Introducing the Open Corporate

Beyond Public and Private

Submitted by ChrisCook on Monday, 23 February, 2009

21st Century problems cannot be fixed by 20th Century solutions”….Dr Narsi GhorbanThe Credit Crash marks the end of an era for the global financial system, and the beginning of another.  Few understand our modern banking system, but in simple terms it consists of banks as “credit intermediaries” who create credit based upon an amount of capital specified by international banking regulators…………………..

 ………………….Introducing the Open Corporate

 

On 6 April 2001 a new UK legal entity, the Limited Liability Partnership (LLP), came into effect in order to protect professional partnerships. Confusingly, an LLP is not legally a partnership. It is, however – like a Corporation – a corporate body with a continuing legal existence independent of its members. Also, as with a limited liability company, you cannot lose more than you invest in an LLP.

The `LLP agreement’ between members is totally flexible and need not even be in writing, since simple provisions based upon partnership law apply by way of default. The LLP may truly be thought of as an “Open” Corporate, and it is being used for purposes never envisaged.

In particular, it is being used as a  framework for investment in productive assets of all kinds. LLP’s are routinely in use in the public sector, and the City of Glasgow currently has three municipal  LLP joint ventures, albeit conventionally financed.  

The Hilton Group first demonstrated the potential of an LLP framework for development and long term financing in a > £1bn plus Capital Partnership.

The Capital Partnership allows risk and reward to be shared equitably in proportional shares of production or revenues : in a good year, Hilton and Investors have a good year; and in a bad year, they share the pain.

This model has universal application, and any enterprise; whether Public or Private; commercial, social or even charitable in aims; whatever the legal form; may opt to share production or revenues in this way.

Within a Capital Partnership framework it is possible to create:

(a) Equity Shares – proportional shares which are not redeemable (there must always be 100%) but may be transferable.

(b) Units – redeemable in “money’s worth” such as Kilo Watt Hours;

and these enable entirely new mechanisms for the financing of assets of all kinds.

In particular, we may create a new class of Community-owned enterprises which allow the production or revenues from assets in Public ownership to be shared equitably as between the providers and users of finance. Let’s have a look at how this might work………………

complete article at http://www.claverton-energy.com/beyond-public-and-private-chris-cook.html

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