• www.CommunityEquity.net

Community Equity™ Implementation Training Session for R3SET Friday Oct 7th, 2016

Attendees: Jay & PJ

This Session is available publicly for anyone to view and learn from.

• Audio Recording
• Video Recording Part 1
• Video Recording Part 2

Agenda:

• Check in
• Overview
• R3set Goals- Building a community owned media and business collective

• %
• Structure
• Place Holder

• Review Steps
• Final Decision Making of Community Equity Distribution

Current Example of R3SET

100% Subsidiary of Give Life To Art

Proposal Options:

30% Community Equity™ (example)

70% Give Life TO Art Partners

30% Community Equity™ = 100% of the Community Equity™

Proposal: To implement 30% Community Equity™ for RESET (Media Company?)

Note: This is Only an indirect reduction of direct ownership. Cause the current owners (individuals and companies) still get Community Equity™ that compliments their existing equity.

Note: in this example proposal the Place Holder becomes the Company itself.

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Choosing a Place HOlder

The Place Holder, or “trustee”, or “oversight” entity, is the actual “owner” of the Equity or Stock Asset, and they are in essence the Trustee that holds the Equity in Trust on behalf of the Community or Beneficiaries.

The whole idea of a place holder is to reduce conflict of interest by getting a 3rd party involved.

List of Place Holder Options:

• Company Board / Decision Maker's itself (Bad model, Fox in charge of the hen house)
• Individual (any)  [goal would be third party]
• Partnership - Group of individuals  [goal would be third party]
• Organization (any) [goal would be third party]
• Joint Venture / Partnership Venture (Two or more Organizations)(+ Individuals)
• 501c3 non-profit organization - Public Charity - is structured automatically as Trust, Public Trust
• Independent Trust [Separate Independent Legal Entity] [most complicated because it is a Multi-Organizational-Complex by definition]

• Donor or Investor - Give the $ or Assets to the Trust - Community - Donating Time and Energy & Resources to the Business
• Trustee - “Place Holder” - Oversees the Administration of the Assets - Decision Making
• Beneficiaries - Receive- the benefits of the Assets etc… - Community of People around the business

Note: Being a Place Holder can involve tax liabilities depending on how it is set up.

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Overall Community Equity™ Implementation Process Steps:

1. Deciding to implement Community Equity™ in the first place
2. Choose a % (can always be changed) (increasing is always easier than decreasing)
3. Choosing a Place Holder
4. ------------------- Wait, chill, no worries ------------------------- SET UP DONE ------
5. Tracking  - Time & Value based contributions
6. Distribution of community Equity™
7. Transfer of Community Equity™ to real equity (can involve tax liability)

Distribution of Community Equity™

• Final Decision Making on the Distribution of the Community Equity™

• Example: 30% Community Equity™
• Place HOlder: a Organization(s) as the Third Party (group, most likely a board)

• Organization Board

• Tracked all the time and contributions of the individual members (20+)

• Step 0)

• Track the Hours & Contributions. Typically this would be a collaborative effort between the Company Board, the Place Holder and the Beneficiaries. The data is then given to the Place HOlder or the finalization.

• Step 1)

• Place Holder crunches the numbers of tracked time and contributions, and creates the initial proposal. If everyone agrees to this proposal, it is a done deal. This would be finalized by the Organization Board (Place Holder)

• Step 2) [problem from Board]

• Board of Business or Company had an issue with the way the Community Equity was distributed, then they could propose an amendment. And it would go back and forth between the Placeholder, Organizational Board, and the Board of the Business / Company.
• If the Board of the Company felt that the Place Holder did not have the best interest of distributing the Community Equity with integrity, there is a way for the Place HOlder to be replaced. The Businesss/Company Board has a lot of power over the Community Equity. The highest level of that power is in replacing the Trustee or Place Holder.
• When you create a separate independent Trust, the beneficiaries get legal rights within the agreement, and therefore the Trust itself can NOT be changed without agreement of the beneficiaries and the Trust itself, but the business Board still has some say in the Community Equity Distribution, just a little less. This would depend on the Official legal written Trust Agreement and what it establishes as the role of the Company Board.

• Step 3)

• Beneficiaries can collectively write out grievances to the Place Holder, and the place holder can literally fire the Board. Its an Owner of the company.  

Next Steps:

• Sponsorship Details and Options for Place Holder
• Societal Equity™
• Distributing Community Equity™ Profits to Individual Beneficiaries
• Ownership / Shareholder Empowerment at  Meetings and Decision Making