A Community Dividend is paid out if a FairShares Company or Co-operative is dissolved, has Residual Assets above a pre-set amount, and has been in receipt of a grant from a public or charitable organisation. To calculate the Community Dividend, the Community Dividend Fraction is calculated using the forumula:
[community and public funding] / ([community and public funding] + [shareholder funds])
The Community Dividend is calculated as follows:
([shareholder funds] + [profit and loss account] + [other assets]) * [community dividend fraction].
Below is a worked example where:
- Community and Public Funding = £50,000
- Shareholder Funds = £345,000
- Profit and Loss Account = £200,000
- Assets - Liabilities = £100,000
Community Dividend Fraction
£50k / (£50k + £345k) = 13%
£345k + £200k + £100 = £645k
£645k * 13% = £81,646
The Community Dividend is divided equally between the organisations specified in Clause 54(b). If no organisations are specified, the community dividend is divided between the Investor Shareholders.
Return to the FairShares Glossary.