Speaker: Chris Cook

About: Limited Liability Partnerships

Website: www.opencapital.net

Two types of Finance: Asset based (ownership) investment and the other is debt-based.

Ownership comes about when a legal wrapper gets put round an asset and revenues coming from it. Limited Liability Co. (LL): 1850 companies got limited liability, many objections. Cult of shareholder value. GM forms: lid for excesses of LL: Industrial and Provident Socities, Community Interest Companies (which are not that successful, fundamental flaws).

Credit (of any kind) is "time to pay"; interest free credit happens all the time, should be the basis for money; credit institutions create credit either secured over an asset or unsecured (credit cards). 2/3 of money in circulation secured on mortgages. This is the main reason for the need/ drive for growth. Money is not backed by a claim on anything. Debt based financed is to blame. Post-distribution: everyone is fighting for what they can get, shareholders antagonistic relationship with stakeholders.

Limited Liability Partnership (LLP): Act says: This is not a partnership; partnership has joint and several responsibility ; but this LLP has no several but a collective liability (ie a corporate body with limited liability). No need for a written agreement. Can own things with an LLP, invite any stakeholders into LLP, Clone any legal form with it (eg co-op), open corporate with a legal wrapper, tax transparent (no corporation tax, sees straight through it, only need to report the capital flowing through it).

Examples: Hilton Group wanted 10 hotels, could have got a bank syndicate Conflict of interest between the lenders and borrowers; if they had a bad year, then the hotels are liquidated. Get a wrapper Hilton (capital user) - Lenders (capital provider) Share the revenue, goes two ways - gross revenue coming in - pre-distribution model Co-ownership Hilton dont own it; the partnership own it. One: uses the investment, Other: lends the money. Share the money that comes from the use of the asset. New form of property right.

Film called the Art of Flirting structured as a LLP Chris - legal work - 5% of the revenue. Actors time - % of the revenue if there is any; Capital Partner: you put up £10,000, we pay you 20% of the revenue if there is any.

Affordable housing models which will aid in financing buildings Normally: developer borrowers tons of money, builds as quickly and cheaply as possible, with no consideration for the environmental costs. With this new model: put a piece of land into a community land trust; Trust over the land to a "company", who sells lease for a long period to the LLP; Company owns the land and acts as the trustee; People put money in (investors, pension funds, etc); Tenants of the land become co-owners by buying "n"ths or very small shares in the LLP, thus becoming stakeholders. Thus we are investing in new ways of doing things and keeping land in community ownership. Cost of capital (with this new model) is 2 - 3% (index linked) therefore a lot cheaper.