable, inspired human beings – which the not-for-profit sector helps provide
- Not-for-profit need gifted start-up funding and fair-provision may require ongoing financial sustainability funding
- The Commons Society contains both for-profit and not-for-profit organisations in recognition of their fundamental symbiosis
Not-for-profit builds human capacity and capability